In re Marriage of Stauffer

Filed 1/26/09 In re Marriage of Stauffer CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, William S. Dato, Judge. Affirmed.

In this second appeal[1] in this marital dissolution action, Jeffrey S. Stauffer appeals from an August 2007 order following a review hearing wherein the court (1) determined the amount of guideline child support from May 2002 through May 2006; (2) found the marital standard of living was approximately $35,700 in net income per month; and (3) set temporary spousal support from May 2002 to January 2006, such support to be eliminated as of January 2006.

Jeffrey[2] asserts the court erred in making those orders because (1) the court placed the burden of proof on him to demonstrate that the "high wage earner" exception to guideline child support applied; (2) the court used only the last 12 months prior to the hearing to determine the marital standard of living; and (3) there was insufficient evidence to support the court's conclusion that 85 percent of the premarital expenses were for Debra Stauffer and the parties' three children.

We first conclude that our holding in Stauffer I moots Jeffrey's contention with regard to the burden of proof on the high wage earner exception to guideline child support. We also reject Jeffrey's remaining arguments and affirm the court's August order.

FACTUAL AND PROCEDURAL BACKGROUND

We take some background facts from our previous unpublished opinion in Stauffer I.[3]

A. Order to Show Cause (OSC) for Temporary Child Support

In December 2001 Debra filed a petition to dissolve her marriage with Jeffrey and, at the same time, filed an OSC for temporary child support. Jeffrey responded by alleging his income was $21,320 a month and listed assets exceeding $2 million. The parties disputed the amount of Jeffrey's income and which items should be considered a part of his income.

B. Stipulated Order re Child Support

In May 2002 the parties entered into a stipulated order that set monthly child support at $3,000. The order further stated that it was "[w]ithout prejudice and pending hearing," and that "[t]he court shall reserve jurisdiction to the next hearing over [] 1. [r]etroactivity of [s]upport and amounts."

Thereafter, attempts to settle the matter were made, and the child support hearing was taken off calendar. When the settlement fell through, the court reiterated that "[t]he court shall reserve jurisdiction over retroactive effect of any subsequent orders."

C. Attempts To Determine Jeffrey's Income

In June 2004 Tony Yip, a certified public accountant, was appointed to determine the parties' incomes. In January 2005 the court ordered that "[a]ll documents are to be provided to [Yip] for his report by 2/1/05." Yip sent follow-up letters in April, May, July and August 2005, requesting a response from Jeffrey to his request for documents. In November 2005 Yip sent a request for additional documents and information from Jeffrey. Counsel for Debra made numerous phone calls to Jeffrey's counsel requesting that Jeffrey cooperate with Yip and inquiring about the status of document production. No response was received. In January 2006 counsel for Debra sent Jeffrey's counsel a request that Jeffrey immediately produce the additional documents so Yip's analysis could be completed. No documents were provided.

In February 2006 Debra brought an OSC to compel Jeffrey to cooperate with the forensic evaluation and sought sanctions for the attorney fees incurred in bringing the OSC. Jeffrey responded with a request that Debra be sanctioned.

In July 2006 the court ordered Jeffrey to comply with "any request by Yip for documents." The court also ordered Jeffrey to pay $4,000 in sanctions.

D. OSC To Modify Temporary Child Support Order

In September 2006 Debra brought an OSC to modify the 2002 stipulated order to reflect Jeffrey's actual income. The OSC further requested that the modified child support be made retroactive to May 2002. In support of the modification, Debra asserted her monthly expenses were over $22,000 a month. Debra produced evidence showing thatJeffrey's income for 2001 was $448,500; in 2002 was $577,320; in 2003 was $1,061,959; in 2004 was $1,014,690;in 2005 was $1,553,803; and as of July 27, 2006, he had received income of $1,299,600 for that year. He also had received a severance package from his work in the amount of $3,607,620. Debra argued the purpose of the retroactivity stipulation was to allow the parties to complete discovery on the issue of Jeffrey's income.

In response, Jeffrey argued any modification should be retroactive only to the period of between May 2001, when Debra filed her original OSC, and May 2002, when the stipulated order was entered. Jeffrey also asserted guideline child support should not be used if the court considered his severance package as this would make him a "high income" wage earner. He also indicated he earned $29,166 in December 2006, the month before he filed his response. He asked that his severance pay be apportioned over two years as that was how he was to be paid that money.

E. March 2007 Order

In March 2007 the court ordered that Jeffrey "shall pay to [Debra] as and for child support, commencing May 1, 2002 and for every year thereafter, guideline child support based upon income to [r]espondent as set forth in the Income Analysis Report of Tony Yip and income to [Debra] based upon the Income Analysis Report of Tony Yip and the findings of the court set forth herein below. The court finds that it has jurisdiction to make child and spousal support orders retroactive to May, 2002 based on the Court's reservation of jurisdiction to do so contained in prior orders of this Court. The child and spousal support orders entered herein shall be retroactive to May, 2002. Guideline child support shall be apportioned based upon the ages of the children." The court also found that Jeffrey presented insufficient evidence to deviate from guideline support. The court declined to allow Jeffrey to deduct his Florida vehicle and residence as business expenses as they were not proper business expenses. However, the court ruled this was without prejudice to Jeffrey proving at trial that they were proper business expenses under the Internal Revenue Code. The court imputed income to Debra according to a vocational expert report.

F. May 2007 Hearing

The court set a review hearing for May 2007 to finalize the calculations as to the exact amount of spousal and child support consistent with Yip's findings. Going forward, the court awarded child support at approximately $41,000 per month.At that hearing, the court also ordered retroactive support, but had Yip rerun his calculations for Jeffrey's income to determine child and spousal support from 2002 to the present. Specifically, the court wanted Yip to determine how to treat Jeffrey's receipt of restricted stock and bonuses from his employer. The stock and bonuses were granted at the end of each year, but received the following year. The court ordered that the stock and bonuses should be included in the year received.

The court gave the parties time to object to Yip's reports, and set another review hearing for July 2007 to go over Yip's new numbers for Jeffrey's income. The court took the issue of whether to deviate from guideline spousal support under submission.

G. August 2007 Hearing (Subject of Instant Appeal)

In June 2007 Yip filed an updated report. In July 2007 Jeffrey objected to the report on the grounds it was late and that income from the property division had been used in the earlier years but not in later years. Jeffrey also filed supplemental points and authorities arguing his Florida income would be taxable at California rates in California. His accountant, Timothy Duffy, opined that this was true.

Thereafter, Yip filed an updated report to correct a computer error to reflect 2006 dividend and interest income and a lump sum $96,150 cashout of "three years health insurance benefits he was to receive from [his employer] as a result of the merger." Jeffrey objected to the updated report. Jeffrey's accountant concluded, based upon the parties' 1998-2001 income tax returns, that the parties' taxable income over the last four years of their marriage averaged $48,576 a month. Jeffrey argued that average should be used as the "marital standard of living" in calculating child and spousal support. He also argued Debra was not entitled to any retroactive spousal support because any support that exceeded her expenses obviated the need for any spousal support.

Debra submitted proposed child and spousal support orders based upon the imputation of income to Debra, Jeffrey's receipt of severance pay when he left his old employer, and his income from his new job in Florida.

Prior to the August 2007 hearing, the court sent a letter to counsel stating the issues to be decided were (1) the amount of retroactive child support from 2002 to 2006; and (2) spousal support from 2002 to 2007. Additionally, prior to the hearing Yip filed another report clarifying he had included separate property gains from the stock Jeffrey received as part of the sale of his former employer's business. However, the value of the community property income from the sale of community shares was excluded from both Jeffrey's and Debra's income.

At the August 2007 review hearing, the court calculated retroactive child and spousal support from 2002 through 2006, based upon the parties' net monthly income, which was $42,000 in 2001, and, as discussed, ante, increased significantly over the years, with net spendable income in 2006 of approximately $71,000 per month. The court also imputed income to Debra in the amount of $20,000 per year as of July 1, 2004, $30,000 per year as of July 1, 2005, $40,000 per year as of July 1, 2006, and $50,000 per year thereafter. The court calculated the marital standard of living as approximately $42,000 per month, of which it attributed 85 percent to Debra and their three children. In doing so, the court stated "[m]other's living expenses are now for a family of four rather than five, and taking into account increases in the cost of living, the court will assume that spendable income of approximately $35,700 per month (85 percent of $42,000) would allow mother to maintain the marital standard of living."

Based upon these calculations, child support increased from $8,457 a month in 2002 to $41,277 in 2007. Spousal support was $11,305 for 2002, increased to a high of $28,267 in 2005, and began decreasing thereafter, with spousal support at $0 as of January 2006.

In awarding retroactive spousal support the court rejected Jeffrey's argument Debra's historic expenses met her needs, finding "the problem with relying on the expenses exclusively is that they simply reflect a cut back in light of available resources at that point in time." On the other hand, the court agreed that in the more recent years she did not need as much as the guidelines would permit, which would have been as much as $75,000 per month.

Jeffrey argued that in calculating the marital standard of living the court should use an average of income over the last four years prior to the parties' separation in 2001: "[I]t is our position that taking only one year's income and that being the last year, does not give a true picture to the court as far as what the marital standard of living was." The court, however, used the last 12 months prior to separation, stating, "My understanding of the law is that as a general rule, I need to take at least a year as an average when there have been variations. Not just pick a month or two months or three months."

Jeffrey also objected to the court assigning 85 percent of the family's expenses to Debra and the children, arguing his percentage of expenses should be at least 20 percent, and the monthly marital standard of living should be decreased by that amount. The court rejected that argument, pointing out there were certain expenses that could not be divided.

H. Stauffer I

In Stauffer I, Jeffrey asserted the court's award of child support was erroneous because (1) it lacked jurisdiction to make a support award retroactive to any date earlier than September 2006 when Debra filed her OSC to modify support; (2) it abused its discretion in refusing to entertain Jeffrey's laches defense; (3) it failed to deduct Jeffrey's Florida business expenses from his income; (4) it placed the burden on Jeffrey to demonstrate that the high income exception to guideline child support should apply in this case; and (5) the court awarded guideline support at a time when it did not know what that amount was, and without assessing the children's needs.

In an unpublished opinion filed December 19, 2008, we affirmed the court's order, finding no error. In particular, we concluded the court did not err in finding Jeffrey failed to meet his burden of proof in demonstrating the high wage earner exception to guideline support should apply and rejected his argument that the burden of proof should have been shifted to Debra on that issue. (Stauffer I, supra, at pp. 10-13.)

DISCUSSION

I. HIGH INCOME EARNER EXCEPTION TO GUIDELINE SUPPORT

Jeffrey renews his contention made in Stauffer I that the court should have shifted the burden of proof to Debra on the issue of whether the high income earner exception to guideline support applied. Because we have already decided that precise issue in Debra's favor in Stauffer I,however, this issue is now moot and we need not revisit it in this opinion.[4] (Eye Dog Foundation v. State Bd. of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541; Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 10.)

II. ASSERTED ERRORS IN CALCULATION OF TEMPORARY SPOUSAL SUPPORT

A. Standard of Review

We review spousal support awards for abuse of discretion. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 282-283.) In awarding temporary spousal support, as opposed to permanent spousal support, the court is given fairly wide discretion. "'Awards of temporary spousal support do not serve the same purposes, nor are they governed by the same procedures, as awards for permanent spousal support.' [Citation.] 'Temporary spousal support is utilized to maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations.' [Citation] On the other hand, '[t]he purpose of permanent spousal support is not to preserve the preseparation status quo but to provide financial assistance, if appropriate, as determined by the financial circumstances of the parties after their dissolution and the division of their community property.' [Citations.] [] Awards of temporary spousal support rest within the broad discretion of the trial court and may be ordered in 'any amount' (Fam. Code,  3600) subject only to the moving party's needs and the other party's ability to pay. [Citation.] Permanent support, by contrast, is constrained by numerous statutory factors set out in [Family Code] section 4320. [Citations.]" (In re Marriage of Murray (2002) 101 Cal.App.4th 581, 594-595, fns. omitted.)

B. Use of 12-Month Time Period To Determine Marital Standard of Living

Family Code section 3600 provides in part: "During the pendency of any proceeding for dissolution of marriage . . . the court may order . . . the husband or wife to pay any amount that is necessary for the support of the wife or husband." (Italics added.)

When the income of the party obligated to pay support fluctuates over time, "the time period on which income is calculated" for support purposes "must be long enough to be representative, as distinct from extraordinary." (Riddle v. Riddle (2005) 125 Cal.App.4th 1075, 1082, italics omitted.) In Riddle, the Court of Appealconcluded that a one-year time period was sufficient. (Ibid.) Thus, the trial court's use of a one-year time period in our case was also a reasonably sufficient length of time. This case is thus distinguishable from the trial court's error in Riddle,where the trial court used "[a] mere two months . . . to predict the annual income of a commissioned salesperson." (Id. at p. 1083, italics omitted.)

Jeffrey asserts the last 12 months of the marriage was not representative because there was a spike in his income due to a buyout of his interest in his former employer, and the marital standard of living was thus "skewed" by that event. However, the record shows the company Jeffrey worked for went public in 1997, not 2001. Further, any alleged spike in pay did not occur until 2006, when he changed jobs and received severance pay, which the court spread out over several years. Thus, neither event had any impact on the parties' marital standard of living for the 12 months preceding separation, and the court did not abuse its discretion in using that time period to determine the marital standard of living.

C. Assignment of 85 Percent of Expenses to Debra and Children

Jeffrey asserts there is no substantial evidence to support the court's conclusion that the marital standard of living should be reduced by only 15 percent to account for his expenses that are no longer a part of the household of Debra and their three children. Rather, because they were a family of five, he asserts his share of expenses should be at least 20 percent. Moreover, he argues that because the adults' expenses are greater than the children's, at least 25 percent should have been allocated to him. We reject these contentions.

As the court pointed out at the hearing in this matter, there are costs that simply cannot be divided. As the court pointed out, reduction of a household of five by one member would not reduce expenses by one-fifth. Further, Jeffrey presented no evidence before the trial court, and no evidence on this appeal, that the adults' share of expenses is greater than that of the children. Because this was a temporary support order, the court had broad discretion to fashion an order that was fair and just. (In re Marriage of Murray, supra, 101 Cal.App.4th at pp. 594-595.) The court could have awarded Debra guideline spousal support, which in some years would have been as high as $75,000 per month. The court could also have refused to make any reduction in the marital standard of living. Finally, the court could have extended spousal support beyond 2006. On this record, Jeffrey cannot establish the court abused its discretion in reducing the marital standard of living by 15 percent to account for his expenses.

DISPOSITION

The order is affirmed. Debra shall recover her costs on appeal.

NARES, J.

WE CONCUR:

HUFFMAN, Acting P. J.

McDONALD, J.

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[1] The first appeal, in which we filed an unpublished opinion on December 19, 2008, was In re Marriage of Stauffer, D051010 (Stauffer I).

[2] We refer to the parties by their first names as is customary in family law matters. (Marriage of Smith (1990) 225 Cal.App.3d 469, 475, fn. 1.) We intend no disrespect.

[3]Debra has brought an unopposed motion requesting that we take judicial notice of this court's file in Stauffer I. We grant that request.

[4] Debra brought a motion to strike those portions of Jeffrey's brief that were duplicative of issues raised in Stauffer I. However, at the time Jeffrey filed his opening brief in this appeal, we had not yet filed our opinion in Stauffer I, and Jeffrey did not know in what manner we would resolve the issue of the high income earner exception to guideline support or whether we would reach it at all. Accordingly, he appropriately raised that issue again in his briefing on this appeal, and we therefore deny Debra's motion to strike.