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In re Marriage of Huntley

Court of Appeal of California, Third Appellate District

April 17, 2017, Opinion Filed

C080534

Introduction

The Third District Court of Appeal of California has decided that a trial court erred by denying a wife’s motion to divide community property which was not previously identified under Fam C §2556.  They reasoned that the wife was not required to file a prior motion to set aside of a default dissolution judgment before seeking to divide previously unadjudicated community property and was not, therefore, precluded from seeking a division of the property some two years after the dissolution judgment was entered.

Reporter

10 Cal. App. 5th 1053 *; 216 Cal. Rptr. 3d 904 **; 2017 Cal. App. LEXIS 344 ***

In re the Marriage of FRANK and DEANNA HUNTLEY.FRANK HUNTLEY, Respondent, v. DEANNA HUNTLEY, Appellant.

Prior History:  [***1] APPEAL from a judgment of the Superior Court of Yolo County, No. FL11001946, Kathleen M. White, Judge.

Disposition: Reversed.

Core Terms

parties, community property, trial court, marriage, divide, dissolution judgment, default judgment, unadjudicated, continuing jurisdiction, adjudicated, open court, dissolution, default, community estate, former spouse, declaration, retirement, benefits, pension

Case Summary

Overview

HOLDINGS: [1]-A trial court should have adjudicated the omitted community property as requested in an ex-wife’s motion under Fam. Code, § 2556, because § 2556 provided the court with continuing jurisdiction to divide omitted or unadjudicated community property, and because it erred in ruling the ex-wife was required to move to set aside the default judgment that dissolved her marriage before availing herself of that continuing jurisdiction; [2]-Because the dissolution judgment did not divide — or even mention — any community property, the parties’ community property remained subject to future litigation; [3]-Although the ex-wife handled the finances during the marriage and was aware of the very community property she sought to have divided under § 2556, her knowledge did not provide a basis for denying her motion.

Outcome

Judgment reversed and matter remanded.

LexisNexis® Headnotes

Civil Procedure > Appeals > Standards of Review > De Novo Review

Governments > Legislation > Interpretation

HN1[]  Standards of Review, De Novo Review

Appellate courts review questions of statutory interpretation under the independent standard of review. In doing so, courts’ fundamental task is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. Courts start with the language of the statute, giving the words their usual and ordinary meaning, while construing them in light of the statute as a whole and the statute’s purpose.

Family Law > … > Property Distribution > Characterization > Community Property

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Jurisdiction

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures

HN2[]  Characterization, Community Property

Generally, once a marital dissolution judgment has become final, the court loses jurisdiction to modify or alter it. However, a dissolution judgment does not affect the disposition of community property as to which the judgment is silent. Under California law, a spouse’s entitlement to a share of the community property arises at the time that the property is acquired. That interest is not altered except by judicial decree or an agreement between the parties. Hence, property that is not mentioned in the pleadings as community property is left unadjudicated by decree of divorce, and is subject to future litigation, the parties being tenants in common meanwhile. This rule applies to partial divisions of community property as well as divorces unaccompanied by any property adjudication whatsoever.

Family Law > … > Property Distribution > Characterization > Community Property

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Jurisdiction

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures

HN3[]  Characterization, Community Property

In providing courts with continuing jurisdiction, Fam. Code, § 2556, imposes no time limit on former spouses to seek to adjudicate omitted or unadjudicated community property after a dissolution judgment was entered. There is no statute of limitations imposed by § 2556 on a former spouse who seeks adjudication of omitted or unadjudicated community property. Section 2556 also imposes no limitation for default judgments. Accordingly, § 2556 applies to require adjudication of the omitted assets. Section 2556 applies even when former spouses were aware of the community property at the time the dissolution judgment was entered.

Civil Procedure > … > Pretrial Judgments > Default & Default Judgments > Default Judgments

Governments > Legislation > Interpretation

Family Law > … > Property Distribution > Characterization > Community Property

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Jurisdiction

HN4[]  Default & Default Judgments, Default Judgments

Although Code Civ. Proc., § 473, generally governs the finality of most default judgments, Fam. Code, § 2556, is the more specific statute in specifically addressing assets omitted from a dissolution of marriage. It is the general rule that where the general statute standing alone would include the same matter as the special act, and thus conflict with it, the special act will be considered as an exception to the general statute whether it was passed before or after such general enactment. The legislature’s specific provision in Fam. Code, § 2556, for adjudication of assets omitted from a marital dissolution judgment is the more specific statute and supplies the governing rule in such cases.

Family Law > … > Property Distribution > Characterization > Community Property

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Jurisdiction

Family Law > Marital Termination & Spousal Support > Dissolution & Divorce > Procedures

HN5[]  Characterization, Community Property

Fam. Code, § 2556, applies to community property not actually adjudicated in the previously entered dissolution judgment. The mere mention of an asset in the judgment is not controlling. The crucial question is whether the community property benefits were actually litigated and divided in the previous proceeding.

Family Law > … > Property Distribution > Equitable Distribution > Property Settlements

Governments > Legislation > Interpretation

HN6[]  Equitable Distribution, Property Settlements

Former spouses may divide their community property by agreement, even if the division is not equal. As long as such agreement is based upon a complete and accurate understanding of the existence and value of community and separate assets that are material to the agreement, the parties are free to decide on an unequal distribution. However, to be valid, even an agreement to divide community property equally must comply with Fam. Code, § 2550. The requirement of § 2550 that an agreement either be written or orally stated in open court is strictly construed. Strictly enforcing § 2550’s requirements will actually promote the policy of encouraging the parties to arrive at an out-of-court resolution containing sufficiently definite terms to be enforced by the court without further litigation. Requiring the parties’ settlement agreement to be committed to writing or recited in court, as mandated by § 2550, prevents the risk of the court enforcing an agreement that never was made.

Headnotes/Syllabus

Summary
 [*1053] CALIFORNIA OFFICIAL REPORTS SUMMARY

An ex-wife filed a motion to divide unadjudicated community property under Fam. Code, § 2556, more than two years after entry of a default judgment that dissolved her marriage to her ex-husband. The trial court denied the motion on ground that the ex-wife had not first moved to set aside the default judgment. (Superior Court of Yolo County, No. FL11001946, Kathleen M. White, Judge.)

The Court of Appeal reversed the judgment and remanded the matter. The court held that Fam. Code, § 2556, provided the trial court with continuing jurisdiction to divide omitted or unadjudicated community property and that the trial court erred in ruling the ex-wife was required to move to set aside the default judgment before availing herself of that continuing jurisdiction. The dissolution judgment did not divide—or even mention—any community property. Consequently, the parties’ community property remained subject to future litigation. Although the ex-wife handled the finances during the marriage and was aware of the very community property she sought to have divided under § 2556, her knowledge did not provide a basis for denying her motion. It was undisputed the judgment of dissolution of marriage did not include any property orders, and there was no evidence of any written agreement or an oral stipulation of the parties in open court. The trial court’s finding in its statement of decision on the ex-wife’s motion that the parties had divided all of their community property and the assets were now owned by the parties based on their actual title did not address or remedy the absence of any division of community property in the judgment. Accordingly, the trial court did not fulfill its duty to divide the parties’ community property as required by Fam. Code, § 2550, and under the continuing jurisdiction provided by § 2556. (Opinion by Hoch, J., with Butz, Acting P. J., and Renner, J., concurring.)

Headnotes

CALIFORNIA OFFICIAL REPORTS HEADNOTES

CA(1)[] (1)

Statutes § 21—Construction—Legislative Intent—Language.

Courts’ fundamental task in interpreting a statute is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. Courts start with the language of the statute, giving the words their usual and ordinary meaning, while construing them in light of the statute as a whole and the statute’s purpose.

CA(2)[] (2)

Dissolution of Marriage § 49—Final Judgment—Effect on Jurisdiction—Community Property—Disposition of Omitted Assets.

Generally, once a marital dissolution judgment has become final, the court loses jurisdiction to modify or alter it. However, a dissolution judgment does not affect the disposition of community property as to which the judgment is silent. Under California law, a spouse’s entitlement to a share of the community property arises at the time that the property is acquired. That interest is not altered except by judicial decree or an agreement between the parties. Hence, property that is not mentioned in the pleadings as community property is left unadjudicated by decree of divorce, and is subject to future litigation, the parties being tenants in common meanwhile. This rule applies to partial divisions of community property as well as divorces unaccompanied by any property adjudication whatsoever.

CA(3)[] (3)

Dissolution of Marriage § 49—Division of Community Property—Continuing Jurisdiction—Omitted Assets.

In providing courts with continuing jurisdiction, Fam. Code, § 2556, imposes no time limit on former spouses to seek to adjudicate omitted or unadjudicated community property after a dissolution judgment was entered. There is no statute of limitations imposed by § 2556 on a former spouse who seeks adjudication of omitted or unadjudicated community property. Section 2556 also imposes no limitation for default judgments. Accordingly, § 2556 applies to require adjudication of the omitted assets. Section 2556 applies even when former spouses were aware of the community property at the time the dissolution judgment was entered.

CA(4)[] (4)

Dissolution of Marriage § 49—Division of Community Property—Continuing Jurisdiction—Omitted Assets.

Although Code Civ. Proc., § 473, generally governs the finality of most default judgments, Fam. Code, § 2556, is the more specific statute in specifically addressing assets omitted from a dissolution of marriage. It is the general rule that where the general statute standing alone would include the same matter as the special act, and thus conflict with it, the special act will be considered as an exception to the general statute whether it was passed [*1055]  before or after such general enactment. The Legislature’s specific provision in Fam. Code, § 2556, for adjudication of assets omitted from a marital dissolution judgment is the more specific statute and supplies the governing rule in such cases.

CA(5)[] (5)

Dissolution of Marriage § 49—Division of Community Property—Continuing Jurisdiction—Unadjudicated Property.

Fam. Code, § 2556, applies to community property not actually adjudicated in the previously entered dissolution judgment. The mere mention of an asset in the judgment is not controlling. The crucial question is whether the community property benefits were actually litigated and divided in the previous proceeding.

CA(6)[] (6)

Dissolution of Marriage § 49—Division of Community Property—Continuing Jurisdiction—Adjudication of Omitted Assets.

The trial court erred in ruling an ex-wife was required to move to set aside the default judgment that dissolved her marriage to her ex-husband before availing herself of the continuing jurisdiction provided by Fam. Code, § 2556, for division of unadjudicated community property. The dissolution judgment did not divide—or even mention—any community property. Consequently, the parties’ community property remained subject to future litigation. Even though the ex-wife waited more than two years after entry of the default judgment before bringing her motion for adjudication of omitted assets, the trial court had jurisdiction under § 2556 to hear the motion. Although it was undisputed the ex-wife handled the finances during the marriage and was aware of the very community property she sought to have divided under § 2556, her knowledge did not provide a basis for denying her motion. Consequently, the trial court should have adjudicated the omitted community property as requested in the ex-wife’s motion.

[Kirkland et al., Cal. Family Law Practice and Procedure (2016) ch. 131, § 131.07; Cal. Forms of Pleading and Practice (2016) ch. 221, Dissolution of Marriage: Procedure, § 221.156.]

CA(7)[] (7)

Dissolution of Marriage § 75—Property Settlement Agreements—Requirements—Written or Recited in Court.

Former spouses may divide their community property by agreement, even if the division is not equal. As long as such agreement is based upon a complete and accurate understanding of the existence and value of community and separate assets that are material to the agreement, the parties are free to decide on an unequal distribution. However, to be valid, even an agreement to divide community property equally must comply with Fam. Code, § 2550. The requirement of § 2550 that an agreement either be [*1056]  written or orally stated in open court is strictly construed. Strictly enforcing § 2550’s requirements will actually promote the policy of encouraging the parties to arrive at an out-of-court resolution containing sufficiently definite terms to be enforced by the court without further litigation. Requiring the parties’ settlement agreement to be committed to writing or recited in court, as mandated by § 2550, prevents the risk of the court enforcing an agreement that never was made.

Counsel: Matthew B. Smith for Appellant.

Bair & Bair and Pamela A. Bair for Respondent.

Judges: Opinion by Hoch, J., with Butz, Acting P. J., and Renner, J., concurring.

Opinion by: Hoch, J.

Opinion

 [**905]  HOCH, J.—Deanna Huntley challenges the trial court’s denial of her motion to divide unadjudicated community property under Family Code section 2556.1 Deanna filed her motion more than two years after entry of a default judgment that dissolved her marriage to Frank Huntley.2 The trial court denied the motion on grounds Deanna had not first moved to set aside the default judgment.

 [**906]  On appeal, Deanna contends (1) section 2556 confers the trial court with continuing jurisdiction to adjudicate omitted community property without having to first move to set aside the judgment, (2) the dissolution judgment’s silence as to the division of any property means all of the community property remains to be divided, and (3) the trial court’s error requires reversal for proper division of the parties’ community property.

We conclude section 2556 provided the trial court with continuing jurisdiction to divide omitted or unadjudicated community property. The default judgment’s silence as to [***2]  any division of property requires reversal and remand for further proceedings under sections 2550 and 2556.

FACTUAL AND PROCEDURAL HISTORY

The Parties’ Community Property

The facts of this case are undisputed. Frank and Deanna married in 2000 and separated in June 2011. As the trial court found, “Both parties were [*1057]  employed during their marriage and [Deanna] was in charge of the parties’ finances. She paid the bills. She was employed with the City of Woodland and was aware of her own employment benefits. [Deanna] was also aware of all of the parties’ assets, their debts, their furniture, vehicles, and other assets. [Frank] retired approximately 15 months before the parties separated and began receiving retirement benefits. [Deanna] was well aware of these benefits and was also aware of [Frank’s] Deferred Benefit Account, because the parties withdrew substantial funds from that account during their marriage.”

The trial court further found that “there were other assets, namely household furnishings, vehicles, [Deanna’s] PERS retirement, and [Frank’s] Union Pension Plan and Deferred Compensation Plan. [Frank’s] Pension Plan and Deferred Compensation Plan were both in pay status with monthly payments being [***3]  received by the parties each month. At one of the hearings in this case, [Deanna] admitted she was aware of all of these assets.”

Petition for Dissolution of Marriage and Default Judgment

In December 2011, Frank served Deanna with a petition for dissolution of marriage, an income and expense declaration, and a community and quasi-community property declaration. Frank’s petition stated all community and quasi-community property was listed in his accompanying declaration. However, the declaration did not list any property other than a house with a negative value of $89,000.

Deanna was served with the petition and attached declarations, but did not respond. In July 2012, Frank filed a request for default and served Deanna with a copy of the request. In October 2012, the trial court entered a default judgment. The default judgment dissolved the marriage but did not mention any community property.

At some point after Deanna received the request to enter a default judgment, she signed a grant deed conveying all title and interest in the house to Frank.

Deanna’s Motion to Adjudicate Omitted Assets

In November 2014, Deanna filed a motion to adjudicate omitted community property. After conducting [***4]  several hearings, the trial court denied the motion. In denying the motion, the trial court reasoned that “[w]hen [Deanna] received Notice of the Judgment, it was obvious that no property orders were made. She had the opportunity to file a Motion to set aside the Judgment and take further action. She took no action.” The trial court  [**907]  acknowledged, “the [*1058]  Judgment does not award assets to either party,” but found “those assets are now owned by the parties based on their actual title. Retirement benefits and retirement accounts are titled in the sole name of the individual who earned them. [Deanna] has signed a Grant Deed releasing her interest in the residence to [Frank]. Vehicles have titles, which reflect their ownership and the parties apparently divided their furniture and furnishings to their satisfaction.” The trial court further found Deanna’s signing of the grant deed to the house “seems to support [Frank’s] contention that the parties had an oral agreement as to how to divide their assets and debts.” There is no indication the oral agreement was stated on the record in open court. Ultimately, the trial court determined “this case is concluded.”

Deanna timely filed a notice of appeal. [***5] 

DISCUSSION

Motion to Divide Omitted or Unadjudicated Community Property After Entry of a Default Judgment

Deanna contends a motion to vacate the default judgment was not necessary because section 2556 provided the trial court with continuing jurisdiction to hear her “motion for adjudication of omitted assets.” The contention has merit.

A.

Standard of Review

HN1[] CA(1)[] (1) We review questions of statutory interpretation under the independent standard of review. (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175 [39 Cal. Rptr. 3d 788, 129 P.3d 1].) “‘In doing so, “‘our fundamental task is “to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute.”’” [Citation.] As always, we start with the language of the statute, “giv[ing] the words their usual and ordinary meaning [citation], while construing them in light of the statute as a whole and the statute’s purpose [citation].” [Citation.]’” (Coker v. JPMorgan Chase Bank, N.A. (2016) 62 Cal.4th 667, 674 [197 Cal. Rptr. 3d 131, 364 P.3d 176], quoting Apple Inc. v. Superior Court (2013) 56 Cal.4th 128, 135 [151 Cal. Rptr. 3d 841, 292 P.3d 883].)

 [*1059] 

B.

The Trial Court’s Continuing Jurisdiction Under Section 2556

HN2[] CA(2)[] (2) “Generally, once a marital dissolution judgment has become final, the court loses jurisdiction to modify or alter it.” (In re Marriage of Thorne & Raccina (2012) 203 Cal.App.4th 492, 499 [136 Cal. Rptr. 3d 887] (Thorne).) However, as the California Supreme Court has explained, a dissolution judgment does not affect the disposition of community property as to which the judgment is silent. “Under California law, a spouse’s [***6]  entitlement to a share of the community property arises at the time that the property is acquired. [Citations.] That interest is not altered except by judicial decree or an agreement between the parties. Hence ‘under settled principles of California community property law, “property which is not mentioned in the pleadings as community property is left unadjudicated by decree of divorce, and is subject to future litigation, the parties being tenants in common meanwhile.”’ (In re Marriage of Brown [(1976)] 15 Cal.3d [838,] 850–851 [126 Cal. Rptr. 633, 544 P.2d 561] … . [Citations.].) This rule applies to partial divisions of community property as well as divorces unaccompanied by any property adjudication whatsoever.” (Henn v. Henn (1980) 26 Cal.3d 323, 330 [161 Cal. Rptr. 502, 605 P.2d 10] (Henn).)

 [**908]  At the time the California Supreme Court decided Henn, a former spouse was required to file a new case in order to seek division of community property assets that were omitted from a dissolution judgment. (Henn, supra, 26 Cal.3d at p. 330.) To alleviate the burden of filing an entirely new action to divide community property previously omitted in a dissolution judgment, the Legislature enacted Civil Code former section 4353 that was later recodified without substantive change at Family Code section 2556. (Lakkees v. Superior Court (1990) 222 Cal.App.3d 531, 540, fn. 5 [271 Cal. Rptr. 845] (Lakkees); see also Cal. Law Revision Com. com., 29D West’s Ann. Fam. Code (2004 ed.) foll. § 2556, p. 516 [“Section 2556 continues former Civil Code Section 4353 without substantive change”].)

Section 2556 provides: “In [***7]  a proceeding for dissolution of marriage, for nullity of marriage, or for legal separation of the parties, the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. In these cases, the court shall equally divide the omitted or unadjudicated [*1060]  community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability.” (Italics added.)

HN3[] CA(3)[] (3) In providing courts with continuing jurisdiction, section 2556 imposes no time limit on former spouses to seek to adjudicate omitted or unadjudicated community property after a dissolution judgment was entered. In Lakkees, supra, 222 Cal.App.3d 531, the Court of Appeal noted arguments “that a dilatory party who suffers an involuntary dismissal should be barred from the postjudgment relief available under Civil Code former section 4353 are not supported by any statutory language.” (Id. at p. 540, fn. 5.) The same observation holds true [***8]  for Civil Code section 4353’s successor: there is no statute of limitations imposed by Family Code section 2556 on a former spouse who seeks adjudication of omitted or unadjudicated community property. Section 2556 also imposes no limitation for default judgments such as that entered in this case. Accordingly, section 2556 applies to require adjudication of the omitted assets.

Section 2556 applies even when former spouses were aware of the community property at the time the dissolution judgment was entered. In Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564 [232 Cal. Rptr. 722] (Huddleson), the appellate court rejected a contention that a community property pension was immune from postjudgment division because the moving party had known of the asset at the time of judgment. The Huddleson court explained, “Regardless of whether the parties know of, or discuss, the vested pension, if the ‘court was not called upon to award it, and did not award it, as community property, separate property, or any property at all’ [citation], then the pension is a missed asset subject to a postdissolution claim.” (Huddleson, at p. 1569, citing Henn, supra, 26 Cal.3d at p. 330.)

HN4[] CA(4)[] (4) Although Code of Civil Procedure section 473 generally governs the finality of most default judgments, it does not control in this case. Section 2556 is the more specific statute in specifically addressing assets omitted from a dissolution  [**909]  of marriage. As the California Supreme [***9]  Court has held, “‘It is the general rule that where the general statute standing alone would include the same matter as the special act, and thus conflict with it, the special act will be considered as an exception to the general statute whether it was passed before or after such general enactment.’” (People v. Gilbert (1969) 1 Cal.3d 475, 479 [82 Cal. Rptr. 724, 462 P.2d 580], quoting In re Williamson (1954) 43 Cal.2d 651, 654 [276 P.2d 593]; accord, Stone Street Capital, LLC v. California State Lottery Com. (2008) 165 Cal.App.4th 109, 118 [80 Cal. Rptr. 3d 326].) The Legislature’s specific provision in section 2556 for [*1061]  adjudication of assets omitted from a marital dissolution judgment is the more specific statute and supplies the governing rule here.

CA(5)[] (5) In sum, HN5[] section 2556 applies to community property not actually adjudicated in the previously entered dissolution judgment. “‘The mere mention of an asset in the judgment is not controlling. [Citation.] “[T]he crucial question is whether the [community property] benefits were actually litigated and divided in the previous proceeding.”’” (In re Marriage of Georgiou & Leslie (2013) 218 Cal.App.4th 561, 575 [160 Cal. Rptr. 3d 254], quoting Thorne, supra, 203 Cal.App.4th at p. 501.)

C.

Motion to Divide Omitted or Unadjudicated Community Property

CA(6)[] (6) The trial court erred in ruling Deanna was required to move to set aside the default judgment before availing herself of the continuing jurisdiction provided by section 2556 for division of unadjudicated community property. The dissolution judgment did not divide—or even mention—any community property. Consequently, [***10]  the parties’ community property remained “‘“subject to future litigation.”’” (Henn, supra, 26 Cal.3d 323, 330; see § 2556.) Even though Deanna waited more than two years after entry of the default judgment before bringing her motion for adjudication of omitted assets, the trial court had jurisdiction under section 2556 to hear the motion. (See Lakkees, supra, 222 Cal.App.3d at p. 540, fn. 5.) Although it is undisputed Deanna handled the finances during the marriage and was aware of the very community property she sought to have divided under section 2556, her knowledge did not provide a basis for denying her motion. (Huddleson, supra, 187 Cal.App.3d at p. 1569.) Consequently, the trial court should have adjudicated the omitted community property as requested in Deanna’s motion.

Frank argues the trial court correctly determined that, even if cognizable, Deanna’s motion was properly denied because all of the community property had actually been divided by the parties according to their informal agreement. As the trial court noted, Deanna’s signing of a grant deed to the marital residence in favor of Frank after entry of the default judgment indicated the parties had actually reached an informal agreement as to the disposition of their property.

HN6[] CA(7)[] (7) Former spouses may divide their community property by agreement, even if the division is not equal. [***11]  “As long as such agreement is based upon a [*1062]  complete and accurate understanding of the existence and value of community and separate assets that are material to the agreement, the parties are free to decide on an unequal distribution.” (In re Marriage of Brewer & Federici (2001) 93 Cal.App.4th 1334, 1349 [113 Cal. Rptr. 2d 849].) However, to be valid, even an agreement to divide  [**910]  community property equally must comply with section 2550. Section 2550 provides: “Except upon the written agreement of the parties, or on oral stipulation of the parties in open court, or as otherwise provided in this division, in a proceeding for dissolution of marriage or for legal separation of the parties, the court shall, either in its judgment of dissolution of the marriage, in its judgment of legal separation of the parties, or at a later time if it expressly reserves jurisdiction to make such a property division, divide the community estate of the parties equally.” (Italics added.)

The requirement of section 2550 that an agreement either be written or orally stated in open court is strictly construed. In re Marriage of Dellaria & Blickman-Dellaria (2009) 172 Cal.App.4th 196 [90 Cal. Rptr. 3d 802] explains that “strictly enforcing … section 2550’s requirements will actually promote the policy of encouraging the parties to arrive at an out-of-court resolution containing sufficiently definite terms to be enforced by the court without [***12]  further litigation. Requiring the parties’ settlement agreement to be committed to writing or recited in court, as mandated by … section 2550, prevents the risk of the court enforcing an agreement that never was made.” (Id. at pp. 203–204.)

In this case, the parties neither reduced their agreement to writing nor did they state terms of the agreement on the record in open court. Consequently, at the time of its judgment of dissolution of marriage, the trial court had the statutory duty to equally divide Frank and Deanna’s community property or make a property division based on the written agreement of the parties or on oral stipulation of the parties in open court. (§ 2550.) It is undisputed the judgment of dissolution of marriage did not include any property orders. And there is no evidence of any written agreement or an oral stipulation of the parties in open court. In its statement of decision on Deanna’s motion, the trial court found the parties had divided all of their community property and these assets were “now owned by the parties based on their actual title.” But this later finding does not address or remedy the absence of any division of community property in the judgment. For this reason, the trial court [***13]  did not fulfill its duty to divide the parties’ community property as required by section 2550 and under the continuing jurisdiction provided by section 2556.3

 [*1063] 

DISPOSITION

The judgment is reversed, and the matter is remanded for further proceedings under Family Code sections 2550 and 2556. The parties shall bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (5).)

Butz, Acting P. J., and Renner, J., concurred.

End of Document

Undesignated statutory citations are to the Family Code.

For the sake of clarity, we refer to the parties by their first names.

We express no opinion as to the factual question of whether the informal division of community property by Frank and Deanna was equal or unequal within the meaning of sections 2550 and 2556.


Introduction

Y.R., Mother of Child Z, appealed a trial court’s order which had set child support from father, a high earner, in an amount that was much less than the statewide uniform child support guideline. The Appellate Court concluded that the trial court’s failure to comply with the requirements of Family Code section 4056, subdivision (a), mandated reversal, despite evidence justifying a deviation from the guideline. The Appellate Court decided that the trial court’s consideration of Mother’s and the child’s expenses and lifestyle, rather than on those of Father and his children, should not have allowed the court sufficient findings to support the deviation ordered by the court. Therefore, the trial court’s ruling was reversed and the matter was remanded for reconsideration of the child support award.

Court of Appeal, Second District, Division 4, California.

Y.R., Plaintiff and Appellant, v. A.F., Defendant and Respondent.

B266621

Decided: February 24, 2017

Walzer Melcher, Christopher C. Melcher and Steven K. Yoda for Plaintiff and Appellant. Cuneo & Hoover, J. Nicholas Cuneo and Janina A. Verano for Defendant and Respondent.

Appellant Y.R., mother of Z., appeals the trial court’s order awarding child support from respondent A.F., father of Z., in an amount that deviated downward from the statewide uniform guideline by a substantial amount. Appellant contends the court failed to state its reasons for awarding less than the guideline or for concluding the amount awarded was in Z.’s best interests, as required by Family Code section 4056, subdivision (a).1 She further contends the court erroneously based the award on appellant’s and Z.’s historical expenses rather than the disposable income and lifestyle of respondent — an extraordinarily high income earner — and placed on appellant the burden of proving the guideline amount reasonable, rather than requiring respondent to prove the guideline amount unjust or inappropriate. Finally, appellant contends respondent presented insufficient evidence to support a deviation from the guideline.

We conclude that the trial court’s failure to comply with the requirements of section 4056, subdivision (a) mandates reversal, despite the existence of evidence sufficient to warrant a deviation from the guideline. We further conclude that the court’s reliance on appellant’s and Z’s expenses and lifestyle, rather than on those of respondent and his children, precludes us from implying findings adequate to support the deviation ordered by the court. Accordingly, we reverse and remand for reconsideration of child support under the correct criteria.

 

FACTUAL AND PROCEDURAL BACKGROUND

  1. Appellant’s Petition and Respondent’s Opposition

Appellant and respondent had a brief affair resulting in the birth of their daughter, Z., in July 2006. Appellant is a hair stylist. Respondent is a successful director and producer. He is married and lives with his wife and three children, one of whom is an adult. Appellant, who has had sole custody of Z. since her birth, did not immediately seek a formal order of support. Instead, respondent paid certain of appellant’s and Z.’s expenses and provided additional funds, totaling approximately $5,000 per month. In October 2014, when Z. was eight, appellant filed a petition to establish parentage and for guideline child support. Her petition also requested that respondent pay Z.’s health insurance, a portion of Z.’s uninsured health care costs, and half the cost of Z.’s extracurricular activities.2

After filing the petition, appellant submitted requests for production to respondent, asking for tax returns and other documents pertinent to his income and expenses. Appellant also submitted interrogatories seeking detailed information about respondent’s lifestyle, including a description of the home he and his family shared, the restaurants they frequented, the vacations they took, and the cost of his other children’s tuition, extracurricular activities, and medical insurance. Respondent objected to answering the interrogatories, on the ground that he acknowledged that he was an “extraordinarily high income earner” within the meaning of section 4057, subdivision (b)(3), and had the ability to pay child support in “any amount commensurate with the reasonable needs of the minor child.”3 He raised the same objection to the document requests. He provided a declaration stating his salary was $2,282,512 per year (approximately $190,000 per month). Appellant disputed that respondent was an extraordinarily high income earner under the statute, but did not seek an order compelling further responses.4

Prior to the hearing, appellant presented evidence that she and Z. lived in a three-bedroom, two-bath apartment in Santa Monica with her other two children, Z.’s older half-brother and half-sister. Z. shared a bedroom with her half-sister. Appellant described the apartment as “cramped,” and stated that the rent for a four-bedroom condo in the same area would be, at a minimum, $6,000 per month, while renting a four-bedroom home in the area would cost between $10,000 and $15,000 monthly. Appellant further stated that one of respondent’s sons attended a private school at a cost of $34,000 per year ($2,833 per month).5 Appellant described a number of activities she wished to provide Z., including tutoring at a cost of $480 per month, a nanny at a cost of $1,800 per month, and theater camp at a cost of $2,100 per year. She also stated she was unable to afford vacations, visits to out-of-state relatives, art classes, piano lessons, and better quality clothing and restaurants for Z. Appellant’s income and expense declaration indicated she worked part-time as a hair stylist, grossing $1,833 per month. Rent on her existing apartment was $2,840 per month. Other expenses, including groceries, utilities, clothing and insurance, totaled approximately $6,000 per month.6

Respondent provided an income and expense declaration stating that his annual salary was $2,097,000, based on 2014 earnings for himself and his company, Cartel.7 Respondent acknowledged, however, that a percentage of the expenses claimed by Cartel should be included in his income, as they represented perquisites for him.8 His income and expense declaration indicated his rent was $20,900 per month and that he spent more than $3,000 per month in each of the following categories: “[g]roceries and household supplies,” “[e]ating out,” “[c]lothes,” education for the two minor children who lived with him, and “[e]ntertainment, gifts, and vacation.” He also indicated “[o]ther” expenditures of over $31,000 per month, including legal fees unrelated to the underlying proceeding, fitness, non-tuition expenses for the children, “[m]iscellaneous [c]ash [e]xpenses” of $7,167, and $7,500 per month he had recently begun paying appellant. He stated that he paid $13,457 ($10,000 plus various expenses) per month for child support for another child born out of wedlock.9 His attorneys prepared a DissoMaster report indicating that based on disposable income of approximately $190,000 per month, guideline child support was $11,840 per month.10

Respondent’s opposition focused on appellant’s and Z.’s current expenses. Respondent argued that based on appellant’s income and expense declaration, $11,840 in support represented “$4,660 more per month than [appellant] needs to pay the monthly expenses for [herself], [Z.] and [her] two other children from prior relationships,” and that appellant needed support from respondent of only $7,180 per month “to pay her monthly expenses.” Respondent’s opposition contained no discussion of his or his other children’s lifestyles, and made no attempt to calculate a reasonable amount of child support based on the evidence of his monthly income and expenses.

In her reply, appellant contended that respondent’s income was much higher than $190,000 per month, observing that his company’s income had been higher in 2013 and that he had already been paid $610,000 for the first two months of 2015.11 Appellant’s accounting expert, David Blumenthal, calculated an average monthly salary for respondent by adding the data for 2013, a year in which respondent and his company had much higher income, to the data for 2014, and assuming that all of Cartel’s expenses for those periods except agent commissions and payroll taxes were perquisites.12 This resulted in average income of $4,037,636 per year or $336,470 per month. Based on this enhanced income, Blumenthal prepared a DissoMaster report indicating guideline child support was $25,325 per month.

  1. The Hearing and the Court’s Ruling

Neither party presented additional evidence at the March 23, 2015 hearing. Initially, the parties debated whether respondent was an extraordinarily high wage earner and the amount of guideline support. After hearing argument, the court concluded that respondent was an extraordinarily high wage earner under section 4057. It further found that respondent’s representations concerning Cartel’s expenses were unsubstantiated, as they were based on “one document, for which there [was] not even a declaration of his business manager of how it was prepared or if it was prepared in the ordinary course.” Accordingly, “for the purposes of ․ analysis,” the court began with appellant’s figures, both for respondent’s monthly income — over $300,000 — and the guideline amount — $25,325. The court described these figures as “probably excessive” and “inflated,” as the expenses included as income to respondent by Blumenthal appeared to be “fairly typical categories of business expenses,” but found Blumenthal’s calculations to be “the most accurate number[s] I’ve got.”

With respect to whether the guideline amount was excessive, respondent’s counsel argued that appellant’s request for sufficient funds to rent a four-bedroom house and hire a nanny exceeded the needs of the child, and whether the guideline amount was $11,840 or $25,325, it was excessive. He contended the court should award an amount “consistent with [the] $7,000 per month, that we’ve suggested, which is her expenses less her income.” Counsel did not address respondent’s resources or the expenses necessary to maintain his other children.

Like respondent’s counsel, the court addressed its remarks to appellant’s expenses. Addressing the appropriateness of the guideline amount, the court stated: “[Appellant’s] income and expense declarations consistently show expenses that don’t approach [$25,325], that never exceed $9,000 per month, excluding some expenses which ․ [respondent] has been picking up. ․ [¶] ․ [¶] Her claimed expenses are $9,013. She includes the $400 in tuition that the respondent pays. ․ And I saw the rent she paid. ․ [¶] ․[¶] If I just ․ take her expenses[,] — which she doesn’t claim are solely for ․ [Z.]. She says those are her personal expenses and she’s included the full amount of her rent — I have to infer that some amount of those expenses are attributable to the other two children for which respondent isn’t responsible. But it’s impossible for me to ․ sort them out.” The court then ordered respondent to pay Z.’s tuition at a school “comparable in nature to the schools attended by his other children,” 75 percent of reasonable extracurricular activities and school expenses not covered by tuition, all of Z.’s health insurance, and 90 percent of uncovered medical expenses. Without mention of respondent’s expenses for himself and the children living with him, the court stated that guideline child support “would be far in excess of ․ the child’s reasonable needs are ․” It ordered respondent to pay appellant $8,500 per month “as a reasonable assessment of the additional expenses that would allow the child to live at a standard of living that’s appropriate for ․ respondent’s position in life.”

Appellant’s counsel immediately objected, stating that appellant’s past monthly expenses were limited by her lack of access to the funds needed to support Z. in an appropriate manner.13 The court responded: “I do believe that her income and expense declaration is evidence of the reasonable needs of the child, together with the other evidence that’s been submitted to me about the ․ experiences [sic, presumably expenses] that the child is incurring. I think ․ [appellant] has a burden to show me what ․ the child’s reasonable needs are where I’ve deviated.”

In its written order, the court reiterated its findings that respondent was an extraordinarily high earner, that his monthly gross cash flow was $336,470, that guideline support was $25,325 per month, and that support in that amount “would exceed the child’s reasonable needs ․” The order directed respondent to pay “$8,500 per month plus the payment of the child’s medical insurance, 90% of the child’s uncovered medical costs, 75% of the child’s extracurricular activities, and 100% of the child’s private school tuition at an institution comparable to those that [respondent’s] other children attend,” stating this would “meet the minor child’s reasonable needs.” The written order gave no explanation for the court’s calculation of child support, the reasoning underlying its conclusion that guideline support was excessive, or the evidence it relied upon in concluding the amount awarded was in the best interests of the child. Appellant timely noticed an appeal of the support order.

DISCUSSION

Appellant contends the court erred in failing to state, orally or in its order, its reasons for deviating from the guideline amount, as required by section 4056, subdivision (a). Appellant further argues that sufficient findings cannot be inferred, as the record demonstrates the court improperly placed the burden of justifying a guideline award on appellant, and improperly relied on appellant’s historical expenses, rather than on respondent’s disposable income and lifestyle, to determine Z’s reasonable needs. We agree.

  1. Standard of Review

The interpretation and application of section 4056 is reviewed de novo. (See, e.g., Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 81 [appellate courts independently determine proper interpretation of statutes, regulations and rules].) Child support awards are reviewed for abuse of discretion. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 282 (Cheriton); Williams, supra, 150 Cal.App.4th at pp. 1233-1234.) However, in reviewing such orders, appellate courts recognize that “California has a strong public policy in favor of adequate child support,” that “ ‘determination of a child support obligation is a highly regulated area of the law,’ ” and that “ ‘the only discretion a trial court possesses is the discretion provided by statute or rule. [Citations.]’ [Citation.]” (Cheriton, supra, at p. 283; accord, Williams, supra, at p. 1234.) The trial court “has ‘a duty to exercise an informed and considered discretion with respect to the [parent’s child] support obligation ․’ [citation],” and its “discretion is not so broad that it ‘may ignore or contravene the purposes of the law. ․ [Citations.]’ [Citation.]” (Cheriton, supra, at p. 283.) Moreover, “a [trial] ․ court abuses its discretion if it applies improper criteria or makes incorrect legal assumptions” (Ellis v. Lyons (2016) 2 Cal.App.5th 404, 415), or when its decision “is influenced by an erroneous understanding of applicable law ․” (Farmers Insurance Exchange v. Superior Court (2013) 218 Cal.App.4th 96, 106.)

  1. The Trial Court Failed to Comply with the Statutory Requirements for Deviating from Guideline Child Support

Every trial judge making a child support order must begin by “making a formula calculation pursuant to section 4055.” (In re Marriage of Hall (2000) 81 Cal.App.4th 313, 316-317 (Hall).) The provision “sets forth a statewide uniform guideline for determining the appropriate amount of child support. The term ‘guideline,’ however, is a euphemism. The support amount rendered under the guideline’s algebraic formula ‘is intended to be presumptively correct in all cases, and only under special circumstances should child support orders fall below the child support mandated by the guideline formula.’ ” (In re Marriage of Hubner (2001) 94 Cal.App.4th 175, 183 (Hubner), quoting § 4053, subd. (k).) As discussed, one special circumstance that justifies award of an amount below the guideline arises when “the parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.” (§ 4057, subd. (b)(3).) “The parent who invokes [the] high income exception to the guideline[ ] has the burden of proving ‘ “application of the formula would be unjust or inappropriate,’ and the lower award would be consistent with the child’s best interests.” (In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1326.)

A child’s “ ‘needs’ ” are not determined under an objective standard. “ ‘What constitutes reasonable needs for a child varies with the circumstances of the parties.’ ” (S.P. v. F.G. (2016) 4 Cal.App.5th 921, 931, quoting In re Marriage of Chandler (1997) 60 Cal.App.4th 124, 129 (Chandler).) “ ‘ “Clearly where the child has a wealthy parent, that child is entitled to, and therefore ‘needs’ something more than the bare necessities of life.” ’ ” (Hubner, supra, 94 Cal.App. 4th at p. 187, quoting Johnson v. Superior Court, supra, 66 Cal.App.4th at p. 72.) A parent’s duty of support for his or her children does not end with the furnishing of necessities “ ‘ “if he [or she] is able to afford more.” ’ ” (Hubner, supra, at p. 187, quoting McGinley v. Herman (1996) 50 Cal.App.4th 936, 941; see section 4053, subd. (a) [“A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life”]; subd. (d) [“Each parent should pay for the support of the children according to his or her ability”]; subd. (f) [“Children should share in the standard of living of both parents”].) In short, “income discrepancies ․ can affect the child’s needs,” and even where the section 4057, subdivision (b)(3) exception clearly applies, the trial court should “assess[ ] [the child’s needs] differently depending on whether [the supporting parent] earns $12 million a year [or] ․ $1 million ․” (Johnson v. Superior Court, supra, at p. 74; accord, Hubner, supra, at p. 187.)

A trial court persuaded by the evidence that a downward departure from the guideline is justified because the guideline amount exceeds the child’s needs must comply with the procedural requirements of section 4056, subdivision (a), which states: “To comply with federal law,[14 ] the court shall state, in writing or on the record, the following information whenever the court is ordering an amount for support that differs from the statewide uniform guideline formula amount under this article: [¶] (1) The amount of support that would have been ordered under the guideline formula. [¶] (2) the reasons the amount of support ordered differs from the guideline formula amount. [¶] (3) The reasons the amount of support ordered is consistent with the best interests of the children.” Section 4056 is clear: “ ‘[A] court cannot exercise its discretion [to deviate from the guideline] ․ without saying why, either in writing or on the record.’ ” (In re Marriage of Brinkman (2003) 111 Cal.App.4th 1281, 1292-1293.) The obligation to provide the information required by section 4056, subdivision (a) arises sua sponte (In re Marriage of Laudeman (2001) 92 Cal.App.4th 1014), and the court’s failure to comply with the statute’s procedural requirements, standing alone, constitutes ground for reversal of a child support order and remand for compliance. (Rojas v. Mitchell (1996) 50 Cal.App.4th 1445, 1450 [reversal required where trial court failed to state its reasoning, although support order did not appear defective or unsupported by substantial evidence]; accord, Hubner, supra, 94 Cal.App.4th at p. 183; Hall, supra, 81 Cal.App.4th at p. 319; In re Marriage of Gigliotti (1995) 33 Cal.App.4th 518, 526.) As explained in Hall, the provision serves several vital functions, including assuring parents that the system under which support is calculated is “ ‘just’ ” and that “ ‘the amount of the support was arrived at [under a process] ․ that is fair and reasonable to both the payor and the payee,’ ” and providing sufficient information in the record for appellate courts “to evaluate whether a court correctly followed the formula guideline ․ or whether it abused its discretion in differing from it.” (Hall, supra, at pp. 319-320, italics omitted.)

Here, the court found the monthly guideline amount was $25,325, but awarded $8,500 in child support.15 It failed to state, either in its written order or on the record, its reasons for deviating from the guideline or why it believed the amount awarded was in Z.’s best interests. Accordingly, we must reverse and remand for the court to provide the omitted reasoning.16

Respondent contends that the mandated findings are discernable from the record. (See Hubner, supra, 94 Cal.App.4th at p. 183 [appellate court need not reverse “if the missing information [required by section 4056, subdivision (a)] is ․ otherwise discernible from the record”]; Rojas v. Mitchell, supra, 50 Cal.App.4th at p. 1450 [“In general, the failure to make a material finding on an issue supported by the pleadings and substantial evidence is harmless when the missing finding may reasonably be found to be implicit in other findings”].) However, the court’s comments on the record do not supply the missing rationale; if anything, they support an alternative ground for reversal. First, the court repeatedly indicated it had reviewed appellant’s income and expense declaration and assured itself that the amount awarded would allow her to pay her existing expenses. As previously discussed, a child’s needs are primarily a function of the higher earning parent’s disposable income and standard of living. The assumption that a child’s “historic expenses” define his or her needs “is erroneous in the case of wealthy parents, because it ignores the well-established principle that the ‘child’s need is measured by the parents’ current station in life.’ ” (Cheriton, supra, 92 Cal.App.4th at p. 293, quoting In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 96; accord, Chandler, supra, 60 Cal.App.4th at pp. 127, 129 [support order reversed where trial court focused on mother’s monthly expenses and concluded $3,000 represented the “ ‘current reasonable needs’ ” of the child, directing father, who had gross monthly income of $117,000, to pay $3,000 per month support, “rather than independently determining the expenses for [the child]”]; Hubner, supra, 94 Cal.App.4th at p. 186 [extraordinarily high earning parent’s income “clearly is the primary factor in a child support determination”]; see also McGinley v. Herman, supra, 50 Cal.App.4th at p. 945 [where trial court determined an award of $2,150 per month was sufficient for an out of wedlock child because it represented the amount “ ‘usually’ ” awarded in “ ‘cases like this,’ ” Court of Appeal reversed, finding court “did not give sufficient consideration to the child’s right to share in the standard of living of his extraordinarily high earning father” (italics omitted) ].)

Second, the court expressed concern that support for Z. might accrue to the benefit of appellant or her other children. The Legislature deems it “appropriate[ ]” that child support be used to “improve the standard of living of the custodial household” because this “improve[s] the lives of the children.” (Section 4053, subd. (f).) Thus, courts have “consistently recognized” that “ ‘where the supporting parent enjoys a lifestyle that far exceeds that of the custodial parent, child support must to some degree reflect the more opulent lifestyle even though this may, as a practical matter, produce a benefit for the custodial parent.’ ” (In re Marriage of Hubner (1988) 205 Cal.App.3d 660, 668; accord, Johnson v. Superior Court, supra, 66 Cal.App.4th at p. 71; In re Marriage of Catalano (1988) 204 Cal.App.3d 543, 552.)

Third, based on the comments made after its ruling, the court appeared to place the burden on appellant to justify payment of the guideline amount she sought. “ ‘When the extraordinarily high earning supporting parent seeks a downward departure from a presumptively correct guideline amount, it is that parent’s “burden to establish application of the formula would be unjust or inappropriate,” and the lower award would be consistent with the child’s best interests.’ ” (S.P. v. F.G., supra, 4 Cal.App.5th at p. 930.)

Respondent contends there was evidence before the court — e.g., father’s breakdown of his household expenses — from which the court reasonably could have concluded that Z.’s needs were in the range of the amount awarded. As the court held in Rojas v. Mitchell, supra, 50 Cal.App.4th at page 1450, the existence of substantial evidence in the record does not take the place of the reasoning required by section 4056, subdivision (a). In any event, nothing in the record indicates the court relied on any evidence other than appellant’s income and expense declaration. Even after its ruling was challenged by appellant’s counsel, the court reiterated its reliance on “[appellant’s] income and expense declaration” as “evidence of the reasonable needs of the child.”17

Finally, we address appellant’s contention that on remand, the trial court should be instructed to award guideline support of $25,325 per month retroactive to October 2014, because respondent “did not meet his burden in rebutting the guideline because he presented no evidence that the guideline exceeded the child’s needs according to the standard of living attainable by his income.” Respondent provided a declaration of income and expenses and detailed information about his expenditures from which information about his lifestyle and the standard of living enjoyed by him and his other children might have been extracted. In addition, Mother presented evidence of the cost of the more comfortable housing and some of the extracurricular activities she wished to provide for Z. (See S.P. v. F.G., supra, 4 Cal.App.5th at p. 930 [“A party’s burden of proof may be satisfied with evidence supplied by the party without the burden”].) On remand, the court may determine that deviation from the guideline is warranted after reassessing the evidence under the correct standard and making the requisite statutory findings.18

DISPOSITION

The order is reversed. The matter is remanded for the trial court to (1) assess whether the guideline amount of $25,325 exceeds Z.’s needs under the criteria discussed in this opinion and if so, (2) state, in writing or on the record, the reasons the amount of support ordered differs from the guideline formula amount and the reasons the amount of support ordered is consistent with the best interests of Z. Appellant is awarded her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Filed 3/15/17

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

Y.R., Plaintiff and Appellant,

v.

A.F., Defendant and Respondent.

B266621

(Los Angeles County Super. Ct. Nos. BF051758)

ORDER MODIFYING OPINION AND CERTIFYING OPINION FOR PUBLICATION [NO CHANGE IN JUDGMENT]

THE COURT:*

It is ordered that the opinion filed February 24, 2017 be modified on page 19, footnote 16, line three as follows:

Replace the word clearing with cleaning so as to be read as “expenses, clothing, and dry cleaning, relating its findings to the ․”

The opinion was not certified for publication in the Official Reports. For good cause it now appears that the opinion should be certified for publication in the Official Reports. Pursuant to California Rules of Court, rules 8.1100 and 8.1110, this opinion, as modified, is certified for publication.

This modification does not change the judgment.

*EPSTEIN, P. J.

MANELLA, J.

WILLHITE, J.

FOOTNOTES

1.   Undesignated statutory references are to the Family Code.

2.   By stipulation of the parties, respondent was to have no custody or visitation rights.

3.   Section 4057, subdivision (a) provides that guideline child support established by the formula set forth in section 4055, subdivision (a) — which increases as the supporting parent’s monthly disposable income increases — “is presumed to be the correct amount of child support to be ordered.” Subdivision (b)(3) of section 4057 provides that the presumption may be rebutted where “[t]he parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.” In White v. Marciano (1987) 190 Cal.App.3d 1026, the court held: “Where there is no question of the noncustodial parent’s ability to pay any reasonable support order, ․ evidence of detailed lifestyle ․ [is] irrelevant to the issue of the amount of support to be paid and thus protected from discovery and inadmissible in determining the support order.” (Id. at p. 1032.) As explained in Johnson v. Superior Court (1998) 66 Cal.App.4th 68, despite the broad language of White, financial information concerning extraordinarily high earners is not irrelevant to the needs of their children: the holding prohibits “the type of detailed discovery ․ for which responses would be ‘unnecessary, ․ unduly burdensome and oppressive ․’ ” (Id. at p. 75.) As further explained in Estevez v. Superior Court (1994) 22 Cal.App.4th 423, in calculating guideline child support where the high income earner resists detailed discovery of his or her financial affairs, “the trial court may make such assumptions concerning his or her net disposable income, federal income tax filing status, and deductions from gross income as are least beneficial to the extraordinarily high earner ․” (Id. at p. 431.)

4.   Counsel for appellant threatened to file a motion to compel and participated in a meet and confer with respondent’s counsel. Respondent eventually provided 2013 and 2014 profit and loss statements for his company, Cartel Productions, Inc.; 2013 and 2014 profit and loss statements for two other companies he owned with insignificant income; 2013 and 2014 personal profit and loss statements; cancelled checks showing his personal income for the first two months of 2015; and tax returns for himself and his companies for 2012 and 2013. Appellant no longer disputes that respondent’s income falls within the extraordinarily high income category.

5.   Respondent states in his brief that he paid $3,913 per month in private school tuition for the two minor children of his marriage.

6.   This sum included the $400 per month appellant paid for Z.’s Catholic school tuition and the $550 per month he paid for appellant’s car lease.

7.   Attached statements of cash receipts and disbursements for Cartel showed the company grossing $5.4 million in 2013 and $3.339 million in 2014. Payment for “salaries” (presumably appellant’s) was $3,612,000 in 2013 and $2,097,000 in 2014. Also attached to the income and expense declaration were copies of five Cartel checks paid to respondent in January and February 2015, totaling approximately $300,000 after deduction of state and federal taxes ($610,000 gross).

8.   Appellant submitted a declaration stating that in his estimation, 50 percent of Cartel’s expenses for “[a]utomobile,” “[e]ntertainment,” “[o]ffice [s]upplies,” “[t]ravel,” and “[p]romotion” should be allocated to him as income, along with 25 percent of the amount allocated to “[t]elephone” expenses and 100 percent of the amount allocated to “[s]ecurity” expenses. When these amounts were added, along with a few thousand dollars in residuals and fees from another company, his income increased from $2,097,000 in 2014 to $2,282,512, the figure he used to calculate his monthly income of approximately $190,000. (See § 4058, subd. (a)(3); In re Marriage of Tharp (2010) 188 Cal.App.4th 1295, 1326 [expenditures classified as expenses by a company may be re-classified perquisites of the employee for purposes of calculating spousal or child support].)

9.   Whether this was included in the income and expense declaration in the tuition or children’s expense categories was unclear.

10.   “The DissoMaster is a privately developed computer program used to calculate guideline child support under the algebraic formula required by section 4055.” (In re Marriage of Williams (2007) 150 Cal.App.4th 1221, 1227, fn. 5 (Williams).)

11.   As previously noted, the $610,000 represented pre-tax income. Respondent’s post-tax income from Cartel was approximately $300,000 for those two months.

12.   In so doing, Blumenthal not only allocated 100 percent of the expenses listed in respondent’s declaration to income, but also added such items as Cartel’s accounting and business management expenses, bank charges, rent, union dues and legal fees.

13.   Appellant also filed written objections after the hearing, stating: “The court placed the burden on [appellant] to prove the reasonable needs of the minor child while the law provides that it is [r]espondent’s burden” and that “[t]he court abused its discretion in determining the minor child’s needs by basing it on [appellant’s] Income and Expense declaration ․”

14.   (See 42 U.S.C. section 667, subd. (a) [“Each State, as a condition for having its State plan approved under this part, must establish guidelines for child support award amounts within the State”]; subd. (b)(2) [“There shall be a rebuttable presumption, in any judicial or administrative proceeding for the award of child support, that the amount of the award which would result from the application of such guidelines is the correct amount of child support to be awarded. A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case, as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case”].)

15.   The court also directed respondent to pay private school tuition for Z. and the cost of health insurance. The amount of these costs is not clear from the record, but neither party suggests they would be more than $3,600 per month.

16.   We recognize the court’s written order stated that the guideline amount “would exceed the child’s reasonable needs,” and the court stated on the record that its $8,500 per month award was “a reasonable assessment of the additional expenses that would allow the child to live at a standard of living that’s appropriate for him [sic] and for the respondent’s position in life.” But to comply with section 4056, subdivision (a), a court must do more than issue conclusory findings; it must articulate why it believes the guideline amount exceeded the child’s needs and why the deviation is in the child’s best interests. (See S.P. v. F.G., supra, 4 Cal.App.5th at p. 935 [“The statement of reasons contemplated by section 4056, subdivision (a)(3) is not just a conclusory finding that the variance from presumptively correct formula support is in a child’s best interest”].) In S.P. v. F.G., where the support order was affirmed, the trial court made specific findings as to reasonable monthly amounts for rent, utilities, groceries, dining out, vacations, entertainment, auto expenses, clothing, and dry clearing, relating its findings to the evidence presented as to both the mother’s current expenses and the costs of a more lavish lifestyle in a detailed written order. (4 Cal.App.4th at pp. 925-930.)

17.   The only other evidence the court mentioned was “the ․ evidence that’s been submitted to me about the [expenses] ․ that the child’s incurring,” another apparent reference to appellant’s income and expense declaration.

18.   We note that the court’s findings and order were made on form FL-340, submitted by respondent’s counsel. The Judicial Council has adopted a supplement to form FL-340 — form FL-342a (Non-Guideline Child Support Findings Attachment) — for mandatory use when a court deviates from the guideline. (See Gov. Code, § 68511.) Form-342a includes the findings mandated by section 4056. Even when that form is used, however, the court must state the reasons for the findings in writing or on the record. (See Rojas v. Mitchell, supra, 50 Cal.App.4th at pp. 1450-1451.)

MANELLA, J.

We concur: EPSTEIN, P. J. WILLHITE, J.

In re Marriage of Cohen
(September 7, 2016; ordered partially published October 3, 2016)

In re Marriage of Cohen was a recently decided family law dissolution of marriage case which dealt with a request for a reduction of a high earner ex-husband/father’s child support obligations as well as his request to terminate spousal support after his ex-wife’s remarriage. The appellate court made findings that the trial court correctly denied the ex-husband/father’s request to reduce the child support amounts and also affirmed the lower court’s ruling which denied his request to terminate spousal support due to his ex-wife’s subsequent remarriage.

No Shepard’s SignalTM

As of: December 6, 2016 2:15 PM EST

In re Marriage of Cohen

Court of Appeal of California, Fourth Appellate District, Division Three

September 7, 2016, Opinion Filed

G052058

Reporter

3 Cal. App. 5th 1014 *; 207 Cal. Rptr. 3d 846 **; 2016 Cal. App. LEXIS 823 ***

In re Marriage of LAURALIN ANDERSON COHEN and RICHARD COHEN.LAURALIN ANDERSON COHEN, Respondent, v. RICHARD COHEN, Appellant; ORANGE COUNTY DEPARTMENT OF CHILD SUPPORT SERVICES, Intervener.

Notice: As modified Oct. 3, 2016. CERTIFIED FOR PARTIAL PUBLICATION.*

Subsequent History: [***1] The Publication Status of this Document has been Changed by the Court from Unpublished to Published October 3, 2016.

Prior History: Appeal from orders of the Superior Court of Orange County, No. 06D009414, Nathan R. Scott, Judge.

Disposition: Affirmed.

Core Terms


spousal support, modification, child support, change of circumstances, stipulated judgment, Marriage, modify, remarriage, terminate, trial court, bonus, support obligation, reduction, remarried, parties, spouse, circumstances, support order, de novo, cases, payor, guideline, annual, decree, terms, two year, earner’s, provides, ex-wife, spousal

Case Summary


Overview
HOLDINGS: [1]-Averaging bonus income over two years in calculating child support was a reasonable exercise of the trial court’s discretion under Fam. Code, §§ 4058, 4059, 4060, 4064, because that was the period the bonus was intended to cover; [2]-A “de novo” modification clause in a stipulated divorce judgment providing for above-guideline child support did not avoid the requirement to show a change of circumstances, which was not shown, in seeking a reduction to the guideline amount; [3]-A stipulation excluding an imminent remarriage showed a clear intent to waive termination under Fam. Code, § 4337, and to continue spousal support after the contemplated remarriage; [4]-In denying a reduction of spousal support based on a temporary loss of income, the trial court properly considered the factors set out in Fam. Code, § 4320, including the supported spouse’s caretaking obligations.

Outcome
Orders affirmed.

LexisNexis® Headnotes


Family Law > Child Support > Support
Obligations > Computation of Child Support

HN1 Under Fam. Code, § 4058, the definition of income includes bonuses. Fam. Code, § 4064, provides that a court may adjust child support as appropriate to accommodate the seasonal or fluctuating income of either parent. To boil down the law involving how bonuses affect income calculations for purposes of child support determination, the treatment must be fair and representative. Averaging out a bonus makes sense over the period the bonus was intended to cover. Generally speaking, there is heavy emphasis in the law on the income tax calendar year as the basic unit on which to calculate income. Fam. Code, § 4059. But the relevant time period may be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income. Since Fam. Code, §§ 4060, 4064, are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after all, the whole point of discretion is a recognition that there are times when there should not be a bright-line rule.

Family Law > … > Support
Obligations > Modification > Changed Circumstances

HN2 A change of circumstances is required before a modification of child support.

Family Law > Child Support > Support
Obligations > Modification

HN3 Child support obligations are law-imposed as distinct from contractual, so the court always retains authority to assure a minimum level of adequate child support. The authority of the court to modify the decree in a proper case, and to provide when necessary that a party shall discharge his paramount duty in caring for and defraying the expense of educating his children, is not doubted. The stipulation of the parents cannot divest them, as against the children, of this duty.

Family Law > … > Support
Obligations > Modification > Changed Circumstances

HN4 The reason for the change of circumstances rule is the doctrine of res judicata. Authority to modify an allowance of child support does not include the right to alter the award upon the state of the case existing when the decree was entered.

Headnotes/Syllabus


Summary

CALIFORNIA OFFICIAL REPORTS SUMMARY

The trial court denied requests to modify above-guideline child support amounts down to a guideline amount and to terminate spousal support following remarriage. (Superior Court of Orange County, No. 06D009414, Nathan R. Scott, Judge.)

The Court of Appeal affirmed, holding that averaging bonus income over two years in calculating child support was a reasonable exercise of the trial court’s discretion (Fam. Code, §§ 4058, 4059, 4060, 4064) because that was the period the bonus was intended to cover. A “de novo” modification clause in a stipulated divorce judgment providing for above-guideline child support did not avoid the requirement to show a change of circumstances, which was not shown, in seeking a reduction to the guideline amount. A stipulation excluding an imminent remarriage showed a clear intent to waive termination (Fam. Code, § 4337) and to continue spousal support after the contemplated remarriage. In denying a reduction of spousal support based on a temporary loss of income, the trial court properly considered factors (Fam. Code, § 4320) that included the supported spouse’s caretaking obligations. (Opinion by Bedsworth, J., with O’Leary, P. J., and Thompson, J., concurring.)

Headnotes

CALIFORNIA OFFICIAL REPORTS HEADNOTES

CA(1) (1)

Dissolution of Marriage; Separation § 100 > Permanent Child Support Orders > Determination of Amount > Bonuses.

Under Fam. Code, § 4058, the definition of income includes bonuses. Fam. Code, § 4064, provides that a court may adjust child support order as appropriate to accommodate seasonal or fluctuating income of either parent. To boil down the law involving how bonuses affect income calculations for purposes of child support determination, the treatment must be fair and representative. Averaging out a bonus makes sense over the period the bonus was intended to cover. Generally speaking, there is heavy emphasis in the law on the income tax calendar year as the basic unit on which to calculate income (Fam. Code, § 4059). But the relevant time period may be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income. Since Fam. Code, §§ 4060, 4064, are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after all, the whole point of discretion is a recognition that there are times when there should not be a bright-line rule.

CA(2) (2)

Dissolution of Marriage; Separation § 104 > Permanent Child Support Orders > Modification > Grounds > Change of Circumstances.

A change of circumstances is required before a modification of child support.

CA(3) (3)

Dissolution of Marriage; Separation § 103 > Permanent Child Support Orders > Modification > Stipulation.

Child support obligations are law imposed as distinct from contractual, so the court always retains authority to assure a minimum level of adequate child support. The authority of the court to modify the decree in a proper case, and to provide when necessary that a party shall discharge his or her paramount duty in caring for and defraying the expense of educating the children, is not doubted. The stipulation of the parents cannot divest them, as against the children, of this duty.

CA(4) (4)

Dissolution of Marriage; Separation § 104 > Permanent Child Support Orders > Modification > Grounds > Change of Circumstances.

The reason for the change of circumstances rule is the doctrine of res judicata. Authority to modify an allowance of child support does not include the right to alter the award upon the state of the case existing when the decree was entered.

CA(5) (5)

Dissolution of Marriage; Separation § 103 > Permanent Child Support Orders > Modification > Stipulation > Change of Circumstances.

A parent’s reliance on a “de novo” modification clause in a stipulated divorce judgment providing for above-guideline child support was untenable as a basis for seeking a reduction without showing a change of circumstances. That position would reduce family law orders and judgments to mere temporary placeholders in contravention of res judicata.

[Kirkland et al., Cal. Family Law Practice and Procedure (2016) ch. 42, § 42.23; Cal. Forms of Pleading and Practice (2016) ch. 224, Dissolution of Marriage: Child Support, § 224.176.]

Counsel: John R. Schilling for Appellant.

The Law Offices of Saylin & Swisher, Brian G. Saylin, Lindsay L. Swisher and Daniela A. Laakso for Respondent.

Kamala D. Harris, Attorney General, Julie Weng-Gutierrez, Assistant Attorney General, Linda M. Gonzalez and Jennevee H. de Guzman, Deputy Attorneys General, for Intervener.

Judges: Opinion by Bedsworth, J., with O’Leary, P. J., and Thompson, concurring.

Opinion by: Bedsworth, J.

Opinion


[**847] BEDSWORTH, J.—

I. INTRODUCTION

The marriage underlying this case was sadly overburdened and failed. Unfortunately, the divorce is also problematic. Essentially, a very high earner making $1.9 million during the marriage agreed to a stipulated divorce judgment providing for above-guideline child and spousal support. In this appeal from what was (mostly) the denial of the high earner’s postjudgment request for a reduction of his child support obligations to guideline, and his request to terminate spousal support in the wake of the wife’s remarriage, he presents two issues of law.

(1) There was a clause in [***2] the stipulated judgment to the effect that any future modification proceeding would be reviewed de novo. Did that clause [*1017] eliminate the usual change-of-circumstances rule that applies to postjudgment modifications? We answer no. The law does not allow litigants to agree to what are in effect “temporary” judgments, revisable at will.

(2) There was a clause in the stipulated judgment that said if the high earner’s ex-wife remarried a person making less than $400,000 a year, the high earner would still keep paying her spousal support—but at a reduced rate. Did the ex-wife’s remarriage terminate spousal support anyway, given that the clause did not expressly mention Family Code section 4337,1 [**848] the statute that makes spousal support terminable at remarriage? Again we answer no. The lack of an express reference to section 4337 did not function as a kind of “king’s X” to contradict the plain intent of the clause—particularly since the parties modified the stipulated judgment in October 2012 to provide for continued spousal support after the wife’s imminent remarriage.

We thus conclude there is no error in the orders challenged here. The trial court correctly denied the [***3] high earner’s requests to modify the child support amounts down to a guideline amount,2 and also correctly denied his request to terminate spousal support in the wake of the ex-wife’s subsequent remarriage.

II. FACTS

Lauralin Anderson Cohen and Richard Cohen were married in 1990 and separated in 2006. They had four children. Lauralin3 then petitioned for dissolution of the marriage. A little less than five years later, the couple entered into a stipulated judgment for dissolution.

Richard is a highly paid executive in the clothing industry who had earned about $1.9 million a year during the marriage. But his income had gone down by 2011. The stipulated judgment recites that Richard’s income in March 2011 was $70,166 per month, which works out to $841,992 annually.

The stipulated judgment provides for total monthly child support payments in excess of $17,366 a month.4 In computing that amount, Richard is given [*1018] credit for having a 90 percent time share with one of the children, Dean, and [***4] a 10 percent time share with two of the other children, Jason and Skylar. The fourth child, Daniel, is quadriplegic as a result of cerebral palsy, and requires continual nursing care.5 There is no dispute that the child support order is higher than statutory legal guidelines (see § 4055 et seq.) require.

[**849] The judgment also has a provision stating that any future requests to modify support should be reviewed “de novo by the court.” The exact text of this provision is: “The allocations of support as set forth above are without prejudice to either party. In the event that either party seeks a modification of child support or dependant adult support in the future, said support amounts and the allocation of said support shall be reviewed de novo by the court.”

It further provides for spousal support in the amount of about $19,166 a month.6 The judgment had this provision in regard to remarriage by Lauralin: “In the event Petitioner [Lauralin] becomes remarried and Petitioner’s new spouse income is less than $400,000.00, Respondent’s [Richard’s] total [***6] annual spousal support obligation shall be reduced by an amount equal to 45% of Petitioner’s new spouse income. If [Lauralin’s] new spouse income is greater than $400,000.00 per year, [Richard’s] spousal support obligation shall be reduced to zero. This provision shall not apply if [Lauralin] remarries within 24 months of entry of this Judgment. In the event that [Lauralin] remarries within 24 months of entry of this Judgment, spousal support payable to [Lauralin] shall terminate.”

In January 2014, Richard filed a request for order (RFO) seeking, among other things, a reduction in his child support obligation based on significant [*1019] declines in his income incurred in the years 2012 and 2013. Clearly his income had declined in those two years.7 However, by the time Richard’s request was finally heard on February 3, 2015, the parties had achieved a stipulation which took care of all issues prior to January 1, 2014. Thus Richard’s RFO was based only on his income in 2014 going forward.

And by February 2015, things had significantly turned around for Richard. In May 2014, Richard had begun working for a Hong Kong based company, Trinity Limited. That month Trinity began paying him a salary of $500,000 a year ($41,666 a month). Plus, it paid him a $500,000 signing bonus, predicated on meeting certain “targets” over the course of the next two years.

Three requests were presented to the court on Richard’s motion: (1) reduction of child support to guideline level, particularly in light of the de novo clause in the stipulated judgment; (2) termination of Lauralin’s spousal support based on a remarriage that occurred in October 2012, and (3) an increase of Richard’s time share percentage regarding Skylar to 100 percent based on his payment [***8] of 100 percent of the costs of Skylar’s being in a school for mentally ill children. Richard challenges the trial court’s decision as to issues (1) and (2), which he lost except for a four-month reduction for the first four months of 2014. Issue (3) has been abandoned on appeal.

In regard to issue (1), the child support reduction, the trial judge noted that, considering Richard’s new employment with Trinity at $41,666 a month plus proration of his $500,000 bonus over the 24 months from May 2014 (another $20,833 a month), and an “ex pat” benefit paid by Trinity [**850] ($10,833 a month), Richard was now making more money than he was making at the time of the May 2011 judgment—at least $73,932 a month against the earlier $70,166.8 On the other hand, if one were to take into account the first four lean months of 2014—in which Richard had made $27,830 per month—the total average for the year 2014 would be $62,695, which, if our math is correct, would represent a roughly 11 percent drop in income from the level provided for in the 2011 stipulated judgment.

The trial [***9] judge resolved these disparities by amortizing the two-year $500,000 bonus prospectively from May 2014 forward. In practical terms, [*1020] that meant the court granted Richard’s request to reduce child support for the first four months of 2014 (prior to the Trinity employment), but from May 2014 forward, there were no adverse changes of circumstance to justify modification.

As to issue (2), it turned out that Lauralin had remarried on October 19, 2012, which was just a little more than 18 months since the date of the March 3, 2011 stipulated judgment. Had nothing been done, her 2012 remarriage, by the terms of the March 2011 judgment, would have terminated all spousal support.

However, on October 15, 2012, four days before her remarriage, she and Richard, each now in propria persona,9 entered into a stipulation which retroactively changed the 24-month period that began on March 3, 2011, to an 18-month period. The net effect of the stipulation allowed Lauralin to remarry within the next few days and still continue receiving spousal support.

The stipulation of October 15, 2012, looks like a repeat [***10] of language already quoted on page 1018 ante, but the 18-month change is significant. The way the stipulation was structured, it was as if the March 2011 stipulated judgment was being modified nunc pro tunc. It said: “Spousal Support paragraph number 3.3 shall be modified so the 18 months is substituted for 24 months at page 11, lines 5 and 6. Said paragraph shall now read as follows: [¶] 3.3 In the event [Lauralin] becomes remarried and [her] new spouse income is less than $400,000, [Richard’s] total annual spousal support obligation shall be reduced by an amount equal to 45% of [Lauralin’s] new spouse income. If [Lauralin’s] new spouse income is greater than $400,000 per year, [Richard’s] spousal support obligation shall be reduced to zero. This provision shall not apply if [Lauralin] remarries within 18 months of this judgment. In the event that [Lauralin] remarries within 18 months of entry of this judgment, spousal support payable to [Lauralin] shall terminate.”

In an income and expense declaration filed May 2014, Lauralin’s new spouse’s income is listed as $5,416 a month (or less than $65,000 a year). Forty-five percent of that amount is $2,337.20, which reduced Richard’s $19,166 [***11] obligation to $16,828.80.

As to Richard’s request in regard to spousal support, the trial court ruled the stipulated judgment, particularly as modified on October 15, 2012, waived [*1021] what would otherwise be the effect of section 4337, which normally terminates spousal support on remarriage.10 The court also [**851] ruled that the stipulated judgment waived what otherwise would be the rebuttable presumption set out in section 4323 of the decreased need for spousal support that occurs on a supported spouse’s cohabitation with a nonmarital partner.11 The court further rejected Richard’s request to reduce spousal support for the first four (lean) months of 2014, ruling that Richard had not shown a material change in the (numerous) factors that govern spousal support under section 4320. The court reasoned his four-month decline in income was “only one such factor.”

The court’s orders and reasoning were formally set out in a signed order filed April 17, 2015. Richard timely filed a notice of appeal from the orders of April 17, 2015, on June 4, 2015.

III. DISCUSSION

A. The Amortization Issue

We first deal with a relatively minor issue in Richard’s appeal, which is his argument that if the trial court had used a 12-month January-to-December 2014 calendar year average, the court would have recognized that Richard had indeed shown a change of circumstances. That is, if one isolates the 12 months of calendar 2014 and takes an average based on those particular 12 months, exhibit 1 showed an 11 percent reduction in monthly income in comparison to March 2011 ($62,695 versus $70,166).

CA(1) (1) The issue implicates the body of law governing how fluctuating income is treated for child support. (See generally HN1 §§ 4058 [definition of income includes bonuses], 4064 [“court [***13] may adjust the child support order as appropriate to accommodate seasonal or fluctuating income of either parent”]; In re Marriage of Mosley (2008) 165 Cal.App.4th 1375 [82 Cal. Rptr. 3d 497] (Mosley); In re Marriage of Riddle (2005) 125 Cal.App.4th 1075 [23 Cal. Rptr. 3d 273] (Riddle); In re Marriage of Rosen (2002) 105 Cal.App.4th 808 [130 Cal. Rptr. 2d 1] (Rosen); and Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2016) ¶ 6:181, pp. 6-118 to 6-119.)

[*1022]

If we were to attempt to boil down the law involving how bonuses affect income calculations for purposes of child support determination, it would be, simply: the treatment must be “fair and representative.” (See Riddle, supra, 125 Cal.App.4th at p. 1081.) Thus, for example, in Mosley, it was an abuse of discretion for the trial court to predicate a support order on the assumption the payor parent would receive a huge bonus when in fact such a large bonus “might never materialize.” (Mosley, supra, 165 Cal.App.4th at p. 1379.) In Riddle, the trial judge abused her discretion by taking just the two best months of the payor spouse’s most recent year of earnings to figure monthly income. That was, as the appellate court said, “an embarrassingly short period on which to predict the annual income of a commissioned salesperson who works in the financial markets.” (Riddle, supra, 125 Cal.App.4th at p. 1083.) And in Rosen this court held it was error for the trial court to base a goodwill valuation on an abnormally good year which was not “‘reasonably illustrative.’” (Rosen, supra, [**852] 105 Cal.App.4th at p. 820.)

But in [***14] this case, the trial court’s decision to average out Richard’s bonus over the two years prospectively May 2014 to May 2016 makes sense. This is the period the bonus was intended to cover. The trial court’s decision corresponds to the economic substance of that bonus, which was essentially paying Richard for anticipated good results for the next two years going forward, and, more to the point, locked him into proverbial golden handcuffs to keep him so working for those years. Conversely, the bonus was certainly not given in payment for any work done in the first four months of 2014.

It is true that, generally speaking, as the court said in Riddle, there is “heavy emphasis” in the law on the income tax calendar year as the basic unit on which to calculate income. (Riddle, supra, 125 Cal.App.4th at p. 1083, citing § 4059.)12 But the court was also careful in Riddle to point out that the relevant time period might be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income: “Since section[s] 4060 and 4064 are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after [***15] all, the whole point of discretion is a recognition that there are times when there shouldn’t be a bright-line rule.” (Id. at p. 1083; see id. at pp. 1083–1084 [contrasting various professions].) In the present case, amortization over two years was the most reasonable way of treating Richard’s May 2014 signing bonus.

[*1023]

B. The De Novo Issue

This brings us to the main argument Richard makes regarding his child support reduction request, namely that the court should have honored the “de novo” language in the modification paragraph of the stipulated judgment and looked at circumstances anew. The subtext of this argument is that the trial court, had it done so, would have reduced his above-guideline current order down to guideline.13

We dare say no family lawyer is unaware of the rule requiring a change of circumstances before a support order may be modified. The reason the rule is so ubiquitous in family practice has been explained in In re Marriage of Schaffer (1999) 69 Cal.App.4th 801 [81 Cal. Rptr. 2d 797]: “Because family law cases typically entail issues concerning an ongoing relationship rather than a distinct event—child support, custody and visitation, for example—the law builds in the necessary flexibility to accommodate changing circumstances by postjudgment orders to show cause hearings where the judgment has provided jurisdiction to do so. Unlike an auto accident case which might end with a tidy final judgment for money damages, [**853] the successive modifications possible in a family law proceeding can make the case resemble an unruly desert caravan strung out upon the sands.” (Id. at pp. 807–808; see, e.g., In re Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1475 [143 Cal. Rptr. 3d 81] [overview of basic rule].)

The precise issue thus becomes whether the parties could contract around the change-of-circumstances rule. [***17] In support of his theory Richard points to a couple of cases, In re Marriage of Catalano (1988) 204 Cal.App.3d 543 [251 Cal. Rptr. 370] (Catalano) and In re Marriage of Thomas (1981) 120 Cal.App.3d 33 [173 Cal. Rptr. 844] (Thomas) from which one might extract the possibility of modification without a change of circumstances.14

CA(2) (2) But reliance on Catalano is misplaced. The only support for Richard’s position in Catalano is dicta,15 because in Catalano there was a change of [*1024] circumstances justifying the modification (in that case, upwards). (See Catalano, supra, 204 Cal.App.3d at p. 549 [noting increase in payor parent’s earnings].) Indeed, Catalano is regularly cited for the proposition that HN2 a change of circumstances is required before a modification. (E.g., Bodo, supra, 198 Cal.App.4th at p. 388; In re Marriage of Laudeman (2001) 92 Cal.App.4th 1009, 1015 [112 Cal. Rptr. 2d 378].)

CA(3) (3) Moreover, the Catalano dicta is merely a variant of the well-established family law rule that HN3 child support obligations are law imposed as distinct from contractual, so the court always retains authority to assure a minimum level of adequate child support. Indeed, from the very earliest days, California courts overrode stipulated support orders (or the total lack of provision for them in the first place) to impose or increase child support. (See Wilson v. Wilson (1873) 45 Cal. 399 (Wilson) [imposing child support where there was none in original divorce decree].) As a late 19th-century case summarized the rule: “The authority of the court to modify the decree in a proper case, and to provide when necessary that the plaintiff shall discharge his paramount duty in caring for and defraying the expense of educating his children, is not doubted. The stipulation of the parents cannot divest them, as against the children, of this duty.” (Parkhurst v. Parkhurst (1897) 118 Cal. 18, 22 [50 P. 9], italics added (Parkhurst).)16

[**854] But the other authority Catalano cited— and one which Richard also relies on directly— Thomas, cannot be so readily distinguished. Thomas, in fact, provides some real support for Richard’s position. In Thomas, a former husband sought and obtained a $25-a-month reduction in child support per child without proof or even allegation of change of circumstances. (See Thomas, supra, 120 Cal.App.3d at p. 34.) We now explain why we decline to follow the Thomas decision.

Thomas was a bagatelle of a decision consisting of but four paragraphs, and dealing with unusual circumstances that could no longer occur. In Thomas, a former husband sought a downward modification of his support obligation from $125 to $100 a month per child, but could not provide a [*1025] “court record” [***20] of the parties’ circumstances at the time the original judgment was made. (Thomas, supra, 120 Cal.app.3d at p. 35.) He got his downward modification in the trial court and the appellate court affirmed. The appellate court reasoned that, given the absence of any findings of financial circumstances, the modification proceeding itself was the “first time” the “proper amount” of child support was litigated, hence the court acted within its discretion in modifying the previous order based on the current evidence, and so affirmed the order. (Thomas, supra, 120 Cal.App.3d at p. 35.) In the process, the Thomas court articulated a rule allowing modification without changed circumstances in more open-ended terms than just a rule that allows courts to increase support upwards to assure that children are adequately supported: “The court may modify a child support order where the parties have stipulated to the amount of support; modification does not always require a showing of changed circumstances and in certain cases may be justified by current circumstances. (See Moore v. Moore (1969) 274 Cal.App.2d 698, 703 [79 Cal. Rptr. 293].)” (Id. at pp. 34–35.)

Moore, however, does not stand for the open-ended proposition that Thomas cited it for. Moore was simply one of the numerous California cases we have already mentioned allowing courts to modify [***21] stipulated judgments to assure adequate child support. Modifications are needed in such cases, as the Moore court put it, if only to prevent children becoming “public charges.” (See Moore v. Moore, supra, 274 Cal.App.2d at p. 703.) The Moore case arose because of a change of custody of one child, and the parent with the new custody of that child simply did not have the “‘“income and resources”’” to adequately provide for that child’s expenses. (Id. at pp. 702–703, quoting Levy v. Levy (1966) 245 Cal.App.2d 341, 358–359 [53 Cal. Rptr. 790].)

Thomas was thus different from the situation in Moore. Had the Thomas court followed the basic California rule, it would have analyzed the wife’s appeal in terms of whether the payor parent had met the burden he had to show a change of circumstances since the previous order. (E.g., In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 77 [46 Cal. Rptr. 2d 8] [burden on party seeking modification, citing cases].) Under the facts as stated in Thomas, the result would have been different. We need merely add such a burden on the payor father in Thomas would have hardly been unreasonable: Surely he could have offered a declaration as to what he was making just four years earlier when he agreed to the $125 per child support order. [**855] (See Thomas, supra, 120 Cal.App.3d at p. 34.) The Thomas court, faced with unusual facts that made their result just, had no reason to conduct this analysis.

HN4 CA(4) (4) The reason for the change of circumstances rule is the doctrine of res judicata. The [***22] first Supreme Court case to announce the change-of-circumstances rule in regard to modification requests was Snyder v. Snyder [*1026] (1933) 219 Cal. 80 [25 P.2d 403] (Snyder). There, in February 1932, a trial court reduced the total support owing an ex-wife and child when, just the previous October, the ex-husband had made an identical application and it had been turned down. The February attempt, in fact, contained not “a single new fact” since the October effort. (Id. at p. 81.) Our Supreme Court flatly said the court in February had “[no] authority” to alter the judgment, and relied on a now long-out-of-print treatise dating back to World War I, McKinney’s Ruling Case Law (1914).17 (Snyder, at p. 81.) After laying down the rule, the Snyder court in fact quoted from page 948 of the first volume of the Ruling Case Law hornbook, in terms that make it clear res judicata is the animating principle behind the change-of-circumstances rule: “‘Authority to modify the allowance, however, does not include the right to alter the award upon the state of case existing when the decree was entered, or to review the action of the chancellor therein. The parties had their day in court, with the right of appeal if the decree was deemed erroneous, and it cannot be supposed that it was intended [***23] that the court should sit in review of its own decrees, or that the same or some succeeding chancellor presiding in the same court should, after the lapse of indefinite time, have power to reverse, alter or modify a decree for alimony upon the facts existing at the time of its entry.’” (Snyder, supra, 219 Cal. at p. 81, italics added.)

CA(5) (5) As Snyder makes clear, Richard’s reliance on the “de novo” clause is untenable. His position would reduce family law orders and judgments to mere temporary placeholders in contravention of res judicata.

C., D.*

IV. DISPOSITION

The orders appealed from are affirmed. Lauralin shall recover her costs on appeal.

O’Leary, P. J., and Thompson, J., concurred.


* Pursuant to California Rules of Court, rule 8.1105(b) and rule 8.1110, this opinion is certified for publication with the exception of parts III.C. and III.D.

1 All further statutory references are to the Family Code.

2 The trial court did reduce support for a four-month period in 2014, a temporary reduction which the husband does not challenge in this appeal, and which we explain in more detail below.

3 We use first names for convenience.

4 The judgment does not spell out such a handy single number in one place. The trial judge, however, canvassed the various provisions of the judgment dealing with child support and put them into a helpful encapsulation in his minute order explaining his ruling:

“a. Jason, $2750 per month

“b. Dean, $1800 per month

“c. Skylar, $6650 per month

“d. Daniel, $2000 per month (into a trust)

“e. Plus $12,500 annually for each child (Daniel’s into a trust)

“f. Plus 100% of the children’s health care costs (though employer-provided funds and insurance)

“g. Plus 100% of the children’s school tuition costs through high school.”

According to Lauralin, the reason for some of the disparities in the payments to the children was to facilitate some publicly assisted nursing care for two of the children, Daniel and Jason. That public assistance is the reason the Attorney General’s office has filed a brief here on behalf of Orange [***5] County Department of Child Support Services.

5 All four children face some sort of significant disability. According to Lauralin’s declaration, in addition to Daniel, who has cerebral palsy, Jason is autistic and given to seizures, and Dean and Skylar (who are adopted siblings) each have attention deficit hyperactivity disorder; Dean also has reactive attachment disorder while his sister Skylar is bipolar.

Daniel is now an adult but incapacitated under section 3910 and thus still receiving support.

6 Fifteen thousand dollars a month plus an annual payment of $50,000, which works out to the $19,166.66 figure on a monthly basis.

7 Just as the May 2011 judgment was being entered, Richard lost his job with Robert Talbott Inc., so [***7] his income for May and June of 2011 was zero. From July 2011 to July 2012, he made $30,000 a month at Saks Fifth Avenue, and in 2012 about $44,000 a month from Saks, which continued to September 2013. He lost his position at Saks that month, but soon found employment with the WDiamond Group at about $20,000 a month, which is where his income stood in January 2014. But as we shall soon see, his employment fortunes were about to change for the better.

8 The figures were conveniently presented to the court in a spreadsheet labeled exhibit 1 and agreed to by both parties. Nice work.

9 The paperwork was prepared by Lauralin, and recites that both she and Richard are in propria persona.

10 Section 4337 provides in its entirety: “Except as otherwise agreed by the parties in writing, the obligation of a party under an order for the support of the other party terminates upon the death of either party or the remarriage of the other party.” (Italics added.)

11 The statute provides in pertinent part: “(a)(1) Except as otherwise agreed to by the parties in writing, there is a rebuttable [***12] presumption, affecting the burden of proof, of decreased need for spousal support if the supported party is cohabiting with a nonmarital partner. Upon a determination that circumstances have changed, the court may modify or terminate the spousal support as provided for in Chapter 6 (commencing with Section 3650) of Part 1.” (§ 4323, subd. (a)(1).)

12 The Riddle court’s point was that statutes, including the Internal Revenue Code and Family Code section 4059, are framed in “whole years” as distinct from “artificially truncated and therefore unrepresentative slices of time,” so it is unfair to try to take just a few months of abnormal income (whether high or low) as representative of a payor parent’s true income. (Riddle, supra, 125 Cal.App.4th at p. 1084.)

13 The point of the Attorney General’s brief in this case is to underscore the fact that parents cannot contract around certain levels of child [***16] support, since the state has an interest in the well-being of children independent of the parents. The Attorney General, however, makes no argument that simply reducing Richard’s child support levels to guideline amounts would somehow contravene public policy.

14 For purposes of this opinion, there is no need, as there was in In re Marriage of Bodo (2011) 198 Cal.App.4th 373 [129 Cal. Rptr. 3d 298] (Bodo), to contemplate the difference between a “material” change of circumstances as distinct from a “substantial” change of circumstances.

15 Here is the passage. Readers should pay attention to the two authorities cited at the end: “Despite the general rule requiring a showing of changed circumstances since the last prior order, a court may base its modification on a showing of current needs alone where, as here, the prior order called for modification based on a stipulation unaccompanied by findings about any change of circumstances existing then. ([Thomas, supra,] 120 Cal.App.3d [***18] [at pp.] 34–35; Singer v. Singer (1970) 7 Cal.App.3d 807, 812–813 [87 Cal.Rptr. 42].)” (Catalano, supra, 204 Cal.App.3d at p. 549.)

16 Singer itself illustrates that rule nicely. The divorce happened in 1960, and in April 1968, the ex-wife and custodial parent agreed to a stipulated modification that only slightly increased the ex-husband’s support obligation for the couple’s [***19] two boys. Then the payee parent got new counsel and, in October 1968, a mere six months later, sought again to increase support. The boys were now “strapping teenagers.” (Singer, supra, 7 Cal.App.3d at p. 810.) The trial court restricted the evidence at the October hearing to change of circumstances since the April hearing. That was error, said the Singer court. And in fact the passage which the Catalano court cited (pp. 812–813 in the official reporter) itself cited the rule from Wilson and Parkhurst. (See particularly Singer, supra, 7 Cal.App.3d at p. 812.)

17 The book was a hornbook style treatise based on various selected cases from both American and British courts. We are indebted to the California Supreme Court library for supplying us with the passage and surrounding text on which the Snyder court relied.

* See footnote, ante, page 1014.



The following case addressed a  trial judge’s order in a child custody case, which was found not to be binding on judges’ later rulings in the same case.

Cited

As of: September 1, 2016 1:32 PM EDT

Anne H. v. Michael B.

Court of Appeal of California, First Appellate District, Division One

June 15, 2016, Opinion Filed

A146610

Reporter
1 Cal. App. 5th 488; 2016 Cal. App. LEXIS 578

ANNE H., Plaintiff and Appellant, v. MICHAEL B., Defendant and Respondent.

Notice: CERTIFIED  FOR PARTIAL PUBLICATION*

Subsequent History: [**1] The Publication Status of this Document has been Changed by the Court from Unpublished to Published July 12, 2016.

Prior History: Superior Court of San Mateo County, No. 120660, Susan L. Greenberg, Judge.

Core Terms


change of circumstances, custody, grandparents, custody order, modification, circumstances, visits, relocation, comments, declaration, binding, custody arrangement, family member, modify, sanctions, family court, trial judge, issues, best interest, res judicata, parties, spend, spousal support, school year, preclusive, permanent, reasons, weekend

Case Summary


Overview
HOLDINGS: [1]-An initial trial judge’s statement in a permanent child custody order specifying changed circumstances requiring a reconsideration of custody arrangements was not binding on subsequent judges because it was unnecessary to his resolution of the initial custody arrangements; [2]The denial of the mother’s request for custody modification was proper because a subsequent trial judge did not abuse her discretion in concluding the mother had failed to demonstrate a significant change of circumstances indicating that a different custody arrangement would be in the child’s best interest under Fam. Code, § 3087, given that there was substantial evidence to support a finding that the child’s grandparents had not genuinely relocated, and even if they had, that relocation did not constitute substantial changed circumstances viewed in light of all circumstances.

Outcome
Orders affirmed.

LexisNexis® Headnotes


Evidence > Burdens of Proof > Allocation
Family Law > … > Custody Awards > Standards > Best Interests of Child
Family Law > Child Custody > Custody Modification > Changed Circumstances
Family Law > Child Custody > Child Custody Procedures

HN1 Although Fam. Code, § 3087, states that an order of joint custody may be modified merely upon a showing that the best interest of the child requires the modification, an additional requirement is imposed when a permanent custody order has been entered. Once a trial court has entered a final or permanent custody order reflecting that a particular custodial arrangement is in the best interest of the child, the paramount need for continuity and stability in custody arrangements— and the harm that may result from disruption of established patterns of care and emotional bonds with the primary caretaker—weigh heavily in favor of maintaining that custody arrangement. In recognition of this policy concern, a variation on the best interest standard, known as the changed circumstance rule, has been articulated that the court must apply when a parent seeks modification of a final judicial custody determination. Under the changed circumstance rule, custody modification is appropriate only if the parent seeking modification demonstrates a significant change of circumstances indicating that a different custody arrangement would be in the child’s best interest. Not only does this serve to protect the weighty interest in stable custody arrangements, but it also fosters judicial economy. The burden of showing changed circumstances is on the party seeking a modification of the custody order.

Civil Procedure > Judgments > Preclusion of Judgments > Res Judicata

HN2 The doctrine of res judicata only applies to issues actually before the court and necessarily decided.

Civil Procedure > … > Preclusion of Judgments > Estoppel > Collateral Estoppel

HN3 Collateral estoppel, also known as issue preclusion, prevents relitigation of previously decided issues. Issue preclusion applies (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. An issue is necessarily decided by an order if the issue was not entirely unnecessary to the judgment in the initial proceeding.

Governments > Courts > Authority to Adjudicate
Governments > Courts > Judges
Civil Procedure > Judicial Officers > Judges

HN4 An individual trial judge generally has the authority to reconsider and change his or her own interim rulings. Different policy considerations, however, are operative if the reconsideration is accomplished by a different judge. Accordingly, the general rule is just the opposite: the power of one judge to vacate an order made by another judge is limited. This principle is founded on the inherent difference between a judge and a court and is designed to ensure the orderly administration of justice.

Governments > Courts > Judges
Civil Procedure > Judgments > Preclusion of Judgments > Law of the Case
Civil Procedure > Judicial Officers > Judges

HN5 It stands to reason that a trial judge’s ruling should have no greater binding effect on subsequent judges in the same case than a comparable ruling by an appellate court. Under the law of the case doctrine, a prior appellate ruling is binding only as to issues necessary to the court’s decision. Incidental statements or conclusions not necessary to the decision are not to be regarded as authority. By the same logic, a trial court ruling is binding on subsequent judges only as to those aspects of the ruling necessary to decision on the matter before the initial judge.

Civil Procedure > Judgments > Preclusion of Judgments
Civil Procedure > Judicial Officers > Judges
Governments > Courts > Judges
Family Law > Child Custody > Child Custody Procedures
Family Law > Child Custody > Custody Modification > Changed Circumstances

HN6 While it is entirely appropriate to preclude later trial judges from reconsidering an earlier judge’s ruling on issues properly presented for decision, there is no reason to require subsequent judges to adhere to an earlier judge’s expression of views on issues that were not actually before him or her. Such a rule would grant arbitrary and unnecessary authority to judicial musings, as opposed to judicial decisions. As applicable specifically to child custody rulings, the issue of changed circumstances necessarily must be considered in light of all circumstances prevailing at the time of a request to modify the order. To isolate particular circumstances and declare them determinative fails to do justice to the doctrine. Further, there is no way for a family court judge to know in advance whether any particular circumstance deemed important at the time a custody order is entered will remain critical, in light of other changing circumstances over time. It would thus be inadvisable to permit a family court judge to render a binding ruling with respect to changed circumstances prior to their occurrence.

Family Law > Child Custody > Custody Modification
Family Law > Child Custody > Child Custody Procedures
Family Law > … > Custody Awards > Standards > Best Interests of Child
Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

HN7 An appellate court reviews a ruling on a request for modification of a custody order for abuse of discretion. Generally, a trial court abuses its discretion if there is no reasonable basis on which the court could conclude its decision advanced the best interests of the child. Under this test, the appellate court must uphold the trial court ruling if it is correct on any basis, regardless of whether such basis was actually invoked.

Civil Procedure > Trials > Bench Trials

HN8 A statement of decision is ordinarily available only after trial, not in connection with a ruling on a motion or special proceeding.

Headnotes/Syllabus


Summary

CALIFORNIA OFFICIAL REPORTS SUMMARY

A mother filed a request to modify a permanent custody order granting joint custody of the parties’ child, claiming her parents had relocated to Virginia and arguing, pursuant to the custody order, the relocation should be regarded as changed circumstances requiring a reexamination of the child’s best interests and a grant to the mother of school-year custody. The request was heard by a different trial judge than the trial judge who had entered the custody order. The second judge denied the mother’s request to modify the custody order, finding no changed circumstances. (Superior Court of San Mateo County, No. 120660, Susan L. Greenberg, Judge.)

The Court of Appeal affirmed the orders. The court held that the initial trial judge’s statement in the custody order specifying changed circumstances requiring a reconsideration of custody arrangements was unnecessary to his resolution of the initial custody arrangements and had no preclusive effect under either the doctrine of res judicata or the doctrine of collateral estoppel. The initial judge’s comments on the issue of changed circumstances did not constitute the type of “ruling” that could not be altered by a subsequent trial judge and thus were not binding on subsequent judges. There was no abuse of discretion in the second judge’s conclusion that the mother had failed to demonstrate changed circumstances. There was substantial evidence to support a finding that the grandparents had not genuinely relocated, and even assuming they had relocated, the judge would not have abused her discretion in concluding that their relocation, viewed in light of all circumstances, did not constitute substantial changed circumstances requiring a reconsideration of the child’s best interests. Because the child’s parents continued to be widely geographically separated, the school year/summer split of custody arrived at by the initial judge remained the most appropriate solution. The judge did not abuse her discretion in concluding that the grandparents’ role in [*489] the child’s life was not so important that their voluntary decision to move away from the area required an adjustment in custody arrangements. (Opinion by Margulies, J., with Humes, P. J., and Dondero, J., concurring.)

Headnotes

CALIFORNIA OFFICIAL REPORTS HEADNOTES

CA(1) (1)

Dissolution of Marriage; Separation § 104 > Permanent Child Support Orders > Modification > Changed Circumstances > Subsequent Judges.

The statement in a permanent child custody order specifying changed circumstances requiring a reconsideration of custody arrangements was not binding on subsequent judges. Because there was no abuse of discretion in the second judge’s conclusion that the mother had failed to demonstrate changed circumstances, the denial of her request for custody modification was proper.

[Kirkland et al., Cal. Family Law Practice and Procedure (2016) ch. 35, § 35.03; Cal. Forms of Pleading and Practice (2016) ch. 223, Dissolution of Marriage: Child Custody, § 223.27.]

CA(2) (2)

Dissolution of Marriage; Separation § 104 > Permanent Child Support Orders > Modification > Best Interest of Child > Changed Circumstances > Burden of Proof.

Although Fam. Code, § 3087, states that an order of joint custody may be modified merely upon a showing that the best interest of the child requires the modification, the Supreme Court has imposed an additional requirement when a permanent custody order has been entered. Once the trial court has entered a final or permanent custody order reflecting that a particular custodial arrangement is in the best interest of the child, the paramount need for continuity and stability in custody arrangements—and the harm that may result from disruption of established patterns of care and emotional bonds with the primary caretaker— weigh heavily in favor of maintaining that custody arrangement. In recognition of this policy concern, the Supreme Court has articulated a variation on the best interest standard, known as the changed circumstance rule, that the trial court must apply when a parent seeks modification of a final judicial custody determination. Under the changed circumstance rule, custody modification is appropriate only if the parent seeking modification demonstrates a significant change of circumstances indicating that a different custody arrangement would be in the child’s best interest. Not only does this [*490] serve to protect the weighty interest in stable custody arrangements, but it also fosters judicial economy. The burden of showing changed circumstances is on the party seeking a modification of the custody order.

CA(3) (3)

Judgments § 77 > Res Judicata.

The doctrine of res judicata only applies to issues actually before the court and necessarily decided.

CA(4) (4)

Judgments § 81 > Res Judicata > Collateral Estoppel > Factors.

Collateral estoppel, also known as issue preclusion, prevents relitigation of previously decided issues. Issue preclusion applies (1) after final adjudication

(2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. An issue is necessarily decided by an order if the issue was not entirely unnecessary to the judgment in the initial proceeding.

CA(5) (5)

Judges § 8 > Authority > Reconsideration of Interim Rulings > Subsequent Judges.

An individual trial judge generally has the authority to reconsider and change his or her own interim rulings. Different policy considerations, however, are operative if the reconsideration is accomplished by a different judge. Accordingly, the general rule is just the opposite: the power of one judge to vacate an order made by another judge is limited. This principle is founded on the inherent difference between a judge and a court and is designed to ensure the orderly administration of justice.

CA(6) (6)

Judges § 8 > Authority > Reconsideration of Rulings > Subsequent Judges > Child Custody Rulings > Changed Circumstances.

It stands to reason that a trial judge’s ruling should have no greater binding effect on subsequent judges in the same case than a comparable ruling by an appellate court. Under the law of the case doctrine, a prior appellate ruling is binding only as to issues necessary to the court’s decision. Incidental statements or conclusions not necessary to the decision are not to be regarded as authority. By the same logic, a trial court ruling is binding on subsequent judges only as to those aspects of the ruling necessary to decision on the matter before the initial judge. While it is entirely appropriate to preclude later trial judges from reconsidering an earlier judge’s ruling on issues properly presented for decision, there is no reason to require subsequent judges to adhere to an earlier judge’s expression of views on issues that were not actually before him or her. Such a rule would grant arbitrary and unnecessary authority to judicial musings, as opposed to judicial decisions. As applicable specifically to [*491] child custody rulings, the issue of changed circumstances necessarily must be considered in light of all circumstances prevailing at the time of a request to modify the order. To isolate particular circumstances and declare them determinative fails to do justice to the doctrine. Further, there is no way for a family court judge to know in advance whether any particular circumstance deemed important at the time a custody order is entered will remain critical, in light of other changing circumstances over time. It would thus be inadvisable to permit a family court judge to render a binding ruling with respect to changed circumstances prior to their occurrence.

Counsel: Leland, Parachini, Steinberg, Matzger & Melnick and Robert A. Roth for Plaintiff and Appellant.

Law Office of Leslie Ellen Shear, Leslie Ellen Shear and Julia C. Shear Kushner for Defendant and Respondent.

Judges: Opinion by Margulies, J., with Humes, P. J., and Dondero, J., concurring.

Opinion by: Margulies, J.

Opinion


MARGULIES, J.—In August 2014, the family court entered a permanent custody order granting joint custody of L., the daughter of appellant Anne H. (Mother) and respondent Michael B. (Father). Under the order, Father, a Bay Area resident, was awarded physical custody of L. during school years, while Mother was awarded physical custody at her home in Virginia during the summers. In making the order, the family court stated that one of the primary considerations in granting Father custody during the school year was the presence of Mother’s family members in the Bay Area, which provided Mother a place to stay while visiting L. and allowed Mother’s family to share in L.’s care. The court’s order noted the relocation of Mother’s family members from the Bay Area, among several other factors, would be changed circumstances “requiring a new analysis of the ongoing custodial timeshare between the parties.”

Less than a year later, Mother filed a request [**2] to modify the custody order, claiming her parents had relocated to Virginia and arguing, pursuant to the custody order, the relocation should be regarded as changed circumstances requiring a reexamination of L.’s best interests and a grant to Mother of school-year custody. The request was heard by a different judge than the judge who had entered the custody order. Without explanation, that judge [*492] denied Mother’s request to modify the custody order, finding no changed circumstances, and granted sanctions to Father under Family Code section 271 in the amount of $5,000.

(1) (1) Upon Mother’s appeal of these rulings, we conclude the statement in the custody order specifying changed circumstances requiring a reconsideration of custody arrangements was not binding on subsequent judges. Finding no abuse of discretion in the second judge’s conclusion that Mother had failed to demonstrate changed circumstances, we affirm the denial of her request for modification. We also find no abuse of discretion in the court’s award of financial sanctions.

I. BACKGROUND

At the time of L.’s birth in 2009, Mother and Father were unmarried members of the armed services. Within a year after the birth, Father left the service, moved into Mother’s [**3] home in the Bay Area, where she was attending law school as a member of the military, and began attending graduate school himself. Father eventually finished school and found a job in the Bay Area. During this time, each parent spent occasional, relatively brief periods away from the home, leaving L. in the sole care of the other parent, assisted by members of Mother’s family, particularly her parents and sister. In August 2012, after completing law school, Mother was posted to Georgia. Mother and Father agreed that L. would remain with Father on a temporary basis, while they worked toward a more permanent custody arrangement.

Father filed a petition in Santa Clara County Superior Court to gain full custody of L. in February 2013. Mother thereafter filed this paternity action in San Mateo County, and the parties stipulated to dismiss Father’s action. Eventually, following a three-day trial, Judge Richard DuBois issued a 20-page statement of decision (custody order) in August 2014, awarding the parents joint custody over L. and requiring her to spend the academic year with Father and the summer months with Mother. In reaching his decision, Judge DuBois found it significant that Mother’s [**4] parents and sister lived in the Bay Area, which provided Mother a place to stay during visits with L., allowed her more “‘real time’” with L. during visits, and permitted her family members to participate in L.’s life while L. was living with Father. Unlike Mother in the Bay Area, Father had no friends or relatives in the places to which Mother was likely to be posted, making his visits comparatively more difficult and reducing the free time he could spend with L. during visits. The court noted that residence in the Bay Area also “would provide continued stability for” L., since it had always been her home and Father had [*493] a steady job and no plans to relocate, while Mother’s future was geographically uncertain, given her service. In the end, the court found the “most significant factor” in determining the custody arrangements to be the presence of Mother’s family members in the Bay Area. The court concluded: “Should these circumstances change by [Father] moving out of the Bay Area, or [Mother’s] family moving farther from the Bay Area, or [Mother’s] family not being allowed or able to have consistent independent contact with [L.], or [Mother] relocating to the Bay Area, such a change [**5] would constitute a change of circumstance requiring a new analysis of the ongoing custodial timeshare between the parties.” Neither party appealed the custody order.

Less than a year later, in May 2015, Mother filed a request for modification of the custody order (request) to grant her physical custody of L. during the school year. In a declaration filed with the request, Mother stated that since entry of the custody order she had been given a posting in Washington, D.C., that would last for “at least the next 5–6 years.” Prior to taking that assignment, Mother would be required to attend a 10-month training course in Charlottesville, Virginia.1 In addition, Mother stated her parents (grandparents), who had been closely involved in L.’s care prior to the custody dispute, had moved from the Bay Area to northern Virginia. According to Mother’s declaration, the grandparents had purchased a home in Virginia located “less than 15 minutes” from her own Virginia home. Attached to the declaration was a grant deed of a parcel of Virginia real estate to the grandparents and Mother’s brother. Mother characterized the grandparents’ relocation as “a prima facie change in circumstances” under the custody [**6] order and sought a reevaluation of L.’s best interests.

Mother also contended Father had failed to cooperate with the grandparents in allowing them access to L. in the Bay Area, but she provided no evidentiary support for the claim, other than her conclusory statement, “Despite repeated requests to resume [the grandparents’] independent visits with [L.] when she is in California, [Father] has consistently declined with excuses, or required them to spend time with her in his presence,” but she provided no support for the claim. The only documentary evidence submitted in support of this claim did not, in fact, support it, and the portion of her declaration detailing Father’s lack of cooperation focused entirely on his relations with Mother and contained no information suggesting Father had prevented the grandparents from spending time with L.2

[*494]

Father opposed the request. In a declaration, he argued no significant change of circumstances had occurred because the grandparents retained ownership of their home in the Bay Area, Mother’s sister continued [**8] to live in the Bay Area, and Mother “has other relatives living in [the Bay Area] with whom she stays during her visitation with [L.].” Further, according to Father, the grandparents had chosen to limit their contact with L., failing to visit with her for months despite his open invitation to do so. Father also challenged the genuineness of the grandparents’ relocation, pointing out that Mother had listed the Virginia home deeded to the grandparents as her own home in a school application, and L. had stayed with the grandparents in their Bay Area home “[a]s recently as June 2015.”3 Father claimed he continued to have only limited opportunities to visit L. when she was in Mother’s custody, since he was allowed only 12 days annually of vacation and had no place to stay in Virginia, while Mother’s posting permitted much more opportunity for West Coast visits. Her job permitted flexibility of scheduling; she had substantial banked leave time; and she acquired 30 additional days of leave per year. Since the custody order went into effect, Mother had been able to spend two four-day weekends per month visiting L. Further, Father argued, Mother would be required either to move L. to Charlottesville [**9] for the duration of the 10-month training course or commute over two hours each way, making it difficult for her to care for L. during that time.

Father’s opposition also requested attorney fees in the amount of $15,867.50 as a sanction under Family Code section 271. His declaration reiterated the procedural history of the proceedings, noting Mother had filed five ex parte applications regarding custody and visitation during the period 2013 to 2014, in addition to the request, while he had filed no pleadings seeking relief other than the initial petition. In ruling on the last of Mother’s ex parte applications in December 2014, Judge Susan L. Greenberg had commented with respect to the parties’ squabbling: “It’s a nightmare. I’m hoping that the parenting coordinator can resolve that for you because [*495] frankly, you guys are adults and you can deal with the stress. But this little girl is going to have a horrible time if you continue to act this way and treat each other this way.” At the time, [**10] Judge Greenberg denied without prejudice motions for section 271 sanctions Father had filed, noting: “I don’t believe that they should be ruled on now. I want the parties to … use the parenting coordinator to try and resolve their constant and continuous fighting and bickering over every single aspect of the timeshare with this little girl.”

Father’s opposition renewed the earlier sanctions motion. As he argued, Mother was an attorney, and therefore able to assist in the preparation of litigation documents, while he was required to rely on counsel with respect to the proceedings. He concluded, “[Mother’s] refusal to accept the Court’s custody orders and incessant efforts to change the Order have exhausted me not only financially, but physically and emotionally as well.” Father argued Mother had the ability to pay the requested sanctions because she is employed as a judge advocate and had the resources to fund the three-day custody trial and four motions to modify the custody order in the preceding year. The requested award of $15,867.50 was based primarily on the attorney fees Father incurred in responding to the request.

In a reply declaration, Mother stated that although her sister remained [**11] in the Bay Area, the sister lived in a small apartment with her husband, making it difficult for her to support Mother’s visits with L. Mother claimed to have no other relatives or friends in the Bay Area on whom she could rely for “logistical support” in visitation. Mother said she owned her own home in Virginia “approximately 20–30 minutes” from her parents’ home and explained her parents leased their house in the Bay Area to college students during the academic year. Addressing Father’s request for sanctions, Mother denied that she had superior financial means. According to Mother, Father’s parents had financed his side of the custody litigation, while Mother had to finance her representation from her own pocket. Mother contended she had attempted to be conciliatory, but Father’s “hostile and unreasonable behavior” had forced her to seek judicial relief.

At the hearing on the request, conducted by Judge Greenberg, Mother’s attorney stated he had brought with him additional evidence to support the claim that the grandparents had moved, including “their utility bills and the lease of their [Bay Area] home.” Those documents were never offered into evidence, however, and they are not [**12] in the appellate record. Counsel for Father argued no move had, in fact, occurred, pointing out that the grandparents had not submitted their own declarations with respect to the claim. [*496] Following argument, Judge Greenberg denied the request, stating without further explanation: “… I find that [Mother] has not met that burden to show the change of circumstances.” The judge also awarded $5,000 in sanctions, again without explanation. Her oral ruling was reflected in a subsequent written order.

II. DISCUSSION

Mother has appealed Judge Greenberg’s denial of the request and grant of sanctions, contending primarily that the denial was inconsistent with the custody order, which noted that a relocation of Mother’s family members would constitute changed circumstances requiring a reconsideration of the custody arrangements.4

A. Mother’s Demonstration of Changed Circumstances

HN1 (2) (2) Although Family Code section 087 [**13] states that an order of joint custody may be modified merely upon a showing that the best interest of the child requires the modification, the Supreme Court has imposed an additional requirement when, as here, a permanent custody order has been entered. “Once the trial court has entered a final or permanent custody order reflecting that a particular custodial arrangement is in the best interest of the child, ‘the paramount need for continuity and stability in custody arrangements—and the harm that may result from disruption of established patterns of care and emotional bonds with the primary caretaker— weigh heavily in favor of maintaining’ that custody arrangement. [Citation.] In recognition of this policy concern, we have articulated a variation on the best interest standard, known as the changed circumstance rule, that the trial court must apply when a parent seeks modification of a final judicial custody determination. [Citation.] Under the changed circumstance rule, custody modification is appropriate only if the parent seeking modification demonstrates ‘a significant change of circumstances’ indicating that a different custody arrangement    would be in the child’s best interest. [**14] [Citation.] Not only does this serve to protect the weighty interest in stable custody arrangements, but it also fosters judicial economy.” (In re Marriage of Brown & Yana (2006) 37 Cal.4th 947, 956 [38 Cal. Rptr. 3d 610, 127 P.3d 28] (Brown).) The burden of showing changed circumstances is on the party seeking a modification of the custody          order. [*497] (Christina L. v. Chauncey B. (2014) 229 Cal.App.4th 731, 738 [177 Cal. Rptr. 3d 178].) 1. Significance of Judge DuBois’s Statement Regarding Changed Circumstances

Mother argues Judge Greenberg’s finding of no changed circumstances must be reversed because it is inconsistent with Judge DuBois’s conclusion in the custody order that changed circumstances would result if Mother’s family members moved from the Bay Area. The first issue to be resolved is therefore the degree to which Judge DuBois’s comment regarding potential changed circumstances controlled Judge Greenberg’s consideration of the request. For the reasons discussed below, we conclude the comment was not binding in any manner on Judge Greenberg in her determination of changed circumstances.

(3) (3) Mother first argues the comment became preclusive under the doctrines of res judicata and collateral estoppel when Father did not appeal the custody order. The issue of res judicata is conclusively resolved by In re Marriage of Rabkin (1986) 179 Cal.App.3d 1071 [225 Cal. Rptr. 219] (Rabkin). In ruling on a motion for modification of a spousal support order, the family court in Rabkin granted the wife a temporary increase in spousal support when she [**15] had difficulty selling the family home, a modification specifically permitted by the couple’s marital settlement agreement (MSA). (Id. at pp. 1076–1077.) Although the MSA expressly stated sale of the couple’s home would not constitute a change in circumstances justifying a further motion to modify the spousal support order, the family court’s order granting the temporary increase stated just the opposite, that sale of the residence would be deemed a change in circumstances entitling either party to seek modification of the support order. (Id. at p. 1077.) After the house was sold, the family court entered a new order in which it set spousal support below that provided in the MSA. The wife appealed, contending the family court was precluded from modifying her support on the basis of the sale of the home by the language of the MSA. (Id. at p. 1078.) The husband contended, in part, that the wife was precluded from arguing sale of the home could not constitute a change in circumstances by the doctrine of res judicata, since she did not appeal the contrary language in the court’s modification order. (Id. at p. 1082.) In rejecting the application of res judicata, the court noted that HN2 the doctrine only applies to issues actually before the court and [**16] necessarily decided. (Ibid.) As the court explained, the sole issue before the family court at the time of the original modification hearing was whether the wife was entitled to a temporary increase in spousal support under the MSA. This issue, the court held, “had nothing to do with the question of whether [*498] the sale of the residence would constitute a change of circumstances for the purpose of further spousal support proceedings. … Thus, the statement … characterizing the sale of the marital residence as a change of circumstances justifying a future modification of spousal support was unnecessary to the court’s decision and purely gratuitous.” (Id. at p. 1083.)

Rabkin is directly on point. The only issue before Judge DuBois in the original hearing was current custody arrangements for L. Necessarily, the issue of the circumstances justifying a change in those arrangements was not before Judge DuBois when he entered the custody order. On the contrary, modification of the custody order due to changed circumstances would not be before a court unless and until Mother or Father filed an appropriate motion to modify. Further, the issue of changed circumstances could not even arise until there had [**17] been sufficient time after entry of the custody order for circumstances to change. Accordingly, Judge DuBois’s comments about a change in circumstances were unnecessary to his decision and, pursuant to Rabkin, had no preclusive effect under the doctrine of res judicata.5

(4) (4) The doctrine of collateral estoppel is inapplicable for essentially the same reason. HN3 Collateral estoppel, also known as issue preclusion, “prevents relitigation of previously decided issues. … [I]ssue preclusion applies (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824–825 [189 Cal. Rptr. 3d 809, 352 P.3d 378].) An issue is “‘necessarily decided’” by an order if the issue was not “‘entirely unnecessary’ to the judgment in the initial proceeding.” (Lucido v. Superior Court (1990) 51 Cal.3d 335, 342 [272 Cal. Rptr. 767, 795 P.2d 1223]; see Mega RV Corp. v. HWH Corp. (2014) 225 Cal.App.4th 1318, 1344 [170 Cal. Rptr. 3d 861].) For the reasons discussed above, Judge DuBois’s comments about changed circumstances were “entirely unnecessary” to his resolution [**18] of the initial custody arrangements, and for that reason those comments have no collateral estoppel effect.

(5) (5) Mother argues that even if the comments had no preclusive effect, Judge Greenberg was not permitted to enter a ruling inconsistent with Judge DuBois’s order because “one trial court judge may not reconsider and overrule a ruling of another judge.” (Curtin v. Koskey (1991) 231 Cal.App.3d 873, 876 [282 Cal. Rptr. 706].) As this principle is explained in In re Alberto (2002) 102 Cal.App.4th 421 [125 Cal. Rptr. 2d 526], HN4 an individual trial judge generally has the authority to reconsider and change his or her own interim [*499] rulings. “Different policy considerations, however, are operative if the reconsideration is accomplished by a different judge. Accordingly, the general rule is just the opposite: the power of one judge to vacate an order made by another judge is limited. [Citation.] This principle is founded on the inherent difference between a judge and a court and is designed to ensure the orderly administration of justice. ‘If the rule were otherwise, it would be only a matter of days until we would have a rule of man rather than a rule of law. To affirm the action taken in this case would lead directly to forum shopping, since if one judge should deny relief, defendants would try another and another judge until [**19] finally they found one who would grant what they were seeking. Such a procedure would instantly breed lack of confidence in the integrity of the courts.’” (Id. at p. 427.)

While we acknowledge the general principle, we conclude that Judge DuBois’s comments on the issue of changed circumstances do not constitute the type of “ruling” that cannot be altered by a subsequent trial judge.6 In deciding the binding scope of Judge DuBois’s ruling, a useful analogy can be made to the law of the case doctrine. Under that doctrine, “‘“where, upon an appeal, the [reviewing] court, in deciding the appeal, states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout its subsequent progress, both in the lower court and upon subsequent appeal and … in any subsequent suit for the same cause of action, and this [is true] although in its subsequent consideration this court may be clearly of the opinion that the former decision is erroneous in that particular.”’” (People v. Murtishaw (2011) 51 Cal.4th 574, 589 [121 Cal. Rptr. 3d 586, 247 P.3d 941].) As suggested in Murtishaw, the binding effect of a prior appellate decision under the law of the case doctrine is limited to issues necessary to the disposition [**20] of the appeal. “The discussion or determination of a point not necessary to the disposition of a question that is decisive of the appeal is generally regarded as obiter dictum and not as the law of the case.” (Stockton Theatres, Inc. v. Palermo (1956) 47 Cal.2d 469, 474 [304 P.2d 7]; see People v. Bryant, Smith and Wheeler (2014) 60 Cal.4th 335, 374, fn. 6 [178 Cal. Rptr. 3d 185, 334 P.3d 573] [law of the case applies to rules of law “‘necessary to the decision’”].)

(6) (6) The law of the case doctrine is not directly applicable to Judge DuBois’s ruling, since the doctrine applies only to matters decided by an appellate court. (People v. Parker (2014) 231 Cal.App.4th 1423, 1434, fn. 2 [180 Cal. Rptr. 3d 879]; Harbor Islands Holdings v. Kim (2003) 107 Cal.App.4th 790, 795 [132 Cal.Rptr.2d 406].) Yet HN5 it stands to reason that a [*500] trial judge’s ruling should have no greater binding effect on subsequent judges in the same case than a comparable ruling by an appellate court. As noted above, under the law of the case doctrine, a prior appellate ruling is binding only as to issues necessary to the court’s decision. “Incidental statements or conclusions not necessary to the decision are not to be regarded as authority.” (Simmons v. Superior Court (1959) 52 Cal.2d 373, 378 [341 P.2d 13].) By the same logic, a trial court ruling is binding on subsequent judges only [**21] as to those aspects of the ruling necessary to decision on the matter before the initial judge. Judge DuBois’s ruling decided a petition for a custody determination. For the reasons discussed above, the issue of changed circumstances was wholly unnecessary to such a decision. Accordingly, Judge DuBois’s comments about changed circumstances were not binding on subsequent judges. Any later decision by Judge Greenberg that might be inconsistent with those comments did not violate the rule prohibiting a trial judge from reconsidering and overruling an earlier ruling by a different trial judge in the same case.

There are strong policy reasons to limit the binding effect of Judge DuBois’s ruling in this manner. In general terms, any other rule would bestow inappropriate authority on the first trial judge on the scene. HN6 While it is entirely appropriate to preclude later trial judges from reconsidering an earlier judge’s ruling on issues properly presented for decision, there is no reason to require subsequent judges to adhere to an earlier judge’s expression of views on issues that were not actually before him or her. Such a rule would grant arbitrary and unnecessary authority to judicial musings, [**22] as opposed to judicial decisions.

As applicable specifically to custody rulings, there are two additional factors. First, the issue of changed circumstances necessarily must be considered in light of all circumstances prevailing at the time of a request to modify the order. To isolate particular circumstances and declare them determinative, as Judge DuBois did, fails to do justice to the doctrine. Further, there is no way for a family court judge to know in advance whether any particular circumstance deemed important at the time a custody order is entered will remain critical, in light of other changing circumstances over time. Under Mother’s argument, Judge DuBois’s comments would have remained binding for years, notwithstanding the growth of L. and the changing nature of living arrangements and relationships among her family members. Second, there was no effective appellate review available for Judge DuBois’s comments regarding changed circumstances. Because those views had no immediate legal or practical effect, it would be unfair, as well as inefficient, to require a party to seek appellate review merely to prevent their application in later proceedings. In addition, because the [**23] comments had nothing to do with the issues involved in the custody decision, it is not clear that judicial review would have been available even if an appeal had been taken. Just as the comments constituted an advisory ruling when they were [*501] written by Judge DuBois, any appellate consideration of the comments would be advisory in the same way. (See, e.g., County of San Diego v. State of California (1997) 15 Cal.4th 68, 110 [61 Cal. Rptr. 2d 134, 931 P.2d 312] [declining to give an advisory ruling].) For all these reasons, it would be inadvisable to permit a family court judge to render a binding ruling with respect to changed circumstances prior to their occurrence.
2. Judge Greenberg’s Finding of No Changed Circumstances

HN7 We review a ruling on a request for modification of a custody order for abuse of discretion. (F.T. v. L.J. (2011) 194 Cal.App.4th 1, 14 [123 Cal. Rptr. 3d 120].) “Generally, a trial court abuses its discretion if there is no reasonable basis on which the court could conclude its decision advanced the best interests of the child. [Citation.] ‘Under this test, we must uphold the trial court “ruling if it is correct on any basis, regardless of whether such basis was actually invoked.”’” (Chalmers v. Hirschkop (2013) 213 Cal.App.4th 289, 299 [152 Cal. Rptr. 3d 361].)7

Judge Greenberg did not abuse her discretion in concluding Mother had failed to demonstrate “‘a significant change of circumstances’ indicating that a different custody arrangement would be in [L.’s] best interest.” (Brown, supra, 37 Cal.4th at p. 956.) First, there was substantial evidence to support a finding that the grandparents had not genuinely relocated. Oddly, the grandparents did not submit their own declarations acknowledging and explaining their purported move. While it seems clear the grandparents (with their son) acquired a home in Virginia, that home was claimed by Mother as her own residence in the school application. Mother provided the court with no address for her own home and described it inconsistently in different declarations as less than 15 minutes from the grandparents’ home and as 20 to 30 minutes [**25] from their home. Further, the grandparents continued to own their Bay Area home and were apparently living there at a time after Mother filed the request, since they had received L. there.8 All of these factors provide substantial evidence to support a finding the grandparents had not actually changed their residence.

[*502]

Second, even assuming the grandparents had relocated, Judge Greenberg would not have abused her discretion in concluding that their relocation, viewed in light of all circumstances, did not constitute substantial changed circumstances requiring a reconsideration of L.’s best interests. Because the two parents continued to be widely geographically separated, the school year/summer split of custody arrived at by Judge DuBois remained the most appropriate solution. Yet nothing in the change of circumstances claimed by Mother caused school year custody with her, rather than Father, to be a clearly preferable situation [**26] in furthering L.’s best interests. After the relocation, Mother continued to have family members available in the Bay Area to assist her visitation there, while Father had no comparable family or friends in Virginia. In addition, Mother’s job in the service continued to offer considerably more opportunity for visits than Father’s limited vacation time at his work. Further, the need for Mother to attend an extended training program meant she would either have to move away from the grandparents or undertake a difficult commute, essentially undercutting any benefit from the requested change. In addition, removing L. from the Bay Area for most of the year would take her away from the place that had been her lifetime home. For that reason, the family court could readily have concluded “‘the paramount need for continuity and stability in custody arrangements— and the harm that may result from disruption of established patterns of care and emotional bonds with the primary caretaker’” were not outweighed by the claimed change in circumstances. (Brown, supra, 37 Cal.4th at p. 956.)

Mother argues Judge Greenberg abused her discretion because the grandparents were deeply involved in L.’s life and “[L.]’s proximity to her maternal [**27] grandparents was a pivotal factor in the custody decision.” An examination of the custody order, however, demonstrates it was the presence of both the grandparents and Mother’s sister in the Bay Area that was important in the resolution of custody, and their presence was important not only because of the role played by those family members in L.’s life but also because Mother could stay with them when visiting with L. in California. Following the grandparents’ relocation, as discussed above, Mother continued to have some family in the Bay Area. In any event, Judge Greenberg did not abuse her discretion in concluding that the grandparents’ role in L.’s life was not so important that their voluntary decision to move away from the Bay Area required an adjustment in custody arrangements.

B. Sanctions* [*503]

III. DISPOSITION

The family court’s orders are affirmed. Father may recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)

Humes, P. J., and Dondero, J., concurred.


1 This aspect of Mother’s application did not constitute wholly changed circumstances. Judge DuBois’s order anticipated that Mother would spend nearly a year in Charlottesville before assuming a more permanent post. While settling in Washington, D.C., was a possibility at that time, there were other options, including a foreign post.

2 In support of her [**7] claim of lack of cooperation with the grandparents, Mother submitted a printout of a chain of e-mails dating from the end of September 2014. The chain began with Father politely declining a request by the maternal grandmother to see L. the following weekend, saying he had already made plans, but he offered to make L. available the following month and asked for dates when the grandparents would be free. In responding, the grandmother reiterated her request for the weekend without mentioning October or otherwise acknowledging the substance of Father’s e-mail. Father again politely declined and asked for October dates. When Friday arrived, the grandmother sent a third e-mail repeating her request for the weekend without mentioning October. This time, Father offered to make L. available that afternoon but repeated he had plans for the remainder of the weekend and again offered time in October. To the extent this e-mail chain demonstrates a lack of cooperation, it rests with the grandmother.

3 According to Father, Mother enrolled L. in a Virginia kindergarten program without consulting him, in violation of the custody order. In the enrollment application, she listed the home deeded to the grandparents as her own home.

4 Mother had earlier filed a petition for writ of mandate challenging the family court’s order, docketed as case No. A146235. This court summarily denied the petition in an order dated October 22, 2015. The parties have relied on exhibits submitted with Mother’s writ petition as the primary record in this appeal.

5 Mother merely distinguishes Rabkin by arguing that the circumstances relating to modification of the custody order were different, without acknowledging or addressing the decision’s ruling with respect to res judicata.

6 The general principle is subject to various subtleties and qualifications. (See, e.g., In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1247–1249 [190 Cal. Rptr. 3d 436].) For purposes of this appeal, it is necessary for us only to accept that a ruling of one trial judge in a case cannot be overturned by a different trial judge.

7 Father contends we should also apply the doctrine of implied findings because Mother failed to request a statement of decision. (See Shaw v. County of Santa Cruz (2008) 170 Cal.App.4th 229, 267 [88 Cal. Rptr. 3d 186] [explaining doctrine].) [**24] HN8 A statement of decision, however, is ordinarily available only after trial, not in connection with a ruling on a motion or special proceeding (In re Marriage of Fong (2011) 193 Cal.App.4th 278, 294–296 [123 Cal. Rptr. 3d 260]), and Father cites no legal authority suggesting a statement of decision was available in connection with a motion to modify an existing custody order. In any event, we find it unnecessary to invoke the doctrine of implied findings to affirm Judge Greenberg’s orders.

8 While Mother’s attorney claimed at the hearing to have a lease of the Bay Area home and Virginia utility bills, these were never provided to the court or offered in evidence, and they are not contained in the appellate record. We therefore cannot consider them.

 



 

Do you need to be living in separate residences to be considered ‘separated’ from your spouse under the California Family Code?

The California Supreme Court, in a recent case printed below, held that “living separate and apart” in the California Family Code is defined as spouses living in separate residences and at least one of them has the subjective intent to end the marital relationship.

The Court has adopted the rule that “living apart physically is an indispensable threshold requirement to separation.” However, the Court expressly left open the question for divorce courts of “whether there could be circumstances that would support a finding that the spouses were living separate and apart… even though they continued to literally share one roof.”

Neutral
As of: May 19, 2016 11:39 AM EDT

In re Marriage of Davis

Supreme Court of California

July 20, 2015, Filed
S215050

Reporter
61 Cal. 4th 846; 352 P.3d 401; 189 Cal. Rptr. 3d 835; 2015 Cal. LEXIS 5115

In re the Marriage of SHERYL JONES DAVIS and KEITH XAVIER DAVIS. SHERYL JONES DAVIS, Respondent, v. KEITH XAVIER DAVIS,
Appellant.

Subsequent History: Reported at Marriage of Jones & Davis, 2015 Cal. LEXIS 8336 (Cal., July 20, 2015)

Prior History: Superior Court of Alameda County, No. RF08428441, Elizabeth Hendrickson, Commissioner, Judge. Court of Appeal, First Appellate District, Division One, No. .
In re Marriage of Davis, 220 Cal. App. 4th 1109, 163 Cal. Rptr. 3d 695, 2013 Cal. App. LEXIS 855
(Cal. App. 1st Dist., 2013)

Core Terms


living separately, spouses, marriage, separate property, parties, earnings, accumulations, marital relationship, community property, separation date, physically, married woman, italics, cases, marital, marital home, circumstances, dissolution, expenses, resuming, legislative intent, divorce, purpose of section, final break, evidenced, appears, Com, der, statutory language, subjective intent

Case Summary


Overview
HOLDINGS: [1]-Spouses were not living separate and apart under Fam. Code, § 771, subd. (a), when they continued to live in the same residence, whether    or    not    their    conduct    otherwise demonstrated their intent to end the marital relationship; [2]-Because living in separate residences was an indispensable threshold requirement for earnings and accumulations to be characterized as separate property, all of the property acquired by the spouses while they lived in the same residence was community property in accordance with Fam. Code, § 760, and the lower courts erred in finding that separation occurred on the date when the spouses began to manage their finances separately, which was earlier than the date when one spouse actually moved out of the marital home.

Outcome
Reversed and remanded.

LexisNexis® Headnotes


Family  Law  >  …  >  Property  Distribution  > Characterization > Community Property

Family  Law  >  …  >  Property  Distribution  > Inferences & Presumptions > Community Property

HN1 Fam. Code, § 760, provides that all property acquired by the spouses during the marriage is community property except as otherwise provided by statute.

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil  Procedure  >  …  >  Standards  of  Review  > Substantial Evidence > Sufficiency of Evidence

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

Family  Law  >  …  >  Property  Distribution  > Characterization > Community Property

Family  Law  >  …  >  Property  Distribution  > Inferences & Presumptions > Community Property

HN2 Although the date of separation is normally a factual issue to be reviewed for substantial evidence, where resolution of the opposing contentions depends on statutory construction, this is  a question  of law  to which  a de  novo standard of review applies.

Family  Law  >  …  >  Property  Distribution  > Characterization > General Overview

Governments > Legislation > Interpretation

HN3 With all questions of statutory construction, the court’s objective is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. This principle is especially important in construing a statute within the community property scheme because the system itself is a creature of statute.

Governments > Legislation > Interpretation

HN4 A court begins with the plain language of a statute, affording the words of the provision their ordinary and usual meaning and viewing them in their statutory context, because the language employed in the Legislature’s enactment generally is the most reliable indicator of legislative intent. The plain meaning controls if there is no ambiguity in the statutory language. If, however, the statutory language may reasonably be given more than one interpretation, courts may consider various extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing the statute.

Family  Law  >  …  >  Property  Distribution  > Characterization > Separate Property

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

HN5 See Fam. Code, § 771, subd. (a).

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

HN6 The phrase ″living separate and apart″ is a term of art. As such, it has been defined as spouses residing in different places and having no intention of resuming marital relations, and as spouses living away from each other, along with at least one spouse’s intent to dissolve the marriage. These definitions contemplate both a physical separation of residence and an accompanying intent to end the marital relationship. They incorporate an ordinary and common linguistic  understanding  of  the  word ″apart,″ used as an adverb, as being at a distance in place, position, or time, or away from, and the word ″separate″ as denoting being kept apart, spaced apart or scattered. Indeed, both legal usage of the phrase ″living separate and apart″ and colloquial understanding of what it means for someone to live separate and apart from someone else do not include persons living together in the same home. Ordinary usage of the language itself contemplates the parties’ occupation of separate residences. Therefore, the statute on its face appears to have a commonly understood, plain meaning.

Governments > Courts > Judicial Precedent

HN7 Cases are not authority for propositions not considered.

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

HN8 The cases addressing the date of separation are consistent with a view that both separate residences and demonstrated intent are necessary.

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

HN9 Parties may live apart and yet not be separated. However, the reverse is not also true. Living apart physically is an indispensable threshold requirement to separation, whether or not it is sufficient, by itself, to establish separation.

Governments > Legislation > Interpretation

HN10 Legislative inaction after a judicial decision does not necessarily imply legislative approval.

Family  Law  >  Marital  Termination  &  Spousal Support > Legal Separation

Family  Law  >  …  >  Property  Distribution  > Characterization > Separate Property

HN11 The Legislature intended the statutory phrase ″living separate and apart″ to require both separate residences and accompanying demonstrated intent to end the marital relationship. Consistent with the history of Fam. Code, § 771, subd. (a), and the developed standard articulated by the case law, ″living separate and apart″ refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.

Governments > Legislation > Interpretation

HN12 A literal construction may be rejected where it would result in absurd consequences the Legislature could not have intended.

Headnotes/Syllabus


Summary
CALIFORNIA OFFICIAL REPORTS SUMMARY

In dissolution of marriage proceedings, the trial court found the date of separation to be the date when the spouses began to manage their finances separately, while still living in the same residence. (Superior Court of Alameda County, No. RF08428441, Elizabeth Hendrickson, Commissioner.) The Court of Appeal, First Dist., Div. One, No. A136858, affirmed.

The Supreme Court reversed and remanded, holding that the spouses were not living separate and apart (Fam. Code, § 771, subd. (a)) when they continued to live in the same residence, whether or not their conduct otherwise demonstrated their intent to end the marital relationship. Because living in separate residences is an indispensable threshold requirement for earnings and accumulations to be characterized as separate property, all of the property acquired by the spouses while they lived in the same residence was community property (Fam. Code, § 760), and the lower courts erred in finding a date of separation earlier than the date when one spouse actually moved out of the marital home. (Opinion by Cantil-Sakauye, C. J., with Werdegar, Chin, Corrigan, Liu, Cuéllar, and Kruger, JJ., concurring. Concurring opinion by Liu, J., with Werdegar, J., concurring (see p. 866).)

Headnotes
CALIFORNIA OFFICIAL REPORTS HEADNOTES

CA(1) (1)
Statutes § 21 > Construction > Legislative Intent > Community Property Statutes.

With all questions of statutory construction, the court’s objective is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute. This principle is especially important in construing a statute within the community property scheme because the system itself is a creature of statute.

CA(2) (2)
Statutes § 30 > Construction > Language > Plain Meaning Rule > Most Reliable Indicator of Intent.

A court begins with the plain [*847] language of a statute, affording the words of the provision their ordinary and usual meaning and viewing them in their statutory context, because the language employed in the Legislature’s enactment generally is the most reliable indicator of legislative intent. The plain meaning controls if there is no ambiguity in the statutory language. If, however, the statutory language may reasonably be given more than one interpretation, courts may consider various extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing the statute.

CA(3) (3)
Dissolution of Marriage; Separation § 48 > Community Property > Determining Separation Date > Separate Residences.

The phrase “living separate and apart” is a term of art. As such, it has been defined as spouses residing in different places and having no intention of resuming marital relations, and as spouses living away from each other, along with at least one spouse’s intent to dissolve the marriage. These definitions contemplate both a physical separation of residence and an accompanying intent to end the marital relationship. They incorporate an ordinary and common linguistic understanding of the word “apart,” used as an adverb, as being at a distance in place, position, or time, or away from, and the word “separate” as denoting being kept apart, spaced apart or scattered. Indeed, both legal usage of the phrase “living separate and apart” and colloquial understanding of what it means for someone to live separate and apart from someone else do not include persons living together in the same home. Ordinary usage of the language itself contemplates the parties’ occupation of separate residences. Therefore, the statute on its face appears to have a commonly understood, plain meaning.

CA(4) (4)
Courts § 38 > Decisions and Orders > Doctrine of Stare Decisis > Identity of Law and Fact > Propositions Not Considered.

Cases are not authority for propositions not considered.

CA(5) (5)
Dissolution   of   Marriage;   Separation   §   48   > Community Property > Determining Separation

Date > Both Separate Residences and Intent Necessary.

The cases addressing the date of separation are consistent with a view that both separate residences and demonstrated intent are necessary.

CA(6) (6)
Dissolution of Marriage; Separation § 48 > Community Property > Determining Separation Date > Separate Residences.

Parties may live apart and yet not be separated. However, the reverse is not also true. Living apart physically is an indispensable threshold requirement to separation, whether or not it is sufficient, by itself, to establish separation.

CA(7) (7)
Statutes § 46 > Construction > Presumptions > Legislative Intent > Implied Approval of Judicial Decision.

Legislative inaction after a judicial decision does not necessarily imply legislative approval.

CA(8) (8)
Dissolution of Marriage; Separation § 48 > Community Property > Determining Separation Date > Both Separate Residences and Intent Necessary.

The Legislature intended the statutory phrase “living separate and apart” to require both separate residences and accompanying demonstrated intent to end the marital relationship. Consistent with the history of Fam. Code, § 771, subd. (a), and the developed standard articulated by the case law, “living separate and apart” refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.

CA(9) (9)
Statutes § 22 > Construction > Reasonableness > Avoiding Absurd Consequences.

A literal construction may be rejected where it would result in absurd consequences the Legislature could not have intended.

CA(10) (10)
Dissolution of Marriage; Separation § 48 > Community Property > Determining Separation Date > Separate Residences.

Living in separate residences is an indispensable threshold requirement for a finding that spouses are living separate and apart for purposes of Fam. Code, § 771, subd. (a). This interpretation of the statutory language aligns with the common understanding of the words, the statutory history of the provision, and legitimate public policy concerns. Because the Court of Appeal rejected such a requirement as a matter of statutory construction, it erred as a matter of law.

[Kirkland et al., Cal. Family Law Practice and Procedure (2015) ch. 20, § 20.06(2)(a); Gray & Wagner, Complex Issues in California Family Law (2014) ch. J3, § J3.03; Cal. Forms of Pleading and Practice (2015) ch. 222, Dissolution of Marriage: Property Division and Valuation, § 222.15; 11 Witkin, Summary of Cal. Law (10th ed. 2005) Community Property, § 1.]

Counsel: Law Office of Stephanie J. Finelli and Stephanie J. Finelli for Appellant.

Ferguson Case Orr Paterson, Wendy C. Lascher; Ivie, McNeill & Wyatt and Lilia E. Duchrow for Respondent.

Judges: Opinion by Cantil-Sakauye, C. J., with Werdegar, Chin, Corrigan, Liu, Cuéllar, and Kruger, JJ., concurring. Concurring opinion by Liu, J., with Werdegar, J., concurring.

Opinion by: Cantil-Sakauye

Opinion


[*849]

[***836]    [**402]    CANTIL-SAKAUYE, C. J.—In a marital dissolution proceeding, a court determines the division of property between the spouses by first characterizing the parties’ property as community property or separate property. (In re Marriage of Valli (2014) 58 Cal.4th 1396, 1399 [171  Cal.  Rptr.  3d  454,  324  P.3d  274].)  HN1 Family Code section 760 provides that all [***837] property acquired by the spouses during the marriage is community property “[e]xcept as otherwise provided by statute.” One such statute is Family Code section 771, subdivision (a) (section 771(a)), which provides that “[t]he earnings and accumulations of a spouse … , while living separate and apart from the other spouse, are the separate property of the spouse.” In this case we consider whether a couple may be “living separate and apart,” for purposes of section 771(a), when they live together in the same home. We conclude the answer is no. The statute requires the spouses to be living in separate residences in order for their earnings and accumulations to be their separate property. Because the Court of Appeal concluded otherwise, we reverse its judgment.

I.    FACTUAL AND PROCEDURAL BACKGROUND

Keith Xavier Davis (husband) and Sheryl Jones Davis (wife) were married on June 12, 1993. They have two children, a daughter born in August 1995 and a son born in November 1999. Wife filed for dissolution on December 30, 2008.

At trial on the issue of the date of their separation, wife described the couple’s marriage as turbulent. She testified that they stopped being sexually intimate after their son was conceived in 1999. They never went on a “date” after their son was born. The parties disagreed as to when they stopped sharing a bedroom in their marital home.

Husband testified wife moved to another bedroom in 2001; wife testified this happened in 2004. Their trial testimony indicates that they both attended the children’s activities, but traveled to the locations by separate cars. Wife did her own and the children’s laundry. Husband did his laundry. Both parties prepared meals, but wife would not prepare something different for husband if he was dissatisfied with the meal she made for herself and the children. The parties took some family vacations together, but also [**403] took separate vacations. In deposition testimony, wife claimed that by 2004 they were “living entirely separate lives.” They spoke about divorce, but stayed together for the sake of the children.

The parties maintained a joint bank account from the beginning of their marriage, which wife managed. In 2001, however, husband started his own business and at some point opened a separate bank account. In 2003, wife reactivated a separate bank account of her own to manage her business funds [*850] and pay for her personal expenses. Husband contributed $ 3,200 a month to the parties’ joint account from his separate account for the payment of household expenses. But both parties were unhappy with each other’s contributions to the joint account. In January 2006, husband became employed by Clorox, substantially increasing his earnings. Wife was frustrated when he did not increase his financial support to the household.

On June 1, 2006, after the end of their son’s school year, wife announced to husband that she was “through” with the marriage. According to her, the “last component” of their marriage was their finances. On June 1, 2006, wife presented husband with a financial ledger that itemized their joint household expenses and their individual expenses. She did this because she wanted the parties to contribute equally to running the home and funding the children’s expenses, while being solely responsible for their own respective personal expenses.  Wife  removed  husband  from  her American Express credit account and returned several of husband’s credit cards to him. She believed at this point that they were acting simply as roommates. In July 2006, wife began working full-time, substantially [***838] increasing her earnings. Husband left his job with Clorox in September 2006.

The parties continued to live in the marital home after June 1, 2006. Wife continued to keep her personal belongings there. She continued to receive mail and telephone calls there. She continued to cook meals at the home when she was in town, although she often traveled for her work. She did not change the address on her driver’s license. In August 2006, the parties took a family vacation to Hawaii with their children. However, they subsequently took no out-of-state vacations with one another. They continued to celebrate special occasions, such as birthdays and holidays, together as a family as they had previously done. They both continued to use their joint bank account.

When wife filed the petition for dissolution of the marriage on December 30, 2008, she listed the date of their separation as June 1, 2006. In his initial response to wife’s petition, husband listed the date of separation as January 2, 2009 (a few days after wife’s filing of the petition). Wife did not move out of the marital home until July 2011. Husband subsequently filed an amended response listing the date of separation as July 1, 2011.

After trial of the issue, the court found the date of separation to be June 1, 2006. The Court of Appeal affirmed. In relevant part, it disagreed with the majority decision in In re Marriage of Norviel (2002) 102 Cal.App.4th 1152 [126 Cal. Rptr. 2d 148] (Norviel), which held that physically living apart is “an indispensable threshold requirement” for separation under section 771(a). (Norviel, supra, at p. 1162.) We granted review to resolve the apparent conflict in interpretation of the statute.
[*851]

II.    DISCUSSION

A.    Contentions of the parties and standard of review

Husband contends that spouses cannot be “living separate and apart” for purposes of section 771(a) when they continue to share a residence. He urges such a bright-line rule in order to provide clear guidance to judges and a measure of predictability to attorneys and litigants. Wife contends that no particular fact, including place of residence, is determinative. Instead, wife argues that a court should consider the totality of the circumstances and decide the date of separation based on conduct by either or both of the spouses evidencing a complete and final intent to part ways with no plan of resuming the marital relationship, even if at that time they are still living in the same residence. According to wife, husband’s proposed bright-line rule is unworkable and would lead [**404] to harsh results. Husband claims the same thing about wife’s proposed rule.

HN2 Although the date of separation is normally a factual issue to be reviewed for substantial evidence (In re Marriage of Manfer (2006) 144 Cal.App.4th 925, 930 [50 Cal. Rptr. 3d 785] (Manfer)), resolution of the opposing contentions here depends on statutory construction of the language of section 771(a), a question of law to which we apply a de novo standard of review. (Ceja v. Rudolph & Sletten, Inc. (2013) 56 Cal.4th 1113, 1119 [158 Cal. Rptr. 3d 21, 302 P.3d 211].)

B.    Statutory construction of section 771(a)

CA(1) (1) Section 771(a) is part of California’s statutory community property scheme, a system of law that “originated in continental Europe, came to Mexico from Spain, and became California law through the treaty of 1848.” (11 Witkin, Summary of [***839] Cal. Law (10th ed. 2005) Community Property, § 1, p. 529; see In re Marriage of Bonds (2000) 24 Cal.4th 1, 12 [99 Cal. Rptr. 2d 252, 5 P.3d 815].) In interpreting the language of section 771(a), as HN3 with all questions of statutory construction, “our objective ‘is to ascertain the intent of the lawmakers so as to effectuate the purpose of the statute.’ ” (Ceja v. Rudolph & Sletten, Inc., supra, 56 Cal.4th at p. 1119.) This principle is especially important in construing a statute within the community property scheme because the system itself is a “‘creature of statute.’” (1 Bassett, Cal. Community Property Law: A Treatise on Marital Property Rights (3d ed. 1994) Origins and Development, § 1:4, p. 8 (Bassett).)

HN4 CA(2) (2) “‘We begin with the plain language of the statute, affording the words of the provision their ordinary and usual meaning and viewing them  in  their  statutory  context,  because  the language employed in the Legislature’s [*852] enactment generally is the most reliable indicator of  legislative  intent.’  [Citations.]  The  plain meaning controls if there is no ambiguity in the statutory language. [Citation.] If, however, ‘the statutory language may reasonably be given more than one interpretation, “‘“courts may consider various extrinsic aids, including the purpose of the statute, the evils to be remedied, the legislative history, public policy, and the statutory scheme encompassing the statute.”’”’” (People v. Cornett (2012) 53 Cal.4th 1261, 1265 [139 Cal. Rptr. 3d 837, 274 P.3d 456].)

1.    The plain meaning of “living separate and apart”

As noted earlier, section 771(a) states that HN5 “[t]he earnings and accumulations of a spouse … , while living separate and apart from the other spouse, are the separate property of the spouse.” (Italics added.)

CA(3) (3) In considering whether this statute has a plain meaning, we recognize that HN6 “the phrase ‘living separate and apart’ is a term of art
… .” (1 Kirkland et al., Cal. Family Law Practice and Procedure (2d ed. 2015) Characterization—Division in General, § 20.06[2][a], p. 20-26.) As such, it has been defined in  Black’s Law  Dictionary as  spouses “residing in different places and having no intention of resuming marital relations” (Black’s Law Dict. (7th ed. 1999) p. 945, col. 2, italics added) and more recently as spouses “living away from each other, along with at least one spouse’s intent to dissolve the marriage” (Black’s Law Dict. (10th ed. 2014) p. 1076, col. 2, italics added). These definitions contemplate both a physical separation of residence and an accompanying intent to end the marital relationship. They incorporate an ordinary and common linguistic understanding of the word “apart,” used as an adverb, as being “[a]t a distance in place, position, or time” or “[a]way from” and the word “separate” as denoting being “ke[pt] apart,” “space[d] apart” or “scatter[ed].” (American Heritage Dict. (4th ed. 2000) pp. 82, col. 2, 1587, col. 1; accord, Webster’s 3d New
Internat. Dict. (2002) p. 98, col. 2 [defining “apart” as “at a ‘“distance,” “separate[] in space or time”].) 1

[**405] Indeed, both legal usage of the phrase “living separate and apart” and colloquial understanding of what it means for someone to live “separate” and “apart” from someone else do not include persons living [***840] together in the same home. Ordinary usage of the language itself contemplates the parties’ occupation of separate residences. Therefore, the statute on its face appears to have a commonly understood, plain meaning.
[*853]

Nevertheless, we recognize that the phrase as used in section 771(a) is not without at least some ambiguity. The phrase “living separate and apart” could less likely, but still plausibly, be read to mean that the spouses are in effect “living separate lives” with the requisite intent to end the marital relationship. (See Webster’s 3d New Internat. Dict., supra, at p. 2069, col. 3 [defining the adjective “separate” as “not shared with another,” “existing by itself: autonomous, independent” or “distinct, different”].) Such an interpretation would not require separate residences for purposes of section 771(a). Instead, it would focus a court’s attention on the spouses’ independence or autonomy from each other in their daily living. Under this understanding of the statutory phrase, physical separation would, as wife contends, be simply one of many factors to consider in determining the date of a couple’s separation.

To consider whether the Legislature intended the language of section 771(a) to encompass this less likely, but still possible secondary meaning, we turn to extrinsic aids—the statute’s long history, its prior judicial construction, and the Legislature’s use of the phrase elsewhere in the Family Code—to consider what light they may shed on the Legislature’s intent. We find evidence there bolstering the ordinary and common meaning of the language as requiring separate residences along with demonstrated intent to finally end the marital relationship before a spouse’s earnings and accumulations are considered that spouse’s separate property.

2.    Consideration of extrinsic aids

The language of section 771(a) originated in a predecessor statute that was enacted 145 years ago in 1870. (Stats. 1870, ch. 161, p. 226, entitled “An Act to protect the rights of married women in certain cases” (hereafter the 1870 Act).) In its first section, the 1870 Act provided that “the earnings of [a] wife” were “not … liable for the debts of [her] husband.” [***841] (1870 Act, Stats. 1870, ch. 161, § 1, p. 226.) More significantly for our purposes, in language identical to section 771(a) except for the original text’s restriction to wives, the 1870 Act provided that “[t]he earnings and accumulations of the wife … , while the wife is living separate and apart from her husband, shall be the separate property of the wife.” (Id., § 2, p. 226.) Further, the 1870 Act specified that a wife “living separate and apart from her husband” had “sole and exclusive control [over] her separate property,” could “sue and be sued,” without joinder of her husband, and could “avail herself of and be subject to all legal process in all actions, including actions concerning her real estate.” (Id., § 3, p. 226.)

The 1870 Act did not contain a definition of the phrase “living separate and apart” used in section 2. (Stats. 1870, ch. 161, § 2, p. 226.) However, the Legislature’s understanding that the phrase connoted a threshold requirement [*854] of separate residences  may be  discerned from  an additional section of the statute. Section 4 of the 1870 Act provided a procedure for a wife who was “living separate and apart” from her husband to sell her real property without joining with her husband. To do so, the wife was required to record a verified and acknowledged declaration “containing a description of such real estate, the name of her husband, her own place of residence, and [stating] that she is a married woman, living separate and apart from her husband.” (1870 Act, Stats. 1870, ch. 161, § 4, p. 226, italics added.) The statutory requirement that the wife state in a declaration “her own” place of residence that is “separate and apart from her husband” strongly suggests that the 1870 Act was directed at a situation where the spouses had physically separated and the wife in fact had “her own” residence. It is some indication that the 1870 Legislature had in mind what we have described as the common meaning of the language when it first adopted it.

[**406] In this regard, we find it additionally helpful to recall the historical context of the 1870 Act. At that time, married women had very limited power over their property. In the absence of a binding premarital agreement, the husband had the absolute right of “management and control” of the community property of the marriage, including the power of sale of assets. (Stats. 1850, ch. 103, §§ 9, 14, pp. 254, 255.) Under the original 1850 statute defining spousal property rights, the “rents and profits of the separate property” of both husband and wife were deemed community property and were, therefore, under the exclusive control of the husband. (Id., § 9, p. 254.) In addition, the husband had the “right of management and control” of the wife’s separate property “during the continuance of the marriage.” (Id., § 6, p. 254.) Her protection against her husband’s inappropriate sale of her separate property “during the continuance of the marriage” lay in a procedural requirement that the sale or encumbrance must be in an instrument in writing signed by both husband and wife, and her protection against her husband’s general mismanagement of her separate property during the marriage lay in an application to the court for the appointment of a trustee to act on her behalf. (Id., §§ 6, 8, p. 254.)

Between 1850 and 1870, the Legislature recognized a few circumstances under which a married woman could have some control over her separate property. By legislation in 1852, a married woman was given authority to run a business in her own name under limited circumstances as a “sole trader” and under such circumstances, could retain the earnings of such a business as her separate property; they were not subject to the debts of her husband and she had the authority to sue her debtors. (See Bassett, supra, § 1:3, pp. 6–7.) By legislation in 1853, if the terms of an instrument bequeathing, devising or gifting property to the wife provided that the rents and profits were to “be applied to her sole and separate use,” the wife could manage and dispose of such rents and profits. (Stats. 1853, ch. 116, § 1, p. 165.) Legislation adopted [*855] in 1855 gave a married woman whose husband was absent from the state for a year the right to convey her  separate property real estate (Stats. 1855, ch. 17, § 1, p. 12), but apparently not any other property left in her possession. (See Prager, The Persistence of Separate Property Concepts in California’s Community Property System, 1849–1975 (1976) 24 UCLA L.Rev. 1, 39–41 (Prager); Stats. 1852, ch. 42, p. 101.)

Nevertheless, under the statutory scheme in effect in 1870, until entry of a decree of dissolution of the marriage (Stats. 1850, ch. 103, § 12, p. 255 [requiring a division of a couple’s community property in the decree of dissolution]), it appears that a woman who was either involved in divorce proceedings or whose husband had deserted or otherwise left her, and who did not have separate property coming within one of the statutory provisions giving her control over it, would have no right of access to the financial sustenance needed to meet the expenses of daily life on her own. Commentators have observed that the law’s restrictive provisions [***842] at this time were to some extent inconsistent with traditional principles of community property law—principles that actually afforded more legal protection to women than did the common law principles that seem to have filtered into the California system. (See Prager, supra, 24 UCLA L.Rev. at pp. 34–46; see also Cammack, Marital Property in California and Indonesia: Community Property and Harta Bersama (2007) 64 Wash. & Lee L.Rev 1417, 1431–1433; Schuele, Community Property Law and the Politics of Married Women’s Rights in Nineteenth-Century California (1994) 7 W. Legal Hist. 245, 262–264; Bassett, supra, § 1:3, pp. 7–8.)

When read as a whole and in this context, it seems evident that the 1870 Act was intended to afford married women some additional protection from the rigors of the law generally denying them control over their earnings and separate property. Under the authority of the 1870 Act, a wife whose husband was not physically living with her could undertake  to  support  herself  in  her  “own” residence. Unlike other married women, she could retain her earnings and accumulations as her separate property to maintain her separate residence. She was given the right to control and dispose of her separate property. She could sue and be sued without the joinder of her husband. Nothing in the 1870 [**407] Act indicates a different intent—to characterize a wife’s earnings and accumulations as her separate property while she was still physically living with her husband in the marital home so long as she and her husband were sufficiently leading “separate lives.” To the contrary, the 1870 Act should be understood as a limited exception to the general rule of that time that the husband had full management and control over the marital and separate assets for the duration of the marriage. It appears the Legislature was concerned only with the special and limited circumstance of a wife who was living physically separate from her husband. Such a wife was likely to be incurring separate expenses associated with her separate residence and could [*856] be anticipated to need the authority to separately maintain, control and manage such property. In such a situation, the 1870 Legislature determined an exception to the normal community property characterization of earnings and accumulations acquired during marriage and husband’s control was appropriate.

When the Legislature adopted the Civil Code in 1872, it enacted a version of section 2 of the 1870 Act as Civil Code section 169 (former section 169). As enacted in 1872, former section 169 provided that “[t]he earnings and accumulations of the wife … , while she is living separate from her husband, are the separate property of the wife.” Again, nothing suggests that the 1872 Legislature contemplated that anything other than separate residences would qualify as “living separate,” i.e., that it intended the language to be construed differently from its common and ordinary meaning. In fact, the Legislature enacted at the same time section 5 of the Civil Code, which states that “[t]he provisions of this Code, so far as they are substantially the same as existing statutes or the common law, must be construed as continuations thereof, and not as new enactments.” Because former section 169 was substantially the same as section 2 of the 1870 Act, Civil Code section 5 directs that it be interpreted as continuing in effect the former law.

Moreover, it might reasonably be suggested that the lack of a statutory definition of the phrase is some indication itself that the Legislature intended the ordinary  meaning  to  apply. Otherwise,  the Legislature would likely have provided a specialized definition of the term. It did not.

[***843] And indeed, with respect to the language now found in section 771(a), from the earliest cases on, the issue presented regarding the interpretation of the statute was not whether separate places of residence were a prerequisite for application of the law, but rather whether separate residences sufficed. That question was answered in the negative.

For example, in 1874, this court held that the 1870 Act did not apply when the evidence showed that the wife was only temporarily physically separated from her husband. We concluded that for the wife to be “‘living separate and apart’” within the meaning of the statute “[t]here must have been an abandonment on the part of the husband or wife, or a separation which was intended to be final.” (Tobin v. Galvin (1874) 49 Cal. 34, 36–37.)

On the other hand, a husband and wife were living separate and apart within the meaning of former section 169 where the husband left his wife, lived in a separate town, and determined during his absence that he would never resume marital relations with his wife, while his wife and children continued to live in the marital home, where the wife kept boarders and did [*857] other work to support herself and the children. (Loring v. Stuart (1889) 79 Cal. 200, 201–202 [21 P. 651]; see Tagus Ranch Co. v. First Nat. Bk. (1935) 7 Cal. App. 2d 457 [46 P.2d 809] [money borrowed by wife who had been deserted by her husband constituted her separate property under former § 169].) These facts illustrate the apparent purpose of the statute: to provide for an estranged wife, whose husband was not physically living with her, a means of maintaining herself in her separate place of residence by allowing her earnings and accumulations to be her separate property.

Without questioning whether separate residences was a necessary predicate, courts struggled to articulate a uniform standard for determining the date of separation in [**408] circumstances where the parties had moved into separate homes.

The court in Makeig v. United Security Bk. & T. Co.  (1931)  112  Cal.App.  138  [296  P.  673] (Makeig), for example, summarized the then-existing law and concluded that “[l]iving separate and apart … , as contemplated by … section 169, does not apply to a case where a man and wife are residing temporarily in different places due to economic or social reasons, but applies to a condition where the spouses have come to a parting of the ways and have no present intention of resuming the marital relations and taking up life together under the same roof.” (Id., at p. 143, italics added.) The court explained that “[u]nder modern conditions there is many a man living and working  in one  place and his  wife living and working in another, seeing one another only on week ends, sometimes not for months at a time, yet they are not living separate and apart within the meaning of the section, for there has been no marital rupture, and there is a present intention to live together as man and wife, and their status is only temporary, although it may happen that the condition might exist for some years.” (Id., at pp. 143–144; accord, Kerr v. Kerr (1960) 182 Cal. App. 2d 12, 18 [5 Cal. Rptr. 630]
[evidence showed that there was no final parting of the ways or intention not to resume marital relations under the same roof until such time as wife refused to permit husband’s return to their home].)

Subsequent legislative developments suggest no intent to change the meaning of the phrase “living separate and apart.” In 1969, the Legislature repealed the family law portions of the Civil Code and replaced them with the Family Law Act. (Stats. 1969, ch. 1608, §§ 3, 6, 8, pp. 3313–3314.) Relevant to our discussion, former section 169 [***844] was repealed and Civil Code section 5118 (former section 5118) was adopted. (Stats. 1969, ch. 1608, § 8, pp. 3314, 3340.) Like its predecessor, former section 5118 provided that “[t]he earnings and accumulations of the wife …, while she is living separate from her husband, are the separate property of the wife.” (Stats. 1969, ch. 1608, § 8, pp. 3314, 3340.) As before, no specialized definition of the [*858] language was provided, and by enacting language identical to former section 169, the 1969 Legislature once again expressed its intent to continue in effect the former law. (Civ. Code, § 5.) Therefore, as it did originally, the statute continued to address the situation in which a wife was living estranged in a separate residence from her husband.

We pause at this point to observe that by this time the Legislature had also used the phrase “living separate and apart” elsewhere in the Civil Code. Civil Code former section 34.6 specified certain circumstances under which “a minor 15 years of age or older who [was] living separate and apart” from his or her parents or legal guardian, “whether with or without the consent of a parent or guardian and regardless of the duration of such separate residence,” could consent to his or her own medical or dental care. (Civ. Code, former § 34.6, italics added, as added by Stats. 1968, ch. 371, § 1, p. 788.) Former section 34.6 was repealed in 1992 (Stats. 1992, ch. 163, § 2, p. 724), but its substance was restated in Family Code section 6922, where it continues to use the phrase “living separate and apart” to mean the minor occupies a separate residence. (Fam. Code, § 6922, subd. (a)(2); see Family Code, 22 Cal. Law Revision Com. Rep. (1992) com. foll. § 6922, p. 545 [“Section 6922 restates former Civil Code Section 34.6 without substantive change.”].) This statute further supports our view that the Legislature likely intends the common meaning of the language when it uses this statutory phrase.

Returning to the predecessor statutes to section 771(a), we note that in 1971, the Legislature amended the Family Law Act to address an inequity that had developed in the treatment of husbands and wives. (Assem. Com. on Judiciary, Analysis of Assem. Bill No. 1549 (1971 Reg. Sess.) May 10, 1971.) By this time, under Civil Code former section 5119, the earnings and accumulations of either spouse became the separate property of such spouse after rendition of a judgment of legal separation. (Civ. Code, former § 5119, subd. (a), as added by Stats. 1969, ch. 1608, § 8, pp. 3314, 3340.) In addition, the earnings and accumulations of a husband became his separate property after rendition of an interlocutory [**409] judgment of dissolution and while he was living separate and apart from his wife. (Civ. Code, former § 5119, subd. (b), as added by Stats. 1969, ch. 1608, § 8, pp. 3314, 3340–3341.) But under former section 5118, the earnings and accumulations of a wife while she was living separate from her husband were her separate property regardless of whether an interlocutory judgment of dissolution had been rendered. (Former § 5118, as added by Stats. 1969, ch. 1608, § 8, pp. 3314, 3340.) In 1971, the Legislature repealed subdivision (b) of former section 5119 and amended former section 5118 to provide equal treatment by specifying that “[t]he earnings and accumulations of a spouse … , while living separate and apart from the other spouse, are the separate property of the spouse.” (Stats. 1971, ch. 1700, p. 3640, italics added.) Nothing in the legislative history, however, indicates any intent to change the original (and commonly understood) [*859] meaning of the phrase “living separate and apart.” 2 Rather, the [***845] focus was simply on equalizing the treatment of husbands and wives. (In re Marriage of Bouquet (1976) 16 Cal.3d 583, 588 [128 Cal. Rptr. 427, 546 P.2d 1371] [The Legislature’s purpose in amending the  statute was  likely  to address  its possible constitutional infirmity as gender discrimination.].)

The post-1971 cases continued to refine the description of what was necessary for application of former section 5118. But again, none of them questioned that a threshold requirement was separate residences. In In re Marriage of Baragry (1977) 73 Cal. App. 3d 444 [140 Cal. Rptr. 779]
(Baragry), the appellate court reversed a trial court’s determination that the parties had separated on the date that the husband moved out of the marital home. (Id., at p. 449.) The reviewing court observed that the fact that husband and wife lived in separate residences was not determinative of whether they were “living separate and apart” for purposes of former section 5118. The court stated: “The question is whether the parties’ conduct evidences a complete and final break in the marital relationship.” (Baragry, supra, at p. 448.) It found no such conduct in the case before it because the husband maintained continuous and frequent contact with his family after moving from the marital home. He continued to eat dinner at the home, maintained his mailing and voter registration address at the home, sent his wife cards and gifts, took her to social occasions, had her do his laundry, and otherwise maintained the appearance of being married. He never informed his wife that he had no intention of reconciling. (Id., at pp. 447–448.)

Similarly, a reviewing court concluded the evidence supported a determination that a husband and his wife were not “living separate and apart” under former section 5118 even though the wife had moved out of the marital home, in a case in which they continued their sexual relationship, sought marriage counseling and made multiple efforts at reconciliation. (In re Marriage of Marsden (1982) 130 Cal. App. 3d 426, 432–435 [181 Cal. Rptr. 910].)

In In re Marriage of Umphrey (1990) 218 Cal. App. 3d 647 [267 Cal. Rptr. 218] (Umphrey), another case in which the spouses were living in separate residences, the Court of Appeal cautioned that in determining the date of separation for purposes of former section 5118, courts are “duty bound to consider all of the relevant evidence” regarding “‘whether the parties’ [*860] conduct evidences a complete and final break in the marital relationship.’” (Umphrey, supra, at p. 657, quoting Baragry, supra, 73 Cal. App. 3d at p. 448.) It concluded that the parties’ stipulation to a separation date after they physically moved apart was not conclusive. (Umphrey, at p. 657.)

In 1989, the Legislature directed the Law Revision Commission to organize disparate statutes into a Family Code. (Family Code, [**410] 22 Cal. Law Revision Com. Rep., supra, at p. 7.) In 1992, the Legislature enacted the Family Code, operative January 1, 1994. In pertinent part, the language of former section 5118 was placed into Family Code section 771. (Stats. 1992, ch. 162, § 10, pp. 464, [***846]   489.) The Law Revision Commission comment to section 771 states that “[s]ection 771 continues … Civil Code [former] [s]ection 5118 without  change.”  (Family  Code,  22  Cal.  Law Revision Com. Rep., supra, com. foll. § 771, p. 137;  see  Cal.  Law  Revision  Com.  com.,  29C West’s Ann. Fam. Code (2004 ed.) foll. § 771, p. 405.) 3

In 1994, the issue of the proper construction of the phrase “living separate and apart” was again before the court in In re Marriage of von der Nuell (1994) 23 Cal.App.4th 730 [28 Cal. Rptr. 2d 447] (von der Nuell). The von der Nuell court concluded that the trial court erred in holding the date of separation of the parties was the date the husband moved out of the family residence even if the parties had, at that time, no intent to resume marital relations. (Id., at p. 732.) The court held that “legal separation requires not only a parting of the ways with no present intention of resuming marital relations, but also, more importantly, conduct evidencing a complete and final break in the marital relationship.” (Id., at p. 736, italics altered.) By requiring both subjective intent and demonstrated conduct, the von der Nuell court essentially combined the requirements of Makeig, supra, 112 Cal.App. at page 143 and Baragry, supra, 73 Cal. App. 3d at page 448. (In re Marriage of Hardin (1995) 38 Cal.App.4th 448, 451 [45 Cal. Rptr. 2d 308] (Hardin) [making this observation].) Pointing to evidence of the parties’ attempts to reconcile, the von der Nuell court found that it was not until some years after the couple separated physically that their conduct evidenced the complete and final break in their marital relationship that was necessary to constitute “living separate and apart.” (See von der Nuell, supra, at pp. 732, 734–737.)

In Hardin, supra, 38 Cal.App.4th 448, the Court of Appeal likewise reversed a trial court’s finding that the parties had separated on the date that the husband moved out of their residence. Like the court in von der Nuell, the Hardin court concluded that both subjective intent to end the marriage and objective conduct demonstrating such intent is necessary for legal separation. (38 Cal.App.4th at p. 451.) “Simply stated, the date of separation occurs [*861] when either of the parties does not intend to resume the marriage and his or her actions bespeak the finality of the marital relationship. There must be problems that have so impaired the marriage relationship that the legitimate objects of matrimony have been destroyed and there is no reasonable possibility of eliminating, correcting or resolving these problems.” (Ibid.) The court declared that “[a]ll factors bearing  on either  party’s intentions  ‘to return or not to return to the other spouse’ are to be considered,” but “[n]o particular facts are per se determinative.” (Id., at p. 452.) “The ultimate question to be decided in determining the date of separation is whether either or both of the parties perceived the rift in their relationship as final. The best evidence of this is their words and actions. The husband’s and the wife’s subjective intents are to be objectively determined from all of the evidence reflecting the parties’ words and actions during the disputed time in order to ascertain when during that period the rift in the parties’ relationship [***847] was final.” (Id., at p. 453.) 4

[**411] CA(4) (4) In our view, the language in these cases—requiring consideration of “all of the relevant evidence” regarding “‘whether the parties’ conduct evidences a complete and final break in the marital relationship’” (Umphrey, supra, 218 Cal. App. 3d at p. 657, quoting Baragry, supra, 73 Cal. App. 3d at p. 448), requiring both a lack of “present intention of resuming marital relations … [and] conduct evidencing a complete and final
break in the marital relationship” (von der Nuell, supra, 23 Cal.App.4th at p. 736, italics omitted), and indicating that “[a]ll factors … are to be considered” in deciding the “ultimate question” of “whether either or both of the parties perceived the rift  in  their  relationship as  final”  (Hardin, supra, 38 Cal.App.4th at pp. 452, 453, italics omitted)—must be understood in the context of their facts, which reflect that in each case the parties had moved into separate places of residence. These cases do not address, and therefore are not authority for a conclusion that “living separate and apart” was intended by the Legislature, originally or subsequently, to require, as wife argues, only demonstrated conduct reflecting a subjective intent to part ways with no plan of resuming the marital relationship, which might, but need not necessarily, [*862] include physical separation. (In re Marriage of Cornejo (1996) 13 Cal.4th 381, 388 [53 Cal. Rptr. 2d 81, 916 P.2d 476] [“ ‘It is axiomatic that HN7 cases are not authority for propositions not considered.’ ”].) HN8 CA(5) (5) They are consistent with a view that both separate residences and demonstrated intent are necessary.

Moreover, as far as can be determined from the decisions, none of the cases that have construed section 771(a) and its predecessors have traced the statutory language back to the original, uncodified, 1870 Act. In our view, consideration of the 1870 Act and its historical background helps to determine the Legislature’s intent in using the phrase “living separate and apart.” It provides support for a common meaning interpretation of the language, as well as context for what followed. It is true that a number of cases have  noted  the  lack  of  a  specific  statutory definition and have expressed a view that there is a similar lack of legislative history regarding how to determine the date of separation, i.e., the date on which the parties began living separate and apart. (Manfer, supra, 144 Cal.App.4th at p. 929 [observing that “the statute does not define ‘date of separation’ or specify a rule for determining it …”]; Norviel, supra, 102 Cal.App.4th at p. 1158 [same]; Hardin, supra, 38 Cal.App.4th at pp. 450–451 [same]; Baragry, supra, 73 Cal. App. 3d at p. 448 [***848] [referring to “[w]hat little law defines separation”].) But to the extent these comments suggest that there is a lack of discernable legislative intent with respect to the underlying requirement of separate residences, we disagree. When the 1870 Act is viewed as part of section 771(a)’s statutory history and in context, there emerges an apparent legislative intent and purpose substantiating the ordinary linguistic understanding of the phrase “living separate and apart.”

CA(6) (6) The issue of whether spouses must be residing in separate places in order to support a finding that they are “living separate and apart” under the statute was finally expressly considered in Norviel, supra, 102 Cal.App.4th 1152. Citing many of the cases that we have reviewed, the majority in Norviel recognized that “[d]ecisional law … clearly establishes that HN9 parties may live apart and yet not be separated.” (Id., at p. 1162.) It concluded, however, that the reverse is not also true. The Norviel majority held that “living apart physically is an indispensable threshold requirement to separation, whether or not it is sufficient, by itself, to establish separation.” (Ibid.) The court found support for that conclusion in the statutory language, in the early decisions of this state, and in decisions from several other jurisdictions. (Id., at pp. 1162–1163.) 5

[**412] The Norviel majority acknowledged that its “conclusion [did] not necessarily rule out the possibility of some spouses living apart [*863] physically while still occupying the same dwelling,” but found that “this [was] not such a case.” (102 Cal.App.4th at p. 1164.)

The dissent in Norviel found that substantial evidence supported the trial court’s finding of a date of separation that was prior to husband moving out of the marital home because husband had clearly communicated his intent to end the marriage and the parties’ conduct thereafter was consistent with that intent. (Norviel, supra, 102 Cal.App.4th at pp. 1165–1167 (dis. opn. of Bamattre-Manoukian, J.).) According to  the dissent, the majority’s rule was unworkable, largely because it did not allow a couple who has reached the decision to end their marriage “a transition period to take the necessary steps to untangle the financial, legal and social ties incident to their decision.” (Id., at p. 1166 (dis. opn. of Bamattre-Manoukian, J.).) Without recognizing that the facts in Hardin, supra, 38 Cal.App.4th 448, reflected a separation of residences, the dissent stated that it would apply the test articulated by the Hardin court, which required consideration and evaluation of all of the evidence regarding “‘the parties’ words and actions during the disputed time in order to ascertain when during that period the rift in the parties’ relationship was final.’” (Norviel, supra, 102 Cal.App.4th at p. 1168 (dis. opn. of Bamattre-Manoukian, J.).) 6

[***849] CA(7) (7) There appears to have been no reaction from the bench or bar subsequent to the Norviel decision contending that the Norviel majority had introduced a sudden new rule that was legislatively unintended and unworkable. No movement to promote the position of the Norviel dissent seems to have materialized. And, although we recognize that HN10 legislative inaction after a judicial decision does not necessarily imply legislative approval  (County  of Los Angeles  v. Workers’ Comp. Appeals Bd. (1981) 30 Cal.3d 391, 404 [179 Cal. Rptr. 214, 637 P.2d 681]), it is
also interesting to observe that the Legislature has had more than a decade to amend section 771(a) in response to the Norviel majority’s recognition of a threshold requirement of physically separate places of residence and has failed to do so.

CA(8) (8) From this survey of the history of section 771(a) and its predecessor statutes, as judicially construed, we are convinced that HN11 the Legislature [*864] intended the statutory phrase “living separate and apart” to require both separate residences and accompanying demonstrated intent to end the marital relationship. Consistent with the statute’s history and the developed standard articulated by the case law, we hold that “living separate and apart” refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship. 7

3.    Public Policy Considerations

Wife contends that a bright-line rule, such as we articulate, will be overly simplistic, will  [**413] lead to unjust, harsh results, and is, essentially, against current public policy considerations. She suggests that “[a] typical spouse in California, for example, may face further financial difficulties simply by being required to move out of the marital residence as a prerequisite to establishing the date of separation rather than intentionally and meaningfully living as roommates at the same residence, while taking the necessary steps to untangle any outstanding financial, legal and social ties incident to that spouse’s decision to terminate the marriage.” She points out that there may be spouses who need to reside in the same residence as “roommates” because of foreclosure, job loss, or other economic factors. She suggests that others may wish to share the same residence in order to coparent their children. Finally, she speculates concerning the difficulty a spouse may encounter in obtaining a move-away order.

CA(9) (9) Wife’s arguments are not without weight. However, it bears repeating that the issue before us is a question of interpretation of a community property statute. Our goal in construing statutory language is to give effect to the Legislature’s intent and purpose. (Ceja v. Rudolph
& Sletten, Inc., supra, 56 Cal.4th at p. 1119.) Here we find original legislative intent to use the language in its common and ordinary sense as requiring separate places of residence before the earnings and accumulations [***850] of a wife during marriage could be characterized as the wife’s separate property. We understand the original legislative purpose of the statute to be the protection of and provision for a wife who was estranged and living physically separate from her husband. Thus, the statutory phrase “living separate and apart” required that the spouses be living in separate residences. We find no evidence of any subsequent change in the legislative intent to apply the commonly understood [*865] meaning of that language or change of legislative purpose in protecting a vulnerable spouse, which alters the meaning of this statutory phrase. Admittedly, the statute, as so construed, may work hardship in some specific situations, but we cannot say it is absurd. (People v. Leiva (2013) 56 Cal.4th 498, 506 [154 Cal. Rptr. 3d 634, 297 P.3d 870] HN12 [a literal construction may be rejected where it would result in absurd consequences the Legislature could not have intended].) Very much to the contrary; a bright-line rule, as husband points out, promotes fairness by providing a measure of predictability to the parties and their attorneys, as well as clear guidance to judges. It reduces the potential for manipulation of a more elastic standard by the higher earner in situations of significant disparity of spousal income. It provides separate property classification of earnings and  accumulations where  the need  is greatest because each spouse is maintaining his or her own separate place of residence. It retains the presumption of community property for earnings and accumulations acquired during marriage during a period of time likely to be prior to the institution of court proceedings and any court order of support, thereby protecting the lower earning spouse.

The requirement of separate residences for purposes of section 771(a) promotes reasonable public policy interests, but if there are other policy concerns that now advise the adoption of a different rule, it is up to the Legislature to craft one. (Sara M. v. Superior Court (2005) 36 Cal.4th 998, 1015 [32 Cal. Rptr. 3d 89, 116 P.3d 550]; Cel-Tech Communications, Inc.  v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 174 [83 Cal. Rptr. 2d 548, 973 P.2d 527].)

C.    Conclusion

CA(10) (10) We conclude that living in separate residences “is an indispensable threshold requirement” (Norviel, supra, 102 Cal.App.4th at
p. 1162) for a finding that spouses are “living separate and apart” for purposes of section 771(a). This interpretation of the statutory language aligns with the common understanding of the words, the statutory history of the provision, and legitimate public  policy  concerns.  Because  the  Court  of Appeal rejected such a requirement as a matter of statutory construction, it erred as a matter of law.

III.    DISPOSITION

The judgment of the Court of Appeal is reversed and the matter is remanded for proceedings consistent with our opinion.

[**414] Werdegar, J., Chin, J., Corrigan, J., Liu, J., Cuéllar, J., and Kruger, J., concurred.

Concur by: Chin

Concur


LIU, J., Concurring.—I agree with today’s opinion that the phrase “living separate and apart” in Family Code section 771, subdivision (a) (hereafter section 771(a)) “refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.” (Maj. opn., ante, at p. 864.) [***851] I also agree that it remains open “whether there could be circumstances that would support a finding that the spouses were ‘living separate and apart,’ i.e., that they had established separate residences with the requisite objectively evidenced intent, even though they continued to literally share one roof.” (Id., at p. 864, fn. 7.) I write separately to note that in addressing that question, courts should understand the purpose of section 771(a) in light of relevant changes in historical context that have occurred since 1870 when the Legislature enacted the original version of the statute.

The phrase “living separate and apart” first appeared in an uncodified 1870 statute titled “An Act to protect the rights of married women in certain cases.” (Stats. 1870, ch. 161, p. 226 (hereafter the 1870 Act).) This statute provided that “[t]he earnings and accumulations of the wife … , while the wife is living separate and apart from her husband, shall be the separate property of the wife.” (Id., § 2, p. 226.) The 1870 Act further provided that a wife “living separate and apart from her husband” had “sole and exclusive control [over] her separate property,” could “sue and be sued” without joinder of her husband, and could “avail herself of and be subject to all legal process in all actions, including actions concerning her real estate.” (Id., § 3, p. 226.)

Although the 1870 Act included no definition of “living separate and apart,” the Legislature clearly contemplated separate addresses for the husband and wife. As the court explains, “[s]ection 4 of the 1870 Act provided a procedure for a wife who was ‘living separate and apart’ from her husband to sell her real property without joining with her husband. To do so, the wife was required to record a verified and acknowledged declaration ‘containing a description of such real estate, the name of her husband, her own place of residence, and [stating] that she is a married woman, living separate and apart from her husband.’ (1870 Act, Stats. 1870, ch. 161, § 4, p. 226, italics added.) The statutory requirement that the wife state in a declaration ‘her own’ place of residence that is ‘separate and apart from her husband’ strongly suggests that the 1870 Act was directed at a situation where the spouses had physically separated and the wife in fact had ‘her own’ residence.” (Maj. opn., ante, at p. 854.)

Today’s opinion accurately describes the context and purpose of the 1870 Act. At the time, “married women had very limited power over their property. [*867] In the absence of a binding premarital agreement, the husband had the absolute right of ‘management  and  control’  of  the  community property of the marriage, including the power of sale of assets,” as well as considerable power over the wife’s separate property. (Maj. opn., ante, at p. 854.) “[U]nder the statutory scheme in effect in 1870, until entry of a decree of dissolution of the marriage … , it appears that a woman who was either involved in divorce proceedings or whose husband had deserted or otherwise left her, and who did not have separate property coming within one of the statutory provisions giving her control over it, would have no right of access to the financial sustenance needed to meet the expenses of daily life on her own.” (Id., at p. 855, citation omitted.)

“When read as a whole and in this context, it seems evident that the 1870 Act was intended to afford married women some additional protection from the rigors of the law generally denying them control over their earnings and separate property. [***852] Under the authority of the 1870 Act, a wife whose husband was not physically living with her could [**415] undertake to support herself in her ‘own’ residence. Unlike other married women, she could retain her earnings and accumulations as her separate property to maintain her separate residence. She was given the right to control and dispose of her separate property. … [T]he 1870 Act should be understood as a limited exception to the general rule of that time that the husband had full management and control over the marital and separate assets for the duration of the marriage. It appears the Legislature was concerned only with the special and limited circumstance of a wife who was living physically separate from her husband. Such a wife was likely to be incurring separate expenses associated with her separate residence and could be anticipated to need the authority to separately maintain, control and manage such property. In such a situation, the 1870 Legislature determined an exception to the normal community property characterization of earnings and accumulations acquired during marriage and husband’s control was appropriate.” (Maj. opn., ante, at pp. 855–856.)

The 1870 Act may be understood as a legislative response to cases like Lawrence v. Spear (1861) 17 Cal. 421. There a wife deserted by her husband engaged in a furniture business and sold furniture to the defendant. The husband sued the defendant to void the sale on the ground that he never consented to it. The court upheld the sale based on the legal fiction that the husband, having abandoned the wife, impliedly consented to her disposition of property for her own support. (Id. at pp. 423–424.) This fiction was necessary because the wife had no control over community property and no way to accumulate or control her own separate property, even though she was living separate and apart from her husband. Moreover, divorce did not appear to be a widely accessible option. (See Stevenson & Wolfers, Marriage and Divorce: Changes and their Driving Forces (Spring 2007) 21 J. Econ. Persp. 27, 29, figure 1 (Stevenson & Wolfers) [showing very low rate of divorce in [*868] the United States between 1860 and 1900].) The 1870 Act provided a narrow exception to the male-dominated property regime in order to protect a wife in such circumstances.

In 1971, the Legislature amended Civil Code former section 5118, the immediate predecessor to section 771(a), to make the statute gender-neutral. The amended statute said: “The earnings and accumulations of a spouse … , while living separate and apart from the other spouse, are the separate property of the spouse.” (Stats. 1971, ch. 1700, p. 3640.) As the court notes, this amendment remedied “an inequity that had developed in the treatment of husbands and wives,” whereby a wife living separate and apart from her husband could accumulate separate property before formal dissolution of the marriage, yet the husband could only accumulate separate property after obtaining an interlocutory judgment of dissolution. (Maj. opn., ante, at p. 858.)

Beyond addressing this specific concern, however, it is evident from context that the amended statute served a different purpose than the original 1870 Act. By 1971, the Legislature had long enacted reforms that gave married women control of their own earnings even though such earnings remained community property (Stats. 1951, ch. 1102, pp. 2860–2861), and by 1975, the Legislature had abandoned the male-controlled community property regime in favor of giving both spouses equal control (Stats. 1973, ch. 987, pp. 1897–1905; Stats. 1974, ch. 11, pp. 3590–3591). (See Prager, The Persistence of Separate Property [***853] Concepts  in  California’s  Community  Property System, 1849–1975 (1976) 24 UCLA L.Rev. 1,
65–67, 73–74 & fn. 350.) Moreover, divorce had become more common by 1971 (Stevenson & Wolfers, supra, 21 J. Econ. Persp. at p. 29, fig. 1), and two years earlier, California had become the first state in the nation to adopt a no-fault divorce law (Family Law Act, Stats. 1969, ch. 1608, § 8,
p. 3314). These reforms occurred in the context of other legal developments promoting gender equality. (See Sail’er Inn, Inc. v. Kirby (1971) 5 Cal.3d 1 [95 Cal. Rptr. 329, 485 P.2d 529]; Reed v. Reed (1971) 404 U.S. 71 [30 L. Ed. 2d 225, 92 S. Ct. 251].)

Thus, by 1971, an estranged wife living separate and apart from her husband had no need for a special statutory dispensation to [**416] earn and control separate property in order to provide for her own sustenance. She already controlled the portion of the community comprised of her own earnings, and she was soon to have equal control of all community property. Thus, the gender-neutral version of the statute enacted in 1971 no longer served the same protective purpose of the gender-specific 1870 Act. The modern statute is best understood to have a different purpose: Instead of addressing a nonexistent need to free one spouse from the other’s exclusive control of [*869] community property, the statute—consistent with contemporary norms of gender equality—evenhandedly recognizes the separateness of each spouse’s earnings and accumulations in situations where the spouses have effectively though not formally ended their marriage. In short, the statute recognizes a separation before divorce that effectively ends the community.

Today’s opinion ascribes to the Legislature a continuing purpose of “protecting a vulnerable spouse” in construing the phrase “living separate and apart” to have the same meaning today as it did in 1870. (Maj. opn., ante, at p. 865.) But whereas a narrow construction of the phrase now “protect[s] the lower earning spouse” by “reduc[ing] the potential for manipulation of a more elastic standard by the higher earner” (ibid.), a narrow construction served no similar protective purpose in 1870. To the contrary, the Legislature in 1870 understood “living separate and apart” narrowly to mean separate addresses because it sought to create “a limited exception to the general rule of that time that the husband had full management and control over the marital and separate assets for the duration of the marriage.” (Id. at p. 867, italics added.) A broader understanding of “living separate and apart”—one that enabled an estranged wife to earn and control separate property without living at a separate address from her husband—would have been more protective of the vulnerable spouse in 1870. Yet it also would have meant greater property rights for married women at the expense of the male-controlled property regime, and there is no indication that the Legislature in 1870 had any interest in fundamentally changing that regime. The 1870 statute was protective because it created an exception to the male-dominated property regime, not because the exception it created was a narrow one.

By 1971, the Legislature had revised the archaic laws granting husbands exclusive control of marital assets, and the original motivation for construing “living separate and apart” narrowly had become obsolete. Now the gender-neutral statute, premised on the legal equality of husband and wife, simply recognizes the separateness of each spouse’s earnings and accumulations at the point when the spouses have effectively but not formally ended the marriage, i.e., when the spouses are “living separate and apart.” Construing this phrase as it appears [***854] in the modern statute, I agree that its most natural meaning (maj. opn.,  ante,  at  p.  852)  as  well  as  practical considerations of clarity and administrability (id. at p. 864) suggest that whether spouses are “living separate and apart” turns not solely on the subjective intent of at least one spouse, but also on an objective manifestation of that intent by some form of physical separation. However, countervailing considerations of family economics and parenting (id. at p. 864) suggest that the physical separation need not assume the precise form that the Legislature in 1870 envisioned, namely, separate addresses.
[*870]

In considering whether spouses living under the same roof are “living separate and apart” for purposes of section 771(a), we are not bound by the 1870 Legislature’s narrow understanding of that term. Rather, in light of the current purpose of section 771(a), the question is whether the spouses, in addition to their intent to separate, have demonstrated “unambiguous, objectively ascertainable conduct amounting to a physical separation under the same roof.” (In re Marriage of Norviel (2002) 102 Cal.App.4th 1152, 1164 [126 Cal. Rptr. 2d 148].) In order to qualify as “living separate and apart,” the spouses must have a living arrangement that clearly and objectively signals a complete and final termination of the marital relationship. Neither the Legislature nor this court has foreclosed [**417] the possibility that such a living arrangement may occur within a single dwelling.

Werdegar, J., concurred.


 1      Although not binding, it can be useful to refer to the dictionary definition of a word in attempting to ascertain the meaning of statutory language. (Wasatch Property Management v. Degrate (2005) 35 Cal.4th 1111, 1121–1122  [29 Cal. Rptr. 3d 262, 112 P.3d 647]; MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635, 649 [3 Cal. Rptr. 3d 228, 73 P.3d 1205].)

2 The 1870 Act used the phrase “living separate and apart from her husband.” (1870 Act, Stats. 1870, ch. 161, § 1, p. 226.) Former section 169 in 1872 and former section 5118 in 1969 both used the phrase “living separate from her husband.” The 1971 amendment to former section 5118 restored the phrase “living separate and apart.” (Stats. 1971, ch. 1700, § 1, p. 3640.) The difference in wording has not been considered significant. (Bruch, The Legal Import of Informal Marital Separations: A Survey of California Law and a Call for Change (1977) 65 Cal. L.Rev. 1015, 1020, fn. 11, and cases cited therein.)

3 In 1999, the language of Family Code section 771 was designated section 771(a) without change. (Stats. 1999, ch. 940, § 1, p. 6859.)

4 The reviewing court in Manfer, supra, 144 Cal.App.4th 925, found Hardin’s articulation of the standard for determining the date of separation to be the most helpful. In Manfer, the husband moved out of the marital home and the wife decided that their stormy marriage was finally over, but the parties agreed to hide their circumstances from family and friends until after the year-end holidays. The Court of Appeal held that the trial court “erroneously applied an ‘outsider’s viewpoint’ standard to defer the date of separation to [a date] after the parties had revealed to the world their hitherto secret that the marriage was over.” (Id., at p. 927.) The Manfer court stated that “[t]he date-of-separation test does not ask what the public thinks, but whether at least one of the parties intended to end the marriage and whether there was objective conduct ‘bespeak[ing] the finality of the marital relationship.’ ” (Id., at p. 928.) Once again, as in all the other cases discussed previously, the facts in Manfer involved the separation of residences.

5 The Norviel majority noted In re Marriage of Johnson (1982) 134 Cal. App. 3d 148 [184 Cal. Rptr. 444] was the only case husband proffered as authority for his position that parties may live together and still be considered separated. (Norviel, supra, 102 Cal.App.4th at p. 1162.) In Johnson, supra, at page 155, the husband contested the trial court’s finding of the date of separation, but the reviewing court concluded, in a single paragraph with little discussion, that the trial court’s determination was based upon substantial evidence. The Norviel majority was not convinced that Johnson was contrary to the conclusion that it reached, given Johnson’s sparse recitation of the relevant facts. (Norviel, supra, at p. 1162.) We agree. But to the extent that it can be argued that the Johnson court determined that living separate lives was sufficient for purposes of former section 5118 (Johnson, supra, at p. 155), it is contrary to the evidence of legislative intent that we have discussed.

6 The Court of Appeal in the present case found the dissenting opinion in Norviel to be compelling and wife reiterates the position here.

7 Under the facts presented by this case, we have no occasion to consider, and expressly reserve the question, whether there could be circumstances that would support a finding that the spouses were “living separate and apart,” i.e., that they had established separate residences with the requisite objectively evidenced intent, even though they continued to literally share one roof.

 



Domestic Violence and Child Custody

The Fourth District Court of Appeal has reversed a trial court order granting joint custody to a parent who had perpetrated domestic violence against the other parent during the previous five years. In making its original decision, the trial court declined to take into account the mandatory legal presumption that it is not in a child’s best interest for a parent who has been determined to have committed domestic violence against the other parent or against the child during the previous five years to be granted custody. It is the burden of the parent who has committed the domestic violence to prove otherwise to the court.

Court of Appeal, Fourth District, Division 1, California

IN RE: the MARRIAGE OF ELENITA L. and Romer N. Fajota. Elenita L. Fajota, Appellant, v. Romer N. Fajota, Respondent.

D064816 & D065118

Decided: October 30, 2014

Reed, Smith, Anne M. Grignon, Margaret A. Grignon; San Diego Volunteer Lawyer Program, Inc., Kris Lee Jacobs; Family Violence Appellate Project and Erin Canfield Smith, for Appellant. Romer N. Fajota, in pro. per., for Respondent.

I. INTRODUCTION

Elenita L. Fajota appeals from an order of the trial court granting her ex-husband, Romer N. Fajota, joint legal custody of the couple’s three children.   According to Elenita, Romer admitted to engaging in acts of domestic violence, and the trial court found that Romer had committed domestic violence against her.   Elenita contends that in awarding Romer joint legal custody, the trial court failed to apply the rebuttable presumption set forth in Family Code 1 section 3044.  Section 3044 provides that it is not in a child’s best interest to award joint or sole legal and/or physical custody to a parent who has been found to have committed domestic violence against the other parent, the child, or the child’s siblings.

We agree with Elenita that the trial court abused its discretion by failing to apply the mandatory presumption set forth in section 3044 when it determined that the parties would share joint legal custody of the children.   We therefore reverse the custody order of the trial court contained in the judgment of dissolution, and remand the matter to the trial court to apply the mandatory presumption in determining the custody of the children.

II. FACTUAL AND PROCEDURAL BACKGROUND

Elenita and Romer married in June 2005 and have three minor children together.   Beginning in 2006, Romer became physically violent with Elenita.   Romer committed acts of violence against Elenita even while she was pregnant with their second child.   Between 2006 and 2008, Romer would charge at Elenita, throw things at her, destroy her belongings, and push her until she fell.   Elenita obtained a restraining order against Romer in 2007 after a particularly violent episode.   Romer was arrested in 2008 after he grabbed Elenita’s hair, jerked her head forward and back, and caused her head to hit a wall.

By the end of 2008, Elenita had moved to Texas with the children and the couple separated.   Romer subsequently also moved to Texas.   The parties divorced in Texas in 2010.

Elenita and Romer later reconciled.   Elenita believed that Romer had changed.   Elenita, Romer, and the children moved back to California in the spring of 2012, and Elenita and Romer remarried in October of that year.   Three months later, Elenita learned that Romer had been unfaithful.   When Elenita told Romer that she wanted another divorce, he again began engaging in physical violence and emotional abuse directed at her.   At various points in time, Romer called Elenita “stupid,” threw an iPad at her, threw a burrito at her, and threw an iPhone at her.   In February 2013, while Elenita was driving, Romer became angry over something that Elenita had said.   He struck her on the head and ordered her to “shut up, and don’t talk about me like that ever again.”

In approximately March 2013, Elenita told Romer that their relationship was over.   However, they continued to live together in the family home.   In April, Romer and Elenita got into an argument.   Romer ordered Elenita not to leave the house.   When Elenita picked up the car keys in preparation to leave, Romer came up behind Elenita and grabbed her.   Romer was yelling at her.   He pinched her hand so hard that it began to bleed.   Two of the children were present during this incident, and one of the children began to cry.   When Elenita threatened to call the police, Romer stopped the abuse and started being nice to her.   Later that day, while Elenita was picking up two of the children from school, Romer moved out of the house.

In addition to the abuse that Romer has perpetrated against her, Elenita has witnessed Romer spanking the children “multiple times in a row” and has noticed the children “ducking and covering” when in Romer’s presence.

Elenita filed a Request for Domestic Violence Restraining Order against Romer in April 2013.   She also requested that the court award her sole legal and physical custody of the children.   Elenita filed a declaration in support of her requests in which she detailed Romer’s abuse from 2006 to the present.   The court issued a temporary restraining order, effective from April 29, 2013 to May 15, 2013, and awarded temporary sole legal and physical custody to Elenita, pending a hearing on the request for a permanent restraining order.

Romer filed a declaration in response to Elenita’s request for a domestic violence restraining order in which he admitted to virtually all of the physical contact that Elenita had detailed.   However, he disputed the extent of the harm that he had caused by this contact.

Elenita filed a petition for dissolution of the marriage on May 14, 2013.   She requested sole legal and physical custody of the children, and filed a declaration in support of the request in which she detailed the history of Romer’s acts of domestic violence.

The trial court, Judge McAdam,2 held a hearing on Elenita’s request for a restraining order on May 15.   Elenita testified about many of the incidents of abuse.   Romer also testified.   He admitted that he had grabbed keys from Elenita during one of the incidents, and also admitted to hitting her on the back of the head in the presence of the children.   When asked to rate the severity of that incident on a scale of one to five, with “five being knock somebody out with a slap, one being sort of a love tap,” Romer said that it was a “two or three just so she would stop bad mouthing [him].”   Romer also admitted that he had spanked the children.

At the conclusion of the hearing, the court found that Romer had engaged in acts of domestic violence.   However, the court denied Elenita’s request for a permanent restraining order, explaining,

“[Elenita] clearly [has] a reason to request a permanent restraining order, you know what I mean.   No matter what Mr. Fajota may say or think I think finally you’ve realized enough is enough, I’m not going on with this.   I’ve got the kids.   Even though we’re still going to be parents together, we’re not going to live together anymore.  [¶] ․ [¶] Is that right?  [¶] ․ [¶] So I’m not going to grant you the request for a permanent restraining order.   It is not that I don’t think that you’ve met the legal requirements, I have to say that, I’m reluctant to say that, I hate to do that but I am saying it because I don’t feel that there is any fear going forward with Mr. Fajota.  [¶] ․ [¶] It is not—a restraining order is not a penalty, it is not like a criminal case.   It is:  do I think that that person needs protection going forward.   I honestly believe that he doesn’t [sic] for two reasons:  [¶] One, I think he’s going to listen to what I have to say.  [His attorney] is going to make sure he abides by it.  [¶] The other reason is his family is here, right.  [¶] ․ [¶] You know, and obviously if they have taken him in the house, that’s a big deal to me.   A lot of times I get parents that won’t let their kids come home, they go, no way I’m not letting that kid in my house.   They’re not going to let him in the house.   And I think his parents are going to make it real clear to him.”

Later, the court said to Elenita, “He’s not going to hit you in the head to get your attention anymore.”

Despite denying Elenita’s request for a permanent restraining order, the court ordered that the dissolution action, which was pending in a different department, be transferred to his department and consolidated with the domestic violence restraining order action.   The court awarded Elenita sole and exclusive use of the family residence, and stated, in Romer’s presence, “What that means is that you [Elenita] have the sole and exclusive use, no one gets to go in that house any more without your permission.”   The court then said, “We’ll work out some schedule to see the kids but if he violates and says, I want to be able to go in and get this and that, it’s my house too, no it is not.   Until a further order of the court, it is yours [Elenita], that’s it.   Period.  [¶ ) ․ [¶] Do you think he hears me say that?   I think he does.   And that is really important to me.   I don’t want you to be afraid of him.”

After the court declined to issue a permanent restraining order, the parties stipulated to a temporary parenting plan pursuant to which Romer would have the children on alternate weekends and would also have one mid-week afternoon visit with them.

The following day, Judge McAdam issued an order entitled “Corrected Non–Appearance Ex–Parte Minute Order,” which noted that on May 15, the court had entered an order that affected the custody and visitation of the parties’ children, and had ordered that the domestic violence and family law proceedings be consolidated.   However, because Judge McAdam had engaged in an ex parte communication with Elenita’s attorney on a procedural matter, Judge McAdam reversed the portion of the May 15 order regarding custody and visitation.3  Judge McAdam reconfirmed the order consolidating the cases and concluded that further proceedings should be held in the family court before Judge Groch.

The parties attended a Family Court Services (FCS) conference in June 2013.   FCS issued a parenting plan/mediation report (the FCS report) that noted the domestic violence allegations.   In addition, the FCS report acknowledged that Romer had admitted to having engaged in domestic violence against Elenita.   The FCS report further noted that there had been three reports of child abuse against Romer to Child Welfare Services, including one that month based on Romer’s admission that he had struck the children with a belt.   Despite the history of domestic violence perpetrated by Romer, the FCS report recommended that the court grant the parties joint legal custody.

Judge Longstreth 4 held a hearing on the dissolution proceedings on July 12, 2013.   Romer did not attend this hearing.   While Elenita agreed with much of the FCS report, she did not agree with the recommendation that the parties share joint legal custody.   Elenita requested sole legal custody on the ground that there had been domestic violence in the relationship, “which [Romer] has admitted to, and it is also listed in the [FCS] report.”

In response to Elenita’s request, the court stated, “That is kind of a strange order for me to make when the most current request for a restraining order was denied.”   Elenita’s attorney responded, “I understand that, Your Honor.   We didn’t agree with the denial of the restraining order.   There was [an] admission of all the abuse, including the most recent abuse.”   The court replied, “I understand that, and that’s your right to disagree with that, but I think that I need to go with what the findings were, not with what you wish they were.”   The court continued, “So I will adopt the [FCS] report, including the joint custody/legal custody provision.   So the recommendations by the [FCS] counselor in the June 21st, 2013 report, pages 6 though 10, paragraphs 1 through 9 with subparagraphs, those are adopted as an order of the court.”   The trial court issued its order adopting the FCS report’s recommendations on August 7, 2013.   Pursuant to the FCS report that was adopted by the court, Romer was required to complete a six-week parenting class by October 2013.

Elenita filed a timely notice of appeal from the court’s August 7, 2013 order.

Elenita filed a second request for a domestic violence restraining order against Romer on September 23, 2013.   In her request, Elenita detailed harassing conduct that Romer had engaged in since the May 2013 hearing on her previous request for a restraining order.   According to Elenita’s declaration, sometime over the weekend of September 20, 2013, without Elenita’s permission or knowledge, Romer entered the home that the court had designated for Elenita’s sole and exclusive use.   Romer had apparently known that Elenita would be out of town that weekend.   Romer removed various items from the house, including Elenita’s bed frame, mattress, television stands, two couches, a miniature refrigerator, a laptop computer, several DVDs, and other personal belongings.   After Elenita discovered what Romer had done and informed him that he was not allowed to be in her home, he sent her a text message claiming that he had “[a]lready cleared it with [the police department].   I’m good.   So like your attorney told me with the reunion, if you don’t like it, take me to court.”

Elenita called the police to file a report, and was informed that Romer had not been escorted by a police officer when he entered her home.   Elenita declared that she “do[es] not feel safe in [her] home, knowing that [Romer] does not respect boundaries and feels he can do whatever he wants to harm [her] without fear of consequences.” ’

According to Elenita’s declaration, Romer continued to berate Elenita, calling her names like “slut,” ‘whore,” “bitch,” and “idiot,” and threatened to take the children away from her.   Romer also began demanding money or sexual favors from Elenita “in exchange” for taking care of the children, even during his court-ordered parenting time.

The couple’s oldest child told Elenita that Romer had questioned him about Elenita’s comings and goings, and that Romer had asked who takes care of the children when Elenita is not at home.   The child reported that if he did not respond, Romer would spank him.

Early one morning in August 2013, at 3:00 a.m., Romer sent Elenita a text message that caused her to believe that Romer had been watching her.   In the text message, Romer referred to a male friend who had visited Elenita the previous evening.   On another occasion, Romer questioned Elenita, through text messaging, as to whether she was allowing other men to be around the children in her home.   Romer warned Elenita that if she had a “ ‘new dude’ “ watch the children, Romer would “ ‘put him in the hospital.’ “

The trial court issued a temporary restraining order requiring that Romer stay at least 100 yards away from Elenita, her home, her place of work, and her vehicle, and set a hearing on Elenita’s request for a permanent restraining order for October 15, 2013.

Prior to the hearing on Elenita’s request for a permanent restraining order, on October 2, Elenita filed a request that the court enter a default against Romer in the dissolution proceeding.   The clerk of court entered a default against Romer that same day.

Romer filed a response to Elenita’s request for a domestic violence restraining order.   In his response, Romer conceded that he had entered Elenita’s home with three friends.   Romer maintained that he had entered Elenita’s bedroom in order to take things that he claimed belonged to him.   Romer contended that Elenita was seeking a restraining order in “retaliation” for his having entered her home.   He admitted that he had threatened to take the children away from her, and acknowledged that he had “demanded money from her” for watching the children.   Romer also admitted that he had sent the 3:00 a.m. text message.   Romer disputed that he had ever “threatened” his son in order to obtain information about Elenita.   On the same day that Romer filed his response to Elenita’s request for a restraining order, he also filed a request for an order to set aside the default in the dissolution action.   In addition, in the final paragraph of his pleading, Romer requested that the court address child custody and visitation, asserting that he had been watching the children 80 to 85 percent of the time.

At the hearing on October 15, at which Judge Groch presided, Romer again admitted that he had entered Elenita’s home without her knowledge.   He acknowledged that he still had a key to the home.   Judge Groch expressed surprised that Romer was “back so soon doing these things,” after “Judge McAdam gave you a break and took you at your word that that nonsense is over, and it looks like nonsense to me still.”   Romer responded, “I felt it was within my rights to still go back there and get my stuff, my personal belongings․  [T]his restraining order is just to get back at me because I went there to get my belongings.”   The court replied, “It sounds like you keep doing things on your terms instead of court terms and by agreement with [Elenita].”   The court asked Romer about the court-ordered parenting class that he was supposed to have completed.   Romer told the court that he was enrolled in a five-week parenting course.   There was no discussion regarding the fact that Romer was to have completed a six-week parenting class by October 2013.

At the conclusion of the hearing, the court issued a one-year restraining order, ordering that Romer stay at least 100 yards away from Elenita, except for “[b]rief and peaceful contact” with Elenita and the children “as required for court-ordered visitation of [the] children.”   However, the court did not revisit the award of joint legal custody, despite having issued a restraining order against Romer based on domestic violence.   At the hearing, the court told Romer, “We will give you a copy of Family Code section 3044 because there’s [sic] consequences of a restraining order.   There’s a presumption against custody, joint custody and visitation.”   Although the court recognized the existence of the presumption against joint custody, the court did not apply the presumption in making its custody order.   Instead, the court stated, “If you currently have joint, legal custody—at this point, I’ll leave that in place.”   The court then told Romer, “In order to overcome [the] presumption of Family Code section 3044, you need to attend [a] high-conflict parenting program, at least six sessions in length.”   After some further discussion about other classes, the court said, “I’m going to give you six months [of a] high-conflict co-parenting [class] because I want you to follow the prior orders and also be a condition of overcoming that Family Code section 3044 presumption.   So you need to do this to make sure you’re eligible to have joint[ ] legal custody.”

After reiterating the details of the restraining order, the court entered a judgment of dissolution, terminating the parties’ marriage.   That judgment ordered that Elenita would have sole physical custody, with visitation for Romer, and that the parties would share joint legal custody of the children.   The trial court’s judgment incorporated the August 7, 2013 Findings and Order After Hearing, which also awarded Romer joint legal custody.

Elenita filed a second notice of appeal, this one from the judgment of dissolution entered on October 15, 2013.   This court ordered the two pending appeals filed by Elenita consolidated for briefing, argument, and decision.5  Only Elenita has filed a brief on appeal.

III. DISCUSSION

Elenita contends that the trial court erred in failing to apply the presumption set forth in section 3044, which provides that awarding sole or joint physical or legal custody to a parent who has committed domestic violence against the other parent is detrimental to the best interests of a child.

We review custody and visitation orders for an abuse of discretion, and apply the substantial evidence standard to the court’s factual findings.  (In re Marriage of Burgess (1996) 13 Cal.4th 25, 32.)   A court abuses its discretion in making a child custody order if there is no reasonable basis on which it could conclude that its decision advanced the best interests of the child.   (Ibid.) A court also abuses its discretion if it applies improper criteria or makes incorrect legal assumptions.  (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435–436.)

Elenita contends that the trial court erred in failing to properly apply the presumption set forth in section 3044.   In interpreting the meaning of a statute, courts give the words “their usual and ordinary meaning.”  (Esberg v. Union Oil Co. (2002) 28 Cal.4th 262, 268 (Esberg ).)   When the statutory language is clear and unambiguous, “we presume the Legislature meant what it said and the plain meaning of the statute governs.”  (People v. Snook (1997) 16 Cal.4th 1210, 1215.)

Section 3044, subdivision (a) provides:

“Upon a finding by the court that a party seeking custody of a child has perpetrated domestic violence against the other party seeking custody of the child or against the child or the child’s siblings within the previous five years, there is a rebuttable presumption that an award of sole or joint physical or legal custody of a child to a person who has perpetrated domestic violence is detrimental to the best interest of the child, pursuant to Section 3011.   This presumption may only be rebutted by a preponderance of the evidence.”

When considering whether the presumption provided in subdivision (a) of section 3044 has been rebutted, the trial court “shall” consider the following factors, as set forth in subdivision (b) of that provision:

“(1) Whether the perpetrator of domestic violence has demonstrated that giving sole or joint physical or legal custody of a child to the perpetrator is in the best interest of the child.   In determining the best interest of the child, the preference for frequent and continuing contact with both parents, as set forth in subdivision (b) of Section 3020, or with the noncustodial parent, as set forth in paragraph (1) of subdivision (a) of Section 3040, may not be used to rebut the presumption, in whole or in part.

“(2) Whether the perpetrator has successfully completed a batterer’s treatment program that meets the criteria outlined in subdivision (c) of Section 1203.097 of the Penal Code;

“(3) Whether the perpetrator has successfully completed a program of alcohol or drug abuse counseling if the court determines that counseling is appropriate.

“(4) Whether the perpetrator has successfully completed a parenting class if the court determines the class to be appropriate.

“(5) Whether the perpetrator is on probation or parole, and whether he or she has complied with the terms and conditions of probation or parole.

“(6) Whether the perpetrator is restrained by a protective order or restraining order, and whether he or she has complied with its terms and conditions.

“(7) Whether the perpetrator of domestic violence has committed any further acts of domestic violence.”

The clear terms of section 3044 require that a court apply a presumption that it is detrimental to the best interest of the child to award joint or sole physical or legal custody to a parent if the court has found that that parent has perpetrated any act of domestic violence against the other parent in the preceding five years.   The presumption is rebuttable, but the court must apply the presumption in any situation in which a finding of domestic violence has been made.   A court may not “ ‘call ․ into play’ the presumption contained in section 3044 only when the court believes it is appropriate.”   (S.M.v.E.P.(2010) 184 Cal.App.4th 1249, 1267.)

There is no indication in the record that the judges who made orders granting or affirming joint legal custody for Romer applied the mandatory presumption provided in Family Code section 3044.   At the first restraining order hearing on May 15, 2013, Romer admitted that he had engaged in acts of domestic violence against Elenita, and the court impliedly found that Romer had committed acts of domestic violence, telling Elenita, “You clearly have a reason to request a permanent restraining order.”   Despite this, Judge McAdam declined to issue the requested restraining order, explaining that a restraining order is not “a penalty” for prior bad acts, but instead, is intended to protect someone going forward.   Judge McAdam apparently believed that Romer “[was] going to listen to what [the court has] to say,” which suggests that the court believed that Romer would no longer engage in domestic violence directed toward Elenita.   However, it is clear that the court found that Romer had previously engaged in domestic violence against Elenita.6  A finding that one parent has committed an act of domestic violence against the other parent within the prior five years triggers the presumption mandated by section 3044.

Judge McAdam ultimately did not enter an order regarding custody after that hearing.   Instead, Judge Longstreth addressed custody and visitation at a July 2013 hearing on Elenita’s petition for dissolution and entered a temporary order with respect to those issues on August 7, 2013.7  Rather than apply section 3044’s presumption based on Judge McAdam’s earlier finding of domestic violence, however, Judge Longstreth appeared to focus on the fact that Judge McAdam had not issued the restraining order that Elenita had requested at the May 15 hearing, stating:  “That is kind of a strange order for me to make [i.e., an order granting Elenita sole legal custody, as she was requesting] when the most current request for a restraining order was denied.”

It appears that the court was under the misimpression that the presumption contained in section 3044 comes into play only upon the issuance of a restraining order.   However, the presumption applies whenever there is a finding that one parent committed an act of domestic violence against another parent, a child, or a child’s siblings within the past five years. (§ 3044, subd. (a) [“Upon a finding by the court that a party seeking custody of a child has perpetrated domestic violence against the other party seeking custody of the child or against the child or the child’s siblings within the previous five years ․ “].) Whether a restraining order is issued as a result of the domestic violence thus has no bearing on the applicability of the statutory presumption to the issue of custody.8  Judge Longstreth should therefore have applied the presumption, given that Judge McAdam had determined that Romer had in fact committed acts of domestic violence against Elenita.   The failure to apply the section 3044 presumption in determining the issue of legal custody of the children was an abuse of the court’s discretion.9

This error was compounded by Judge Groch’s failure to reconsider the custody order after having found at the October 2013 hearing that Romer’s past domestic violence and his more recent conduct warranted the issuance of a restraining order.   Although the court clearly found that Romer’s acts of domestic violence warranted the issuance of a restraining order, the court did not apply the section 3044 presumption in making the custody order, despite the fact that, as noted, the court was aware of section 3044’s presumption against awarding joint custody to a perpetrator of domestic abuse.10  Instead of properly applying the presumption at that point in time, the court said, “If you currently have joint, legal custody—at this point, I’ll leave that in place.”   The court then indicated that Romer would have to comply with certain requirements in the future in order to “overcome [the] presumption of Family Code section 3044.”

There is no reasonable basis for the trial court’s failure to apply the section 3044 presumption at either of the two hearings at which the court addressed custody in this case.   The trial court thus abused its discretion in awarding Romer joint legal custody without applying the section 3044 presumption that it would be detrimental to the children’s best interests to award joint legal custody.11  We therefore reverse the trial court’s judgment to the extent that it orders that the parties share joint legal custody of the children, and remand for the trial court to reassess that custody order in light of the presumption set forth in section 3044, and to enter a new custody order after applying the presumption.¿

IV. DISPOSITION

The appeal taken from the August 7, 2013 order is dismissed.

The portion of the judgment of dissolution in which the trial court awarded Romer joint legal custody of the children is reversed.   On remand, the trial court shall hold further proceedings consistent with this opinion, and shall determine the legal custody of the parties’ children after applying the presumption set forth in section 3044.   Specifically, the trial court may not award Romer joint legal custody unless Romer rebuts the presumption set forth in section 3044 that an award of joint legal custody is detrimental to the best interests of the children.   Elenita shall recover costs on appeal.

FOOTNOTES

1. Further statutory references are to the Family Code unless otherwise indicated.

2. Although it is not generally our custom to identify judges by name, in order to give proper context to the procedural history of this case we consider it helpful to identify the several different judges who made the various rulings.

3. The record does not include any written order issued by Judge McAdam on May 15 that “affected the custody and visitation of the parties’ three minor children,” and it is not clear as to what Judge McAdam’s May 16 order is referring in stating that the court made an order regarding the custody and visitation of the parties’ children.   It is possible that the court was referring to an apparent stipulation, read into the record by one of the parties’ attorneys, regarding a temporary agreement concerning the parents’ division of time with the children.   However, the record does not clearly establish that this stipulation was adopted as an order of the court.

4. The minute order issued with respect to this hearing identifies the judge who presided over the hearing as Judge Longstreth.   The “Findings and Order After Hearing” also identifies Judge Longstreth as having presided over the July 12 hearing, although the document was signed by Judge Maureen F. Hallahan.   However, the reporter’s transcript for the July 12 proceeding identifies Judge Groch as presiding over the proceeding.   Given that the minute order and “Findings and Order After Hearing” both identify Judge Longstreth as having presided over July 12 hearing, we will refer to Judge Longstreth as the judge for that proceeding.   The record does not disclose why this hearing may have been held in Judge Longstreth’s department, rather than in Judge Groch’s department.

5. Although Elenita filed two separate notices of appeal, and the appeals have been consolidated in this court, Elenita has not established that the first notice of appeal was taken from an appealable order.   Specifically, it is not clear that the court’s August 7, 2013 order was a final order regarding custody.  (See Smith v. Smith (2012) 208 Cal.App.4th 1074, 1089[“[I]t is well settled that temporary custody orders are nonappealable”];  id. at p. 1090 [“ ‘A temporary custody order is interlocutory by definition, since it is made pendente lite with the intent that it will be superseded by an award of custody after trial.   Fam.Code, §§ 3022, 3040, 3060– 3062․’  [Citation.]”].) Although the notice of appeal from the August 7, 2013 order indicates that the appeal from that order was taken from a “judgment after court trial,” in fact, the August 7, 2013 order was not a judgment entered after a court trial, and Elenita has not explained how or why this order is independently appealable.  (See Cal. Rules of Court, rule 8.204(a)(2) [an appellant’s opening brief must “(A) State the nature of the action, the relief sought in the trial court, and the judgment or order appealed from;  [¶] (B) State that the judgment appealed from is final, or explain why the order appealed from is appealable ․ “].)

6. For example, the court told Elenita, “He’s not going to hit you in the head to get your attention anymore ” (italics added), demonstrating that the court found that Romer had, in fact, struck Elenita in the head in the past.

7. Notwithstanding the fact that the August 7, 2013 order is not separately appealable and that Elenita does not specifically seek reversal of that order, we discuss the merits of that order because the trial court incorporated the August 7, 2013 order into the final judgment, which is properly before us on appeal.

8. The Domestic Violence Protection Act (DVPA) authorizes the trial court to issue a restraining order “for the purpose of preventing a recurrence of domestic violence and ensuring a period of separation of the persons involved, if an affidavit ․ shows, to the satisfaction of the court, reasonable proof of a past act or acts of abuse.” (§§ 6300, 6220 [purpose of DVPA stated].)   However, the fact that a trial court finds past abuse does not require that the court issue a restraining order;  rather, a court may decline to issue a restraining order.   Thus, the court will not necessarily issue a restraining order in every case in which there has been a finding of a past act of domestic violence.It is possible that Judge Longstreth mistakenly believed that Judge McAdam’s denial of Elenita’s request for a permanent restraining order was based on a finding that no abuse had occurred, and was unaware that, in fact, the finding was based on Judge McAdam’s belief that the parties’ separation and/or the court’s “talking to” directed at Romer would prevent Romer from engaging in further acts of domestic violence.   In response to Elenita’s attorney’s statement that, “We didn’t agree with the denial of the restraining order,” Judge Longstreth said, “I understand that, and that’s your right to disagree with that, but I think that I need to go with what the findings were, not with what you wish they were.”

9. The FCS report failed to acknowledge the presumption contained in section 3044.   Despite noting that Romer had admitted to engaging in physically violent conduct against Elenita, the report recommended that the court order that the parties share joint legal custody, with no mention of the fact that the allegations of domestic violence and Romer’s admissions regarding that violence might necessitate the application of section 3044’s presumption.   It is critical that the social workers who prepare the FCS reports be aware of the provisions of section 3044, and in particular, the mandatory presumption, and in making recommendations to the court, should, at a minimum, acknowledge that the court may be required to consider whether the presumption has been triggered in cases involving allegations of domestic violence.

10. Judge Groch’s comments regarding the implication of the issuance of a restraining order appear to reflect a misunderstanding of the requirements of section 3044.   We reiterate, the presumption of section 3044 is triggered not by the issuance of a restraining order, but rather, by a finding that a parent has engaged in an act of domestic violence against the other parent, the child, or the child’s siblings.   If a domestic violence restraining order has been issued, then it is clear that there has been a finding of domestic violence sufficient to trigger the presumption of section 3044.   However, the failure to issue a domestic violence restraining does not necessarily mean that the court did not find that a party committed domestic violence sufficient to trigger the presumption as well, as this case demonstrates.

11. Because the trial court failed to apply the presumption, it follows that the court’s award of joint legal custody could not have been based on Romer’s having rebutted the presumption.

AARON, J.

WE CONCUR:McCONNELL, P.J.O’ROURKE, J.

 



 

Sharing expenses of College

When a couple with children goes through a separation or divorce, there are many important issues which require careful consideration.  One such issue relates to the question of the future payment of expenses for a college education for the couple’s child or children.  In this case, the Court of Appeal, Second District, determined that agreements which specify how such future education will be paid for by the parents may be considered “adult support” and the spouses may therefore, using specific language in the agreement, limit a court’s ability to later modify an order as to how these expenses will be paid.  The specific language must specify that the educational expenses are not to be considered child support.  If such language is not included in the agreement, if circumstances of either party are changed significantly, the court may consider a modification of the previous order based on change in circumstances.

Drescher v. Gross, Cal: Court of Appeal, 2nd Appellate Dist., 3rd Div. 2014

LENORE DRESCHER, Plaintiff and Appellant,
v.
MARK P. GROSS, Defendant and Respondent.

No. B246494.

Court of Appeals of California, Second District, Division Three.

Filed April 11, 2014.

Drescher Law Firm, Robert E. Drescher; Law Offices of Herb Fox and Herb Fox for Plaintiff and Appellant.

Brot & Gross, Ronald F. Brot, Marie A. Lamolinara; Barbakow & Ribet and Claudia Ribet for Defendant and Respondent.

CERTIFIED FOR PUBLICATION

KITCHING, J.

INTRODUCTION

With the dissolution of their marriage in 2001, Lenore Drescher and Mark Gross executed a marital settlement agreement wherein they stipulated to equally pay for the future college expenses of their three minor children. The agreement was incorporated into the judgment of dissolution and child support and spousal support were ordered as set forth in the agreement.

Eleven years later their daughter enrolled in the University of Missouri and began incurring significant expenses. Drescher sought a modification of the judgment, asserting she had become permanently disabled with an income of less than $23,000 a year, while Gross’s income had increased to over $400,000. The trial court denied Drescher’s request for modification, concluding it lacked jurisdiction to modify the judgment with respect to college expenses because the marital settlement agreement did not refer to the obligation as “child support.” Drescher appeals from this order.

In this appeal, we must decide whether parents may contractually limit the court’s jurisdiction to modify an adult child support order made pursuant to the parents’ agreement under Family Code[1] section 3587. We conclude parents may do so. In contrast to the court’s broad jurisdiction to order minor child support, which is rooted in parents’ law-imposed duty to support their children until adulthood, the court’s jurisdiction to order adult child support under section 3587 derives entirely from the parents’ agreement to pay adult support, and the statute grants the court limited authority to “make a support order to effectuate the agreement.” Consistent with this grant of limited authority, in section 3651, the Legislature expressly made the court’s general authority to modify a support order “subject to” section 3587. Interpreting the statutes together within the broader statutory framework, we conclude, as a matter of first impression, that the “subject to” clause in section 3651 means an order for adult child support, when authorized exclusively by the parents’ agreement under section 3587, may be made non-modifiable by the parents’ express and specific agreement to restrict the court’s jurisdiction.

Though we hold parents may contract to restrict the court’s jurisdiction to modify an adult child support order in this limited circumstance, we conclude the parties’ marital settlement agreement in this case did not limit the court’s jurisdiction. Accordingly, we reverse the order and remand the matter to the trial court with directions to consider whether the college expense support obligation should be modified.

FACTS AND PROCEDURAL BACKGROUND

1. The Marital Settlement Agreement and Judgment

Drescher and Gross were married in 1987 and separated in 2001. There are three children from the marriage: Joshua, born in 1992; Lila, born in 1994; and Noah, born in 1997.

In June 2001, the parties executed a Marital Settlement Agreement (MSA). At the time, the parties were both employed as attorneys earning six-figure incomes.

The parties’ financial support obligations are set forth in Paragraph IV of the MSA, under the heading “FAMILY SUPPORT,” and the specific obligations are detailed in subparagraphs A through D. The MSA refers to the financial obligations set forth in subparagraph A as “non-modifiable, non-taxable family support,” while the obligations set forth in subparagraphs B and C are referred to as “additional child support.” Subparagraph D, the most pertinent to this appeal, does not contain a similar specific reference to “family support” or “child support.” Subparagraph D provides:

“D. Each party shall be responsible for payment of one-half (1/2) of all costs incurred on behalf of each minor child, for undergraduate California state college or university expenses, trade or other school or schools’ costs incurred by such minor child, or other schools approved by the parties, so long as such minor child is continuing to reasonably matriculate at such school. Costs for such undergraduate college or trade or other school or schools shall be defined as all tuition, fees, room, board, supplies, books, transportation costs, reasonable living expenses.”

In October 2002, the final judgment of dissolution was entered. The judgment incorporates the MSA and orders child custody, spousal support and child support as set forth therein. Pursuant to the terms of the MSA, the judgment awarded Drescher and Gross joint legal and physical custody of the children.

2. November 2011 Order Modifying Child Support and Enforcing College Expense Obligation

In August 2011, Gross filed an order to show cause requesting modification of child support, citing the significantly reduced timeshare between Drescher and the parties’ daughter, Lila, as a material change in circumstances warranting modification. The order to show cause also asked the court to enforce the college expense provision of the MSA, as incorporated into the judgment. Specifically, Gross sought an order requiring Drescher to pay half of what it would cost for Lila to attend college in California, regardless of whether Lila ultimately enrolled in an in-state or out-of-state school.

In response, Drescher argued any modification in child support should take into account the vast disparity in the parties’ incomes that had developed over the past 10 years. She presented evidence showing that, in 2004 and 2006, she was diagnosed with various ailments rendering her permanently disabled and unable to work in any capacity. She asserted her State Bar membership became inactive in 2006 and she was supporting herself on disability payments and child support. During the same period she claimed Gross’s income had increased to over $400,000 a year.

As for the college expense provision, Drescher argued she could not be compelled to pay for Lila to attend an out-of-state school because the provision was limited, by its terms, to costs incurred for undergraduate California state college or university expenses.

In November 2011, the trial court entered an order modifying the child support Gross paid for Lila’s and Noah’s maintenance. With respect to the parties’ incomes, the court found Drescher was disabled, unable to work, and received an annual income of $22,908, while Gross earned approximately $421,000 per year.

The court also granted Gross’s request to enforce the college expense provision of the judgment, and ordered the parties to “meet and confer annually in advance of the Fall Semester to determine the maximum cost of a California college or university, trade or other school.” Commencing in 2012, the order required each party to pay on behalf of Lila one-half of the maximum annual cost of a California college, university, trade or other school, regardless of whether Lila attended a California or non-California school.

3. Order Denying Modification of College Expense Obligation

In June 2012, Drescher filed an order to show cause requesting modification of the college expense provision of the judgment. Drescher asserted her disability and the resulting change in the parties’ relative incomes since the judgment was entered constituted a material change in circumstances. Her order to show cause asked the court to reallocate 91 percent of the shared support obligation to Gross, and 9 percent to Drescher, based on the disparity in their current incomes.

Gross opposed the request, arguing the court had no authority to modify the provision because college expenses are not child support, and the parties’ stipulation to pay their children’s college expenses was entirely contractual. He also argued Drescher had failed to establish a change in circumstances since the court had last modified child support in November 2011. While Drescher’s request for modification was pending, Gross brought a competing order to show cause seeking payment from Drescher of approximately $8,800 for her share of tuition and living expenses incurred through September 2012 on behalf of Lila, who was now attending the University of Missouri.

On November 12, 2013, the trial court denied Drescher’s request to modify the judgment and granted Gross’s request for reimbursement of college expenses incurred on Lila’s behalf. With respect to modification, the court concluded, as a matter of contract interpretation, that it lacked jurisdiction to modify because the parties had not intended the college expense provision to be treated as child support. The court reasoned that nothing in the language of the MSA indicated the parties intended “shared expenses for adult children to be treated as equivalent to statutorily mandated child support,” citing the fact that “[t]he MSA specifically identified certain items as child support, but [the college expense provision] is not among them.” Because Drescher had not presented extrinsic evidence of the parties’ intent, the trial court concluded the language of the MSA controlled and it lacked jurisdiction to modify the provision. The court also concluded Drescher had failed to establish a change in circumstances. Drescher appealed.

DISCUSSION

1. Jurisdiction to Modify Judgment

a. Standard of review

Drescher contends the trial court erred in concluding it lacked jurisdiction to modify the college expense provision of the judgment. We review the trial court’s determination to grant or deny a modification of a support order for an abuse of discretion. (Edwards v. Edwards (2008) 162 Cal.App.4th 136, 141.) However, questions concerning the interpretation of statutes are matters of law for the reviewing court. (Ibid.) Likewise, “the interpretation of a contract or other written instrument is a question of law if there is no extrinsic evidence thereon or if the evidence is without conflict and is not susceptible of conflicting inferences.” (Lucas v. Elliott (1992) 3 Cal.App.4th 888, 892 (Lucas).) So too, “[t]he question of the trial court’s jurisdiction is a pure question of law subject to our independent review.” (Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 537.) “A trial court’s failure to exercise discretion is itself an abuse of discretion, and we review such action in accordance with that standard of review.” (In re Marriage of Gray (2007) 155 Cal.App.4th 504, 515.)

b. Parents may restrict the court’s jurisdiction to modify adult child support when the authority to order support is based exclusively on the parents’ contract

We begin with Drescher’s contention that an agreement to pay an adult child’s college expenses is modifiable as a matter of law, regardless of whether the parents contract to restrict the court’s jurisdiction.

Section 3900 recognizes the equal duty of parents to “support their child in the manner suitable to the child’s circumstances.” (See also § 4053, subds. (a) & (b).) “`Support,'” when used with reference to a minor child, refers to “a support obligation owing on behalf of a child,” and includes the obligation to pay for the child’s “maintenance and education.” (§ 150.) Additionally, among the expenses the court may order parents to pay as “additional child support” are “[c]osts related to the educational or other special needs of the children.” (§ 4062, subd. (b)(1).)

The duration of the parents’ child support obligation normally continues until an unmarried child “completes the 12th grade or attains the age of 19 years, whichever occurs first.” (§3901, subd. (a).) However, “[n]othing in [section 3901] limits a parent’s ability to agree to provide additional support . . . .” (§ 3901, subd. (b).) Consistent with this qualification, section 3587 authorizes the court to order adult child support, as follows: “Notwithstanding any other provision of law, the court has the authority to approve a stipulated agreement by the parents to pay for the support of an adult child or for the continuation of child support after a child attains the age of 18 years and to make a support order to effectuate the agreement.” And, consistent with this authority, section 58 defines “`Child for whom support may be ordered'” as “a minor child and a child for whom support is authorized under Section 3587. . . .” (§ 58.)

Section 3651 states the general rule for modification or termination of support orders, “whether or not the support order is based upon an agreement between the parties.” (§ 3651, subd. (e); In re Marriage of Alter (2009) 171 Cal.App.4th 718, 726 (Alter).) Subject to other provisions of the Family Code—including section 3587, as we will discuss—section 3651 authorizes prospective modification of all child support orders, even those based upon the parents’ agreement. (Alter, at p. 727.) In turn, section 3585 states that “provisions of an agreement between the parents for child support shall be deemed to be separate and severable from all other provisions,” and “[a]n order for child support based on the agreement shall be law-imposed and shall be made under the power of the court to order child support.” Thus, with respect to support for a minor child, our Supreme Court has held, “[w]hen 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; see also In re Marriage of Bodo (2011) 198 Cal.App.4th 373, 386.)

Based on the court’s general authority to modify support orders under section 3651 and the Supreme Court’s holding in Armstrong, Drescher contends an agreement concerning child support is always modifiable, even if the parents contract to restrict the court’s jurisdiction. While this undoubtedly is true with respect to support ordered for a minor child, the language of section 3651, and the limited authority granted by section 3587, suggests a different rule applies to orders for adult child support that are authorized exclusively to “effectuate” the parents’ agreement under section 3587.

Section 3651, subdivision (a) states the court’s authority to modify or terminate a support order is “subject to . . . [section] 3587.”[2] (Italics added.) No appellate authority has yet considered the effect of the clause making the general power to modify a support order “subject to” section 3587; however, one commentator has suggested the language means parents have the contractual power to limit the court’s jurisdiction to modify adult support orders authorized by section 3587. (See Minerich, Support for Adult Children: Is it Modifiable? (May 2005) Orange County Law, at p. 61.) We agree with this interpretation.

Unlike the authority to order support for a minor child, which derives from the parents’ law-imposed duty to support children until adulthood under sections 3900 and 3901, or the authority to order support for an incapacitated adult child, which derives from the parents’ law-imposed duty to “maintain . . . a child of whatever age who is incapacitated from earning a living and without sufficient means” under section 3910, the court’s authority to order adult child support under section 3587 derives entirely from the parents’ agreement to pay such support. Because the court’s authority is rooted in the parents’ contractual agreement, it follows that the parents’ agreement also may restrict the court’s authority to modify an order for adult child support made under section 3587. Construing the “subject to” clause in section 3651 to limit the court’s authority to modify an adult child support order where the parents have expressly contracted for such a restriction is consistent with the limited grant of jurisdiction under section 3587, which authorizes the court to order adult child support to “effectuate the [parents’] agreement.”

Moreover, this interpretation also gives effect to the “[n]otwithstanding any other provision of law” clause that prefaces section 3587. (See Minerich, supra, 47-May Orange County Law. at p. 61.) That is, as we interpret the relationship of the various statutes, where the parents’ agreement provides for adult child support that cannot be modified, section 3587 authorizes the court to make a non-modifiable “support order to effectuate the agreement.” And this is so notwithstanding sections 3585 and 3651, which otherwise treat child support provisions of an agreement as “severable,” and the resulting order as “law-imposed,” such that it remains subject to the court’s continuing jurisdiction to modify.

Accordingly, we conclude that while section 3651 generally authorizes the court to modify a child support order, including adult child support ordered pursuant to the parents’ agreement, this authority is “subject to,” and may be limited by, the parents’ express agreement to restrict modification of adult child support ordered pursuant to section 3587. We turn now to the trial court’s construction of the MSA.

c. The MSA does not expressly restrict the court’s jurisdiction to modify the college expense support order; the trial court’s failure to consider modification was an abuse of discretion

In concluding it lacked jurisdiction to modify the college expense provision, the trial court framed the issue as “fundamentally a question of contract interpretation.” Because the “MSA specifically identified certain items as child support,” but the provision concerning college expenses was “not among them,” the court reasoned that “[n]othing in the language of the MSA indicates that the parties intended that voluntarily undertaken shared expenses for adult children be treated as equivalent to statutorily mandated child support, or that the equal obligation could later be altered other than by mutual consent.”

Though we agree this is a question of contract interpretation, we disagree with the trial court’s construction of the MSA. As noted, because no extrinsic evidence was considered, we are not bound by the trial court’s construction and interpret the terms of the MSA de novo. (Lucas, supra, 3 Cal.App.4th at p. 892.)

The trial court’s construction was based entirely on an inference drawn from an omission. Because the parents referred to some support obligations as “child support,” but not the provision concerning college expenses, the court inferred the parents must not have intended the resulting order to be modifiable. Though there is some logic to this reasoning, we find the statutory scheme requires a more explicit statement of intent to restrict the court’s jurisdiction where matters of support are concerned.

As with adult child support ordered pursuant to section 3587, which we have concluded can be made non-modifiable to effectuate the parents’ agreement, parties are similarly permitted to contractually restrict the court’s jurisdiction to modify spousal support. However, to do so, section 3651, subdivision (d) requires a written or oral agreement made in open court that “specifically provides that the spousal support is not subject to modification or termination.” (Italics added.) We conclude the same rule should apply in the context of adult child support orders. Parties may restrict the court’s jurisdiction to modify, but to do so, they must expressly and specifically state in their agreement that any resulting adult child support order made under section 3587 will not be subject to modification or termination by the court. In this case, the absence of an express and specific statement in the MSA is alone sufficient to conclude the trial court had jurisdiction to modify the adult child support order pertaining to college expenses.[3]

Nevertheless, apart from the lack of an express agreement restricting modification, we find other problems with the inference drawn by the trial court. To begin, the parties’ use of the terms “family support” and “child support” in the MSA is hardly dispositive. Though it is true the college expense provision was not designated as “additional child support,” the provision was included under the section defining the parties'”FAMILY SUPPORT” obligations. Section 92 defines “`Family support'” as “an agreement between the parents, or an order or judgment, that combines child support and spousal support. . . .” (Italics added.) It follows that by including the stipulation to pay each child’s college expenses within the section of the MSA setting forth the parties’ respective family support obligations, the parties intended the resulting judgment to incorporate the college expense obligation in a child support order.

Moreover, though the MSA may not specifically refer to college expenses as “child support,” the obligation it describes constitutes child support under the law. The subject provision obligates each parent to pay one-half of all costs incurred on behalf of “each minor child” for undergraduate college expenses, trade or other school costs incurred by such minor child, as well as other “reasonable living expenses.” As noted, “`Support'” when used with reference to a minor child is defined to include the obligation to provide for the child’s “maintenance and education” (§ 150), and the court may order parents to pay as “additional child support” “[c]osts related to the educational or other special needs of the children” (§ 4062, subd. (b)(1)). Though the parties agreed the obligation would persist “so long as such minor child is continuing to reasonably matriculate at such school”—thus, presumably, beyond age 18 and into adulthood—the obligation described, by its terms, fits squarely within the Family Code’s definition of child support.

We conclude the parties’ stipulation to pay each minor child’s college expenses resulted in a child support order when incorporated into the court’s judgment. Though based on an agreement to pay adult child support, the resulting order was subject to the court’s jurisdiction to modify, absent an express and specific agreement by the parties to the contrary. Because the MSA does not expressly restrict the court’s authority to modify the college expense support order, the trial court erred in concluding it lacked jurisdiction. The court’s failure to consider whether the support order should be modified was an abuse of discretion.

2. Material Change in Circumstances

Notwithstanding our conclusion concerning the court’s jurisdiction to modify the college support order, Gross contends the judgment should nevertheless be affirmed because Drescher failed to establish a material change in circumstances since the last order modifying child support in November 2011. We disagree.”

`As a general rule, courts will not revise a child support order unless there has been a “material change of circumstances.“. . . .'” (In re Marriage of Stanton (2010) 190 Cal.App.4th 547, 553 (Stanton).) “[T]he reason for the change of circumstances rule is to preclude relitigation of the same facts” and to bring finality to determinations concerning financial support. (In re Marriage of Baker (1992) 3 Cal.App.4th 491, 501; Stanton, at pp. 553-554.) “Without a changed circumstances rule, `”dissolution cases would have no finality and unhappy former spouses could bring repeated actions for modification with no burden of showing a justification to change the order. Litigants `”are entitled to attempt, with some degree of certainty, to reorder their finances and life style [sic] in reliance upon the finality of the decree.”‘ [Citations.] Absent a change of circumstances, a motion for modification is nothing more than an impermissible collateral attack on a prior final order.”‘” (Stanton, at pp. 553-554.)

Because a request to modify the college expense support allocation was not before the trial court when it made its November 2011 order, the underlying rationale for the change of circumstances rule is not implicated here. Though the November 2011 order modified Gross’s child support obligation for Lila and Noah based on a change in the parties’ timeshare for Lila and a change in their respective incomes, with respect to college expenses, the order was limited to granting Gross’s request to enforce the obligation, regardless of whether Lila attended a California or out-of-state school. The trial court did not consider whether the allocation of college expenses to each parent should be modified in light of the disparity in their respective incomes or other assets that each might have to pay the children’s college expenses. Indeed, when Drescher’s counsel raised modification, the trial court questioned whether that relief had been requested in Drescher’s papers, and Gross’s counsel argued it would be a violation of due process for the court to consider the issue without a “cognizable request to modify.” Because the November 2011 order did not determine whether modification was appropriate, Drescher’s subsequent request for modification cannot be regarded as a collateral attack on a prior final order. (See Stanton, supra, 190 Cal.App.4th at p. 554.)

DISPOSITION

The order is reversed. On remand, the trial court is directed to consider whether the allocation of the college expense support obligation should be modified in light of the parties’ respective incomes, other assets they may have to satisfy the support obligation, and any other relevant evidence the court may consider in exercise of its discretion. Drescher is entitled to costs on appeal.

CROSKEY, Acting P. J. and ALDRICH, J., concurs.

[1] All statutory references are to the Family Code unless otherwise specified.

[2] Section 3651, subdivision (a) provides: “Except as provided in subdivisions (c) and (d) and subject to Article 3 (commencing with Section 3680) and Sections 3552, 3587, and 4004, a support order may be modified or terminated at any time as the court determines to be necessary.”

[3] Gross’s reliance on In re Marriage of Smith & Maescher (1993) 21 Cal.App.4th 100 (Smith) is misplaced. In Smith, the mother brought her claim for reimbursement of college expenses gratuitously loaned to her son as a contract action and, on appeal, “[t]he parties agree[d] the separation agreement made [the child] an intended third party beneficiary as to college expenses.” (Id. at p. 105.) Thus, the appellate court identified the “pivotal issue in this dispute [as] whether [the mother] may maintain a damage action for breach of the third party beneficiary contract,” and did not consider whether the agreement created a child support obligation, subject to the court’s general jurisdiction to modify under section 3651. (Smith, at p. 105.) Indeed, because the marital separation agreement in Smith was governed by Massachusetts law and incorporated into a Massachusetts judgment, the court relied “particularly [on] generally accepted contract principles and Massachusetts case law,” without analyzing the statutory framework that governs our decision here. (Id. at p. 106.)

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In re Marriage of LaMoure – 221 Cal.App.4th 1463

In this case, an attorney who was ineligible to practice law due to his failure to pay child and spousal support to his former wife argued on appeal that his individual retirement account should not have been levied in order to pay the amounts owed. The Fourth District Court of Appeal ruled that for many reasons, the levy of funds from the retirement account was proper and denied the appeal.

Filed 12/11/13

CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO

E051856
(Super.Ct.No. SBFSS71194)
OPINION
THE SUPERIOR COURT OF VENTURA COUNTY,
Respondent;

In re the Marriage of NATHAN and ROBIN LA MOURE.

NATHAN D. LA MOURE,
Appellant,
v.
ROBIN LA MOURE,
Respondent;
SAN BERNARDINO COUNTY
DEPARTMENT OF CHILD SUPPORT
SERVICES,
Respondent;

APPEAL from the Superior Court of San Bernardino County. John M. Pacheco, Judge. Affirmed. Nathan D. La Moure, in pro. per., for Appellant. Hanke & Williams, Rick D. Williams and Shelly L. Hanke for Respondent

I. INTRODUCTION

This matter arises out of the dissolution of Nathan D. La Moure’s marriage to Robin La Moure and consequential division of assets, including Nathan’s defined benefit pension plan (pension plan). Nathan appeals two orders: (1) a July 23, 2010 order restraining disbursements from Nathan’s pension plan and (2) a December 1, 2010 order granting reconsideration of the court’s October 18, 2010 order, granting

On May 4, 2012, Robin filed a motion for augmentation, which this court deemed a request for judicial notice. Robin requests this court to include in the record on appeal the trial court’s statement of decision dated September 13, 2011, which indicates that Nathan has numerous assets and sources of income, other than his pension plan. Robin’s May 4, 2012, request for judicial notice is denied on the ground the September 13, 2011, statement of decision is irrelevant to the issues raised in the instant appeal.

Nathan’s claim of exemption and motion to quash orders restraining him from transferring assets from his pension plan

Nathan contends the trial court erred in ordering restraints on his pension plan assets and denying his claim of exemption, because ERISA1 preempts state law and prohibits alienation of pension plan assets and benefits. Nathan argues that ERISA’s anti-alienation provisions prohibit payment of funds from Nathan’s pension plan to Robin’s attorney for attorney’s fees. Nathan further argues that his pension plan is exempt from levy on the writ of execution, and the trial court erred in issuing the writ of execution upon the custodian of the assets of his pension plan. In addition, Nathan argues there were no new facts or law justifying granting Robin’s motion for reconsideration. Also, the trial court abused its discretion in granting Robin’s motion for reconsideration because the new ruling, allowing levy on assets in Nathan’s pension plan, violated ERISA.

We reject Nathan’s contentions on the ground there was substantial evidence that Nathan abused the pension plan by secreting community property assets and funneling them through the pension plan. As a consequence, Nathan’s pension plan was not protected by ERISA. We therefore affirm the judgment.

II. FACTS AND PROCEDURAL BACKGROUND

Nathan and Robin married in 1993, and separated in February 2003. A month later, on March 3, 2003, Nathan filed for divorce. In interim orders in March and April 2003, the trial court ordered Nathan and Robin to share equal custody of their two sons. The court further ordered Nathan, who practiced law as a sole practitioner, to pay Robin spousal and child support.

Nathan fell behind on his support obligations. In April 2009, the California Department of Child Support Services (DCSS) issued an order to Morgan Stanley to withhold funds from Nathan’s retirement accounts for the purpose of collecting child support arrears. On April 20, 2009, Nathan filed a claim of exemption and ex parte motion to quash the levy on his Morgan Stanley IRA rollover and IRA accounts.

In May 2009, the trial court heard and denied Nathan’s claim of exemption and motion to quash/recall the IRA levy. On June 5, 2009, Nathan faxed the DCSS and Robin’s attorney a letter stating that Nathan would be filing an ex parte application “to Stay the levy/notice of execution on my Morgan Stanley IRA Rollover plan and to dispense with an undertaking pending appeal of the minute orders of 5/12/09 and 5/27/09 and/or a petition for writ of supersedeas in the reviewing court.” The trial court granted a stay until June 29, 2009, and extended the stay until July 31, 2009.

On July 23, 2009, the trial court heard and again denied Nathan’s claim of exemption and motion to quash and recall levy on Nathan’s Morgan Stanley IRA account for payment of support (support appeal). On July 30, 2009, Nathan filed a notice of appeal of the July 23, 2009 order (In re Marriage of Lamoure (2011) 198 Cal.App.4th 807, 812, 830, case No. E048992). On August 31, 2009, Nathan also filed a petition for writ of supersedeas in this court, seeking a stay of the trial court proceedings. On September 3, 2009, this court denied the writ and request for a stay. However, on September 9, 2009, the trial court

Employee Retirement Income Security Act of 1974, 29 United States Code section 1001 et seq. (ERISA). All further statutory references are to title 29 of the United States Code unless otherwise indicated.granted Nathan’s request for a stay pending resolution of Nathan’s support appeal. On August 2, 2011, this court entered its decision in the support appeal, affirming the lower court’s July 23, 2009 order.

Writ of Execution for Payment of Robin’s Attorney’s Fees

Meanwhile, during proceedings from 2003 through 2010, the trial court ordered Nathan to pay Robin’s attorney’s fees and costs totaling over $99,000.

On March 22, 2010, the trial court heard and granted Robin’s order to show cause (OSC) and motions for a writ of attachment, for $10,000 in sanctions against Nathan, for breach of fiduciary duties, for $182,0421.08 in statutory penalties and awards against Nathan, and for reimbursement of Robin’s expert fees totaling $15,300.

On March 26, 2010, the trial court issued a writ of execution for payment of Robin’s attorney’s fees against Nathan’s pension plan. Because the writ only named Nathan and his law corporation but did not name his recently created trust1 as a judgment debtor in the writ, the Morgan Stanley custodian of Nathan’s pension plan refused to enforce the writ against the pension plan.

On April 21, 2010, Nathan served a claim of exemption as to Nathan’s Morgan Stanley accounts, seeking exemption as to any funds held by Morgan Stanley for the benefit of Nathan, Nathan’s law firm, or his pension plan, or funds held by Merrill Lynch in his recently created trust.
During a hearing on April 23, 2010, Nathan informed the court that the trial court had previously issued a stay. The trial court did not find any record of the stay and did not believe there was any reason for a stay. The court therefore ruled on Robin’s pending motions on support and other matters, and denied Nathan’s oral motion to set aside the March 22, 2010, and March 26, 2010, orders based on not receiving notice. On June 10, 2010, the court denied Nathan’s claim of exemption.

Restraining Order Prohibiting Transfer of Pension Fund Assets

On July 20, 2010, Robin filed an ex parte motion requesting a temporary order restraining Nathan from withdrawing, transferring, or disposing of any funds held in his Morgan Stanley accounts. Robin asserted the temporary hold was necessary until the trial court ruled on her motion to add Nathan’s pension plan to the writ of execution as a judgment debtor. Once the pension was added to the writ, Robin could immediately serve Morgan Stanley with the writ, which would ensure the pension assets were subject to the trial court’s jurisdiction and control.

On July 21, 2010, the trial court heard and took under submission Robin’s ex parte motion. On or about July 23, 2010,1 the trial court granted Robin’s motion and ordered Nathan restrained from transferring any funds in any Morgan Stanley account in his name of the name of his law firm or law firm pension.

Nathan D. LaMoure Law Office Retirement Plan & Trust (Merrill Lynch account No. [redacted]).

The trial court’s order is date stamped July 21, 2010. However, the minute order and register of actions state the court ruled on the matter on July 23, 2010, and Nathan states in his notice of appeal that he is appealing the July 23, 2010 order. We will assume solely for purposes of this appeal, that Nathan is appealing the restraining order, regardless of whether the order was actually entered on July 21, 2010, or July 23, 2010.any funds in any Morgan Stanley account in his name or the name of his law firm or law firm pension plan. The court also ordered that Morgan Stanley was to hold all such funds, pending further order of the court.

On August 6, 2010, Nathan transferred approximately $100,000 from his Morgan Stanley pension plan account to his Merrill Lynch trust account.

On August 17, 1010, the court granted Robin’s motion and amended the writ of execution by adding the pension plan to the writ. The court issued the amended writ of execution for $99,383.65, on August 24, 2010. The instant appeal is founded on this writ of execution. The amended writ of execution (hereafter referred to as “the writ” or “writ of execution”) was served on Morgan Stanley as the pension plan administrator. The writ directed the county sheriff to enforce the judgments entered on May 10, 2006, and on March 22, 2010, against Nathan and his pension plan.

On September 13, 2010, Nathan filed a notice of appeal of the March 22, 2010, and March 26, 2010, writ of execution order and judgment, and the July 23, 2010, restraining order. This court dismissed the appeal of the March 22, 2010, and May 26, 2010, order and judgment as untimely.

On September 23, 2010, Robin filed opposition to Nathan’s claim of exemption to the writ of execution. Robin opposed Nathan’s claim of exemption on the grounds Nathan transferred funds into the trust on August 27, 2010, in direct violation of the trial court’s orders, including the automatic temporary restraining orders (ATROs) and July 21, 2010, order, prohibiting any transfer of funds. In addition, the trial court already ruled in June 2010, that funds in the pension plan were not exempt.

On October 8, 2010, the trial court heard and took under submission Nathan’s claim of exemption. The court found that the only matter stayed was regarding Nathan’s claim of exemption, conditioned upon Nathan properly posting bonds. On October 18, 2010, the court granted Nathan’s claim of exemption.

Motion for Reconsideration

Robin filed an ex parte motion for reconsideration of the October 18, 2010, order. The trial court heard Robin’s motion for reconsideration, granted it on December 1, 2010, and amended the order on December 6, 2010. The court found that Robin provided new and different facts, and that the trial court had legal authority to order a writ of execution against Nathan’s pension plan. The court vacated its October 18, 2010, order and denied Nathan’s claim of exemption.

On December 6, 2010, Nathan filed an ex parte motion to stay execution of the March 2006 and March 2010 orders, quash and recall the writ of execution, vacate the levies, and reconsider the ruling on Robin’s motion for reconsideration. The trial court denied Nathan’s request for a stay. In addition the trial court modified sua sponte and nunc pro tunc its September 9, 2009 order granting a stay. The trial court explained: “Regarding petitioner’s claim that the court’s stay pending petitioner’s appeal of one narrow issue dealing with Petitioner’s IRA, the Court rules that this is NOT a stay of the entire action. Petitioner was previously advised by the Court that the stay did not stay the entire family law proceedings and in fact, Petitioner himself moved this court for orders subsequent to the stay. The Court will order, Sua Sponte and Nunc Pro Tunc that the stay is only applicable to the narrow issue on appeal to the date that the stay was issued.”

On December 27, 2010, Nathan filed a supplemental notice of appeal, adding the order entered on December 1, 2010, granting Robin’s motion for reconsideration of the order on October 18, 2010.

III. JULY 2010 RESTRAINING ORDER

Nathan challenges the July 2010 restraining order barring him from transferring assets out of his pension fund but does not specifically state why the order is improper. Nathan seems to be arguing that the restraining order is improper under ERISA, since his pension plan is subject to ERISA protection.

The July 2010 restraining order states: “THE COURT ORDERS: A) Petitioner [Nathan] is restrained from withdrawing, transferring, encumbering, hypothecating, concealing, or in any way disposing of any property or funds in any account maintained with Morgan Stanley in the name of (1) Nathan D. LaMoure; (2) Nathan D. LaMoure, A Professional Corporation; and (3) Nathan D. LaMoure Law Office Retirement Plan. B) Morgan Stanley shall hold all funds maintained on Petitioner’s behalf in any account in the name of (1) Nathan D. LaMoure; (2) Nathan D. LaMoure, A Professional Corporation; and (3) Nathan D. LaMoure Law Office Retirement Plan, pending further order of this Court. This order shall be effective starting 7/21/10 for a minimum of 15 days or further order.”

The trial court stated that it based the July 2010 restraining order on the following findings: “On evidence presented at the within hearing on Respondent’s motion for a restraining order prohibiting the transfer of any funds currently being held at Morgan Stanley, there is GOOD CAUSE to order that Petitioner is prohibited from transferring any and all assets in Petitioner’s name in any account maintained at Morgan Stanley, including but not limited to accounts in the name of: (1) Nathan D. LaMoure; (2) Nathan D. LaMoure, A Professional Corporation; and (3) Nathan D. LaMoure Law Office Retirement Plan.”

IV. ORDER GRANTING ROBIN’S MOTION FOR RECONSIDERATION

Nathan contends the trial court abused its discretion in granting Robin’s motion for reconsideration of the court’s October 18, 2010 order. The October order granted Nathan’s claim of exemption and his motion to quash the order restraining him from transferring assets from his pension plan. We reject Nathan’s contentions challenging the propriety of the underlying writ of execution issued in March 2010, and the related April 23, 2010, order, since those contentions are not properly before this court in this appeal. This court previously dismissed Nathan’s appeal of the March and April 2010 orders as untimely. (Code Civ. Proc., § 906; Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 19.)

A. Procedural Background

On October 18, 2010, the court granted Nathan’s claim of exemption on the grounds the court did not have authority under ERISA to issue a writ of attachment of the pension plan on March 22, 2010, and March 26, 2010. The trial court concluded the pension plan was a defined benefit trust plan governed exclusively by ERISA. Therefore the trial court did not have authority to determine whether the plan was a qualified ERISA plan, and funds in the pension plan could only be accessed by a qualified domestic relations order (QDRO). The court ordered the release of any funds held by the levying officer.

Robin immediately filed an ex parte motion for reconsideration of the October 18, 2010 order granting Nathan’s claim of exemption. Robin requested the trial court to vacate the order, deny Nathan’s claim of exemption, and order the Orange County sheriff to hold the pension plan funds pursuant to the writ of execution, pending the hearing on the motion for reconsideration. The motion was based on a newly discovered Morgan Stanley pension plan statement. Robin argued Morgan Stanley account statements showed that Nathan was secreting community property funds in the pension plan. There was new evidence that, after Nathan filed for divorce, he moved approximately $250,000 out of his pension plan account. On December 1, 2010, the court granted reconsideration and amended its ruling on December 6, 2010, to correct language in the December 1, 2010 order which incorrectly referred to the writ of execution granted on March 22, 2010, and March 26, 2010, as a writ of attachment.

In the December 1, 2010 order, as amended, the trial court found that Robin provided new and different facts and substantial legal authority supporting her position that the trial court had authority to order a writ of execution on Nathan’s pension plan. The court concluded the pension plan was not protected by ERISA because Nathan used the pension plan to secrete and shield community assets by funneling them through the pension plan. The court vacated the court’s October 18, 2010 order and denied Nathan’s claim of exemption. The levying officer was ordered to release to Robin’s attorney all funds currently held under the writ of execution issued on March 22, 2010, and March 26, 2010.

B. New Facts

Nathan argues the trial court erred in granting Robin’s motion for reconsideration because Robin failed to present any new facts or law. We disagree, as did the trial court. A party affected by a trial court’s order may seek reconsideration of that order under Code of Civil Procedure section 1008 “. . . within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, . . . The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc., § 1008, subd. (a).) We review the trial court’s ruling on the motion for reconsideration under the abuse of discretion standard. (Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457.)

Robin’s motion for reconsideration was founded on significant new facts and evidence, consisting of a Morgan Stanley account statement for Nathan’s pension plan, showing that, as of January 31, 2009, the pension plan account had $149,270 in assets. This evidence supported the reasonable inference that Nathan illicitly removed a total of approximately $250,000 from his pension plan during the marital dissolution proceedings, thereby abrogating his claim of exemption under ERISA.

C. Applicable Law

Nathan argues that the writ of execution levied against his pension plan assets violated ERISA because his pension plan is exempt under ERISA. Therefore the court should not have granted reconsideration and set aside Nathan’s claim of exemption.

ERISA, as amended by the Retirement Equity Act of 1984 (Pub.L. No. 98-397, 98 Stat. 1426), primarily regulates and preempts state employee benefit plan law. “ERISA is a remedial statute designed to protect the interests of employees in pension and welfare plans [citation], and to protect employers from conflicting and inconsistent state and local regulation of such plans [citation]. The former purpose is achieved through requirements for reporting, disclosure, participation rights, vesting of rights to benefits, funding, fiduciary responsibilities, and claims procedures. [Citation.] The latter purpose is achieved through the preemption, with a few exceptions . . . , of all state laws relating to employee pension and welfare benefit plans. [Citation.]” (Scott v. Gulf Oil Corp. (9th Cir. 1985) 754 F.2d 1499, 1501; see also Shaw v. Delta Air Lines, Inc. (1983) 463 U.S. 85, 104; Boggs v. Boggs (1997) 520 U.S. 833, 845-846 (Boggs).)

Although generally ERISA preempts state law, under ERISA state courts have concurrent jurisdiction with the federal district courts when a civil action is brought by an employee benefit plan beneficiary “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” (§ 1132(a)(1)(B) & (e)(1).) In all other instances, the federal district courts have exclusive jurisdiction of civil actions relating to those plans governed by ERISA. (§ 1132(e)(1).) California State law, under Code of Civil Procedure section 704.115, subdivision (b), provides: “All amounts held, controlled, or in process of distribution by a private retirement plan, for the payment of benefits as an annuity, pension, retirement allowance, disability payment, or death benefit from a private retirement plan are exempt.”

Nathan argues that, under ERISA and Code of Civil Procedure section 704.115, subdivision (b), his pension plan is exempt from the writ of execution and is not subject to any exception which would authorize levy upon his pension assets. Therefore, the trial court abused its discretion in vacating its previous order on October 18, 2010, quashing the writ of execution and setting aside his claim of exemption. We disagree. As discussed below, we conclude the new evidence, along with other evidence, supported a reasonable finding by the trial court that Nathan was using his pension plan to secret community property assets and funnel assets through the pension plan. Under such circumstances, ERISA does not apply.

D. Subject Matter Jurisdiction to Determine if Pension Plan Qualifies

Nathan argues that, because federal ERISA law preempts state law and the pension plan originally qualified under ERISA for protection, the trial court did not have subject matter jurisdiction to determine that the pension plan did not qualify for ERISA protection. We disagree. Although there is no case law factually on point, Plunk v. Yaquinto (In re Plunk) (5th Cir. 2007) 481 F.3d 302 (Plunk) supports the proposition that the trial court had jurisdiction to determine whether Nathan’s pension plan qualified under ERISA.

In bankruptcy proceedings in Plunk, supra, 481 F.3d 302, a judgment creditor attempted to garnish the judgment debtor’s pension plan assets in order to collect on a judgment. The judgment creditor argued the pension plan was not qualified under the Internal Revenue Code because the debtor had abused pension plan assets and therefore the pension plan assets were not exempt from garnishment. (Id. at p. 304.) The Plunk court agreed, holding that the bankruptcy court was not required to defer to the Internal Revenue Service’s (IRS) initial determination that the pension plan qualified. (Id. at p. 307.) The court stated that, when disqualifying events occur after the IRS has last determined that a plan is qualified, the bankruptcy court may, under state law, determine that the plan is no longer qualified based on recent disqualifying events, such as misusing pension plan assets. (Ibid.)

Nathan argues Plunk is not dispositive because it did not overturn ERISA preemption of state law or establish that there was state subject matter jurisdiction in the instant case. Nevertheless, we conclude Plunk, by analogy, supports the proposition that the trial court had jurisdiction to determine that, where there was evidence of abuse of Nathan’s pension plan, the pension plan no longer qualified under ERISA for protection and the pension plan assets were not exempt from being levied upon under state law.

E. The Pension Plan Is Not a Qualified ERISA Plan

Regardless of whether Nathan’s law firm pension plan initially qualified under ERISA, there was substantial evidence that during the marital dissolution proceedings, commencing in 2003, it no longer qualified because Nathan was the sole employee of his law firm, sole shareholder of his law firm, sole beneficiary of his law firm pension plan assets, administrator of the pension plan, and trustee of the pension plan account. Nathan stated in his declaration filed on November 6, 2006, that his law firm was the employer sponsor of the plan. Nathan also stated that he was trustee of the pension plan and he was not receiving any payments from the plan. Nathan further stated that he was the sole remaining employee with vested benefits who was entitled to benefits from the plan. The assets in the plan, according to Nathan, were at that time, approximately $180,000. In another declaration filed on July 6, 2010, Nathan again stated that he was the sole primary beneficiary of the pension plan benefits and administrator of the plan, but no longer trustee of the pension plan trust. Apparently, a relative, Steve LaMoure, replaced him as trustee at some point during the divorce proceedings.

Since there was substantial evidence Nathan was the employer sponsor of the plan and the sole employee, beneficiary and trustee of the pension plan, the trial court reasonably concluded that ERISA was inapplicable and the pension plan was therefore not exempt from the writ of execution under ERISA. (Nelson v. California Trust Company (1949) 33 Cal.2d 501, In re Watson (Bkrtcy.D.Nev. 1996) 192 B.R. 238, 242, and In re Acosta (N.D. Cal. 1994) 182 B.R. 561.) In Acosta, the bankruptcy court and federal district court concluded the judgment debtor’s pension plans were not ERISA qualified and thus were not excluded under ERISA because there was only one current employee and a sole shareholder of a corporation does not qualify as an employee, but is rather deemed to be an employer. “[A]n employer is prohibited from receiving any benefit from an ERISA-qualified plan.” (Acosta, at p. 565.) Likewise, here, Nathan’s pension plan did not qualify as an ERISA-qualified plan because it “hardly can be said to provide payment of pensions or employee benefits since its sponsors had no employees and were obligated to pay no pensions. The Retirement Plan resembles in name only a private retirement plan intended for such purposes; names alone are not controlling.” (In re Phillips (1997) 206 B.R. 196, 203 (Phillips).)

F. Misuse of Pension Plan

Even assuming the pension plan initially qualified under ERISA, there is substantial evidence supporting the trial court’s finding that Nathan abused his pension plan during the divorce litigation, and this disqualified the plan from ERISA protection. This is substantiated by the following evidence.

Nathan filed for divorce in February 2003. An income tax form (Actuarial Information Form 5500, Schedule B) dated March 24, 2003, shows that, before filing for divorce, during the period of December 1, 2001, to November 30, 2002, Nathan’s pension plan was valued at $145,405. An account statement for Nathan’s law firm1 (Salomon Smith Barney Inc., account No. [redacted]) for December 2002, shows an ending value of $184,591. An account statement for Nathan’s pension plan (Salomon Smith Barney Inc., account No. [redacted]), for February 2003, shows an ending value of $113, 373.

By letter dated April 30, 2003, two months after Nathan filed for divorce, Nathan directed the transfer of approximately $100,000 to his pension plan from his law firm investment account (account No. [redacted]), in violation of the ATRO’s. An income tax form, Schedule I (Form 5500), entitled, “Financial Information – Small Plan,” shows that for the period of December 1, 2003, to November 30, 2004, Nathan’s pension plan had a beginning value of $417,174 and ended the year with a value of $403,413. This indicates that Nathan’s pension plan increased approximately $250,000 in value in 2003, after Nathan filed for divorce. Actuarial Information Form 5500, Schedule B, dated July 15, 2006, shows that for the period of December 1, 2004, to November 30, 2005, Nathan’s pension plan was valued at $379,799.

5 Nathan D. La Moure, APC.

This restraining order prohibited Nathan from transferring or withdrawing assets from his Morgan Stanley pension plan and law firm account. The restraining order was consistent with the preexisting ATROs and other orders prohibiting the transfer of assets. Robin presented evidence that, after the trial court issued the writ of execution in March 2010, Nathan violated the ATROs and March 26, 2010 order by withdrawing assets out of his law firm account and transferring them to his Morgan Stanley pension.

Based on Nathan’s violations of the ATROs and other orders prohibiting the transfer of assets, the July 2010 restraining order was appropriate and did not violate ERISA since it appropriately ordered Nathan not to transfer assets during the pending dissolution proceedings. The order was not against the pension plan. It merely prohibited Nathan from transferring or instigating the transfer of any assets in his name or the name of his law firm or pension plan. The order further informed Morgan Stanley that, in accordance with the restraining order, Morgan Stanley should not carry out any requests by Nathan to transfer or withdraw assets subject to the order. Nathan has not demonstrated that the trial court abused its discretion in entering the July 2010 restraining order.

Newly discovered evidence provided in Robin’s motion for reconsideration, confirmed that after Nathan filed for divorce, he moved at least $250,000 in community property assets out of his pension plan account during the divorce proceedings. A Morgan Stanley pension plan statement for the month ending January 31, 2009, showed a total value for the pension plan account of $149,270.

The evidence as a whole was sufficient to support the trial court’s reasonable findings that after Nathan filed for divorce, Nathan misused his pension plan by secreting, shielding, and illicitly funneling community property assets through the pension plan. As in Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8 (Yaesu), Nathan’s abuse of his pension plan resulted in loss of its exemption status under California law. Likewise, we conclude Nathan’s pension plan did not qualify for ERISA protection.

In Yaesu, supra, 28 Cal.App.4th 8, judgment creditors brought an action to set aside a judgment debtor’s gift of $243,206 to his sons as a fraudulent conveyance. The gift was made one month after a jury entered a $2.2 million verdict against the judgment debtor. The gifted funds were from the judgment debtor’s benefit pension plan. He also divested himself of many of his other assets against which the creditor could execute. The judgment debtor maintained that the funds given to his sons were entitled to the statutory exemption from execution accorded private retirement plans under Code of Civil Procedure section 704.115. The trial court and Court of Appeal concluded the exemption was inapplicable because the plan was not designed and used for retirement purposes. The transfer of funds to the sons was one of many assets which would have been subject to execution by the judgment creditor and which the judgment debtor intended to conceal from the judgment creditor.

The Yaesu court explained that Code of Civil Procedure section 704.115 exempts property otherwise available for enforcement of a money judgment. The court further explained that “The purpose of this exemption is to safeguard a source of income for retirees at the expense of creditors. [Citation.] However, neither the debtor’s mere compliance with the pertinent IRS rules in creating the private retirement plan nor the debtor’s designation of the asset as a private retirement plan translates to an automatic exemption from execution. In analyzing Code of Civil Procedure section 704.115, in the

6 In January 2009, Smith Barney merged with Morgan Stanley’s Global Wealth Management Group. The joint venture thereafter operated as Morgan Stanley Smith Barney. (https://www.citigroup.com/citi/press/2009/090113c.pdf, “Morgan Stanley and Citi to Form Industry-Leading Wealth Management Business Through Joint Venture,” Morgan Stanley, Citigroup release, January 13, 2009.) context of a bankruptcy proceeding, [] the Ninth Circuit Court of Appeals recently held: ‘Without regard to its label, a plan not used and designed for retirement purposes is not a retirement plan’ entitled to the benefit of the statutory exemption. [Citation.]” (Yaesu, supra, 28 Cal.App.4th at pp. 13-14.) The dispositive inquiry for the trial court in Yaesu was whether the plan was designated and used for retirement purposes. (Id. at p. 14.)

Likewise, in Phillips, supra, 206 B.R. 196, the bankruptcy court concluded that the judgment debtors were shielding equity in their residence and other assets in their private retirement plan. (Id. at p. 203.) The Phillips court stated that “The facts are overwhelming that Debtors designed and used the Retirement Plan, not to provide for their later years, but to frustrate the Mayers in the enforcement of their state court judgment. . . . [S]hielding of assets is clearly not a proper retirement purpose.” (Ibid.) The court further stated that the expenditure of funds in the retirement plan and revocable trust for their own legal defense and other expenses was inconsistent with using the plan for retirement purposes. (Ibid.) Based on the Phillips court’s findings that the judgment debtors were shielding assets in their retirement plan and not using the plan for a proper retirement purpose, the bankruptcy court in Phillips held that the retirement plan assets were not exempt, the retirement plan was deemed a nullity, and the assets in it could be reached as though the retirement plan did not exist. (Ibid.)

In the instant case, a reasonable inference can be made that Nathan used his pension plan to shield assets during his divorce proceedings, rather than use the plan and assets funneled through the plan solely for retirement purposes. Although Yaesu and Phillips do not address application of ERISA, the rationale for rejecting the pension plan exemption under Code of Civil Procedure section 704.115 in Yaesu and Phillips applies in the instant case to an exemption under ERISA. Even though in the instant case there may have been compliance with IRS rules and the plan initially may have qualified as a pension plan under Code of Civil Procedure section 704.115, as well as ERISA, there was substantial evidence that during the marital dissolution proceedings the plan was not used for a retirement purpose. Rather, Nathan used the pension plan to secret and shield community property assets by funneling them through the plan. Just as the pension plan is not subject to exemption under Code of Civil Procedure section 704.115, it is also not entitled to protection under ERISA.

In re Bell & Beckwith (1993) 5 F.3d 150 (Bell), supports this proposition. In Bell, a stock brokerage partnership set up a retirement plan and trust, which was approved by the IRS as an ERISA qualified pension plan. Later, the partnership entered bankruptcy. (Id. at p. 151.) The bankruptcy trustee initiated suit against the general partners of the partnership and obtained a deficiency judgment against them and writs of execution against their interests in the retirement plan. (Id. at p. 152.) The trustee of the pension plan objected to the writ of execution on the ground ERISA exempted the pension plan from garnishment. (Id. at p. 151.) The bankruptcy trustee countered that contributions made to the retirement plan violated the terms of the plan and were void ab initio (invalid), because the partnership’s managing and general partner had embezzled millions of dollars from the partnership and there was no net income. Therefore the invalid contributions could be garnished for the benefit of the bankruptcy estate, despite ERISA. (Id. at pp. 151-152.)

The court in Bell agreed and affirmed the district court ruling. (Bell, supra, 5 F.3d at pp. 152-153.) The Bell court explained that ERISA protections did not apply because contributions to the pension plan, made in violation of the plan’s net income requirement, were invalid and void. The contributions therefore never became a part of the plan and were not exempt under ERISA. (Id. at p. 153.)

Likewise, here, the community property assets illicitly funneled through Nathan’s pension plan during the marital dissolution proceedings were invalid, and thus were never part of the pension plan. Because such assets were comingled with other assets in the pension plan and the pension plan was abused, the assets remaining in the plan are not protected by ERISA and are subject to the writ of execution of Robin’s attorney’s fee award against the pension plan assets.

G. A QDRO Is Not Required For Levying on the Writ of Execution

Nathan argues that execution on the writ for collection of Robin’s attorney’s fees from his pension plan can only be accomplished through a QDRO. Nathan asserts that, since the writ of execution is not in the form of a QDRO, ERISA’s anti-alienation of pension assets and benefits prohibits execution of the attorney’s fees award in favor of Robin’s attorney. “QDRO’s, unlike domestic relations orders in general, are exempt from both the pension plan anti-alienation provision, § 1056(d)(3)(A), and ERISA’s general pre-emption clause, § 1144(b)(7).” (Boggs, supra, 520 U.S. at p. 846.)

Here, the attorney’s fees award was payable to Robin’s attorney, who does not qualify for a QDRO because she is not a nonparticipant spouse or dependent. “A QDRO is a type of domestic relations order that creates or recognizes an alternate payee’s right to, or assigns to an alternate payee the right to, a portion of the benefits payable with respect to a participant under a plan. § 1056(d)(3)(B)(i). . . . In creating the QDRO mechanism Congress was careful to provide that the alternate payee, the ‘spouse, former spouse, child, or other dependent of a participant,’ is to be considered a plan beneficiary. §§ 1056(d)(3)(K), (J). These provisions are essential to one of REA’s central purposes,1 which is to give enhanced protection to the spouse and dependent children in the event of divorce or separation, and in the event of death the surviving spouse. Apart from these detailed provisions, ERISA does not confer beneficiary status on nonparticipants by reason of their marital or dependent status.” (Boggs, supra, 520 U.S. at pp. 846-847.)

Nathan further argues that under ERISA, even if there was a QDRO, the pension assets are not accessible, and there exists no rights to actual distribution of the benefits to a third party under a QDRO until his pension benefits are actually being paid out. According to Nathan, to date, he has not yet begun receiving any pension benefits.

A QDRO was not required in the instant case to levy against the pension plan assets because, as discussed above, there was substantial evidence that Nathan abused his pension plan by funneling community property assets through the plan and therefore the plan was not protected by ERISA or exempt under Code of Civil Procedure section 704.115.

V. DISPOSITION

The judgment is affirmed. The trial court did not err in entering a restraining order on July 21, 2010, or July 23, 2010, prohibiting disbursements from Nathan’s pension plan. There also was no abuse of discretion in granting on December 1, 2010, Robin’s motion for reconsideration of the court’s order on October 18, 2010, and denying Nathan’s claim of exemption, since there was substantial evidence that Nathan misused his pension plan to secrete and shield community assets by funneling them through the pension plan.

7 The Retirement Equity Act of 1984 (REA), Pub.L. No. 98-397, 98 Stat. 1426, sought to protect the rights of surviving spouses. (In re Marriage of Padgett (2009) 172 Cal.App.4th 830, 840.)

Nathan is ordered to pay Robin’s costs on appeal.

CERTIFIED FOR PUBLICATION
CODRINGTON
J.

We concur:
McKINSTER
Acting P. J.

MILLER
J.

 



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