Family Law Case Studies - Volume 10, Number 5
Published and Unpublished Appellate Court Opinions for June 2012
Published as a service to the Family Law Bar Association.
Compiled by the Hon. E. J. Burke, 1035 Palm Street, Room 355, San Luis Obispo, CA 93408, firstname.lastname@example.org.
Published and unpublished slip opinions can be secured from www.courts.ca.gov/opinions.htm.
Irmo Khera & Sameer (2012) ___ Cal.App.4th ___ (CA 6 -- Opinion filed June 19, 2012)
1. The supported party in a Richmond order must show changed circumstances such as "unrealized expectations" that warrants an extension of support.
2. a voluntary decision to pursue a doctoral degree rather than going to work full time is not a change of circumstances that warrants an extension of support.
Husband's dissolution petition was filed in 2003. The parties 2007 settlement agreement was reflected in a 2008 judgment that provided for monthly support of $2,650 that was stepped down over three years to zero "unless, before that date, Wife files a motion to have spousal support continued and shows good cause as to why the Court should order spousal support to be continued." The judgment also required the parties to divide child care expenses to permit a party to work but until October 30, 2007 Husband was to pay reasonable child care expenses incurred to permit Wife to obtain her MSW degree.
In 2009, Wife moved to set aside the judgment and in 2010 moved to modify spousal support by extending it beyond the scheduled termination date. The basis for Wife's motion was her contention that she agreed to the stipulation under duress and because Husband failed to make full financial disclosures. She asserted that the judgment's spousal support provisions were "grossly inequitable" and that her standard of living was far below the marital standard.
Wife said Husband's earnings were $593,111 in 2006, $545,435 in 2007 and $417,160 in 2008. She said she earned $9 per hour as an associate social worker and was $87,000 in debt. Her January 2010 I&E showed that the previous month she earned $700.
Wife's points and authorities argued that she was not required to show changed circumstances to modify support because the judgment specifically allowed her to do so. Citing Irmo Beust (1994) 23 Cal.App.4th 29 she alternatively argued that changed circumstances can be grounded on a showing of "unrealized expectations" if she showed she made reasonable efforts to become self-supporting. Wife explained that despite fulltime enrollment in the doctoral program, she had not yet met all of the necessary requirements in order to graduate.
Husband opposed the relief requested. He cited a vocational assessment completed before their May 2007 agreement that indicated Wife was enrolled in a Master's program in social work and that she would complete her coursework at the end of May 2007 and would earn her MSW degree later that year. The report showed she would be employable as soon as she completed her thesis at a salary of between $38,000 and $42,000 per year and when required work experience and licensure was completed, she could earn from $72,000 to $93,000 per year.
A CPA determined in May 2007 that Wife required $44,193 annually to maintain the marital standard of living. Husband argued that instead of pursuing employment that would permit her to be self-supporting, Wife decided to seek her PhD. His declaration also indicated that Wife received substantial financial assets in the settlement.
The court denied Wife's motion without commenting on the factors listed in FC § 4320. Wife appealed. AFFIRMED
FC § 4330 (a), provides that support of a party may be ordered in an amount and for a period of time, that the court determines is just and reasonable based on the standard of living established during the marriage. The several factors listed in § 4320 must be considered. FC § 3651(d) provides a support order may be modified or terminated at any time unless the parties agree otherwise in writing or orally on the record in open court.
Modification of spousal support, even if the prior amount is established by agreement, requires a material change of circumstances since the last order. (Irmo McCann (1996) 41 Cal.App.4th 978, 982.) A material change of circumstances may be found in the unrealized expectations of the supported party. (Beust at p. 29.) A change of circumstances may not however, be found by reconsidering a circumstance that has not changed since the previous order. (Irmo Farrell (1985) 171 Cal.App.3d 695.) Thus circumstances that were taken into account in setting an earlier support order can never qualify as a change of circumstances warranting reconsideration of the existing order. (Hogoboom & King, Cal. Practice Guide: Family Law (Rutter 1999) § 17:147; Irmo Lautsbaugh (1999) 72 Cal.App.4th 1131, 1133.)
If changed circumstances are proved, a trial court presented with a request to modify a spousal support order must then reconsider the criteria set forth in FC § 4320. (Irmo West (2007) 152 Cal.App.4th 240, 247.) Unless the parties agree otherwise in writing, the court retains jurisdiction indefinitely in a proceeding for dissolution of marriage where the marriage is of long duration; viz., 10 years. (§ 4336 (a), (b).)
A "Richmond Order" provides for contingent termination of spousal support on a specific date unless before that time, the supported spouse brings a motion to modify for good cause. (Irmo Richmond (1980) 105 Cal.App.3d 352.) In upholding the order, the court of appeal in Richmond approved limiting the duration of support so that both parties can develop their own lives. "[A] spousal support order may ... be fashioned ... to encourage such supportive self-reliance and to discourage delay in preparation for or in seeking, or refusal of, available employment." (Id. at p. 356.) A Richmond order expects that with reasonable diligence the supported party will be self-supporting by the date set for support payments to end. (Irmo Berland (1989) 215 Cal.App.3d 1257, 1260.) It places the burden of showing good cause for a change in the order upon the one who is most able to exercise the control necessary to meet the expectations the trial judge had in making the order." (Irmo Prietsch & Calhoun (1987) 190 Cal.App.3d 645, 665-666.)
A Material Change of Circumstances Was Required
A material change of circumstances may be found in "unrealized expectations" if the supported spouse made reasonable efforts to become self-supporting. Here, the judgment clearly indicated that absent unforeseen circumstances, Wife was expected to complete her MSW degree and be fully self-supporting by June 1, 2010. It was, therefore, Wife's burden to demonstrate a convincing reason her unrealized expectations were good cause for extending spousal support.
Wife Presented No Evidence of a Material Change in Circumstances
Consideration of the FC § 4320 factors is unnecessary until evidence is presented that shows a material change of circumstances. (Irmo Dietz (2009) 176 Cal.App.4th 387, 401-403.) Here, Wife argued her "unrealized expectation" that she would be employed as a social worker at a salary of at least $42,000 was a change of circumstances that in and of itself required the trial court to reconsider the FC § 4320 factors. The CA rejected the argument.
"[Wife] did not show that she diligently acted to achieve financial self-sufficiency and, that despite reasonable efforts, she was unable to complete her MSW degree, unable to obtain fulltime social work, or unable to find a job at a salary that made her self-supporting. (Irmo Aninger (1990) 220 Cal.App.3d 230, 241.) ... ¶ In our view, a voluntary decision to pursue a doctoral degree rather than entering the working world fulltime does not constitute a material change of circumstances in the context of this case."
Wife argued that reconsideration of support was also indicated by the disparity between her financial circumstances and prosperity enjoyed by Husband and his new wife. The CA dismissed the observation. "'[E]quality of post-separation income is not an element of section 4320 in setting spousal support.' (Irmo Ackerman (2006) 146 Cal.App.4th 191, 209.) A fortiori, an increased inequality of income is not in itself a material change of circumstance."
Similarly, the CA also rejected Wife's reference to her observation that she was $87,000 in debt. (Aninger at p. 242 ["it would defeat the intent and reasonable expectations of the parties that the supported spouse would achieve self-support if the court allowed her to manufacture a change in circumstances by going into debt far beyond her means" in purchasing her new residence].)
"[I]n determining what constitutes a change in circumstances the trial court is bound to give effect to the intent and reasonable expectations of the parties as expressed in the agreement." (Aninger at p. 238; see Dietz at p. 399.) The court may not simply reevaluate the spousal support award. Here, nothing in the parties' stipulation suggested that they expected spousal support to facilitate a voluntary decision by Wife to pursue higher education beyond a MSW degree, if she was able to be self-supporting based on her education and skills in the existing job market.
Please note: The following digests of unpublished opinions of the California Courts of Appeal are presented as case studies to illustrate how commonly recurring family law disputes were resolved in trial and appellate courts.
Caution: Rule 8.1115 (a), California Rules of Court, prohibits courts and parties from citing or relying on any unpublished opinion in any action or proceeding, except in the limited circumstances specified by rule 8.1115 (b).
Irmo Diamond -- Unpublished opinion of District 4, Division 1 (Filed May 4, 2012)
General contract interpretation rules and family law public policy considerations govern the interpretation of MSA's.
In December 2005, the parties stipulated to a judgment of dissolution. It provided Wife was to receive spousal support of $885 per month until she received her portion of Husband's Navy pension. At that point, spousal support was to drop to zero.
Three years later a judgment of dissolution was prepared and approved by Husband. It matched the terms of their stipulation and attached an addendum that provided the community portion of Husband's Navy pension was to be equally divided.
In 2009, Wife filed an OSC seeking a determination of Husband's spousal support arrears and also asked for an order setting the amount of his arrears for the portion of his Navy pension she did not receive. Wife claimed Husband's spousal support arrears were $34,075 from December 1, 2005 to September 1, 2009. She did not request a specific amount for the Navy pension arrears although she pointed out that Husband retired in 2002 and began receiving pension payments on July 1, 2002. She requested arrears beginning from August 1, 2004.
Husband agreed to the amount of his spousal support arrears but resisted Wife's request for Navy pension arrears covering the same period. He argued that the terms of their stipulation plainly meant Wife could not receive spousal support and the Navy pension at the same time and was not entitled to support and pension arrearages covering the same period.
The trial court granted the relief requested by Wife finding the Navy pension arrearages were an asset and the spousal support was not and therefore it could award arrears for both for the same period of time. The court entered an order awarding Wife Navy pension arrears in the amount of $95,186 through June 2010. Husband appealed. REVERSED
"Courts interpreting provisions of marital settlement agreements may be subject not only to general contract interpretation rules but also to family law public policy considerations." (Irmo Vomacka (1984) 36 Cal.3d 459, 469.) "A contract must be interpreted to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful." (Civ. Code, § 1636.) The intent is to be inferred, if possible, solely from the written provisions of the contract. (Civ. Code, § 1639.) Language in a contract must be interpreted as a whole and in the circumstances of the case, and cannot be found ambiguous in the abstract. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265; Civ. Code, §§ 1641, 1647.)
The CA said the parties' stipulation unmistakably provides that Wife's spousal support of $885 ends when she begins receiving her share of the Navy pension. Yet Wife implied that the court should ignore the stipulation because the Navy pension is an asset and spousal support is not. The CA said spousal support was merely a temporary payment to be replaced by payments under the Navy pension.
Irmo Johnson -- Unpublished opinion of District 2, Division 8 (Filed June 5, 2012)
Discovery games may be costly.
Husband and Wife married in 1984 and divorced in 2000. In 2008, Wife filed an OSC to modify child sup port and for an award of attorney's fees and costs.
Wife sought Husband's personal financial records and the business records of his law firm where he was the managing shareholder. She sought the records because she said she suspected Husband paid many of his personal expenses through the firm's accounts. Husband resisted her request, saying she would have to comply with discovery requirements for non-party witnesses in seeking the firm's business records.
The trial court found Wife's motion to compel production was untimely but nevertheless sua sponte ordered the firm to comply with the subpoena and provide its general ledger to Wife pursuant to C.C.P. § 1987.1 [a trial court has the power to sua sponte enforce a subpoena requiring the "production of books, documents, or other things before a court, or at the trial of an issue]." The firm refused to comply with the order.
Wife's motion to modify support was heard in January 2010 and the trial court drew an adverse inference against Husband that the firm's general ledger would show he paid many of his personal living expenses through the firm's accounts. Relying on both the adverse inference and monthly statements documenting Husband's use of the firm's Amex card, the court imputed additional income to Husband in calculating Husband's child support obligation to Wife.
After modifying the child support order, the court considered Wife's request for attorney fees pursuant to FC §§ 2030, 2032 and 271. Following an evidentiary hearing, the trial court found Wife fully complied with Husband's discovery requests but that Husband did not, instead "engaging in excessive litigation" by putting roadblocks in the way of her efforts to discover Husband's income and assets. The trial court also found that Husband lied to the court about his income by understating the personal expenses his law firm paid for him. The court awarded Wife $50,000 in attorney's fees and $24,702 in accounting costs under the fee-shifting of section 2030 and FC § 271.
Husband appealed. AFFIRMED
The Sua Sponte Order to Compel Production
The CA rejected Husband argument that the trial court lacked the authority to order the law firm to comply with an untimely motion to compel. First, the trial court did not grant Wife's motion to compel; instead, it exercised its sua sponte authority under Code of Civil Procedure section 1987.1 to enforce Wife's subpoena for business records. Second, the CA characterized Husband's attempt to use the separate existence of the law firm as a shield to thwart Wife's attempts to discover through him the firm's financial records. "Husband does not identify any legal rule that permits him to pick up the firm's shield of separate existence and wield it as his own personal sword against Wife in his appeal from the court's orders directed against him."
The CA also rejected Husband contention that the trial court erred by drawing an adverse inference against him for his firm's failure to produce firm records to Wife. The trial court respected the firm's separate corporate existence but properly did not indulge the fiction that it had a mind of its own. "Professional corporations such as law firms act through their shareholders. Husband was the managing 50% shareholder and was calling the shots. "The trial court's adverse inference arose from Husband's own misconduct." (See Schnabel v. Superior Court, supra, at p. 715 [spouse has fiduciary duty to other spouse to cooperate in obtaining production from business in which first spouse has ownership interest]; accord Rosen v. St. Joseph Hospital of Orange County (2011) 193 Cal.App.4th 453, 459 ["A trial court . . . could draw adverse evidentiary inferences . . . against a litigant who benefitted from a third party's spoliation when a sufficient relationship existed between the litigant and third party."].)
The CA also rejected the argument that the trial court should have tried lesser sanctions before imposing an issue sanction. "[T]he court did not impose an issue sanction; the court drew an adverse inference. An issue sanction is different from an adverse inference. (Compare Evid. Code, § 413 [adverse inference] to Code Civ. Proc., § 2023.030 (b) [issue sanction].)
Family Law Section 271 Sanctions
The CA acknowledged that a trial court may not impose section 271 sanctions without a noticed hearing. (Irmo Duris and Urbany (2011) 193 Cal.App.4th 510, 513; Niko v. Foreman (2006) 144 Cal.App.4th 344, 369.) But the CA said, "No particular form of notice is required so long as a party knows he is at risk of suffering sanctions. "[Case law] expressly states, 'the only procedural requirement' is 'notice to the party against whom the sanction is proposed to be imposed and opportunity for that party to be heard.' " (Irmo Davenport (2011) 194 Cal.App.4th 1507, 1529.) Here, Husband knew, or should have known, the court was contemplating section 271 sanctions.
Husband complained that he was sanctioned for another person's misconduct. "Not so. The court imposed sanctions after finding Husband lied about the income he drew from his law firm. Husband 'intentionally misrepresented his income for child support purposes denying that any personal expenses were paid by his law firm. He is responsible for the substantial cost to Wife necessary to prove this representation false.'" Other complaints were also rejected.
Irmo Brantner -- Unpublished opinion of District 2, Division 6 (Filed June 12, 2012)
Post-separation disability benefits ARE COMMUNITY PROPERTY IF (1) the parties bought the policy during the marriage with community funds and (2) IF the policies were intended to provide retirement protection to both parties in their later years.
Husband, 61 and Wife, 61 married in 1978 and separated in 2004 when Husband stopped practicing law and submitted a disability claim. Husband received disability benefits from 2004 until the time of trial, half of which he paid to Wife pursuant to a temporary support order. Wife became an RN four years after separation. She was earning $8,000 a month at the time of trial.
The primary issue at trial was whether three disability policies purchased at various times before and during the marriage were intended to provide retirement income to the community. The third policy pays about $10,000 per month for Husband's lifetime so long as he remains disabled. The monthly benefit was about $12,000 at the time of trial. Husband's treating psychiatrist testified that he does not believe Husband will ever be able to work again as a lawyer or otherwise.
Wife testified that Husband bought the disability policies as part of their overall retirement plan. According to Wife, the disability policies were part of their estate, like the house. That stream of income was to carry them into their old age.
Husband testified that the disability policies were not part of a retirement plan. According to Husband, their retirement plan was to "pay off" the mortgages on their home and his office, and to invest in individual retirement accounts (IRAs).
The trial court determined that the disability payments were community property and ordered equal division of the payments. Neither party requested a statement of decision. Husband appealed. AFFIRMED
The characterization of post-separation disability benefits depends on (1) whether the parties bought the policy during the marriage with community funds, and (2) "the extent to which the disability policies at issue were intended to provide retirement protection to both parties in their later years." Irmo Saslow (1985) 40 Cal.3d 848, 862.) Here, the third policy was purchased during the marriage with community funds. The benefits are community property if it was intended to replace retirement income. (Ibid.) But the benefits are separate property if it was intended to "replace post-dissolution earnings that would have been the separate-property income of the disabled spouse." (Id. at pp. 860-861.)
"[T]he determination of the intent of the parties regarding the purpose of the benefits will not always be easy. However, trial court judges have extensive experience in making such difficult factual determinations." (Saslow at p. 861.) In Saslow, the parties bought disability insurance during the marriage with community funds. There was evidence that they intended the policy to replace retirement income because they had not invested in a retirement plan, they did not contemplate dissolution when they purchased the policies, and, "[w]ith [husband's] long history of psychological problems, he may have been aware that he might not be able to continue the practice of medicine due to his disability." (Id. at p. 862.)
The CA said this case was much like Saslow and that the fact the parties made other provisions for retirement income does not preclude a finding that they intended to supplement the income with disability benefits. (In re Elfmont (1995) 9 Cal.4th 1026, 1032-1033.) The CA compared this case to Elfmont where the husband renewed the disability policy after separation, with separate property income, without the intent to provide retirement income to the community. Substantial evidence supports the trial court's implied finding that the parties intended the policies to provide retirement protection.
Irmo Venziano & Zendel -- Unpublished opinion of District 2, Division 4 (Filed June 13, 2012
Vague statements about an unspecified incapacity will not support a request for accommodation of an ada disability.
Wife and Husband married in 2003 and separated about three and one-half years later. Since then, the parties vigorously litigated a variety of issues. The trial court scheduled a trial to determine the character, value and division of the community assets and liabilities in August 2010.
Wife failed to appear on the date set for trial but filed a handwritten note stating that she could not appear because of a "medical condition." She attached a letter purporting to be from a physician that said Wife had severe migraines and that the hearing would make her worse. Wife requested permission to appear telephonically. The court reset the trial for October 2010.
Wife then filed a request for permission to appear at the trial in October by Court Call, restating her claim that her "medical condition" might prevent her personal participation. On the same date, Wife moved to continue the trial on division of property and debt and asked the court to instead hold a hearing on her requests to extend and modify temporary spousal support. The trial court did not rule on her requests.
Wife failed to appear for trial in October and it commenced in her absence. As the trial was underway, a messenger appeared with a declaration from Wife stating a "dire emergency medical condition" prevented her from appearing. She requested a continuance. Husband objected to a continuance stating Wife's assertions were not truthful and noting her past excuses to postpone trial indefinitely.
The trial court denied Wife's request for a continuance finding it was inadequate and lacking good cause. The court also found a delay would prejudice Husband. Wife then called the court and asked to participate telephonically, but hung up before the court could consider the request. Husband then presented evidence about Wife's earning capacity, about her good health during the marriage, and said 19 months of spousal support was enough. Husband spoke of his financial difficulties and testified to the substantial credit card and other debts that Wife ran up during the marriage and argued they were all her separate obligations.
The trial court divided the couple's debts and assets in accordance with Husband's testimony and awarded Wife an additional three months of spousal support. The ruling was incorporated in a final judgment. Wife appealed. AFFIRMED
Wife's Requests for Accommodation
The CA rejected Wife's argument reversal was required because the trial court failed to rule on her two requests for accommodation. The CA described the requests as ambiguous, not in the proper format and not brought to the court's attention in the proper manner. Any error in failing to rule on them was harmless.
CRC, rule 1.100(c), (h) provides that persons with disabilities must "have equal and full access to the judicial system." If a request for reasonable accommodation is made and the court is provided with a statement that describes the impairment, the disability must be accommodated. (Biscaro v. Stern (2010) 181 Cal.App.4th 702, 708; Irmo James & Christine C. (2008) 158 Cal.App.4th 1261, 1273.) It is error for a trial court to fail to rule on a request for accommodation. Even so, the judgment will be affirmed if it is clear from the record that the party failed to satisfy the requirements of the rule and that the request should have been denied as a matter of law.
CRC rule 1.100 requires the request to be presented "on a form approved by the Judicial Council, in another written format, or orally." (CRC rule 1.100(c)(1).) Wife did not use form MC-410 or make an oral request. Nor was her request in an acceptable "other written format." They were two, single-spaced handwritten pages of information that did not refer to CRC rule 1.100 or the ADA. To the contrary, Wife said she wished to appear "via Court Call" which signaled that her request came under CRC rule 3.670.
The CA characterized the information concerning the nature of Wife's alleged disability and the reason she required accommodation as "wholly inadequate." (See Brundage v. Hahn (1997) 57 Cal.App.4th 228, 237 ["'[v]ague or conclusory statements revealing an unspecified incapacity'" are insufficient to support that a party is a person with a disability as defined by the ADA].) The declaration did not describe any disabling condition but simply said she was experiencing a "medical condition." (See Lewis v. Neptune Society Corp. (1987) 195 Cal.App.3d 427, 430.)
Wife's Request for a Continuance
Wife's request was presented late on the trial date without an explanation of her "dire medical emergency." Where an inadequate showing is made in support of an application for a continuance, it is not an abuse of discretion to deny it. (Muller v. Tanner (1969) 2 Cal.App.3d 445, 458.) Even "[t]he unavoidable absence of a party does not necessarily compel the court to grant a continuance." (Whalen v. Superior Court (1960) 184 Cal.App.2d 598, 600.)
Other challenges to the judgment were also rejected.
Irmo Sun -- Unpublished opinion of District 6 (Filed June 15, 2012)
The trial court has broad discretion to set the amount of temporary spousal support.
Husband and Wife married in 2007 and separated in 2008. In 2011, Wife filed a motion for spousal support of $1,500 per month. Her I&E showed her monthly income was $1,800. Husband opposed the request. His I&E showed his average monthly income was $7,643.
Husband argued that Wife's income statement was untrue but presented no evidence in support of the argument. Wife testified that she lost her job but found a new one but had not yet been paid. Following an evidentiary hearing, the trial court found Wife's monthly income was $1,800 and Husband's was $7,643 and set temporary spousal support at $1,699 pursuant to well-established "guidelines." The arrearage created by the order was to be paid at $500 per month.
Husband filed a motion to modify the temporary spousal support order arguing that $2,199 per month came to more than half his disposable income and the payment worked a hardship on his mother and his adult daughter. At the hearing, Wife had not completed her I&E but explained that in her current job she worked as a maid and looked after two seven-year-old boys. She testified that she was earning on average $1,600 per month. Husband presented evidence from a witness who testified that he employed Wife as a babysitter from September 2009 to April 2011 at about $2,800 per month.
Wife said Husband had not yet paid her anything. The trial court reminded Husband that the order was in place and denied his request to set it aside. Husband appealed. AFFIRMED
The trial court has broad discretion to set the amount of temporary spousal support. (Irmo Blazer (2009) 176 Cal.App.4th 1438, 1442.) Unless there have been changed circumstances, a motion for modification is nothing more than an impermissible collateral attack on a prior final order. A trial court abuses its discretion if it changes an existing support order absent evidence of changed circumstances. (Irmo Smith (1990) 225 Cal.App.3d 469, 480.)
Husband's only argument relating to the temporary support order is that Wife made more money than she said she did and the trial court erred in believing her account. Husband disputed her account but offered no conflicting evidence. Accordingly, the only available evidence on the point supports the trial court's finding regarding Wife's income. The trial court applied the standard guideline calculations to the parties' stated income and expenses and arrived at the figure of $1,699 per month for temporary spousal support. There was no error in the findings and orders of the trial court.
Irmo Hoffman -- Unpublished opinion of District 2, Division 5 (Filed June 19, 2012)
A party who accepts payments after a breach of contract waives the breach if the payments were accepted with full knowledge of all facts.
Husband and Wife married in 1987 and had three children. In 2007, a judgment of dissolution was entered incorporating Husband's agreement to pay $2,000 and $3,000 per month in spousal and child support respectively. Husband fell behind in his support obligations and by 2008 owed $35,578 in child and spousal support arrearages.
In 2009, the parties entered into a stipulation that Husband's spousal support obligation could be terminated unless he failed to comply with other provisions of the agreement. Child support was reduced to $2,000 per month. When their oldest child became an adult, they agreed Husband's payment would stay at $2,000 with $1,000 applied to his arrearage. When their youngest child became an adult, the entire $2,000 payment would be applied to reduce the arrearage. Another provision required Husband to make five $500 payments toward Wife's attorney fees. "A default on any one of the $500 payments is a default of the entire agreement."
The stipulation also provided that if a payment is not timely made, the "stipulation is terminated, its terms become null and void and the ... previous spousal support order is reinstated." Husband failed to pay the $1,000 arrearages payments in May, June and July 2010. In July 2010, Husband and Wife modified the agreement because Husband's earnings changed. Child support was reduced to $900 per month and the arrearage payments were reduced to $350. Husband's child and spousal support arrearage in July 2010 exceeded $45,000.
In 2011, Wife filed a motion seeking to reinstate spousal support arguing Husband breached the agreement by failing to pay $1,000 in arrearages in May, June and July 2010. The trial court found Husband violated its terms and ordered reinstatement of the $2,000 per month spousal support obligation retroactively to 2008. Husband appealed. REVERSED
The CA concluded that the parties' modification of the agreement after Husband violated the terms of the stipulation and Wife's acceptance of performance of the new arrangement for nearly a year was a release by Wife of Husband's obligation under the agreement before it was modified. Wife "is estopped from seeking to reinstate spousal support based on Husband's breach. (See Kern Sunset Oil Co. v. Good Roads Oil Co. (1931) 214 Cal. 435, 440 [acceptance of payment after contract breach with full knowledge of all facts is waiver of breach]; Hames v. Rust (1944) 64 Cal.App.2d 70, 75-76 [modification of lease waiving unpaid installment payments is valid and binding].)
McRoberts v. Lesserson -- Unpublished opinion of District 2, Division 3 (Filed June 19, 2012)
1. Whenever there is a "possibility," however remote, that a child might be molested, the trial court must consider that risk in fashioning a remedy.
2. A psychologist's expert opinion testimony about a child's alienation from his or her parent is not generally subject to the Kelly/Frye test.
Mother and Father married in 1998 and separated in 2006. They have four children one of whom has serious health problems. Father and Mother remarried persons who brought other children into the new relationships.
In 2006, the parties stipulated to a custody evaluation because Mother was concerned about the children's safety in light of Father's conviction for a crime arising from domestic violence not involving sexual molestation. Mother and Father settled their differences and the children visited him every other weekend.
The custody evaluator said Mother has historically been "hypervigilant" about sexual abuse such that when the parties were married and had overnight guests Mother asked Father to sleep in front of the girls' room in order to prevent their guests from molesting them in the middle of the night. Mother also alleged she was the victim of inappropriate sexual advances by two different rabbis and an employer and accused a caregiver of sexually molesting one of the children.
In 2009, Mother requested restraining orders against Father alleging he sexually molested two of the children. A TRO issued and the court reappointed the custody evaluator to investigate. The children made no specific allegations of sexual molestation against Father but demonstrated that they were "aligned" with Mother and very angry at Father. The custody evaluator testified there was no credible evidence of sexual molestation and the court reinstated the pre-existing custody and visitation arrangement.
In 2010, one of the children demonstrated emotional issues and reported to her psychotherapist that Father had touched her "private parts." The psychologist reported the allegation and when authorities failed to contact Mother, she took the child to a police station to be interviewed. DCFS opened an investigation. No criminal charges were filed against Father and DCFS did not file a juvenile dependency petition. The DCFS filed included a detective's remark that the children were being coached by their Mother.
Later in 2010, Father took the children to a friend's house for a visit but one of them refused to go inside the house and stayed on the front lawn. She then called 911 and her Mother and said to both that Father had sexually abused her. When the police arrived, the child explained Father did not abuse her but she was afraid the might. The police took the children into protective custody. The children did not see Father again for several months.
In June 2010, Mother filed a request for restraining orders against Father alleging he sexually molested both girls. A TRO issued. The custody evaluator was appointed yet again to determine among other things whether Father molested the children. The evaluator's 77-page report concluded the one of the children was "fully alienated." She could think of nothing good about Father and said she "was trying to teach her siblings that her father was bad" and that Mother gave her permission to "beat him up."
The child claimed Father touched her when she was four, six and eight years old, most recently in 2008, about two years before the evaluation. The other daughter told the evaluator that Mother "hates" Father and admitted that she had fun at her father's house when she did not know he was bad. However, her mother and her sister taught her Father was bad. She told the investigator that Father molested her 13 different times when she was six years old, i.e. in approximately 2007.
The evaluator concluded the report of sexual abuse was contrived and inconsistent with the absence of any such allegation when custody was evaluated earlier. The evaluator concluded there is a "very small likelihood the children were actually sexually molested" by Father. He opined the girls' memories of Father's alleged sexual abuse were "contaminated" by Mother who is "obsessed with hostility" toward Father. The evaluation also concluded "the three younger children have the potential to develop a healthy relationship with their father and stepmother as long as the oldest daughter does not have the presence or power to sabotage their relationships."
Following an evidentiary hearing, the trial court ordered the three younger children to have monitored visits with Father. Mother and the oldest daughter deliberately frustrated the therapeutic visitation and the second daughter eventually refused to participate. At one of the numerous hearings that followed, the custody investigator recommended that the three younger children spend 30 days in Father's custody without any contact with mother. Thereafter, the three younger children could gradually reintegrate with Mother.
In July 2011, the trial court adopted the evaluator's recommendations finding there was no independent substantial corroboration of sexual abuse. The court ordered the three younger children to be placed in the care and custody of Father for 30 days with no contact between them and Mother. The restraining orders were vacated and the children's passports were given to the children's appointed counsel.
Mother petitioned the CA for writ of mandate challenging the orders. The CA stayed orders, issued an order reinstating the restraining order against Father and issued an OSC as to why the relief requested in Mother's petition should or should not be granted. PETITION DENIED, STAY LIFTED AND TRO VACATED
"[I]t is the public policy of this state ... that children have frequent and continuing contact with both parents after the parents have separated or dissolved their marriage ... and to encourage parents to share the rights and responsibilities of child rearing ... except where the contact would not be in the best interest of the child . . . ." (FC § 3020 (b).)
In determining whether a custody order is in the best interests of a child, the trial court must look at all the circumstances (Irmo Burgess (1996) 13 Cal.4th 25, 31) including the "health, safety and welfare of the child" and whether there is a history of abuse by a parent seeking custody …. (FC § 3011 (a).) Further, "[a]s a prerequisite to the consideration of allegations of abuse, the court may require substantial independent corroboration, including, but not limited to, written reports by law enforcement agencies, child protective services or other social welfare agencies, courts, medical facilities, or other public agencies or private nonprofit organizations providing services to victims of sexual assault or domestic violence." (Id., (b)(3).)
Mother's allegations rested entirely on the statements the daughters made to Mother and others but the trial court impliedly rejected the veracity of their allegations. "There were ample grounds upon which the trial court could have reasonably concluded that Father did not sexually molest the girls. The oldest daughter did not report the alleged molestation to the custody evaluator in 2006 even though the alleged incidents occurred before she was interviewed. In 2009, she again failed to make any specific allegations regarding sexual molestation. Only in 2010, after the child developed a deep hostility toward Father, with Mother's encouragement, did the child specifically describe the abuse to the evaluator.
The trial court's decision to adopt the evaluator's conclusion that the only way to repair the second daughter's relationship with Father was for her to spend 30 days with him and his family without contact with Mother and her older sister. The CA said that whenever there is a "possibility," however remote that a child might be molested, the trial court must consider that risk in fashioning a remedy. "Specifically, in this case, we must consider whether there is a risk that Father will molest his second daughter in the 30-day period he will have sole custody over her." The CA concluded the trial court's remedy adequately addressed that risk.
First, Father lives in a relatively small home with his wife and four children. When the child joins this family, they will be living in a crowded household, making her less vulnerable. Since she too has become hypervigilant regarding sexual abuse, the CA said it was very unlikely Father would molest her during the 30-day period she is required to live with him. "Moreover, the child was ordered to commence individual therapy and will have her medical condition treated by a nurse during the 30-day period she is in Father's custody. [T]his means the child will have access to at least two neutral adults outside of father's household …. This too ameliorates the risk."
Second the trial court must consider the strain the remedy might cause the child, since she sincerely believes Father sexually molested her and that he poses a danger. "Even if her belief is unfounded, it is not an easy decision to compel her to live with father for a month without contacting Mother." Nevertheless, "there was substantial evidence supporting the trial court's implied findings that the child could not save her relationship with Father unless she spent time with him away from Mother and her older sister, and that ordering the child to have monitored visits with Father was simply not enough. There was no abuse of discretion in the findings and orders of the trial court.
Testimony Regarding Parental Alienation Is Not Subject to the Kelly/Frye Test
The CA rejected Mother's argument that it was error to receive evidence of "parental alienation syndrome" (PAS) and "parental alienation." (Frye v. United States (D.C. Cir. 1923) 293 F. 1013, 1014 and People v. Kelly (1976) 17 Cal.3d 24). The CA said the Kelly/Frye test applies to the admissibility of expert testimony based on "a new scientific technique." But absent some "some special feature which effectively blindsides the jury," a psychologist's expert opinion testimony is not subject to the Kelly/Frye test. (Stoll at p. 1157.)
In Stoll, for example, a defendant accused of child molestation proffered expert opinion testimony by a psychologist who conducted tests on the defendant and concluded that she did not possess any pathology in the nature of sexual deviation. (Stoll, supra, 49 Cal.3d at p. 1146.) The trial court excluded the expert opinion on the grounds that it did not pass the Kelly/Frye test. (Id. at p. 1147.) The California Supreme Court, however, held that "[t]he psychological testimony proffered here raises none of the concerns addressed by Kelly/Frye. The methods employed are not new to psychology or the law, and they carry no misleading aura of scientific infallibility." (Id. at p. 1157.)
By contrast, courts have found that expert testimony regarding certain psychological "syndromes" must past the Kelly/Frye test. For example, in People v. Bledsoe (1984) 36 Cal.3d 236, 251, the court held that under the Kelly/Frye test expert testimony regarding the "rape trauma syndrome" was not admissible to prove that the complaining witness was raped. Similarly, in In re Sara M. (1987) 194 Cal.App.3d 585, 592, the court held that under the Kelly/Frye test expert testimony regarding the "child molest syndrome" was not admissible to prove that a child was molested.
Here, when asked about the "parental alienation syndrome," the custody investigator stated that PAS is not found in the American Psychological Society's Diagnostic and Statistical Manual of Mental Disorders and that alienation is not a "psychiatric diagnosis." He added, however, that in high-conflict divorce cases, children are sometimes alienated from one parent. The custody investigator stated: "You can't be diagnosed as having alienation, but it is clear, everyone involved in these kind of cases know[s] the children are estranged and sometimes alienated from their parents." Thus, the investigator did not offer an opinion based on PAS or any other syndrome or diagnosis. He instead simply discussed a dynamic that he frequently observed during his three decades of practice and offered his expert opinion regarding the matter.
The investigator's testimony did not present evidence of a "new scientific technique" or employ a method or analysis that is new to psychology or law. Nothing in his testimony carried a misleading aura of scientific infallibility. "The expert's opinion regarding parental alienation was not subject to the Kelly/Frye test, and that the trial court did not error in admitting such evidence."
Irmo Warnkentin -- Unpublished opinion of District 5 (filed June 20, 2012)
Guideline child support for a disabled adult child cannot be reduced because ordering it reduces SSI and other entitlements paid to the child. the family code prefers private support.
In 2007, Mother, as guardian, sought an award of support for the parties' adult disabled son. At the time, Mother lived in Idaho with their son and was paid by that state to care for him. The child also received SSI. Father lived in California and had custody of the parties' five other minor children.
In 2008, the trial court ordered Mother to pay spousal and child support to Father but denied an award of child support to Mother for their disabled son. In 2009, the court modified the support orders and ordered Father to pay $1,319 for the disabled son's support.
Mother then moved to modify her obligation to pay child and spousal support to Father. In 2009, the trial court reduced the disabled child's support to $667 -- a guideline order. Father then moved for reconsideration arguing that support for the adult disabled son was improper because the son was not "without sufficient means" -- a prerequisite under FC § 3910 (a). Father pointed out that increasing support would terminate the son's SSI benefits and would make him ineligible for a state-paid caretaker. Mother's stipend for caring for their son would be eliminated, leaving the family worse off.
The trial court denied Father's motion finding no new facts, circumstances, or law in support of the motion. Father appealed. AFFIRMED
CCP § 1008 authorizes a motion for reconsideration if "new or different facts, circumstances, or law" warrant revocation or modification of the order. "'[T]he party seeking reconsideration must provide not only new evidence but also a satisfactory explanation for the failure to produce that evidence [or cite the law] at an earlier time.'" (Mink v. Superior Court (1992) 2 Cal.App.4th 1338, 1342 [facts]; Baldwin v. Home Savings of America (1997) 59 Cal.App.4th 1192, 1200 [law].) "Without a diligence requirement the number of times a court could be required to reconsider its prior orders would be limited only by the ability of counsel to belatedly conjure a legal theory different from those previously rejected, which is not much of a limitation." (Baldwin at p. 1199.)
Here, Father argued reconsideration should be permitted where the trial court cites and relies cases not cited by the parties. The CA disagreed noting Baldwin concludes, "the requirements for a motion for reconsideration [are] not met where the motion [is] based on a case not previously cited, but not newly decided, and was supported by a declaration that merely stated the case was found after the adverse order was made. (Id. at pp. 1200-1201.)" Father offered no explanation for his failure to present and discuss the cases cited by the court.
The CA rejected Father's argument that the child support order was intended to be a final order that should not have been modified. "With some exceptions …, 'a support order may be modified or terminated at any time as the court determines to be necessary.' (FC § 3651 (a).) Under this section, all child support orders, even those based on an agreement of the parties that includes an agreement that such support will not be modified, are modifiable prospectively. (Irmo Alter (2009) 171 Cal.App.4th 718, 727; Irmo Lambe & Meehan (1995) 37 Cal.App.4th 388, 391-393 [adult disabled child].)
The CA disposed of Father's argument the statutory requirements for such an award were not met because he received SSI. "The father and mother have an equal responsibility to maintain, to the extent of their ability, a child of whatever age who is incapacitated from earning a living and without sufficient means." (FC § 3910 (a).)" Nothing in the record itemized his expenses or showed that they were met solely through SSI.
The CA rejected Father's assertion that he should not be required to pay support to his son because it would reduce, dollar for dollar, the SSI he receives and that this would adversely affect the family as a whole. The CA pointed out that "the Family Code expresses a preference for private support. (FC § 4053 (h).) Moreover, Father's argument presumes there should be a preference for public support of a disabled adult child. This is contrary to Elsenheimer v. Elsenheimer (2004) 124 Cal.App.4th 1532 and FC § 4053(h) where the CA approved a refusal to consider SSI received by the mother in determining support because it would "transfer a significant portion of father's burden of meeting the children's needs to the government," contrary to the intent expressed in FC §§ 3900 and 4053 (h)." (Elsenheimer at p. 1540.)
Finally, California's formula for guideline support is presumed to be correct in all cases and no deviation was warranted in this instance. The trial court's calculation took into account all of the dependent children.
Irmo Jacobi -- Unpublished opinion of District 5 (Filed June 25, 2012)
Once a non-managing spouse makes a prima facie showing of the existence and value of community assets in the other spouse's control, the burden of proof shifts to the managing spouse to prove the proper disposition or lesser value of those assets.
Husband and Wife separated after 15 years of marriage. After a trial, the court made custodial and support orders and divided the parties' property. Wife was awarded one-half the proceeds from the sale of a boat that Husband asserted was sold before they separated to pay community debts, household expenses and other debts before and after separation. The trial court also ordered Husband to pay Wife $500 per month in spousal support even though she was cohabiting with an unrelated male.
Husband appealed. AFFIRMED
Husband testified that he sold the boat to a neighbor for $30,000 cash about two weeks before Wife moved out. Wife, on the other hand, testified the boat was still at their home when she left. As to the disposition of the proceeds of the sale, the only evidence was Husband's undocumented testimony that he used the money "to pay off bills and pay for furniture and various household expenses," "this and that," and "used it to pay for a lot of different things, children activities, clothes, life."
Husband argued that because the boat was sold during marriage he did not have to account for it in the dissolution proceeding. "Spouses have a fiduciary duty toward each other, which includes a duty to account for property of the marriage, both before and after separation. (FC §§ 721 (b), 1100 (e), 2100.)" "Once a non-managing spouse makes a prima facie showing of the existence and value of community assets in the other spouse's control post-separation, the burden of proof shifts to the managing spouse to prove the proper disposition or lesser value of those assets. Failing such proof, the court should charge the managing spouse with the assets according to the prima facie showing." (Irmo Margulis (2011) 198 Cal.App.4th 1252, 1258.)
Here, Wife's testimony the boat was not sold prior to separation shifted the burden to Husband to show a proper disposition of the boat or its proceeds. Husband's testimony that he sold it for $30,000 and his vague undocumented explanation of the use of the proceeds didn't measure up.
Wife denied two or three times that she lived with an unrelated male although she admitted he occasionally stayed with her. The trial court found Wife's occasional cohabitant contributed very little to her support and made other findings on the factors it was required to consider pursuant to Family Code section 4320. There was no abuse of discretion in the order requiring Husband to pay Wife $500 per month in post-judgment spousal support.
Medina-Puerta v. Goon -- Unpublished opinion of District 4, Division 3 (filed June 27, 2012)
When one party is not forthcoming with financial information, bank records may be used to establish a parent's income. The records are not inadmissible because they are hearsay, irrelevant, lack foundation or are illegally obtained.
Husband and Wife married and divorced before the their twin sons were born in 2000. Husband filed a paternity action and in 2002 was awarded joint legal and physical custody. Wife was ordered to pay $23 per month child support because she was employed and Husband was not. A vocational assessment at the time concluded Husband had an earning capacity of $80,000 per year based upon his undergraduate and advanced degrees in engineering from the Massachusetts Institute of Technology.
In 2008, Wife relocated with the children to Milpitas. Husband remained in Southern California. In 2010, at Husband's request, the Orange County DCSS filed a request to modify the child support order based upon the expiration of Husband's unemployment benefits. Husband claimed he was last employed in 2007 at $1,640 per month. His I&E listed $1,266 per month in unemployment benefits, $95 in assets and $2,480 per month in expenses.
The trial court made financial discovery orders and Wife subpoenaed the records of Pacific Premier Bank in Husband's name and various other names he had used in the past. Husband filed a motion to quash the subpoenas.
Wife resisted Husband's modification request stating he turned down an employment offer in 2009 of $95,000 per year. She also documented his receipt in 2006 of over $700,000 from a consent decree and alleged that although Husband refused to work in the United States, he had an employment relationship with the University of Madrid. Wife claimed Husband had five aliases and used the children's trust accounts to hide income and property.
Wife's 2010 I&E and paystubs showed her gross monthly income was $8,284. She claimed $7,842 in monthly expenses.
Husband's 2010 I&E listed income of $554 per month, assets of $35 and over $21,000 in credit card and other debt. He said his expenses averaged $2,430 per month. On the same day his I&E was filed, Husband moved again to quash Wife's subpoenas for his bank records. His motion was denied.
At the hearing in January 2011, Wife testified her gross earnings in 2010 were $91,310 from which she pays a mortgage, property taxes and health care insurance covering the children. She also pays for day care for the twins and has other costs related to their learning disabilities. Wife said Husband never sent her anything to offset these costs.
Husband's January 2011 I&E claimed his income was only $150 per month and that his assets were limited to $27. He acknowledged his advanced degrees in engineering but claimed he had not been able to find gainful employment since 2007. He denied any physical disability. He admitted using several names on his passport and bank accounts.
Husband conceded he was offered a full-time position at $95,000 a year but said he refused because working would interfere with his visits with the children. During cross examination, he admitted several undisclosed bank accounts, one with an ending balance of $41,469 derived from a settlement with an undisclosed former employer. The records of the children's trust accounts forced Husband to explain a $25,421 deposit in one account and a $41,400 internet transfer from his personal account. The explanations were unconvincing. Nor could Husband explain a transfer of $72,000 from one trust account into his personal checking account, an amount that was then deposited into another trust account at a different bank. In the end, he begrudgingly confessed to receiving over $700,000 from a civil forfeiture claim in 2006 and approximately $300,000 from his family the following year.
The trial court found Wife's income was as she stated but that Husband's testimony was not credible. The trial court imputed income to Husband of $95,000 based upon the offer of full-time work. The court said it believed Husband was hiding money as evidenced by the huge amount of money going in and out of banks. The trial court set Husband's child support obligation at $197 per month and "add on's" at $509. Husband appealed. AFFIRMED
The CA rejected Husband's argument that the trial court erroneously arrived at its child support calculation by imputing an annual $95,000 income to him.
FC § 4058 defines "annual gross income" as "income from whatever source derived" including "[i]ncome such as commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding to establish a child support order under this article." (FC § 4058 (a)(3).) And in some cases, "[t]he court may . . . consider the earning capacity of a parent in lieu of the parent's income, consistent with the best interests of the children." (FC § 4058 (b).)
Here, the CA noted that although there is no requirement a parent act in bad faith before earning capacity may be imputed (Irmo Padilla (1995) 38 Cal.App.4th 1212, 1217), "in this case bad faith was arguably demonstrated." Husband asserted that the trial court's order was based on "incompetent and prejudicial" evidence in violation of his right to due process of law. The CA disagreed.
"Of principal interest are the bank statements, the production of which Husband fought tooth and nail. 'There is no other way to say this -- a parent's financial information is both relevant and necessary to a proper determination of child support. Family Code section 4058 requires the court to determine the annual gross income of each parent. Bank records help establish this amount, especially when one party is not forthcoming with financial information, and our review of the record reveals no basis to exclude this information on any of the grounds asserted by Husband, i.e., lack of foundation, hearsay, illegally obtained information, or relevance.'"
Finally, Husband complained about the trial court's limit on his cross-examination of Wife and by doing so improperly excluded evidence she had "secret assets and interest income." The CA rejected the argument noting the trial court had no need for further inquiry into Wife's finances because her income was verified through tax records and pay stubs. The CA also said Husband limited cross-examination of Wife revealed nothing new. His claim she hid a certain amount of unearned interest in one account failed because any interest earned from moneys deposited in a bank account is reported on the individual's tax return and is not considered a "hidden asset."
Irmo Papp -- Unpublished opinion of District 2, Division 3 (Filed June 27, 2012)
Husband's agreement to stay on title and make the mortgage payment for five years was not spousal support.
Husband and Wife were married for a year. A 2006 judgment of dissolution incorporates the terms of the parties' MSA. The agreement included a mutual specific waiver of spousal support and the court was asked to terminate its jurisdiction to award spousal support to either party.
Other terms of the MSA divided the community property and debts. As to the family residence the parties agreed to remain co-owners and they further agreed, "Husband shall pay Mortgage on Residence . . . for 4 years from the date of Final Divorce Decree." The house would then be sold or Wife would buy out his 50% ownership interest.
In 2011, Husband filed a motion seeking an order terminating his obligation to pay the mortgage and to require the property to be sold. Husband's declaration claimed Wife remarried only days after the judgment was entered although she did not disclose this fact until July 2009. Husband's points and authorities claimed the mortgage payments were support that FC § 4337 required to be terminated when Wife remarried. He also cited Irmo Benjamins (1994) 26 Cal.App.4th 423, 430.
Wife opposed the relief requested, relying on the MSA to argue the parties explicitly waived spousal support. She said the provisions about the mortgage payment was connected only to Husband's wish to keep an interest in the residence so he could profit if its value increased. She also pointed out Husband prepared the MSA.
The trial court denied Husband's motion to characterize the mortgage payments as support but also ordered Wife to buy out Husband's interest of to sell the home immediately. Husband appealed. AFFIRMED
Husband fared no better on appeal. Marital settlement agreements incorporated into a dissolution judgment are construed under the statutory rules governing the interpretations of contracts generally. (Irmo Simundza (2004) 121 Cal.App.4th 1513, 1518.) "The parties' mutual waiver of spousal support is unequivocal and made with full consideration of other benefits. ... We see no reason to ignore an express spousal support provision and recast Husband's obligation to make mortgage payments."
The court distinguished Benjamins -- a case cited by Husband -- because there, the parties agreed the wife would receive spousal support payments for a specified time period. Additionally, the husband agreed to pay medical insurance premiums. When the wife died the husband continued paying his support obligation but refused to pay the health insurance premium. The appellate court concluded, the health insurance premium provided proper health care for the supported spouse and was necessarily in the nature of spousal support." (Benjamins at p. 430.) Here, there was not only no preexisting obligation to pay support, the parties definitively waived it.
Irmo Pitto & Behrendt -- Unpublished opinion of District 1, Division 3 (Filed June 29, 2012)
A post-marital agreement transmuting the character of property must measure up to FC § 852 requirements. If a spouse is advantaged by the transaction, undue influence is presumed and the advantaged spouse must establish that the disadvantaged spouse's action was freely and voluntarily made.
In 1999, Husband and Wife agreed to marry. Husband told her that he would not do so unless they had a prenuptial agreement that eliminated community property from their marriage. Wife agreed. When it appeared a PMA could not be concluded before the date of the marriage, Husband decided to proceed with the wedding and Wife agreed they would conclude a PMA afterward.
Shortly after the wedding, Wife consulted a family law attorney about the PMA. Husband's attorney sent Wife's attorney a copy of the PMA the parties prepared before the wedding along with financial disclosures. Wife's attorney suggested that the agreement await the final version of Husband's MSA with his first wife so there would be a clearer picture of Husband's estate and support obligations. Husband agreed.
In 2002, the process of formalizing a PMA resumed. Several drafts were exchanged such as whether Wife would get to keep the family home if Husband died during the marriage. In 2005, the parties met to discuss remaining issues. In May 2005, Wife sent Husband Husband's attorney and her counsel an e-mail approving the most recent revision. A final PMA was executed in June 2005.
In 2006, after about seven years of marriage, Husband filed a dissolution petition. In 2007, he filed a motion to bifurcate the issue of the validity of the PMA alleging that it controls the characterization and division of marital property. The first phase of the PMA trial commenced in 2008. After hearing argument of counsel, the court ruled the PMA was a valid transmutation instrument under FC § 852. After further testimony on the issue of undue influence or duress tainted the PMA, the court found each party waived any community property claim in the earnings, income and acquisitions of the other. The court further concluded Wife was not unduly influenced to agree to the PMA, was not induced to agree to it by fraud or concealment and found Husband did not materially breach the PMA.
In the second phase of the trial, the trial court received evidence and made findings and orders concerning the amount due to Wife under the PMA, permanent spousal support and an educational trust set up by Husband for Wife's young daughter.
Wife appealed the trial court's rulings on the PMA and the rulings on reserved issues. AFFIRMED
Transmutation Principles Under Family Code Section 852
FC § 852 (a) provides "A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." The "express declaration" is not required to include the terms "transmutation," "community property" or "separate property" but it must "unambiguously indicate a change in character or ownership of property." (Irmo Starkman (2005) 129 Cal.App.4th 659, 664.) "A writing ... is not an 'express declaration' . . . unless it contains language which expressly states that the characterization or ownership of the property is being changed." (Estate of MacDonald (1990) 51 Cal.3d 262, 272; Irmo Benson (2005) 36 Cal.4th 1096, 1107.) "'The determination whether the language of a writing purporting to transmute property meets the MacDonald test must be made by reference to the writing itself, without resort to parol evidence.' " (Irmo Leni (2006) 144 Cal.App.4th 1087, 1096.)
The PMA began with a number of recitals intended to set the tone of the agreement, recite the parties' intentions and document the history of the negotiations. The PMA then states, "All property, real and personal ... owned by Husband at the commencement of the marriage or acquired by him during the marriage ... and all appreciation in the value of such property and earnings and income occurring during the marriage ... or from the personal services, skill, effort and work of Wife, shall be his separate property." Wife acknowledged that their earnings and personal services income during the marriage would be community property subject to equal distribution "but that by this Agreement such appreciation, earnings and income is made his separate property."
The CA rejected Wife's argument that the PMA did not satisfy the requirements for a transmutation document. The CA concluded the language of the PMA plainly expresses the parties' intention to make all property and earnings coming to them from whatever source during the marriage their separate property." The CA said language of the agreement "reflects a clear understanding on Wife's part that any community property inhering in the assets and liabilities held by Husband at the time of the PMA is transmuted to his separate property."
The CA also rejected Wife's argument the PMA was ambiguous because it did not describe what specific property is being made separate property. "It clearly provides that any community interest that may have accrued in the separate property of Husband at the time of the PMA through the efforts and skill of Wife "is made" Husband's separate property. Nothing more specific is required. (Benson at p. 1100.)
Wife also argued that the PMA was an attempt conditionally to transmute future income, an act she contended was prohibited by Lund and Holtemann. The CA disagreed, saying neither case supports that proposition and pointing out that Holtemann upheld an agreement transmuting certain property and its "future rents, issues, profits, and proceeds." Other constructions of the PMA by Wife were also rejected as unreasonable when viewed in the light of the entire agreement.
For a transmutation between spouses to be valid, it must also satisfy the rules governing fiduciary relationships set forth in FC § 721. (See Barneson at p. 588.) Under FC § 721(a), spouses "may enter into any transaction with the other ... respecting property which either might if unmarried." Their confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither is permitted to take any unfair advantage of the other." (§ 721 (b).) When an advantage is obtained by one spouse "the law presumes such transactions to have been induced by undue influence." (Lund at p. 55.) Finally, if a presumption of undue influence applies, "the spouse who was advantaged by the transaction must establish that the disadvantaged spouse's action 'was freely and voluntarily made, with a full knowledge of all the facts, and with a complete understanding of the effect of" the transaction.'" (Ibid.)
Here, the trial court found Husband was advantaged by the PMA and required him to rebut the presumption of undue influence. It found he did so and the CA approved the conclusion. The trial court found Wife entered the agreement freely and voluntarily and cited a variety of facts that supported the finding. For example, Wife's claim that she lacked knowledge and understanding of the agreement was not credible in light of "consultation with no less than three family law specialists, five and a half years of negotiation, several drafts, and the plain language in the agreement."
Wife contended that the PMA should be set aside not because Husband failed to disclose the existence of assets or that he misstated the value of any assets disclosed; rather she claimed Husband failed to disclose the value of any community property that may have existed. The CA rejected the argument, noting Boeseke v. Boeseke (1974) 10 Cal.3d 844 addressed the issue and concluded while husband did not disclose all facts relating to the value and extent of the community property, the wife and her counsel nevertheless were fully advised of the property descriptions and were aware some of it was of substantial value but did not request further facts relating to the value. The Supreme Court stated, "[W]hen a spouse, represented by independent counsel, determines to forego a suggested investigation and to accept a proposed settlement, that spouse may not later avoid the agreement unless there has been a misrepresentation or concealment of material facts." (Boeseke at p. 850.)
Here, Husband provided full disclosure of his financial assets and liabilities. Wife was advised that there may be community property inhering in Husband's assets and that she could ask for a forensic accounting to determine its extent. She decided however not to pursue the matter. Under these circumstances, there was no further obligation on Husband's part to disclose.
Various challenges to the trial court's findings and orders on support, attorney fees, sanctions, and other issues were also rejected.
Irmo Camerlingo -- Unpublished opinion of District 4, Division 3 (Filed June 29, 2012)
An express waiver of spousal support in a final judgment of dissolution cannot later be modified by agreement to provide for support.
Husband and Wife married in 1982 and divorced 25 years later in 2007 when a judgment of dissolution was entered. The judgment incorporated the terms of their MSA that expressly waived spousal support for either Husband or Wife and stated the "termination [of support] shall not be modifiable by the parties or the court for any reason whatsoever."
Nevertheless, in 2009 Husband and Wife fashioned a new stipulation. Husband promised to pay Wife $140,000 plus a monthly payment of $2,500 in 2009, $50,000 annually from 2010 to 2019 and $24,000 in the 10th year. The agreement described Husband's payments as "non-includable, non-deductible, non-modifiable spousal support," and provided that they would continue even upon the death or remarriage of either party. Husband was also required to create a trust and a will that provided Wife was to be the sole beneficiary of 100% of his assets.
Although neither Husband nor Wife had filed a motion or an OSC to modify the spousal support waiver in their divorce judgment, the agreement was presented to the court in a pleading format with a line for the signature of the judge under the words "IT IS SO ORDERED." The family court signed the document viewing it as a new, independent agreement between the parties, rather than a support order.
In January 2010, Wife filed an OSC seeking to modify the 2009 stipulation to replace the $50,000 yearly payment with "guideline temporary" support. Her goal was said to be "the complete renegotiation" of the terms of the MSA or, alternatively, to reopen the 2007 divorce judgment to address long-term permanent spousal support.
Wife contended the divorce was a sham that was intended to help a relative in Vietnam emigrate to the U.S. According to Wife, Husband persuaded her to sign a document quitclaiming any interest in their property stating he would put her name on the title to the house when they remarried. In 2008, Wife moved $500,000 from her separate brokerage account to his so he could "invest it for us." In December 2008, Husband admitted he had lost the $500,000 she loaned him. By late fall 2009, Wife explained that she and Husband entered into the November 2009 "Stipulation to Modify the Judgment." In February 2010, while her modification petition was pending, Wife also filed a motion to hold Husband in contempt for failure to fulfill his promises in their November 2009 stipulation.
Following a hearing, the family court denied Wife's motion. The court explained that the "parties are bound to their agreement in both instances" which the CA inferred meant the family court concluded the parties could not modify the judgment to require spousal support because they expressly waived support in their MSA. The ruling suggests however that the family court believed the parties were free to later reach binding contractual agreements with each other after the judgment if they chose to do so.
In June 2010, the family court granted Husband's motion to strike Wife's contempt citation based upon a finding it did not have jurisdiction over the issue of support. The CA inferred the family court "accepted the parties' characterization of their November 2009 agreement as an attempt to modify court-ordered support, namely the divorce judgment's zero figure for either spouse, rather than viewing the agreement as an independent, post-judgment contractual agreement."
Wife did not appeal or otherwise challenge either ruling. Instead, 15 months later Wife retained a new attorney who filed an application for an order requiring a judgment debtor examination. The family court denied Husband's motion to strike the judgment debtor exam, finding November 2009 stipulation and order "is a valid court order that modifies the divorce judgment. Husband appealed. REVERSED
Examining a "Judgment" Debtor Based on a Support Order
The beneficiary of a valid spousal support order may utilize a judgment debtor exam as an aid to enforcing the order. Family law presents special circumstances and allowances, including, for example, that support orders are enforceable by a writ of execution without prior court approval. (FC § 5100.)
Here, Husband argued collateral estoppel bars Wife's attempt to require him to submit to a judgment debtor's exam. He pointed out that the court earlier determined it lacked jurisdiction over family support, no valid spousal support order or money judgment existed on which to require an exam. He conceded below in his motion to strike the exam that the November 2009 stipulation was "enforceable by ordinary contract remedies," but he noted Wife filed a civil complaint against him alleging a breach of the Stipulation but then dismissed the case.
The CA agreed with Husband that collateral estoppel bars Wife from enforcing the November 2009 stipulation as a support order. The doctrine of collateral estoppel precludes re-litigation of issues previously adjudicated. "Here, the family court determined not once but in two final adjudications that the November 2009 stipulation did not constitute an enforceable family support order. Consequently, Wife could not rely on the stipulation as the basis for Husband's debtor exam."
First, the trial court concluded in the contempt proceeding that it lacked jurisdiction over family support because the parties rejected the right to spousal support in their divorce judgment and failed to reserve jurisdiction over the issue. The CA pointed out that spouses are permitted to waive support and the trial court's jurisdiction terminates unless there has been an express reservation concerning spousal support. Finally the parties may not confer jurisdiction on a court. The family court's jurisdictional finding was final.
Second, the family court had determined in its order denying Wife's modification request that the November 2009 stipulation did not constitute a valid support order. The trial court's order denying Wife's modification on jurisdictional grounds request was a final, appealable order and became effective for collateral estoppel purposes when Wife failed to appeal it. And her failure to follow through with her suit to obtain a judgment for breach of contract based upon the November agreement removed the last possible basis for a family court judge to later order Husband to appear for a debtor exam.
The CA dispatched other arguments by Wife and concluded with the observation, "our resolution of this appeal says nothing about whether Wife may have valid claims against Husband that could support a judgment. We do not know on the record presented whether Wife dismissed her breach of contract claim with prejudice or whether the statute of limitations has passed on her claim for nonpayment of $1,400 out of the $140,000 Husband owed her under their agreement, nor do we know whether new claims for breach have arisen if Husband failed to pay the annual $50,000 installments, or whether viable fraud claims might remain -- none of these issues are before us."