Filed 1/31/18 Marriage of Freiter CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a postjudgment order of the Superior Court of Orange County, Donald F. Gaffney, Judge. Affirmed.

Elizabeth Nigro & Associates and Paul M. Frazier for Appellant.

The Blonska Firm and Shannon R. Thomas for Respondent.

* * *

Introduction

When Robert Freiter and Susan Freiter divorced, Robert agreed to pay Susan $7,500 per month in spousal support, and to make an equalizing payment of $875,000 to Susan, payable at the rate of $5,000 per month.[1] Five years later, Robert sought termination of the spousal support payments, claiming lack of ability to pay. The trial court denied Robert’s request, and he appealed.

We affirm. The trial court failed to specifically list each of the factors it considered when ruling on the request to modify a spousal support award. However, a review of the oral and written explanations of the court’s order reflects that the court nevertheless did consider and apply the applicable statutory factors and the court’s order was supported by substantial evidence.

Statement of Facts and Procedural History

In August 2010, a stipulated judgment resolved all issues relating to the dissolution of Susan and Robert’s marriage. The judgment provided that Robert would pay $7,500 per month in spousal support to Susan. Robert was awarded RF Freiter & Associates, Inc., an investment business, as his separate property. Robert was required to make an equalizing payment to Susan in the amount of $875,000, to be paid at the rate of $5,000 per month. The equalizing payment was directly connected to the award of the business to Robert; the stipulated judgment reads, in relevant part: “Should [Robert] sell, transfer, hypothecate any of his interest in RF Freiter & Associates, Inc., the entre unpaid balance of the equalizing payment shall become due and payable, and bear interest at the legal rate. [Robert] shall secure the equalizing payment to [Susan] by stock pledge agreement, pledging the stock as security for the $875,000 equalizing payment.”

In July 2015, Robert filed a request to terminate spousal support based on his inability to pay. Robert’s request was based on his contention that (1) his income was significantly reduced since the time the judgment was entered, (2) the value of the business had decreased during the economic downturn, and (3) he had serious health issues that affected his ability to work.

At an evidentiary hearing, the court admitted into evidence Robert’s March 2010 and March 2016 income and expense declarations and Susan’s March 2010 and May 2016 income and expense declarations. Robert testified and confirmed that, as a result of the financial downturn, his income and the value of the business had been decreasing since before the judgment was entered.

Robert testified that his annual income for the 12 months before the judgment was entered was between $580,000 and $600,000. The March 2010 income and expense declaration appears to reflect net self-employment income of $120,000, and commissions and bonuses of $384,000. That declaration also reflects monthly expenses of about $18,700, and nonreimbursed work-related expenses of $19,515 per month. Using the figures in the March 2010 income and expense declaration, Robert had net income of about $3,800 per month[2] when he stipulated to pay Susan a total of $7,500 per month in spousal support and $5,000 per month as the equalizing payment. Robert also testified that his income for the 12 months before the hearing on his request to modify spousal support was $307,949. Robert’s March 2016 income and expense declaration reflects average monthly income of $9,000 and monthly expenses of about $9,300.[3] (Robert did not testify about his ability to find other work.)

As to his health, Robert’s request stated that he had had heart attacks in 2006 (before the judgment was entered) and 2011. Robert testified that the second incident was actually not a heart attack, but that he was suffering from anxiety and stress.

Following the evidentiary hearing, the trial court denied Robert’s request to terminate or modify spousal support. The court issued an oral statement of decision from the bench:

“I believe the court retains jurisdiction to modify the spousal support. I also agree that the court’s discretion whether or not to do that is quite broad. And simply because the court has discretion to do something, doesn’t necessarily mean the court should do something.

“I will note that in the spousal support provision [in the stipulated judgment], the parties do not specify a desire to deprive the court of the authority to modify spousal support. But the parties do seem to clearly indicate what they would consider to be a change of circumstance in warranting a modification of spousal support. In that the parties indicate that these payments will continue until one of three possibilities: Death of either party, remarriage of [Susan], or a specified date upon which not only would the payments stop, but apparently the parties contemplate that the court’s jurisdiction [to] modify, no matter what happens, would be terminated. . . .

“What is not included here is any indication that the parties considered the continuing economic climate, which apparently [Robert] was already aware of as constituting a substantial change of circumstances based upon which this court would terminate or modify the agreed upon spousal support amount.

“I will add to this, from a credibility standpoint, I do not find [Robert]’s testimony particularly persuasive. That’s a polite way of saying I don’t find it to be credible. . . .^[[4]]

“A reduction in spousal support, allegedly agreed . . . verbally by [Susan], for which there is no evidence other than the statements of [Robert], there’s no indication that she receives any benefit for reducing the amount of spousal support. And [Robert] can’t indicate any benefit that [Susan] would receive for that alleged reduction to reduce what she is entitled to under the law as spousal support. There’s no written agreement to reduce her spousal support.

“Based upon the evidence that has been produced here today, the court does not find that [Robert] has met his burden to establish a change of circumstances such that the court would modify the agreed upon spousal support in this agreement. And the court declines to exercise its discretion to do so. . . . [¶] . . . [¶]

“[Robert’s counsel]: . . . Is the court declining to address any of the other factors under Family Code section 43[20] —

“The Court: For the record the court takes those other factors that were alleged as changes in circumstances, health, alleged heart attacks. There is insufficient evidence to establish that any of those things are actually impacting his ability or his work hours to earn money. [The] court does not consider anything admitted here today to be a sufficient change in circumstances.

“[Robert’s counsel]: So is the court declining to state for the record your ruling on each of the 4320 factors?

“The Court: Counsel, I don’t think you get to the 4320 factors until you show a substantial change in circumstances.”

The court made the following written findings in its Findings and Order After Hearing:

“The Court does have jurisdiction to modify the spousal support orders set forth in the August 6, 2010 judgment.

“ . . . The Court finds that there is no substantial change of circumstances warranting a modification of [Robert]’s spousal support obligation, based on [Robert]’s testimony regarding the economic circumstances of his business in 2007 and at the time the stipulated judgment was signed and on comparison of [Robert]’s March 22, 2010 Income & Expense Declaration and his March 16, 2016 Income & Expense Declaration, since the 2010 declaration stated at #9, that [Robert] experienced a change in income due to ‘deterioration of the financial services business due to current economic climate.’

“The court declined to analyze the Family Code Section 4320 factors pursuant to I[n re Marriage of] Shimkus (2016) 244 CA 4th 1262.”[5]

Robert filed a timely notice of appeal.

Discussion

“A prerequisite to modification or termination of spousal support is a material change of circumstances. [Citation.] ‘“Change of circumstances” means a reduction or increase in the supporting spouse’s ability to pay and/or an increase or decrease in the supported spouse’s needs. It includes all factors affecting need and the ability to pay.’ [Citation.] [¶] ‘The trial court has broad discretion to decide whether to modify a spousal support order. [Citation.]’ [Citation.] In exercising that discretion, the court must consider the required factors set out in section 4320. [Citation.] The court has discretion as to the weight it gives to each factor [citation], and then ‘“the ultimate decision as to amount and duration of spousal support rests within its broad discretion and will not be reversed on appeal absent an abuse of [its] discretion.” [Citation.]’ [Citation.] Failure to weigh the factors is an abuse of discretion. [Citation.]” (In re Marriage of Shimkus, supra, 224 Cal.App.4th at p. 1273, fn. omitted, italics added.)

When a court is considering a request to modify a stipulated spousal support order, whether there has been a change of circumstances depends on the parties’ intent and expectations at the time of their agreement. (In re Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1476 [“A family law court may not find a change of circumstances, however, in the reconsideration of a circumstance which has not changed since the previous order. [Citation.] Circumstances accounted for in the previous order cannot constitute a change of circumstances”]; In re Marriage of Dietz (2009) 176 Cal.App.4th 387, 398-399; In re Marriage of Aninger (1990) 220 Cal.App.3d 230, 238.)

We presume the trial court’s order is correct and when the appellate record is silent on a matter, we must indulge all intendments and presumptions that support the order. (In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 822; In re Marriage of Aninger, supra, 220 Cal.App.3d at p. 238.) We cannot, however, ignore that the court’s ruling and written findings do not specifically address any of the specific factors by express reference to Family Code section 4320. We would not presume the court considered the statutorily required factors when its actual ruling contradicts such a presumption. But, when we actually look at the court’s oral ruling and the written findings, we see that the trial court did address the relevant statutory factors.[6]

In relevant part, the trial court’s oral statement of decision reads: “Based upon the evidence that has been produced here today, the court does not find that [Robert] has met his burden to establish a change of circumstances such that the court would modify the agreed upon spousal support in this agreement. . . . [¶] . . . [¶] [The] court does not consider anything admitted here today to be a sufficient change in circumstances.” Further, the court’s written findings read as follows: “The Court finds that there is no substantial change of circumstances warranting a modification of [Robert]’s spousal support obligation, based on [Robert]’s testimony regarding the economic circumstances of his business in 2007 and at the time the stipulated judgment was signed and on comparison of [Robert]’s March 22, 2010 Income & Expense Declaration and his March 16, 2016 Income & Expense Declaration, since the 2010 declaration stated at #9, that [Robert] experienced a change in income due to ‘deterioration of the financial services business due to current economic climate.’”

What is clear from reading the oral and written findings is that the court found no change of circumstances vis-à-vis Robert’s ability to pay. That finding was supported by the evidence of Robert’s reported and testified to income in 2010 and 2016, and the evidence of the value of the business. While Robert argues on appeal that the trial court improperly refused to consider his ability to pay, the court actually found Robert’s income had not changed significantly, he had not proven an inability to work based on his health, and he had not explained why, if he was not earning enough from the business, he did not seek other employment; these findings are supported by the evidence.

Further, the trial court was considering a motion to modify spousal support based on the limited ground that Robert’s ability to pay support had decreased due to his lower income and reduction in the value of the business he was awarded in the judgment. The court adequately addressed these changed circumstances in its ruling. In the stipulated judgment, the trial court relied on the parties’ stipulation with respect to the relevant factors at that point in time—a stipulation in which the parties agreed that Robert would be obligated to pay Susan a certain amount in spousal support for a specified period of time, and that Robert would make the equalizing payment to Susan in monthly installments. In the stipulation that became part of the judgment, Susan and Robert acknowledged that their stipulated division of property might not be equal, and that the support Robert would pay to Susan might not be what would be awarded if the court were to enter an award absent the stipulation. The trial court was justified in relying on the parties’ stipulation that they had approved the division of property and spousal support award based on their understanding of their respective circumstances, and that they freely and voluntarily agreed to the judgment.

Not every factor in Family Code section 4320 was relevant to the case before the court. There is no rule that the absence of a discussion of a Family Code section 4320 factor demonstrates that the trial court failed to consider the factor; courts can “‘consider’” matters without discussing them in a written ruling. (See Gonzales v. Interinsurance Exchange (1978) 84 Cal.App.3d 58, 63.)

Furthermore, the original spousal support award was agreed to by the parties as part of the stipulated judgment. “‘[A] marital settlement agreement is a contract between the parties. [Citations.] Where the agreement permits modifications, those modifications require a showing of a change in circumstances. [Citations.] Moreover, in determining what constitutes a change in circumstances the trial court is bound to give effect to the intent and reasonable expectations of the parties as expressed in the agreement,’ and, thus, ‘the trial court’s discretion to modify the spousal support order is constrained by the terms of the marital settlement agreement.’ [Citation.]” (In re Marriage of Dietz, supra, 176 Cal.App.4th at p. 398.) In determining whether Robert showed a sufficient change in circumstances, the trial court was required to give effect to the parties’ reasonable expectations at the time they agreed to the stipulated judgment. The stipulated judgment reflects that the parties agreed the monthly spousal support to which they had agreed might be different than what the court would award after an evidentiary hearing, but that they opted in favor of a settlement anyway. The spousal support was scheduled to terminate, at the latest, less than 10 years after the judgment was entered, indicating the parties intended the support to be temporary, and would have considered that in setting the amount. And, as Robert testified, the value of the business had started to decline before the judgment was entered; that fact was part of the parties’ reasonable expectations.

Robert is correct in arguing that the termination provisions in the stipulated judgment do not make the spousal support award nonmodifiable. In this case, the trial court did consider modification of the spousal support award, but determined that Robert had failed to show a change in circumstances to justify a modification.

Robert also argues substantial uncontroverted evidence supported his request for a modification of the spousal support order, and that no reasonable judge would deny his request. Because Robert had the burden of proof on the issue of whether there was a material change of circumstances justifying a modification of the spousal support order, we could only determine a finding in Robert’s favor was compelled as a matter of law if the evidence he presented at the hearing was uncontradicted and unimpeached, and was of such a character and weight as to leave no room for a judicial determination that it was insufficient. (In re I.W. (2009) 180 Cal.App.4th 1517, 1528.) The trial court’s finding that Robert’s testimony was not credible precludes such a determination.

Any change in the value of the business, which was awarded to Robert as his separate property, does not affect Robert’s ability to pay. (In re Marriage of Dietz, supra, 176 Cal.App.4th at pp. 399-400.) Additionally, the money Susan received from sale of the house does not affect Robert’s ability to pay. The equity in the house was to be split by the parties if the house was sold after Robert lived in it for 10 years, or he would have to buy her out. (In re Marriage of Rabkin (1986) 179 Cal.App.3d 1071, 1081 [the wife’s spousal support could not be modified downward based on her receipt of “her rightful share of the community property”].)

Disposition

The postjudgment order is affirmed. Respondent to recover costs on appeal.

FYBEL, J.

WE CONCUR:

O’LEARY, P. J.

MOORE, J.