Family Law Case Studies - Volume 11, Number 3
Published and Unpublished Appellate Court Opinions for March 2013
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, email@example.com.
Published and unpublished slip opinions can be secured from www.courts.ca.gov/opinions.htm.
Irmo Priem (2013) ___ Cal.App.4th ___ (CA 1/1 -- Opinion filed March 13, 2013)
Penal Code Section 1016 does not prohibit consideration of a nolo plea to a misdemeanor domestic violence offense in determining whether the offender's request for spousal support should be refuse.
Husband and Wife married in 1999. In 2010, Wife filed a petition for dissolution. In February 2010, the trial court ordered Husband to pay Wife $10,000 per month in unallocated temporary support and $20,000 toward her attorney fees and costs.
In March 2010, Husband filed a response to Wife's OSC seeking support and other relief. He detailed her erratic and abusive behavior over a period of 10 years. Husband's supplemental response agreed to an order requiring him to pay guideline child support to Wife but he argued an order for temporary spousal support was unwarranted. He cited Wife's conviction in May 2008 for battery committed against him. (Pen. Code, § 243 (e)(1)).
Husband's declaration detailed a long history of domestic abuse, alleging it had generated 19 written police reports, five arrests, three criminal convictions, three criminal protective orders, one civil temporary restraining order, and three probationary periods. Wife was still on probation in 2010 as a result of the May 2008 conviction, and there was a criminal protective order in effect that would not expire until May 2011.
Following an evidentiary hearing, the trial court ordered Husband to pay Wife $14,602 per month in child support but refused Wife's request for temporary spousal support noting her 2008 conviction for domestic violence. The trial court found Wife "presented little in the way of mitigation" to rebut the presumption against an award of support found in FC § 4325.
Wife appealed. AFFIRMED
Spousal Support Awards in Cases Involving Domestic Violence
FC § 3600 permits the court to order either spouse to pay "any amount that is necessary" for the other spouse's support having in mind the factors listed in FC §§ 4320 and 4325. (Irmo Wittgrove (2004) 120 Cal.App.4th 1317, 1326.) Section 4320 (i) requires the trial court to consider "[d]ocumented evidence of any history of domestic violence" when ordering spousal support. Section 4320 (m) provides that the criminal conviction of an abusive spouse must be considered in making a reduction or elimination of a spousal support award.
The CA explained, "Together, these provisions represent 'a legislative determination that victims of domestic violence not be required to finance their own abuse.' (Irmo Cauley (2006) 138 Cal.App.4th 1100, 1107 [41 Cal.Rptr.3d 902].) ... ¶ FC § 4325 creates a rebuttable presumption that spousal support requests are not to be granted to spouses who have been convicted of domestic violence during the five years preceding the filing of a petition for dissolution."
Penal Code Section 1016
Wife argued that Penal Code § 1016 (3) precludes the use of a misdemeanor conviction based on a plea of nolo contendere as the predicate offense under Family Code section 4325. She said Penal Code section 1016 (3) prohibits the use of a nolo contendere plea to a misdemeanor offense "against the defendant as an admission in any civil suit based upon or growing out of the act upon which the criminal prosecution is based." The CA rejected her contention.
First, while the trial court relied on Wife's May 2008 conviction of misdemeanor domestic violence, it also observed Husband had offered proof of a pattern of abusive behavior going back to 2001. The trial court noted that Husband's evidence showed an extreme and ongoing history of domestic violence that had continued despite two criminal convictions and several restraining orders that were imposed against Wife during this time period.
Moreover, the CA said a proceeding to set the amount and duration of spousal support was not a "civil suit based upon or growing out of the act upon which the criminal prosecution is based" under Penal Code section 1016 (3). It said interpreting this section in that manner "would effectively revoke the FC § 4325 presumption."
The CA explained that generally, pleas of nolo contendere are not conclusive in subsequent civil proceedings as admissions of wrongdoing because "the court in any subsequent civil proceeding must independently examine the facts in order to determine whether the defendant actually committed the offense alleged for purposes of the particular civil proceeding.'" (County of Los Angeles v. Civil Service Com. (1995) 39 Cal.App.4th 620, 629 fn. 8.)
The CA pointed out that the Supreme Court has noted that the legislative history of Penal Code section 1016 suggests the limitation on the use of nolo contendere pleas as evidence in a subsequent civil suit was intended to apply to matters involving traffic offenses, corporate fraud, and crime victims' damages suits. (See People v. Yartz (2005) 37 Cal.4th 529, 539--540.)
The CA cited and digested opinions that distinguish noncriminal judicial proceedings that do not qualify as "civil suits" under PC § 1016. "The instant case is not analogous to an administrative hearing, nor to a collateral civil action brought against a criminal defendant. Specifically, spousal support hearings are not civil proceedings 'based upon or growing out of' a criminal act." Noting that no decisional authority exists supporting Wife's argument, the CA said the domestic violence support limitation "is intended to ensure that a victim of abuse will not be compelled to reward the perpetrator for his or her behavior, or to underwrite any further abuse."
Failure to Award Reduced Spousal Support
Wife also argued that the trial court should not have imposed a "draconian, punitive" order that eliminated Husband's obligation to pay spousal support but should instead have simply reduced the amount of support. The CA rejected the argument.
At the hearing on temporary support, Wife acknowledged her "anger management problems" but said the domestic violence in the family was mutual and was generally provoked by Husband. She also cited the therapy she sought over the years.
Husband on the other hand presented evidence of an unrelenting pattern of domestic abuse on the part of Wife. Over the 10-year period, he had sustained bruises, scratches, bleeding, and hyper-extended fingers. Specific incidents of violence were detailed.
The CA said, "The fact that Husband has been spared serious physical injury does not lessen the detrimental impact of the abuse, nor does it in any way excuse Wife's conduct. The abuse that did occur was enough to justify more than one criminal conviction and to place her in violation of court-issued restraining orders. Given the long-standing history of abuse and her apparent inability to control her behavior, we also conclude the trial court did not abuse its discretion in failing to award her reduced spousal support."
Irmo Bendetti (2013) ___ Cal.App.4th ___ (CA 2/2 -- Opinion filed March 19, 2013)
A second wife can be ordered to pay pendente lite attorney fees to a fiormer spouse to equalize her ability to address the issues.
In 1993, Husband first wife executed an MSA that divided their property and provided for spousal support for Ex-Wife. A 1994 judgment of dissolution divided their 50% interest in two restaurants named Library I and Library II.
Husband and Ex-Wife noted their partner's interest in purchasing their half of these businesses for $400,000 and agreed that the net proceeds of such a sale would be divided equally. The partner was to execute a promissory note to Ex-Wife for her 25% share, the proceeds of which were to be paid in equal monthly installments over a 10-year period at 10% interest. Husband was to receive his 25% when the deal closed.
Ex-Wife claimed she was never paid for her interest in the Library restaurants. She said Husband also failed to comply with the spousal support order. In 2006, Ex-Wife began proceedings to recover the arrearage. Discovery in these proceedings revealed that Husband and Second Wife were involved in litigation with Dennis Mastro and others in connection with an investment in The Beverly Hills Steakhouse.
Husband alleged in the Steakhouse litigation that he invested $750,000 in the venture. He testified that although Second Wife signed the operating agreement, his unwritten understanding with Mastro was that they were 25/75 partners. The "real agreement," Husband said, was that he rather than Second Wife was the real party to the investment agreement. Second Wife confirmed that the Steakhouse was in her name only nominally.
In his deposition, Husband testified that his former partner in the Library restaurants agreed to pay part of his capital investment in the Steakhouse because he owed Husband a portion of the proceeds of the sale of one of the Library restaurants. Ex-Wife then filed a judgment lien in the Steakhouse litigation. In 2007, the Steakhouse litigation was settled with a payment of $7.25 million to Second Wife, apparently without regard to the lien.
A few months later, Husband paid Ex-Wife $271,000 with funds from Second Wife to settle Ex-Wife's claim against him for spousal support. Ex-Wife then moved to recover $31,693.59 in attorney fees incurred in recovering her spousal support. Husband resisted her request contending he was broke, had no assets and was unable to pay the attorney fees. In this proceeding, and in spite of the position he took before the Steakhouse case was settled, Husband claimed that Second Wife was the investor in the Beverly Hills Steakhouse and that he never had any interest in it. Ex-Wife then joined Second Wife as a party to the dissolution proceeding and filed a complaint alleging Husband and Second Wife fraudulently transferred assets.
In 2010, Ex-Wife moved to recover $223,090.98 in attorney fees pendente lite from Husband and Second Wife and $100,000 for work to be performed. The trial court rejected Second Wife and Husband's contention that Ex-Wife's claim for an interest in the Steakhouse litigation settlement was a sham. The trial court granted Ex-Wife's attorney fees request in part. It awarded her $137,500 but denied Ex-Wife's request for $100,000 for work to be performed. Second Wife appealed. AFFIRMED
FC § 2030 (d)
Second Wife argued the trial court erred by not requiring Husband's ex-Wife to demonstrate a prima facie case and show a likelihood of success on the merits before ordering her to pay attorney fees to ex-Wife. The CA disagreed.
An award of attorney fees award in a marital dissolution proceeding is to ensure that a party has the funds needed to properly litigate the matter. (Irmo Sullivan (1984) 37 Cal.3d 762, 768.) The party seeking an award of need-based attorney fees has the burden of establishing need. (Irmo Falcone & Fyke (2008) 164 Cal.App.4th 814, 824.) The trial court must considers the parties' respective needs and incomes, including their assets and liabilities. (Sullivan at p. 768; § 2032.)
The CA said Irmo Siller (1986) 187 Cal.App.3d 36 establishes that (1) a third party may be liable for attorney fees in a marital dissolution proceeding; and, (2) the spouse in need of assistance with the cost of the proceedings is not required to show he or she would be prejudiced in the prosecution of her case unless attorneys' fees were awarded or that he or she is reasonably likely to prevail against the third party. (Siller at p. 50.)
The CA here extended the principles established in Siller by ruling Ex-Wife was not required to limit her request to fees incurred as to matters in which she prevailed. "[Since] Ex-Wife was not required to establish a likelihood of prevailing on the ultimate issues, she should be entitled to attorney fees for steps taken to assert and prosecute her claims, even if some of them did not result in her prevailing on the matters for which the trial court was awarding attorney fees. Otherwise, without such a pendente lite award of attorney fees, Ex-Wife might be unable to pursue her claims. Accordingly, because there is no requirement that a party to a dissolution proceeding demonstrate a likelihood that he or she will prevail in his or her claim against a third party to be entitled to attorney fees pendente lite, Second Wife's argument fails."
Second Wife also claimed Ex-Wife was required to present a prima facie showing that Second Wife was connected to an issue in the dissolution proceeding. The CA also rejected this argument, noting Second Wife's various entanglements in the dissolution proceeding. "Husband's complaint in the Mastro litigation states he invested $750,000 in the Beverly Hills Steakhouse. In his deposition, Husband testified that he settled a $200,000 or $240,000 debt that DeLamos owed him for $130,000, and that $65,000 of that settlement also was invested in the restaurant. Husband further testified that although Second Wife signed the operating agreement for the restaurant, the real agreement was that he and Mastro would be partners on a 25/75 percent basis."
Yet, notwithstanding Husband's investment and his partnership agreement with Mastro and notwithstanding Second Wife's testimony that she just a figurehead, Second Wife received a settlement of $7.25 million when the Mastro litigation was settled. In opposing Ex-Wife's attorney fees motion, Husband claimed that Second Wife was the investor in the Beverly Hills Steakhouse, that he never received distributions or income from the restaurant, and that there was no agreement with Second Wife that he would share in the restaurant investment or in any recovery from the Mastro litigation.
Thus there were "issues" in the dissolution proceeding that related to Second Wife -- that is, whether Husband invested funds in which Ex-Wife had a community property interest and then fraudulently transferred his interest in the restaurant to Second Wife.
Ex-Wife's Showing of Need and Ability to Pay Justified an Order Requiring Second Wife To Pay Her Attorney Fees
The trial court found that all of the parties' I&E's were insufficient and had credibility issues. Second Wife argued this finding proscribed an award requiring her to pay Ex-Wife's attorney fees. The CA disagreed, holding even with the shortcomings of the I&E's, there was sufficient evidence of Ex-Wife's need for Second Wife to pay her attorney fees and Second Wife's ability to pay those fees.
The trial court questioned the income shown on Ex-Wife's three 2010 I&E's because they were incomplete and seemed to be inconsistent with her 2007 and 2008 tax returns. As to Second Wife's 2010 I&E, the trial court repeatedly questioned the credibility of the entries showing monthly income of only $2,960 and monthly expenses of $33,081. The trial court noted Second Wife and Husband's tax returns reflected significant real estate holdings and a "retired couple with some very sophisticated investment activity." Second Wife's 2008 tax return showed $84,000 in tax exempt interest which indicated an account containing as much as $4 million. "Doesn't sound like somebody who is broke to me."
The Trial Court's Attorney Fees Award
In an unpublished portion of the opinion the CA reviewed the various elements of Second Wife's claim the amount awarded was excessive because they were disproportionate to the nature of the controversy and because some of the fees for certain work should not have been awarded.
The CA noted the trial court's attorney fee order substantially discounted Ex-Wife's fee request ($323,000 was requested; $131,750 was awarded) and concluded the fees awarded all related to issues in the proceeding to which Second Wife was connected. The CA found no error in the findings and orders of the trial court.
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).
Esquivelzeta v. Sohn -- Unpublished opinion of District 2, Division 8 (Filed March 12, 2013)
A Mexican divorce decree that grants custody of the children to mother with limited daytime visitation to father does not confer custody rights to father. Mother's relocation to the U.S. was not wrongful.
Mother and Father have three children. They separated in late 2007 when Father moved out of the family home. A Mexican divorce decree was entered in August 2009 granting custody of the children to Mother and reserving visitation rights to Father. The judgment required both parties to give 15 day's notice of any change of domicile.
Mother moved with the children to Los Angeles in March 2010. Mother and Father disputed whether Father knew she was moving and consented to it.
Father claimed he didn't know and nearly a year later asked the Los Angeles District Attorney to locate the minor children and return them to Mexico. In May 2011, the D.A. sought a warrant, alleging that Mother had abducted the children in violation of the Hague Convention.
Mother opposed the petition, saying the children were not wrongfully removed; Husband had no custody rights, only a right of access to the children; Mexico was not the children's habitual residence; and even assuming the Hague Convention generally applied, this case fell within the exceptions for grave risk of harm and the objections of the child to being returned to Father's custody in Mexico.
The trial court appointed a clinical social worker to interview the children about domestic abuse and violence, whether they objected to being returned to Mexico and the nature of their attachment to friends and relatives in the United States. The social worker testified that the children informed her Father physically and emotionally abused them children and their Mother. None of the children had anything positive to say about Father. The social worker also reported that the children had made a smooth transition to life in Los Angeles and that they were well adjusted in school and had many friends.
Mother testified about Father's emotional and physical abuse and noted a Mexican court granted a restraining order against Father. Mother explained that she agreed to allow Father unmonitored visits with the children because he agreed she could move with the children to the US to facilitate her intention to apply for a work-study program at a dance school in New York. Father went with Mother to get a passport for their youngest child so that Mother could take her to New York. On another occasion, Father met Mother at a notary's office to sign the necessary paperwork to obtain visas for the children to go to Canada but withdrew his consent when Mother refused to agree to the inclusion of a return date in the visa.
Mother decided to move to Los Angeles. She said Father came to her home while the movers were packing up the house. Mother told him she planned to stay with Father's first cousin Alice and he did not object. After Mother left for Los Angeles, she said Father never called or emailed her. Once in Los Angeles, Mother obtained a driver's license, registered a car, got an apartment, obtained utility service for the apartment and registered for courses, all in her own name.
Mother and the children all had student visas. She supported herself and the children on her savings and help from her family. The children were enrolled in a public elementary school where they excelled academically and participated in sports and other school activities. They were very popular and have a lot of friends. Mother said she is afraid to return to Mexico because of Father's past violence towards her and the children, including threats to kill her.
Father denied committing any domestic violence against Mother or the children. Father acknowledged he rarely saw the children during the first 10 months, but blamed Mother for making it difficult for him to do so. Father said he only discovered Mother had moved away when discovered that the children were not in school. He said Mother did not give him 15 day's notice of her intention to move and never disclosed where she was after relocating.
Father's first-cousin confirmed Father's abuse of the children and also said Father was present when Mother and the children were packing up to leave Mexico to live with her in the U.S. Other family members and friends offered conflicting testimony about Father's abuse of Mother and the children.
Following the hearing in August 2011, the trial court granted Father's petition for return of the children to Mexico. The trial court found Mexico was the children's habitual residence and that the Mexican divorce decree gave Father custody rights. The court found Father did not consent to the children moving to Los Angeles and Mother did not establish any defense to the wrongful removal of the children from Mexico.
Mother sought a temporary stay that was granted and timely appealed. REVERSED
Father Did Not Have Custody Rights.
"The Hague Convention distinguishes between a 'right of custody' and a 'right of access.' It defines 'right of access' as 'the right to take a child for a limited period of time to a place other than the child's residence.' (Art. 5(b).) By contrast, it defines 'right of custody' as 'including rights relating to the care of the person of the child and, in particular, the right to determine the child's place of residence.' (Art. 5(a).)"
Although the Convention recognizes a 'right of access,' there is no return remedy for a breach of that right. (Abbott v. Abbott (2010) 560 U.S. __ [130 S.Ct. 1983, 1989].) The return remedy is available only for 'wrongful removal' of a child. (Art. 3a.) Thus Father was required to prove he had a right of custody and that Mother's removal was for that reason wrongful. (§ 11603(e)(1)(A).)
"In determining whether a parent has a right of custody, the court consults the law of the country from which the child was removed, in this case Mexico. 'Custody law in Mexico is based on the concept of "patria potestas" which is: 'The parents' responsibility to care for the child, reside with the child, and provide for the child's necessities, including food, education and development.' . . . By law, the right to patria potestas belongs to both parents, but the exercise of the right, by necessity, normally involves one decision-maker."' (Ramirez v. Buyauskas (E.D. Pa. Feb. 24, 2012, No. 11-6411) 2012 U.S. Dist. LEXIS 24899 (Ramirez); see also A.A.M. v. J.L.R.C. (E.D.N.Y. 2012) 840 F.Supp.2d 624, 634.)"
When it applies, patria potestas requires both parents to consent to removal of the child from the country. In Abbott, the U.S. Supreme Court held that a ne exeat right is a right of custody under the Convention, not just a right of access. But the CA explained that Abbott does not hold that a custody agreement relinquishing patria potestas rights, including the ne exeat right, is invalid. "Patria potestas can be terminated by a divorce decree. (See e.g. Ramirez, supra, 2012 U.S. Dist. LEXIS 24899, *39-40; Castro v. Martinez (W.D. Tex. 2012) 872 F.Supp.2d 546, 554.) Thus, an ICARA petitioner must show either that the custody agreement gives him or her custody rights, or that the statutory law of the state from which the child was removed gives him or her such rights notwithstanding the custody agreement. Once a right to custody has been established, a showing that the petitioner kept or sought to keep some sort of regular contact with the child is enough to establish that the petitioner was exercising his or her custody rights at the time of removal. (Tsai-Yi Yang v. Fu-Chiang Tsui (3rd Cir. 2007) 499 F.3d 259, 277.)"
Here, the Mexican divorce decree declared "the protection and custody of all three children [was] entrusted to Mother." Father was allowed to spend time with the children from time to time during the day. He was not allowed overnight visits. The parties agreed "to advise any change in domicile within fifteen day's advance notice, and also to report to one another immediately on any matter related to their minor children." The Mexican divorce decree was silent on the question of whether Father had a ne exeat right to veto Mother's ability to change the children's domicile.
The CA rejected the trial court's conclusion these provisions were sufficient to establish Father's ne exeat rights, holding the evidence did not support this finding. "The custody agreement unambiguously entrusted Mother with exclusive 'custody and protection' of all three children. It gave Father a right of access but only 'on two day's advance notice and agreement between the parties . . . .' At best, the mutual 15-day notice provision regarding any change of address gave both parties an opportunity to go to court to try to prevent the other party from moving. It did not give either party the power to unilaterally veto the other's decision to move. Accordingly, Father did not have any ne exeat rights and, therefore, had no custody rights. Because Father had no custody rights, Mother's removal of the children was not 'wrongful' within the meaning of the Convention even if it violated Father's access rights. Because removal was not wrongful, Father is not entitled to return of the children under the Convention."
The Children Were Settled in California
The trial court had discretion to not order the children returned to Mexico if Mother showed that they are so settled here that return would be disruptive with likely harmful effects. The CA cited In re Koc (E.D.N.Y. 2001) 181 F.Supp.2d 136, 152 and In re B. Del C.S.B. (9th Cir. 2009) 559 F.3d 999, 1003 to illustrate the point that after a child has become settled in its new environment, a return should take place only after an examination of the merits of the custody rights of the parties.
The CA acknowledged that neither the Hague Convention nor ICARA defines "settled" and no California case has addressed the issue. The Ninth Circuit articulated the factors to be considered in determining the issue: "(1) the child's age; (2) the stability and duration of the child's residence in the new environment; (3) whether the child attends school or day care consistently; (4) whether the child has friends and relatives in the new area; (5) the child's participation in community or extracurricular school activities, such as team sports, youth groups, or school clubs; and (6) the respondent's employment and financial stability." (In re B. Del C.S.B. at p. 1009.) According to the Ninth Circuit, the most important factors are the length and stability of the child's residence in the new environment.
After digesting cases where children were found to be "settled," and "not settled," the CA said the trial court's finding here that the children were not settled in California was not supported by the evidence. The CA pointed to undisputed evidence that Mother and the children lived in the same apartment in Los Angeles for over a year and attended public schools. The oldest child played intramural sports, took piano lessons and sang in a choir. The middle child was less academically accomplished than his brother, but he had made a lot of progress in his new school and was very popular. The youngest did well in pre-school. All three had many friends at school and in the neighborhood with whom they socialized at the park, at the swimming pool and on play dates. The children told the evaluator that they did not want to go back to school in Mexico and were happy because they felt safe here.
"The only reasonable conclusion from this evidence is that the children were settled in Los Angeles and that returning them to Mexico would be disruptive with likely harmful effects. (See In re Koc, supra, 181 F.Supp.2d at p. 152.)"
M.V. v. J.V. -- Unpublished opinion of District 4, Division 1 (Filed March 13, 2013)
A continuance should be granted to permit evidence of father's income and assets to be collected. It is error to modify the parties' agrements to extend child support beyond age 18 in the absence of strong evidence of changed circumstances.
A 2010 judgment based upon a written stipulation establishes the paternity of the parties' five-year-old-daughter, sets out custody and visitation orders and provides for child support. The judgment requires Father to pay Mother $3,000 per month for child support and to bear the cost of private schooling including all clothing and uniforms. This obligation was to continue until the child was 21 and no longer a full-time student, or until she married, died, or completed her university studies.
The agreement recites that the amount and duration of child support was based upon Father's representation "that he has [and will have] the ability to pay all support and expense payments set forth in this agreement." He refused to provide Mother with an I&E but said he "has sufficient assets and other sources from which to pay the support and expenses" without regard to his income from work. Father further agreed that he would not request a downward modification of child support, "absent a very strong and specific showing of changed circumstances."
Only six months later, Father filed a motion based upon C.C.P. § 473 (b) to set aside the stipulated judgment or in the alternative to modify the custody and support orders. The trial court denied the set aside motion but took evidence in regard to his motion to modify the support.
Father's request for a decrease in his $3,000 monthly support obligation was based, he said on the reduction of his earnings when he voluntarily resigned his job as a deputy attorney general in Mexico to accept a new job in the Mexican federal legal system at $4,652 per month. His 2009 tax return showed he had income of $172,513.
Mother testified Father's income was not limited to a salary. She said he owned a money lending business that produced about $20,000 per month. All in all, she said Father's total monthly income from his work and properties was about $80,000. According to Mother, Father concealed his interest in various properties by putting them in his mother and brother's names. Mother said Father had income from an inheritance from his grandmother as well as a tire warehouse in Mexico City.
Before the hearing, Mother requested a continuance to explore Father's recent purchase of an $885,000 home in Coronado with his brother and to complete additional discovery in regard to assets that Father held in the name of others in Mexico. The court denied her request.
At the hearing, Mother produced declarations from Father's half-sister and Grandfather about their knowledge of assets that Father held in Mexico. Mother testified about her personal knowledge of the real properties and businesses that Father was operating and stated he often received valuable gifts in the course of his legal work for favors he gave. He drove cars that were registered in the names of others, obtained gasoline subsidies from work, and did not pay rent.
Following the hearing, the trial court reduced Father's support obligation from $3,000 to $928 based upon the court's view that Father's pay stubs reflected his current and only income and that Mother's testimony about his assets and other income was unsubstantiated. The court also expressed its view that the parties stipulation to continue Father's obligation to pay child support past age 18 was not fair and reduced the duration of child support from 21 to 18. Finally, the trial court altered and decreased Father's obligation to pay elementary school and college preparatory educational expenses from 100% to 0% and for higher education costs from 100% to 50%.
Mother appealed. REVERSED
"A parent's duty of support continues as to an unmarried child who has attained age 18, is a full-time high school student, and is not self-supporting until the child completes the 12th grade or reaches age 19, whichever occurs first." (FC § 3901 (a).) Nevertheless, "There is nothing in the law to prevent a parent from contracting to support a child, minor or adult, married or unmarried. And when the agreement . . . is founded upon sufficient consideration, the contractual obligation is not measured by legal duties otherwise imposed. No principle of public policy intervenes to prevent such a contract and the courts have no right by a process of interpretation to release one of the contracting parties from disadvantageous terms actually agreed upon." (Kamper v. Waldon (1941) 17 Cal.2d 718, 721.)
"When a child support agreement is incorporated in a child support order, the obligation created is deemed court-imposed rather than contractual, and the order is subsequently modifiable despite the agreement's language to the contrary." (Armstrong v. Armstrong (1976) 15 Cal.3d 942, 947.) Any modification of such an agreement, and likewise of this paternity settlement agreement, requires an evidentiary hearing that produces evidence showing a material change of circumstances. (Irmo Cheriton (2001) 92 Cal.App.4th 269, 298-299.)
A parent's "annual gross income" for support purposes means "income from whatever source derived." (FC § 4058 (a).) Income can be imputed based on a parent's earning capacity and "'income from other sources [must also] be factored into the "annual gross income" computation. (Cheriton at pp. 285, 301.)
In computing child support the assets owned by a parent "may enter indirectly into the calculation in two ways: (1) In assessing earning capacity, a trial court may take into account the earnings from invested assets; and (2) a court may deem assets a 'special circumstance' that may justify a departure from the guideline figure for support payments." (Mejia v. Reed (2003) 31 Cal.4th 657, 671; Cheritonat p. 292; § 4057 (b)(5).)
Even where the supporting party has "non-income-producing assets, the trial court has discretion to impute income to those assets based on an assumed reasonable rate of return." (Irmo Pearlstein, supra, 137 Cal.App.4th 1361, 1373-1374; County of Kern v. Castle (1999) 75 Cal.App.4th 1442, 1453-1454.) Likewise, where a supporting parent can reasonably expect to receive cash or easily valued or negotiable gifts on a consistent basis, they may be deemed a regular part of income, and the trial court is permitted to include such gifts in the income calculation. (Irmo Alter (2009) 171 Cal.App.4th 718, 734-737.)
The Denial of Mother's Motion for a Continuance
Mother argued the family court abused its discretion in denying her request for time to develop the facts surrounding Father's income-producing activities. The CA agreed.
When the trial court ruled on Father's request to reduce support, he had recently changed jobs and was on temporary disability. "However, that was not the only potentially relevant and reasonably available evidence to be factored into the support calculation."
The CA said Mother's attempt to rebut Father's contention regarding the income he had available for support was "was unduly hampered ... by Father's practice of putting his various real property and business assets in the names of friends and relatives." The CA noted that Mother's basis for her contentions was that she personally participated with Father in managing some of his assets and lending business. She also testified that she knew Father regularly received valuable gifts in connection with his work duties within the federal Mexican legal system including a gasoline subsidy and bonuses.
The CA concluded it was error for the trial court to disregard the terms of the parties' stipulation by focusing only on his current disability income and ignoring the assets Father explicitly made the basis of the agreed-upon monthly amount of support. The trial court "improperly failed to permit relevant evidence to be adduced on the main alleged change of circumstances before the court." Father specifically agreed that the terms of the judgment were grounded in the substantial assets he owned that he said allowed him to make the support payment without any need for income from his work.
The CA also pointed out that Father could not, without a more complete showing about his net worth, repudiate his prior agreement that a strong showing of a change of circumstances would be needed to modify his child support obligation. The CA said no such strong showing was made here. It was accordingly an abuse of discretion for the family court to deny Mother's requests for a continuance to obtain such documentation.
It Was Error to Modify Post-Minority Child Support
A court is authorized to approve a stipulation by the parents to pay for the support of an adult child after age of 18 years. (FC § 3587.) No statutory authority permits a court to set aside such an agreement that has been folded into a judgment. A collateral attack on the judgment through the guise of a motion to modify the terms of the contract is not permitted. (See Irmo Stanton at p. 554.)
The CA pointed out that all of the child support provisions were premised upon Father's acknowledgment that his assets and income were sufficient to pay all of the support and private school expenses called for by the agreement. The CA ruled there was no adequate basis in the record for the trial court to disregard and vacate the portions of the judicially confirmed agreement that required Father to pay for their child's private school education. The trial court's statement that its allocation of schooling costs was "more fair than what was in the agreement" was not the "very strong and specific showing of changed circumstances" required by the stipulated agreement and by case law.
Irmo Lindley & East -- Unpublished opinion of District 4, Division 2 (Filed March 12, 2013)
Where an MSA calls for a specified amount of spousal support and says nothing about the effect of the termination of child support as the children reach majority, spousal support does not automatically increase child support ends.
In 2006, Husband and Wife stipulated to a judgment incorporating the terms of their MSA. It provides for child support of $382 per month from Wife to Husband but this amount was deducted from Husband's obligation to pay spousal support to her. The MSA said Husband's spousal support obligation was $444 per month. Spousal support was scheduled to terminate in August 2009 although other provisions of the MSA were less clear.
In 2010, Wife filed an OSC asking the court to set Husband's spousal support arrears at $17,697 plus $12,767 for household bills, credit cards, and medical expenses. Wife's trial brief was filed in August 2010. Husband's trial brief was filed on the date set for the hearing on Wife's OSC. Wife objected to the filing as untimely.
The trial court found Husband support arrearage plus 10% interest was $12,574 and also awarded Wife about $14,000 for household bills, medical expenses, and credit card balances for a total award of $26,096. Finally, the trial court ordered Husband to reduce the arrearage at the rate of $217 per month. Wife appealed. AFFIRMED
Husband's Trial Brief Was Not Untimely
Wife argued the trial court was without power to file the trial brief Husband offered on the morning of the hearing and should have prohibited his appearance and simply entered an award in the amount she requested. The CA rejected the argument.
"All responsive papers must be served no later than nine court days before the hearing . . . ." (Hogoboom & King, Cal. Prac. Guide: Family Law (The Rutter Group 2012) § 5.386.) Nevertheless, "No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate." (CRC, rule 3.1300(d).) "Tardy responsive papers will be 'filed' but the court has discretion to disregard them in ruling on the motion or OSC." (Hogoboom & King, at § 5.386.) The family law court is vested with discretion to receive evidence and, where necessary, take a matter off calendar and continue it.
Here, the trial court ordered Husband to file his response to Wife's OSC by the next hearing date of 9/13/10 and Husband complied. His brief was not untimely.
Second, the CA said that even if Husband's response had been untimely filed, no authority supports Wife contention that a failure to file a response to an OSC requires the entry of Husband's default. Finally, the CA said Wife was not prejudiced by the timing of Husband's filing since it is clear the outcome would have been the same because the trial court's decision was based almost entirely on the terms of the stipulated judgment not on the arguments in the briefs.
Husband's Support Arrearage
Wife argued that the MSA actually required Husband to pay $826 per month in spousal and that the $444 support stated in the agreement was the net amount due after an "offset" for the $382 she was required to pay him in child support. She said the MSA requires Husband to pay her $444 per month during the children's minority and that as the children attain majority, Husband's spousal support obligation should increase by the amount of child support that was no longer due.
The trial court concluded that the amount of spousal support contemplated in the MSA was not susceptible to the increases suggested by Wife. The CA agreed.
Initially, the trial court impression of the terms in the MSA was that Husband's net support obligation after Wife's child support offset was only $62 a month ($444 - $382). When Husband conceded that his $444 spousal support obligation was after the offset for Wife's child support obligation to him, the trial court observed that the MSA "is a model of poor draftsmanship" and asked the parties to brief the issue. Husband conceded his arrearage was $11,503.
An MSA is a contract between the parties. (Irmo Dietz (2009) 176 Cal.App.4th 387, 398.) "The basic goal of contract interpretation is to give effect to the parties' mutual intent at the time of contracting. ... 'The words of a contract are to be understood in their ordinary and popular sense.'" (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 955.)
Where the meaning cannot be determined from the words alone, parol evidence may be admitted if the language is ambiguous. "The test of whether parol evidence is admissible to construe an ambiguity is not whether the language appears to the court to be unambiguous, but whether the evidence presented is relevant to prove a meaning to which the language is 'reasonably susceptible.'" (Winet v. Price (1992) 4 Cal.App.4th 1159, 1165.)
"The decision whether to admit parol evidence involves a two-step process. First, the court provisionally receives (without actually admitting) all credible evidence concerning the parties' intentions to determine 'ambiguity,' i.e., whether the language is 'reasonably susceptible' to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is 'reasonably susceptible' to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step -- interpreting the [document]." (Ibid.)
The trial court accepted Husband's argument that the agreement required him to make spousal support payments in the amount prescribed until August 2009 and that he was entitled to the benefit of the child support "offset" for that period. The CA said "the agreement strongly reinforces this interpretation as it nowhere dictates the suspension of the "offset," refers to it in the singular, and in no way explains in what amounts and when the "offset[s]" would expire."
The CA rejected Wife's argument. "The MSA makes no mention of the respective attainment of the parties' children's majority whatsoever. Nor does it reflect the 'offset[s]' from Husband's spousal support would ever be reduced. Moreover, it is impossible to determine from the MSA why mother's child support payments regarding the two children would differ. Moreover, Wife herself testified she had never previously interpreted the agreement in such a manner."
Finally, FC § 3901 (b) provides that parents can agree to additional child support beyond guideline. Here, the trial court concluded the terms of the MSA did provide for Wife to pay additional child support beyond the children's majority because the agreement called for spousal support of $444 to commence on August 1, 2006 and continue until August 30, 2009. The amount to be paid by Husband was $444 per month for the entire duration of his obligation without regard to Wife's independent obligation to support the children.
Irmo Chiu -- Unpublished opinion of District 1, Division 1 (Opinion filed March 15, 2013)
A managing spouse is not obligated as a fiduciary to maximize the value of the community's property. Irmo Munguia is not authority to the contrary.
Husband and Wife married in 1969, divorced in 1988 and remarried in 1992. Over time, Husband purchased several properties with the goal of fixing them up in order to rent or sell them. By the time they separated for the final time in June 1994 they owned four such properties.
In September 2010, a status-only divorce judgment was entered. Nine issues were reserved for trial, including whether Husband breached his fiduciary duty to Wife by mismanaging three of the properties during periods of marital separation. Husband's claims for reimbursement were also to be addressed.
Wife's expert testified as to the value, condition and habitability of the rental units in each of the three properties. Taking all three properties into account, there were 11 habitable units that were not being rented out in 2009 and thereafter. Wife's expert calculated "lost rental income" by comparing actual rents to the full rental value as stated in the appraisers' reports. His estimated of lost rents was $450,000.
Wife argued Husband should be charged with the rents lost due to his failure to make all units rent-ready and to insure all habitable units were rented. Citing Irmo Munguia (1983) 146 Cal.App.3d 853, Wife argued Husband's exclusive control of the properties gave rise to a duty on his part to maximize the value of the rentals.
Wife said that while she was dissatisfied with Husband's management of their rental properties, she did not allege that Husband had ever lied to her or withhold information from her concerning the management of the rental properties. Nor did she allege he had ever stolen rents or managed the properties to benefit only himself.
Husband did not dispute the fact that occupancy of the buildings had declined since 2003. He explained the tenants were moving out due to the deteriorating condition of the properties. He said that in 2009 he hired a person to manage the three rental properties and oversee needed repairs. He asserted some repairs were not completed because Wife was not willing to help Husband pay for it.
As to reimbursements, Husband claimed he was entitled to return of his contributions of separate property to the maintenance and improvement of the rental properties during the parties' lengthy periods of separation. But, although ordered to do so, Husband failed to provide Wife's expert with a list of his claims. He instead simply gave her boxes of receipts documenting business expenses he had claimed on his tax returns over several years. Although the expert attempted an analysis of the information, she found claims made for improvements that she was unable to verify. Husband's experts opined Husband was entitled to reimbursement of nearly $300,000.
The trial court found Husband breached a fiduciary duty owed to Wife because "far from maximizing the properties' values, Husband ran them into the ground. [He] ignored tenants' requests to perform repairs and the quality of the premises disintegrated under his regime. Occupancy declined and although the appraiser indicated that a significant number of the units were habitable and ready to be rented, they were not." In the distribution of the community assets and liabilities, Husband was charged with $450,000 to compensate Wife for her half of the lost community rents.
The trial court denied Husband's claim for reimbursement finding the amount, if any, that he was entitled to recover could not be determined because his tax returns were unreliable and because his demeanor and testimony lacked credibility.
The judgment on reserved issues distributed the parties' properties and charged Husband with receiving $450,000 for "lost rents." This resulted in an equalizing payment from Husband to Wife of $200,069. Husband appealed. REVERSED
A Spouse's Duty to Manage Community Property
Spouses have a duty to manage community property in accordance with "the general rules governing fiduciary relationships." (See FC §§ 721 (b); 1100 (e).) Each spouse has a duty to deal with the other in good faith must never take any unfair advantage of the other. FC § 1101 (a) authorizes a spouse to recover the damages suffered by the other spouse if the breach impairs that person's present undivided one-half interest in the community estate.
Husband argued he was under no greater obligation to do more than perform according to a standard that was "marginally better than gross negligence." He cited Corporation Code §16404 (c) incorporated in FC § 721 that provides "[a] partner's duty of care to the partnership and the other partners in the conduct and winding up of the partnership business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law." Husband said it was error for the trial court to hold him culpable for failing to produce the maximum possible rental income. The CA agreed.
"There is nothing in the relevant statutory language that equates a managing spouses' failure to maximize the value of the community's property with a breach of fiduciary duty to the non-managing spouse. The trial court erred in relying on [Irmo Munguia (1983) 146 Cal.App.3d 853] to justify such a finding."
The CA characterized the statement in Munguia that the managing spouse could have been under a "fiduciary duty to maximize the value of the [business] by securing a continuation of the lease" as dicta, noting "we have not located a published decision citing to it for the proposition that spouses have a fiduciary duty to maximize community income during periods of separation." (See Munguia at p. 859 and see Irmo Partridge (1990) 226 Cal.App.3d 120 at p. 125 ["Other than stating the undisputed principle that intentional mismanagement is a factor in valuation, [Munguia] does not support wife's position as it does not contain any benchmark by which it can be said husband's conduct amounted to intentional mismanagement."].)
Here, Wife did not contend Husband failed to disclose financial information or that he secured any unfair benefit for himself. Husband did not conceal the lack of rental revenue from her and did not prevent her from taking legal action to intervene instead of passively allowing the apartments to languish unrented. "Viewed in that light, the trial court's decision to impute $10,000 per month in lost rental income to him is unsupported as a matter of law, and is arguably both unfair and unjust."
The judgment was reversed and the trial court was instructed to recalculate the net equalizing payment between the parties.
Reimbursement for Separate Property Contributions
FC § 2640 authorizes reimbursements of a "party's contributions to the acquisition of property in the community property estate to the extent the party traces the contributions to a separate property source." (§ 2640 (b).) Irmo Epstein (1979) 24 Cal.3d 76 establishes the right of a spouse to reimbursement from community property for payment of post-separation community expenses from the spouse's separate funds was.
Here, Husband asserted the trial court erred in denying his reimbursement claim because he said it was undisputed that he spent over $145,000 in separate property for expenses associated with the property. The trial court denied Husband's claims because it could not accept the assumption that his tax returns and receipts were trustworthy. The CA affirmed noting, "the trial judge is the sole judge of credibility and "may reject any evidence as unworthy of credence, even uncontradicted testimony." (Irmo Falcone & Fyke (2012) 203 Cal.App.4th 964, 979.)
Irmo Taylor -- Unpublished opinion of District 2, Division 7 (March 20, 2013)
A terminating sanction is warranted where a party repeatedly refuses to comply with court orders and to provide the financial information necessary for the court to determine property interests.
Husband and Wife married in 1988 and separated in 2001. Husband's petition for dissolution was filed in 2005. Wife's response was filed in 2006.
In 2008 Husband and Wife and their respective counsel entered into a written stipulation and proposed order that dismissed a temporary restraining order against Husband and detailed a process for the parties to inventory their assets and liabilities. Husband also served three sets of formula discovery demands on Wife. Wife failed to respond.
In 2009, Husband served motions to compel Wife to respond to his discovery requests. On the day before the hearing, Wife filed several documents, including: (1) "Judicial Notice of Special and Limited Visitation Caveat Notice of Removal of State Clerk Praxis to Federal Court: Request for Appointed Article III Court justice, Waiver None ever;" and, (2) "Notice of Removal under 28 United States Code 1446 section 576 [¶] Removal of State Praxis Admiral in Rem Article II Court Proceeding, due to Commercial Dishonor of Notice of Intent to Redeem CUSIP Bond & Post Full Settlement and Closure . . . ."
The trial court granted Husband's motions and imposed sanctions.
In 2010, Husband asked the court to set the matter for trial. Wife's response was a notice the matter had been removed to the federal court. A TSC was set in August 2010 that was continued because of Wife's nonappearance. This time, the trial court on its own motion issued an OSC why sanctions should not be imposed, including an order striking Wife's pleadings and entering her default. The court ordered Wife to serve her preliminary and final declaration of disclosure by September 2, 2010. Wife did not serve her disclosure declarations and failed to appear at the TSC.
The trial court struck Wife's response and entered her default. The court found Wife's claim the superior court had no jurisdiction was frivolous and that she failed to appear on several occasions, failed to comply with discovery orders and failed to pay discovery sanctions. Additional sanctions were imposed.
The court then started the trial by taking testimony from Husband about jurisdictional questions in order to allay concerns about the five-year rule. The matter was set for a further trial of the reserved issues in November 2010. Wife again failed to appear but Husband's counsel advised the court she had received a single-page letter, addressed "to whom it may concern," from a physician stating Wife suffers from various psychiatric disabilities.
The trial court proceeded with the trial in Wife's absence and announced its decision from the bench. A judgment was entered in December 2010 that identifies and divides the community property and orders certain reimbursements and equalizing payments. Wife appealed. AFFIRMED
It Was Not Error to Impose Terminating Sanctions
The trial court has broad discretion to impose sanctions for violations of court orders. Nonetheless, terminating sanctions based upon procedural errors "have been held to be an abuse of discretion unless the party's violation of the procedural rule was willful or, if not willful, at least preceded by a history of abuse of pretrial procedures, or a showing [that] less severe sanctions would not produce compliance with the procedural rule." (Elkins v. Superior Court (2007) 41 Cal.4th 1337, 1364, fn. 16.)
The CA found no error in the trial court's findings and orders. Wife defiance of court orders and her refusal to serve disclosure declarations amply supported the trial court's sanction.
"Under these circumstances, and given the age of the case, the court's decision to enter Wife's default and to proceed on the basis of the financial information submitted by Husband was well within its ample discretion. (See Elkins at p. 1364, fn. 16; Del Junco v. Hufnagel, supra, 150 Cal.App.4th at pp. 799-800.)"
It Was Not Error to Proceed With the Trial
A Kaiser psychiatrist stated in a letter "to whom it may concern" that Wife was his patient and had a major depressive disorder, ptsd and an adjustment disorder. He then opined Wife "lacks capacity to represent herself in court at this time." The CA rejected Wife's contention that once notified of her psychiatric condition, the trial court should have continued all proceedings until she was well enough to proceed.
First, Wife never asked for a stay or postponement of the proceedings based on her psychiatric problems during the two and one-half years she was being treated by the Kaiser psychiatrist. Second, Wife's response had been stricken and her default entered before she submitted the letter to the court and Husband's counsel.
Third, the decision to grant or deny a continuance is committed to the discretion of the trial court. (Irmo Falcone & Fyke (2008) 164 Cal.App.4th 814, 823.) This dissolution proceeding had been pending for more than five years and Wife had, without explanation, failed to participate in it or to cooperate with the court or Husband's counsel for an extended time. Moreover, there was nothing in the psychiatrist's letter to indicate Wife's condition to resolve itself at any time in the near future.
Irmo Prokop -- Unpublished opinion of District 4, Division 1 (March 26, 2013)
A helpful discussion of commonly encountered issues: (1) When to impute an earning capacity to a party and (2) How a preliminary distribution of assets to a party should be allocated.
Wife and Husband married in 1998 and had one child. They separated in 2008.
Wife was a U.S. Army officer until she passed the bar. She then worked as a juvenile court referee until 2003 when multiple sclerosis rendered her permanently disabled and unable to work. Wife receives disability benefits from the VA and retirement disability from her work as a referee.
Husband worked as the manager of a computer security engineering team and earned an annual salary of $102,700. He quit his job in 2005 claiming it was too stressful for him to work and take care of his family. Thereafter, Husband trained to become an aircraft mechanic so he could work on his own airplane.
In 2009, Husband asked for an award of child support and temporary spousal support based upon the disparity in the parties' incomes. The trial court denied Husband's request for temporary spousal support but instead authorized the distribution of $50,000 to him from the proceeds of the sale of a residence, reserving jurisdiction to "allocate" this award at the time of trial.
At trial, Wife's vocational evaluator and rehabilitation counselor and her human resources expert testified that potential jobs existed for Husband as a computer security engineer.
Husband's vocational expert reported that Husband worked on airplanes until 2007, but had no further work history and was attending school to become a mechanic. Husband's expert also reported that Husband had no physical disabilities and was not restricted in the type of work he could perform. Husband's expert agreed that Husband had not been diligent in searching for a job, that he had the ability to earn an annual income of $41,600 as an entry-level mechanic or $80,000 to $90,000 as a senior security manager.
The trial court found Husband's earning capacity in the computer security field was $90,000 per year and found he would be under-employed in a job as an airplane mechanic that paid only $41,600 per year. The trial court acknowledged Husband's earning capacity was impaired because he allowed a certification to lapse, but observed that his unemployment was voluntary and that his "impaired earning capacity fell squarely on his shoulders."
The trial court concluded Husband had the ability to earn an airplane mechanic's salary of $3,500 for six months and that thereafter could earn $7,500 per month as a computer security engineer.
As to Wife, the court found she was completely disabled and had no earning capacity. Her ability to pay spousal support was limited by her health care needs and by the needs of their minor child. The trial court found that both parties had assets to support themselves and concluded "it would be unjust and inequitable for Wife, as a 100% disabled veteran, to support Husband, who presented as a talented, educated and experienced professional capable of earning an annual income of $90,000 or more."
The trial court found that the parties' marital standard of living was upper middle class and that the marriage was long-term. It found that the parties' minor child did not impair the ability of either Husband or Wife to work, that neither party contributed to the other party's education, there was no criminal conviction for abuse, and any emotional distress resulting from domestic violence did not factor into its decision.
Husband's request for spousal support was denied but the court reserved to the parties the right to request support in the future. The trial court also denied Husband's request to characterize the $50,000 distribution in 2009 as temporary spousal support, instead charging him with having received $50,000 of community property. Finally, the court denied Husband's request for an award of attorney fees.
Husband appealed. AFFIRMED
Unallocated Distribution of Assets
"Temporary spousal support is intended to preserve the standard of living enjoyed by the parties pending final division of their assets. (Irmo Winter (1992) 7 Cal.App.4th 1926, 1932.) Unlike permanent support, an award of temporary support may be ordered in "any amount" subject only to the supported party's needs and the supporting party's ability to pay. (FC § 3600; Irmo Murray (2002) 101 Cal.App.4th 581, 594.) Trial courts are permitted and encouraged to use standard guidelines, based solely on income, in setting temporary spousal support to promote consistency and predictability. (Winter at p. 1933.) A trial court, however, may take into account any unusual factors. (Irmo Olson (1993) 14 Cal.App.4th 1, 5-6; Winter at p. 1933.)"
Husband argued that characterizing the $50,000 distribution in 2009 as a preliminary distribution of community property was error because it amounted to charging him for his own temporary support. The CA rejected his contention.
The CA said the trial court could have reasonably concluded that Wife did not have the ability then or now to pay temporary spousal support because her expenses exceeded her income. Wife received monthly income of about $15,716 but presented evidence that her monthly expenses were about $16,207. The CA agreed with Wife that "[M]ultiple sclerosis is [an] expensive medical condition as individuals with the disease live near normal life spans, but accumulate additional disabilities as they age."
The CA also noted that the trial court could reasonably have concluded that although Wife's monthly income greatly exceeded Husband's monthly income, Husband had sufficient assets to maintain a standard of living equal to Wife's.
Finally, the CA said the allocation of the distribution to community assets was warranted by the fact that in addition to the $50,000 awarded to Husband from the house proceeds held in trust, the trial court awarded Husband $126,000 from funds held in trust by Wife's attorney as a settlement of his claims for reimbursement to the acquisition of community property under section 2640.
Imputing an Earning Capacity
A trial court has the discretion to substitute earning capacity for actual income in applying the guideline formulas for child and spousal support. (Irmo LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1337; Irmo Cheriton (2001) 92 Cal.App.4th 269, 308.) The findings required to impute an earning capacity to a party are: (1) the ability to work taking into factors as age, employment history, education and health; (2) a willingness to work as shown by good faith, diligent and meaningful attempts to secure employment; and (3) the opportunity to work as shown by evidence employers exist who are willing to hire persons who have the abilities of the party in question. (LaBass & Munsee at pp. 1337-1338.)
On appeal, Husband argued the evidence did not support the trial court's findings (1) that he had the ability to earn an airplane mechanic salary of $41,600 for six months because he faced a second shoulder surgery; and (2) that he could earn $7,500 per month as a computer security engineer. The CA rejected his contentions.
"[T]he evidence supported the trial court's implied conclusion that Husband had been malingering, and that he had the ability to work in some capacity during the six-month period after his surgery to earn the imputed salary of $41,600 per year. ... [O]ther than his shoulder, he was in good health, his unemployment was voluntary and he possessed significant skills, education and job history."
The CA also pointed out that Husband's vocational expert conceded Husband had no physical disabilities and was not restricted in the type of work he could perform. The CA noted Husband's expert agreed Husband had not been diligent in searching for a job, that he had the ability to earn an annual income of $41,600 as an entry-level mechanic or $80,000 to $90,000 as a senior security manager. The CA observed there was no testimony from any physician that he could not work in the computer field.
Moreover, Wife's expert testified he "found between 400 and 450 jobs" within 50 miles of Husband's home zip code while searching for "security engineering manager," "senior security engineer" and "certified information system security professional." Ten jobs offered salaried positions ranging from about $68,000 to $124,000. The CA said, "[T]his evidence amply supported the trial court's implied conclusion that, if motivated to find employment, Husband would be able to earn at least $41,600 annually for six months."
FC § 4320 identifies 14 factors a trial court must consider in ordering permanent spousal support. While the trial court "must consider the mandatory guidelines of section 4320, "it possesses broad discretion to weigh the factors with the goal of accomplishing substantial justice for the parties in the case before it. (Irmo Kerr (1999) 77 Cal.App.4th 87, 93.)"
The CA said its review of the record showed "the court properly considered all of the section 4320 factors, including Wife's income and expenses." The trial court found that both parties lived under "modest circumstances" and needed support which was an implied finding that neither party had the income, separately or combined, to maintain the marital standard of living. (Irmo Smith (1990) 225 Cal.App.3d 469, 488.)
The trial court may order one party to pay the other party's attorney fees "if necessary based on the income and needs assessments." (§ 2030 (a)(1).) In assessing ability to pay, the court is not restricted to salary alone, but may consider "all the evidence concerning the parties' income, assets and abilities." (Irmo Sullivan (1984) 37 Cal.3d 762, 768.) An award under section 2030 is proper when it is "just and reasonable under the relative circumstances of the respective parties." (§ 2032, subd. (a).) In determining what is just and reasonable the court may also consider any other factors including such matters as earning capacity, age and health, and the balance of the hardships to each party. (§§ 2032, subd. (b), 4320.)
The trial court addressed all of the section 4320 factors in the portion of the statement of decision regarding spousal support. "Husband's singular focus on the income of the parties is insufficient to show the trial court abused its discretion when it declined Husband's request for a further contribution."
Finally, the CA rejected Husband's contention that the court was biased against him based on its comment at a pretrial hearing in July 2009 that "there's no question that for purposes of permanent support orders, the court will impute income." At that hearing, the court received and considered [Wife's expert's] report and imputed minimum wage income to Husband for purposes of awarding child support. [The trial court's] warning, however, does not demonstrate bias without a showing that the trial court failed to weigh and consider all the evidence before it imputed income for purposes of permanent support. Rather, the court's intended statement of decision reveals it considered, among other things, Husband's employment history, [and the experts called by both sides]."
Irmo Meyer -- Unpublished opinion of District 1, Division 3 (March 26, 2013)
Evidence of domestic violence creates a presumption that awarding custody to the abusive parent is detrimental to the child's best interest.
Wife and Husband married in 2000 and separated in 2010 when Wife moved out of the family home in Castro Valley and relocated to her mother's residence in Fairfield.
In November 2010 Husband requested sole legal and physical custody of the children. He disapproved of the girls' living arrangements in Fairfield, and while he acknowledged that Wife provided the girls with adequate food and clothing, Husband was concerned about some self-destructive behavior by their 10-year-old daughter. Husband said he was able to spend much less time with his daughters after the move although he admitted his visits were good and that he was able to speak with them by phone. Husband felt the girls were harmed by the move because of the change in schools and by their removal from their network of family and the friends and because mother and her boyfriend were nudists
Husband denied that he was ever physically abusive to Wife but acknowledged that on two occasions "he was forced to physically defend himself from her attacks."
Wife presented evidence that their 10-year-old daughter's educational needs were being addressed in her new school and that she was adjusting well to the change. Her test scores and grades were good. The four-year-old daughter experienced some separation anxiety from Wife when she went to school, but it was improving. There was also evidence that the four-year-old daughter was reluctant to visit with Husband, and according to Wife, she was afraid he would show up at her school. Wife was in a therapy program for victims of domestic violence, and both girls and Wife were in family counseling.
Wife testified that Husband was the aggressor in physical confrontations in 2002, 2008 and on many other occasions during their marriage. A deputy sheriff corroborated Wife's testimony by testifying he investigated a call from Husband in 2008 and then arrested him based upon his conversation with Husband, Wife and the parties' daughter.
The court awarded sole legal and physical custody of both girls to Wife, with weekly visits and phone calls to Husband. Husband appealed. AFFIRMED
Husband argued the trial court should not have applied the FC § 3044 (a) presumption because the evidence relating to their tumultuous marital relationship was "too close a call." He also contended that even if § 3044 (a) were applied, the evidence showing that awarding custody to Wife was not in the girls' best interest outweighed the effect of the presumption. The CA disagreed.
In a contested child custody proceeding, the trial court is to make an award that is in the best interest of the child. (FC § 3040 (a).) When the court determines that a parent seeking custody has perpetrated domestic violence against the other person seeking custody, there is a rebuttable presumption that awarding custody to that parent is detrimental to the child's best interest. (FC § 3044 (a).) The CA said, "The court's custody determination was supported by evidence that David had inflicted physical abuse on Wendy and that David did not sustain his burden to show that, irrespective of such abuse, joint legal and physical custody of the girls was in their best interest."
The CA also pointed out that Husband's other complaints simply asked the panel to reweigh the evidence. "The trial court specifically concluded that no evidence was presented to show that the children's current living arrangements were 'anything but wholesome or presented any type of danger.' We agree that Husband has not demonstrated any nexus between the evidence that Wife's mother and her boyfriend may practice nudity, and the girls' living arrangements [in section 8 housing]. ... Wife was taking care of the girls' educational and psychological needs and 'since separation . . . acted in the best interests of the children taking into account her lack of resources and her own psychological needs.'"
Irmo Jayaratne -- Unpublished opinion of District 2, Division 4 (March 27, 2013)
If a court explicitly reserves jurisdiction to amend a support award such that the parties know the existing support awards are not final as to the months already past, the court can reconsider the support awarded for those months.
In 2011 Wife filed an OSC seeking spousal and child support. Husband's responsive declaration and I&E indicated he was unemployed and that his income was limited to $810 per month in unemployment benefits. He claimed he was looking for work as a bookkeeper and said he was trying to get a bank loan to start a Subway franchise. He admitted his mother was helping him support his child and that he lived rent-free in her home.
At the hearing, the court indicated that it suspected Husband was hiding assets and income. Husband admitted his mother put money in his bank account but avoided giving the court a precise answer. The court then said it would assume Husband received at least a thousand dollars a week from his mother in the form of free rent and other advances.
The court imputed a monthly income of $5,600 to Husband, including his unemployment benefits and set spousal support at $1,100 per month and child support at $330 per month. The court set for a hearing in December on "custody, visitation and support."
At the further hearing in December, the trial court refused to revisit the existing support orders citing Irmo Gruen (2011) 191 Cal.App.4th 627. Husband's counsel pointed out that the reporter's transcript of the September hearing indicated the further hearing would reconsider support but the trial court responded that reconsideration would not matter anyway because "[i]t is quite apparent to this court that your client is getting unreported perks from his mother, and that he wasn't paying for any of this ... and that [these payments and benefits] are income under Irmo Alter (2009) 171 Cal.App.4th 718." Husband's counsel said he would file an OSC to modify support and the court agreed support would be reconsidered at that time based upon current financial information.
Husband's OSC to modify child and spousal support was filed in February 2012. At the hearing he produced his bank statements, an email from Subway rejecting his franchise application, and documents related to his unemployment benefits. His I&E indicated his unemployment compensation was $1,950 per month ($350 higher than his 2011 I&E), his monthly expenses totaled $2,510, and that his girlfriend paid some of their household expenses.
At the hearing on Husband's OSC, the court stated that Husband's I&E indicated he is not paying any rent or mortgage while living in his mother's house and was therefore being assisted by his mother on a consistent basis. Husband's unemployment compensation was $350 more than his previous I&E indicated and he acknowledged unspecified assistance from his girlfriend.
The trial court concluded that there was no significant change in Husband's financial circumstances since September 2011 and denied his motion.
Husband appealed. AFFIRMED
Jurisdiction to Reconsider the Support Orders
The CA rejected Husband's argument that the trial court denied his OSC to modify support because it believed Gruen barred prospective modification of support. "As the court clearly understood, it had jurisdiction to consider a prospective modification of support. The court said: '[A]ssuming for argument's sake that it was here for support, I'm not changing my order from back then.' Husband's counsel said he would file an OSC, and the court agreed the OSC would address 'what is going on at that time.'"
The CA explained that Gruen concluded that a trial court lacks jurisdiction to retroactively modify a temporary support order to any date earlier than the date on which a proper pleading seeking modification of such order is filed. Subsequently, in Irmo Freitas (2012) 209 Cal.App.4th 1059, 1062, the same appellate court made clear that unless a trial court expressly reserves jurisdiction to amend a support award it has already made, such that the parties' clear expectation was that the original support awards were not final as to the months already past, the court could not reconsider the support awarded for those months.
That was not the case here. The trial court "was simply saying that its order establishing support ... was a final order. The court did not expressly continue the hearing on Wife's OSC for support and therefore the support awarded for the months of August 2011 through the time of the December 21, 2011 hearing was not subject to revision."
Consideration of New Evidence
Husband also argued his OSC was "summarily denied" and that the court refused to consider the evidence it previously promised to hear. The CA disagreed, saying Husband's moving papers and the evidence he attached in support of his request to modify support showed he made $350 more in unemployment compensation than his previous I&E indicated, that he received assistance in an unspecified amount from his girlfriend, and that his mother had paid his counsel's $3,000 fee.
"The court plainly considered the evidence, did not refuse to hear or review anything offered by Husband, and correctly determined there was no change in circumstances to justify modifying the support order.
Irmo Vigil -- Unpublished opinion of District 4, Division 1 (March 27, 2013)
A change of financial circumstances is measured from the date of the last order, not the date of the separation.
Husband and Wife separated in 2005 after approximately 38 years of marriage. A 2007 MSA incorporated in a judgment of dissolution required Husband to pay spousal support of $6,500 per month. The MSA recited Husband earned $19,145 per month and the amount of spousal support "does not allow Wife to meet the marital standard of living."
In 2010, Husband sought to modify spousal support based upon a change in his employment after the date of the MSA and judgment in 2007 that reduced his compensation to $13,382 per month. Wife opposed the request arguing Husband's income had actually increased from the time of their separation in 2005.
The trial court denied Husband's request finding there was no substantial change in circumstances because Husband's income increased from what it was when the parties separated. The trial court specifically said a change in financial circumstances is measured from "the date of separation and not the incomes of the parties recited in the Judgment." Husband appealed. REVERSED
"'Modification of spousal support, even if the prior amount is established by agreement, requires a material change of circumstances since the last order.'" (Irmo Dietz (2009) 176 Cal.App.4th 387, 396.) Modification of post-judgment support requires reconsideration of the criteria listed in FC § 4320. (FC § 4320 (a)--(k), (n).)
Husband argued it was error for the trial court to use the date of separation as the baseline in measuring whether the financial circumstances of the parties had changed. The CA agreed.
"The moving party must show a "material change since the entry of the previous order." (Irmo Schmir (2005) 134 Cal.App.4th 43, 47.) When the court includes the parties' stipulation in its own decree, it "presumes that the parties arrived at a fair support award, after arm's-length negotiations, that took into consideration all of the circumstances as they then existed." (Irmo Hentz (1976) 57 Cal.App.3d 899, 901.) Accordingly, "[t]he support order sought to be modified is conclusive as to circumstances existing when entered." (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2012) ¶ 17:151, p. 17--37, citing Irmo Hoffmeister (1987) 191 Cal.App.3d 351, 364.)
Here, the MSA reflected the parties' reasonable expectations as to spousal support but the trial court's order ignored the terms of the MSA by focusing on Husband's income when the parties separated in 2005. "The trial court missed the general rule that there must be a change in circumstances 'since the entry of the previous order.' (Schmir at p. 47.) ... ¶ In basing its findings on Husband's earlier 2005 income, the trial court essentially discarded the parties' bargained-for MSA and inserted terms of its own. However, the court was not in a position to reevaluate the parties' agreement. ... As a contract between the parties, the trial court should have considered the 2007 MSA as a benchmark for determining whether there was a change in circumstances."
The CA rejected Husband's argument that the marital standing of living is only relevant when the supporting spouse's income increased after entry of the previous order. "The first of the enumerated circumstances, the marital standard of living, is relevant as a reference point against which the other statutory factors are to be weighed. " (Irmo Cheriton (2001) 92 Cal.App.4th 269, 302--303.) Here, the trial court's order "note[d] the recital in the Judgment that the level of spousal support therein d[id] not allow Wife to meet the marital standard of living." This is a factor the trial court must consider in reevaluating support. (Dietz at p. 396; Cheriton at pp. 302--303.)
Irmo Brown -- Unpublished opinion of District 4, Division 1 (March 27, 2013)
Husband's failure to serve a disclosure declaration and wife's mistake when a partial agreemen was put on the record warrants setting aside a portion of a judgment.
Husband and Wife married in 2004 and separated in 2008. Shortly after they married, Wife used approximately $85,000 of her separate property to pay creditors of Husband's father. Husband's father repaid Wife by quitclaiming property he owned in Barstow to Wife and Husband. In 2008, Wife and Husband sold the Barstow property. The $127,000 proceeds of the sale were deposited into a joint bank account.
Five days after the proceeds were placed into the joint account, Wife filed a petition for dissolution. Within a month, Husband withdrew over $119,000 from the account without Wife's knowledge or consent. What was left of the proceeds of the sale was used to pay household expenses.
Wife's declaration of disclosure said the proceeds of the sale of the Barstow property were in an account at Bank of America. Husband did not file a declaration of disclosure reporting the disposition of the proceeds of the sale of the Barstow property. He instead filed a schedule of assets and debts and in a letter, included some settlement proposals to Wife that asserted the proceeds in the account at the Bank of America actually belonged to Husband's father who used it to repay a loan by Husband made to him.
In 2009, the parties settled all property issues except the question of how the proceeds of the sale of the Barstow property would be handled. Wife accepted the settlement judge's suggestion that the Barstow issue be severed from other terms of the MSA and thus did not initial the page in the MSA that referred to her claim. Wife was unrepresented and was unaware that her agreement to sever her claim to a portion of the Barstow proceeds should have been placed on the record with a request that the court reserve jurisdiction over that issue. A judgment incorporating the MSA was entered in November 2009.
When Wife was unable to resolve the issue of the Barstow proceeds with Husband and his counsel, she filed a motion to set-aside the provision of the judgment purporting to waive her interest in the Barstow proceeds.
The trial court concluded Wife was entitled to relief under FC § 2122 (e) and (f). The trial court found there was no meeting of the minds because Husband failed to meet his disclosure obligations and because Wife reasonably believed the MSA and the judgment would not dispose of the Barstow proceeds.
The trial court concluded Husband violated his fiduciary duty to Wife, found the Barstow assets were unadjudicated and reserved jurisdiction to divide them. Husband was ordered to contribute to Wife's attorney fees. Husband appealed.AFFIRMED
Grounds for a Set-aside Order
Each party must serve on the other party a preliminary declaration of disclosure that identifies (1) assets in which the declarant has or may have an interest and all liabilities for which the declarant is or may be liable and (2) the declarant's percentage of ownership in each asset. (FC § 2104 (a) and (c).) A dissolution judgment must be set aside if the parties do not comply with all the disclosure requirements set forth in section 2104. "The failure to comply with the disclosure requirements does not constitute harmless error." (§ 2107 (d).) The grounds for setting aside a judgment explicitly include mistake and a party's failure to comply with the disclosure requirements.
The CA said, "[T]here is substantial evidence supporting [the trial court's] findings. The finding that Husband did not comply with the disclosure obligations ... is supported by the evidence that [his] schedule of assets and debts] did not mention either the proceeds or the existence of the $42,000 certificate of deposit." The CA said Husband's letter proposing settlement options did not satisfy his disclosure requirements even if it referred to the account holding the Barstow sale proceeds. FC § 2104 (a) specifies that the required preliminary declaration be contained "on a form prescribed by the Judicial Council" and be "executed under penalty of perjury."
As to Wife's mistake, the CA said the evidence that she understood, based on representations made to her by the settlement judge during the two-hour settlement conference that by agreeing to all parts of the MSA except the page she did not initial, the parties could resolve all issues except the Barstow proceeds and could reserve that issue for future resolution was more than enough to support the trial court's findings and orders.
Irmo Rovai -- Unpublished opinion of District 6 (March 28, 2013)
An agreement providing for family support can be modified to reflect a new amount of child support. The spousal support component of the family support order may also be modified unless the parties' agreement specifically provides otherwise.
Husband and Wife married in 1992 and separated in 2003. A 2004 judgment of dissolution incorporates an MSA that provides for child support and spousal support. The MSA declares that it "is a final and complete settlement of all ... rights and obligations concerning child custody, child support, spousal support, and division of property" but says nothing specifically about the modifiability of support.
The MSA recites that "guideline support is $10,093" but provides Husband would pay "family support" to Wife of $8,500 per month until January 1, 2009 when support would be reduced to $5,170. All support was to terminate when their youngest child turns 18. He was also obligated to pay the children's school expenses and health insurance premiums for coverage of the children and Wife
Soon after the judgment was entered, Husband began paying Wife less than the amount ordered. This eventually caused Wife to seek help from DCSS. In May 2010, DCSS filed a "motion to modify child support" at Husband's request based on his claim his income had decreased. Wife's response asked the court to "continue with current order: $5,170, as per our dissolution judgment." Wife asserted the "family support" provided for in the MSA and judgment was not modifiable.
Later in 2010, Wife retained an attorney who filed a motion for declaratory relief as to the modifiability of the support judgment and for a determination of Husband's arrearages. Wife's motion alleged that Husband unilaterally decided in 2006 to reduce his support payments and in 2007 no longer paid for her health insurance. She sought a determination of his support arrearage and reimbursement of the health insurance premiums he failed to pay.
In her pleadings, Wife acknowledged that child support is always modifiable but argued that the terms of the MSA made the total amount of support ("family support") not modifiable. Thus, whatever guideline child support turned out to be, the total amount of child support and spousal support could not differ from the $5,170 called for by the 2004 judgment.
Husband's response to Wife's motion attached a written agreement executed in December 2006 that reduced family support to $7,200 per month that was to be retroactively effective on March 1, 2006.
Following a hearing on Wife's OSC, the trial court issued a tentative ruling that found family support of $8,500 per month was due from the date of the judgment until December 2006 when it diminished by agreement to $7,200 per month. On January 1, 2009, support dropped to $5,170 per month pursuant to the judgment. The child support commissioner found these findings meant Husband owed Wife "approximately $24,250, not including interest." Husband and Wife then agreed guideline child support should be set at $2,950 per month.
The commissioner's order reflects this agreement but makes no mention of spousal support. Following a further hearing on Wife's motion for declaratory relief and to calculate Husband's arrearages, the trial court set child support at $2,950 per month. The trial court accepted Wife's argument that overall support was not modifiable and said the $2,220 balance of the $5,170 per month called for by the MSA and judgment was spousal support. The trial court also found Husband's obligation to provide health insurance to Wife was an element of family support and that he owed her $10,534 for her out-of-pocket health insurance expenses.
Thus, the amount of the spousal support component of the "family support" was variable depending upon the amount of the child support component.
The judge directed the parties to calculate arrearages based upon the findings that total family support should have been $8,500 per month from January 2004 through November 2006; $7,200 per month from December 2006 through December 2008; and $5,170 from January 2009 through May 28, 2018. In addition, Husband was liable for 100 percent of the children's school tuition expenses and major medical coverage for each child and for Wife until May 28, 2018. He was also ordered to pay $10,000 of Wife's attorney fees.
Husband appealed. REVERSED IN PART
Modifiability of the Family Support Order
The general rule is that "a support order may be modified or terminated at any time as the court determines to be necessary." (FC § 3651 (a).) Child support is always modifiable, regardless of the parents' agreement to the contrary (Irmo Alter (2009) 171 Cal.App.4th 718, 730), but spousal support may be etched in stone and thus non-modifiable if "a written agreement ... specifically provides that the spousal support is not subject to modification or termination." (FC § 3651 (d).)
The CA said the MSA in this case does not specifically state that the amount of family support is non-modifiable. Rather, it simply said the parties' agreement was a final settlement of disputed issues -- language courts have long said does not meet the "specifically provides" language of the statutes. (See Fukuzaki v. Superior Court (1981) 120 Cal.App.3d 454, 458; Irmo Jones (1990) 222 Cal.App.3d 505, 510; Irmo Nielsen (1980) 100 Cal.App.3d 874, 878.)
The CA pointed out that this MSA "is entirely silent on the question of modifiability. Even taken as a whole, the MSA does not reveal an intent to prevent judicial modification of the total amount of the support order. The "final and complete" language is boilerplate, referring to all custody, support, and property terms as a final settlement."
The CA distinguished authority relied upon by Wife. (See Irmo Smiley (1975) 53 Cal.App.3d 228, 231 and Irmo Forcum (1983) 145 Cal.App.3d 599, 604.)
Although family support in this case can be modified, the CA said the trial court's ruling on Husband's accrued support arrearage would not be disturbed. The CA noted that "A support order may not be modified or terminated as to an amount that accrued before the date of the filing of the notice of motion or order to show cause to modify or terminate" the support order. (FC § 3651 (c)(1).)
Here, there was no motion to modify or terminate the spousal support component of the order and no attempt by either party to show a change of circumstances warranting modification. Wife's motion for declaratory relief was only a request for a ruling from the court about whether family support was modifiable, not whether changed circumstances warranted a new support order.
Effective Date of the December 2006 Agreement
The general rule is that an order for child support continues in effect until terminated by the court or by operation of law. (§ 3601 (a).) FC § 3651 (c)(1) provides that "a support order may not be modified or terminated as to an amount that accrued before the date of the filing of the notice of motion or order to show cause to modify or terminate." The section applies whether or not the order is based upon an agreement between the parties. (§ 3651 (e).)
Thus, the court may modify or terminate a support order prospectively only; it may not modify or forgive accrued support arrearages. (Irmo Sabine & Toshio M. (2007) 153 Cal.App.4th 1203, 1213.) That said, some courts have applied the defenses of accord and satisfaction, waiver, and estoppel to extrajudicial parental agreements. (Id. at p. 1215; Irmo Vroenen (2001) 94 Cal.App.4th 1176, 1182; Irmo Ayo (1987) 190 Cal.App.3d 442, 452.)
Here, Husband argued that the trial court should have concluded that the modification was retroactively effective in March 2006 as the parties agreed rather than December 2006 when the agreement was executed. The CA disagreed, refusing to apply the change in support retroactively.
Retroactive reduction of a support order forgives arrearages that have already accrued. But the court cannot forgive accrued arrearages even if the parties had agreed otherwise except when an accord and satisfaction settles a dispute concerning how much an obligor is in arrears. But an accord and satisfaction requires the existence of a bona fide dispute concerning the debt. (Sabine & Toshio at p. 1215.)
Here, there was no dispute about how much was due. Since the court was precluded from retroactively modifying accrued arrearages, it was not error to reject Husband's claim that the parties' written modification agreement should be effective on the earlier date stated in the agreement.
The trial court's award of attorney fees referenced FC § 3652 that provides an award of fees can be made to the prevailing party in a request to modify, terminate, or set aside a support order. Husband argued the statute was inapplicable because the trial court did none of those things. The CA agreed and remanded the question to the trial court with instruction to consider the fee request in the light of FC §§ 2030 and 2032 only.
Weissberg v. Weissberg -- Unpublished opinion of District 1, Division 2 (March 28, 2013)
A spouse in an intact marriage may seek an order compelling the other spouse to pay spousal support in an amount sufficient to maintain the marital standard of living.
Husband and Wife married in 1982 after entering into a prenuptial agreement that provides there would be no community property of the marriage. Husband, then 66, had accumulated significant wealth before the parties married.
As Husband grew older, he wanted to enjoy life and to have Wife spend all of her time with him. The couple thereafter enjoyed an upper income lifestyle, dividing their time between Husband's home in in San Francisco and his condominium in the Trump Palace in Manhattan. Husband was unstinting in providing Wife with a standard of living appropriate to his means.
By 2000, Wife, then in her 70's began to feel financially vulnerable. Husband was almost 80, and Wife had little in the way of assets and was not accumulating assets in spite of their long marriage. To alleviate her concern, Husband agreed to give her $2 million and $15,000 per month to provide her with some financial security. In addition to creating a separate property estate for Wife, Husband also promised to give her, upon his death, his residence in San Francisco, his condominium in the Trump Palace, and resources for the upkeep of both. Husband continued to spend lavishly of his own assets to sustain their lifestyle.
Sadly, Husband's dementia progressed as time passed and there is no dispute that he is incompetent. In 2001, Husband appointed his son Frederick as attorney in fact and in 2001 Frederick became a trustee of the Husband's trust.
Wife claimed that once Frederick took control of his father's wealth, he became increasingly resistant to providing Wife with the funds required to maintain the lifestyle she enjoyed when Husband was in good health. In 2005, Wife approached the trust about receiving the $1,040,000 she was due at Husband's death. Wife and the trustees agreed to the advance in consideration of Wife's release of the trust from any additional claims.
After Husband was moved to a dementia care facility, Husband's sons as co-trustees dramatically reduced the amount spent on Wife's needs. In 2008, the trustees sent Wife a letter stating that they had decided to pay her only $15,000 per month, for general household expenses but would pay nothing toward her personal expense. Wife continued to enjoy the use of Husband's two homes but claimed the amount she was provided was insufficient to allow her to maintain her marital lifestyle and to continue to move in her preexisting social circles.
In 2010, Wife filed a petition pursuant to sections 4300 and 4303 naming Husband as the defendant to enforce his duty of support during marriage. She sought an order setting a "reasonable sum" for support sufficient to meet her needs and to "return her to the marital standard." Wife also sought attorney fees and costs.
The Wife settled her disputes with the trustees in December 2010. They agreed (1) Wife would receive a tax-free, non-modifiable allowance from the LWT of $55,000 per month continuing until the earlier of her death, Husband's death, or her remarriage; (2) Wife would receive clear title to the Pacific Heights and Trump Palace properties; and (3) Wife would be given access to a $100,000 reserve fund in the event of a future emergency. The question of how Wife's attorney fees would be allocated was reserved. Their settlement was, by agreement, folded into a judgment that recited all claims about the jurisdiction of the court to address the issue of support were waived.
In January 2011, Wife filed a memorandum of points and authorities in support of her request for fees and costs, along with her own income and expense declaration and declarations by her attorney and accountant to substantiate the fees. Her total fees and costs were $791,696.
The trial court concluded Kilroy v. Kilroy (1995) 35 Cal.App.4th 1141, 1146 authorized it to grant pendent lite support and litigation expenses. It then awarded Wife $689,223 in fees and costs.
Appellants appealed. AFFIRMED
Husband, the trust, and the trustees argued that fundamental issues of privacy within a marriage prohibit courts from making any orders that would compel the payment of support to maintain a certain standard of living in an intact marriage. Appellants contended the courts have no legitimate interest in the internal marital affairs of its citizens and should take no action that would determine the amount received by a spouse in the absence of evidence of abandonment or refusal of shelter or necessaries.
The CA emphatically disagreed and affirmed the order awarding Wife attorney fees.
Appellants' argument was that Wife's action was not authorized because (a) FC § 4300 is intended to require a spouse only to provide his or her spouse with "the necessaries of life" and Wife was not being deprived of any necessities; (b) an action by one spouse against another during an intact marriage may be brought only if the health or basic welfare of the petitioning spouse is in jeopardy; and (c) an action for support may only be brought under section 4303 in a case where the Husband and Wife are separated or divorced.
The CA began by pointing out that FC § 4300 unambiguously provides that everyone must support his or her spouse and also declares, "(a) The obligee spouse ... may bring an action against the obligor spouse to enforce the duty of support."
Even so, appellants contended the trial court had no authority to make orders about support because no other reported case involved a suit by a spouse in an intact marriage who was seeking support even though he or she was being provided with basic necessities even if the support provided was not enough to maintain the marital standard of living. Appellants asserted FC § 4320 (d) was inapplicable to an intact marriage.
The CA characterized the argument as follows: "[Appellants are] evidently of the view that separated or divorced spouses are entitled to continue being supported at the marital standard, but spouses in an ongoing, intact marriage are not. We cannot wring such a meaning from the statutes. And any public policy supporting such a position is hard to discern."
The CA said, "The obligation of spousal support was codified in California long before section 4300 was adopted. ... Our courts have held there is no single uniform legislative purpose served by spousal support, that its purpose in each case turns on the individual facts. (Citations omitted.) In this case, its purpose is to protect a 71yearold, probably unemployable, woman from having to reduce her standard of living due to what appears to be the trustees' unreasonable refusal to maintain her at the marital standard set by her Husband, the trustor."
"We find no textual support for appellants' claimed limitation in the Family Code sections, and we look no further. ... ¶ Here, the reach of section 4303 is plain .... There is no limiting language to suggest that only abandoned or impoverished spouses may sue. No language to suggest that an action for support may only be filed if the couple is separated. And no language suggesting that violation of the criminal statute for failure to support one's spouse is prerequisite to the spouse's filing a civil action for support."
The CA endorsed the precedent relied upon by the trial court in Kilroy v. Kilroy] (1995) 35 Cal.App.4th 1141. "There is no escaping the fact that Kilroy expressly determined that attorney fees may be ordered in actions brought under section 4303. Given the undisputed evidence that Husband, while he was competent to do so, fully and liberally complied with what he viewed to be his obligation of support, we cannot conclude that Wife's petition to enforce continuing compliance with the standard he set was 'unauthorized' under sections 4300 and 4303. Kilroy does nothing to convince us that Wife's action was not 'authorized.' It does much to persuade us that attorney fees were properly awarded."
The CA also cited Galland v. Galland (1869) 38 Cal. 265, 272 where the Supreme Court allowed the Wife to sue her Husband in equity for adequate support without having to file for divorce. "The obligation of support, besides being covered by section 4300, is provided for under section 720, which defines the mutual obligations of Husband and Wife during marriage: "Husband and Wife contract toward each other obligations of mutual respect, fidelity, and support." Such support is not, as appellants contend, limited to the "necessaries of life."
The CA also concluded that none of appellants' objections or policy arguments called for a different result. The CA said Husband's privacy rights were not implicated by Wife's request for a support order since, "It is Wife who is throwing open the marriage to judicial intervention, not the state that is seeking out Husband's private secrets. And Wife is as much a holder of the marital privacy right as is Husband. When a spouse in an intact marriage opts to abandon her own privacy interests to obtain the support to which she is entitled, we give the right to spousal support more weight than the sued spouse's privacy interest. (See Evid. Code, § 984 [marital communication privilege not applicable in suits between spouses]; § 3551.) We think this scheme properly balances the competing interests of the parties. That is all that is required. (Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 37-38.)"
"At their root, appellants' objections to the availability of relief under sections 4300 and 4303 derive from the notion that courts should stay out of the affairs of married couples, that it is bad public policy to allow husbands and wives to sue each other over issues of support during an ongoing intact marriage. ... ¶ [But,] [t]he same argument was raised in Galland, ... namely that affording a Wife a remedy without a divorce "will tend to breed discord in families, and to encourage discontented wives to abandon their Husbands on frivolous pretexts of illusage, relying on the Courts to compel the Husbands to support them." The Supreme Court rejected the argument in 1869, reasoning that "it might be urged with even more force, that if such redress be denied to the Wife in proper cases, dissolute and unprincipled Husbands would be encouraged to abuse their wives, by a consciousness that any ill-treatment which stopped short of a lawful ground for divorce, was without redress in the Courts." [Galland at p. 272.] We reject the argument today, with the observation that the same may be said about trustees who fail to abide by their trustor's level of support."
"We are doubtful our decision will have the dire consequences predicted by appellants. We see no threat to the integrity of the marriage before us, as the bulk of Wife's testimony consisted of a fond recollection of the lifestyle she and Husband had enjoyed during his better days. This is not a case where a court was asked to micromanage a cohabiting, fully competent married couple's finances. Nor one where the Husband had been tight-fisted throughout the marriage and the Wife now tries to improve her lifestyle by seeking a higher standard of support after he has lost his capacity to object. What we have, and it is all we have, is that Wife's spousal support was significantly reduced after her Husband's incapacity, and her request only to be returned to the previously established standard. No public policy, nor one asserted in the name of marital harmony, or privacy, or autonomy, is offended by the decision we make today."
Finally, the CA determined that Appellants had no right to contest the award of fees and costs because their stipulation "party waived [each party's] right to make any claim that the Court lacked jurisdiction, exceeded its jurisdiction, lacked power, or exceeded its power by making a separate Stipulation and Order re Non-Modifiable Support." Appellants sought the aid of the court to enshrine their settlement with Wife in an order and to make it non-modifiable and explicitly waived any claims about the court's jurisdiction and power as part of that process. The CA found no error in the trial court's analysis of the amount of the fees and costs awarded.
Irmo Darian -- Unpublished opinion of District 4, Division 2 (March 27, 2013).
Wife moved to join Husband's sister and a Limited Partnership to this divorce proceeding based upon the accusation Husband transferred ownership of real property to the Limited Partnership without consideration and encumbered the same real property by granting deeds of trust to Husband's sister without consideration, all as part of an effort to avoid payment of "well over $250,000 in child support, spousal support and equalization arrears." Husband appealed the order authorizing the joinder.
"A person who claims or controls an interest in any matter subject to disposition in the proceeding may be joined as a party to the family law case only as provided in this chapter." (Cal. Rules of Court, rule 5.24; FC § 2021 (a).) But only a person aggrieved by a judgment or order has standing to appeal the judgment or order. And to be cognizable on appeal, "the aggrieved party's interest must be immediate, pecuniary and substantial, and not merely a nominal or remote consequence of the judgment." (In re FairWageLaw (2009) 176 Cal.App.4th 279, 285.) The standing requirement is jurisdictional. (Sabi v. Sterling (2010) 183 Cal.App.4th 916, 947.)
The CA said Husband's sister and the Limited Partnership may at some appropriate time challenge their joinder in the action through a motion or demurrer to the complaint joining them to the action. "But Husband is not aggrieved directly by the court's order. Simply opposing an order at the trial court level is not enough to establish appellate standing. (Cf. In re K.C. (2011) 52 Cal.4th 231, 239.) This is not a case in which Husband's 'rights or interests are injuriously affected by the order in an immediate, pecuniary and substantial manner.' (Irmo Justice (1984) 157 Cal.App.3d 82, 86, fn. 4.) ¶ Instead, the court's postjudgment order merely allows two nonparties to be joined to the action based on allegations that assets were fraudulently transferred to these nonparties."
The appeal was dismissed.
Irmo Castenada -- Unpublished opinion of District 3 (Filed March 22, 2013).
In this unpublished opinion, the third District Court of Appeal declined to address the merits of an appeal from a trial court ruling imposing $3,155 in sanctions for arrogant, bullying behavior and childish name-calling by husband's counsel at his deposition. Husband's appeal contended Wife's motion to compel responses to a discovery request did not include a request for sanctions based upon the conduct of counsel and that it was error to impose them without notice.
The CA began by acknowledging FC § 271 (a) permits the court to base an award of sanctions on conduct of a party or attorney that frustrates settlement fails to reduce the cost of litigation by encouraging cooperation. The conduct and remarks of counsel reflected in the deposition transcript could qualify for a monetary sanction.
Even so, "An award of attorney's fees and costs as a sanction pursuant to this section shall be imposed only after notice to the party against whom the sanction is proposed to be imposed and opportunity for that party to be heard." (FC § 271 (b); Cal. Const., art. I, § 7; U.S. Const., 14th Amend; O'Brien v. Cseh (1983) 148 Cal.App.3d 957, 961.)
Here, it was clear that the trial court based its sanctions award on what happened at Husband's deposition as opposed to other objections reflected in his response to Wife's motion to require him to produce certain documents at trial. At the hearing on Wife's motion, the court asked the parties to provide a copy of Husband deposition and other documents and ordered counsel to return for further hearing and ruling. The trial court was provided a copy of the transcript of Husband's deposition that revealed the uncooperative, immature behavior and remarks of counsel.
On appeal however, Husband failed to produce a reporter's transcript of the initial hearing on Wife's motion to compel. This made it impossible for the CA to determine whether the trial court did or did not inform the parties that it was considering imposing sanctions based on Husband and Husband's counsel's conduct.
"Without the reporter's transcript of the hearing, we do not have before us the content of what transpired at the hearing, including any notice given to husband that the court was considering imposing sanctions based upon what happened at his deposition, arguments made in relation thereto, or any inquiry made by the trial court before imposing the sanctions. Thus, no error affirmatively appears in the record before us, as it would, for instance, if we could consult the transcript and determine that no notice or opportunity to be heard was given. (Citation omitted.) Even assuming, as husband contends, that he was entitled to written notice under section 271, we likewise must presume that he waived the lack of written notice either expressly or by failing to object to the lack thereof at the hearing."