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Supreme Court of Colorado • 2016

In re the Marriage of de Koning

2016 CO 2 | 364 P.3d 494

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Takeaway

In short, when fees are part of dissolution permanent orders, section 14-10-119 looks to the parties' finances at the decree or earlier property hearing—not later post-decree changes revealed at a deferred fee hearing.

Background

After eleven years of marriage and three children, Kendrik de Koning and Melissa de Koning litigated an acrimonious dissolution case. By the time permanent orders entered, they had spent about $180,000 in attorney fees and costs—nearly forty percent of the marital estate. At temporary orders, the trial court required Husband to pay $20,000 toward Wife's attorney fees and $8,500 per month in temporary unallocated family support.

Both parties asked the court to address attorney fees at the March 2012 two-day permanent-orders hearing, but neither devoted substantial time to the issue. In April, the trial court dissolved the marriage, divided marital property, allocated parental responsibilities, ordered child support and maintenance, and deferred attorney fees for a later hearing because the parties had not adequately presented the issue.

Three months after the decree, Wife sought updated discovery concerning Husband's bank accounts, business records, credit cards, and leases. She asserted that Husband's mutual-fund business had substantially improved after the permanent-orders hearing. Husband sought a protective order, arguing that the relevant financial circumstances were those existing at the March hearing. The trial court agreed, barred the discovery, and later ordered each party to pay his or her own fees and costs.

The court of appeals reversed. It regarded the later fee hearing as an extension of the permanent-orders proceeding and held that the trial court had to consider the parties' finances as they existed at the fee hearing. The Colorado Supreme Court granted certiorari.

Issues

Issue #1

Whether a court deciding attorney fees under section 14-10-119 after entry of a dissolution decree must assess the parties' financial resources at the later fee hearing rather than at the permanent-orders or property-disposition hearing.

Holding

No. When attorney fees are decided as part of permanent orders, the court should assess financial resources as of the decree's issuance, or as of the property-disposition hearing if that hearing occurred before the decree.

Reasoning

Section 14-10-119 permits a discretionary award of reasonable attorney fees after consideration of both parties' financial resources. Its equitable purpose is to prevent undue economic hardship caused by dissolution litigation. But the statute does not use the term "current" financial resources, and its allowance of awards "from time to time" does not require a court to use financial information arising after the marriage has been dissolved.

The Uniform Dissolution of Marriage Act establishes an interdependent sequence for financial permanent orders. The court first divides marital property, valuing it as of the decree date or the earlier property-disposition hearing. It then determines maintenance in light of the property apportioned to the requesting spouse, and it may calculate child support after maintenance. Attorney fees are considered after the property division and maintenance award, using the parties' resulting financial positions.

Property distribution is the linchpin of this sequence. If a property division is revisited, the court ordinarily must reconsider maintenance and attorney fees because both depend on that division. The reverse does not follow: correcting or separately deciding a fee award does not require reopening the already completed property division or reevaluating later changes in the parties' financial circumstances.

The decree ends the marriage, so it is sensible to assess the parties' financial circumstances as of that point for permanent-orders purposes. After dissolution, their economic lives are no longer closely intertwined. A later hearing on deferred fees does not transform post-decree developments into facts that govern the original permanent-orders financial assessment.

Practical concerns reinforce this rule. Allowing post-decree discovery whenever a fee hearing is deferred would prolong dissolution litigation, permit relitigation of settled issues, and add emotional and financial costs to spouses and children. Colorado's domestic-relations rules also favor completing discovery before the hearing and generally contemplate resolving section 14-10-119 fees at the hearing on the underlying proceeding.

Applying that rule, the trial court properly confined its analysis to financial circumstances existing at the March permanent-orders hearing. It could therefore issue a protective order blocking Wife's requests for updated financial discovery and order each party to bear his or her own attorney fees and costs. The Court emphasized that its rule is limited to fees decided in connection with permanent orders, not requests made in post-decree modification proceedings.