Filed 11/29/18 Marriage of Hylton CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. Chad W. Firetag, Judge. Affirmed.

Sherry Lee Collins for Appellant.

Linda K. Hylton, in pro. per, for Respondent.

The family law court entered a judgment of dissolution for the marriage of respondent Linda K. Hylton and appellant Joseph H. Hylton. The court ordered Joseph[1] to pay $800 a month in spousal support. He appeals, contending the court abused its discretion in imputing income to him, but failing to impute income to Linda based on her earning capacity, her intimate relationship with a man she was renting a room from, and income from her share of the equity in the marital home. We affirm.

I. PROCEDURAL BACKGROUND AND FACTS

A. Background Information.

Joseph and Linda married in June 1978. During the marriage, Joseph ran the family roofing business. Linda was a “homemaker” and helped in the business by running errands, answering the phone, and “do[ing] the books.” She did not have a high school diploma. The parties separated in September 2013; Joseph was 55 years old and Linda was 57. On October 8, 2013, Linda filed a petition to dissolve the marriage. Pending judgment, the court ordered Joseph to pay interim spousal support of $841 a month and issued a Gavron[2] warning to Linda. A stipulated judgment was entered on February 24, 2016 (filed Feb. 25, 2016); however, the parties reserved jurisdiction on, inter alia, permanent spousal support.

B. The Trial Testimony.

Trial on permanent spousal support took place on June 8 and September 23, 2016. Both parties submitted income and expense declarations. Joseph’s declaration filed on June 3, 2016, estimated $30,000 in income from his business for the first five months of that calendar year. His declaration filed three months later stated (1) he received Social Security disability in the amount of $1,806 a month, (2) $1,054 of his expenses were paid by others, and (3) he had a debt to the Internal Revenue Service for $12,169.08. In contrast, Linda’s declaration filed on April 7, 2017, stated she (1) had been unemployed since 2005, (2) had no high school or general education diploma,[3] and (3) had an average monthly income of $125 from housecleaning.

Joseph testified to the following: He had been employed in the roofing business for about 30 years, mostly doing small jobs. Occasionally, he hired people to help him. His income for 2011 and 2012 was $35,440 and $37,787, respectively. In 2013 and 2014, his income dropped to $15,644 and $9,491, respectively; however, in 2016 it was “a little bit better.” The parties enjoyed a middle class standard of living; Linda acquired a cosmetology license, but she was primarily a homemaker. In 2016, Joseph was diagnosed with severe and degenerative back issues, which affected his ability to work as a roofer. He applied for, and began receiving, Social Security disability benefits in the amount of $1,806 a month. Since his disability claim had been accepted, he no longer operated the roofing business. The high deposits on his bank statements reflect gross figures, not profit after accounting for costs.

Linda testified to the following: She performed domestic duties, but was also instrumental in Joseph’s business by running errands, roofing with him, helping him study for his contractor’s license, and driving him to school. About 10 years ago, the business operated at a loss, and the last few years the parties’ income was greatly reduced; however, the business was making over $80,000 a year before the parties’ separation. She had no personal knowledge as to the current state of the business. In March 2014, she moved to Raymond, California, and began renting a room in the home of her “best friend” Anthony Laymon, a former high school boyfriend. Although the two were not in a romantic relationship, they have had sex “[o]n an occasion.” She acquired a cosmetology license, but her work as a hairstylist was intermittent depending on when Joseph needed help with the roofing business. She suffers from arthritis and cannot hold scissors. She has unsuccessfully applied for “almost 40 jobs,” and a “temp agency” told her to get a high school diploma. She anticipated receiving her diploma in June 2017. Regarding her share of the equity in the marital home, she received $110,000 and had invested it.

C. Statement of Decision.

On December 9, 2016, the court issued its statement of decision, considering the factors contained in Family Code[4] section 4320, listing the evidence it had considered and its findings of fact. As relevant here, the court concluded that Linda had contributed to the success of the family roofing business; she did not possess “marketable skills that will assist her in becoming self-supporting any time soon” because she was 59 years old and had not worked for several years; she was not in a sexual, romantic, or “homemaker-companion” relationship with the person she was cohabiting with; and she should not have to drain her assets to pay her expenses. The court stated: “Based on the length of the marriage, [Joseph’s] current ability to pay based on his disability, the marital standard of living, the balance of hardships, the distribution of assets contained in the Judgment and all of the remaining factors above, the Court finds that [Joseph] shall pay [Linda] spousal support in the amount of $800.00 per month, payable one-half on the first and one-half on the fifteenth days of each month commencing January 1, 2017 and continuing thereafter until the death of either party, the remarriage of [Linda] or further order of the Court, whichever first occurs.”

D. Joseph’s Objections to the Statement of Decision.

On December 21, 2016, Joseph filed objections to the statement of decision. He claimed: (1) the court should impute some income to Linda, both from her cleaning of houses and the income earned from her share of the equity in the marital home; (2) the court may not impute income from the roofing business to him because he is receiving Social Security disability income; (3) the court erred in concluding that there was no sexual relationship between Linda and Anthony; and (4) the court did not indicate what income it used to calculate spousal support.

On April 10, 2017, the court overruled the objections.

II. DISCUSSION

A. The Appeal Should Not Be Dismissed.

Linda contends that the appeal should be dismissed because Joseph is appealing the earnings assignment order, not the judgment.

The statement of decision, filed on December 9, 2016, did not become final until April 10, 2017, when the court ruled on Joseph’s objections. (Cal. Rules of Court, rule 3.1590(k) [“The court may order a hearing on proposals or objections to a proposed statement of decision or the proposed judgment.”].) Rule 3.1590(l) requires the court to sign and file a judgment “within 50 days after the announcement or service of the tentative decision, whichever is later, or, if a hearing was held under (k), within 10 days after the hearing.” Here, the abstract of judgment was issued on February 7, 2017, prior to the hearing on Joseph’s objections, rather than “within 10 days after the hearing.” The only document filed after the hearing was the earnings assignment order filed on April 19, 2017.

Although Joseph’s June 7, 2017, notice of appeal indicates that he is appealing the earnings assignment order, the substance of his appeal concerns findings and conclusions in the statement of decision, which did not become final until April 10, 2017, when the court ruled on his objections. The statement of decision explains the basis for the court’s decision, allowing the parties to make an informed decision on whether to file an appeal. (Whittington v. McKinney (1991) 234 Cal.App.3d 123, 126-128.) Moreover, the “statement of decision is as much, or more, for the benefit of the Court of Appeal as for the parties. It ‘is our touchstone to determine whether or not the trial court’s decision is supported by the facts and the law. [Citations.]’” (In re Marriage of Sellers (2003) 110 Cal.App.4th 1007, 1010.)

Assuming for purposes of argument that Joseph should have appealed from the abstract of judgment, rather than the earnings assignment order, we will exercise our discretion and, in the interest of justice, deem his notice of appeal to have been from both the abstract of judgment issued on February 7, 2017, and the statement of decision originally filed on December 9, 2016, but not final until April 10, 2017. (Cal. Rules of Court, rule 8.104(a) [Because no party served notice of entry of judgment, the notice of appeal must be filed within 180 days after entry of judgment.].)

B. The Court Did Not Abuse Its Discretion in Setting Spousal Support.

Joseph contends the court abused its discretion in setting spousal support by imputing income to him, but not imputing income to Linda.

1. Applicable Law

“In ordering permanent spousal support, ‘the trial court must consider and weigh all of the circumstances enumerated in [section 4320], to the extent they are relevant to the case before it. [Citations.] The first of the enumerated circumstances, the marital standard of living, is relevant as a reference point against which the other statutory factors are to be weighed. [Citations.]’ [Citation.] Other relevant statutory factors include the supporting spouse’s ability to pay; the needs of each party, based on the marital standard of living; the duration of the marriage; the age and health of the parties; the balance of hardships to the parties; and the goal that the supported party be self-supporting within a reasonable period of time. [Citations.]” (In re Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1316.)

A court may substitute earning capacity for actual income in applying the guideline formulas for spousal support. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 308.) “‘“Earning capacity is composed of (1) the ability to work, including such factors as age, occupation, skills, education, health, background, work experience and qualifications; (2) the willingness to work exemplified through good faith efforts, due diligence and meaningful attempts to secure employment; and (3) an opportunity to work which means an employer who is willing to hire.”’ [Citation.]” (In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1337-1338.) We review the court’s decision to impute income to Joseph based on his earning capacity for an abuse of discretion. (In re Marriage of Destein (2001) 91 Cal.App.4th 1385, 1393.) “[W]e consider only ‘whether the court’s factual determinations are supported by substantial evidence and whether the court acted reasonably in exercising its discretion.’ [Citation.] As explained in In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 753 . . . , ‘[w]e do not substitute our own judgment for that of the trial court, but determine only if any judge reasonably could have made such an order.’” (In re Marriage of Berger (2009) 170 Cal.App.4th 1070, 1079.)

2. Analysis

a. The Court Correctly Imputed Income to Joseph for Purposes of Setting Spousal Support.

Joseph contends the court erred in imputing income to him from his roofing business for purposes of spousal support. We find no error.

In awarding spousal support, the court balanced the different factors listed in section 4320. One of those factors is Joseph’s ability to pay spousal support based on his earning capacity, earned and unearned income, and assets. (§ 4320, subd. (c).) Regarding his earned income, Joseph acknowledged a monthly income of $1,806 in Social Security disability benefits, and that $1,054 of his expenses were paid by others. His monthly income therefore was $2,860 ($1,806 [Social Security disability] & $1,054 [others]). However, his June 3, 2016 income and expense declaration showed an average monthly income from his roofing business of $2,095 for the period of January 1 through May 31, 2016. Thus, prior to receiving disability income, Joseph’s monthly income was in the range of $2,095 (assuming no expenses were paid by others)[5] to $3,149 ($2,095 [roofing business] & $1,054 [amount of expenses paid by others]). The court observed that Joseph “indicated that he has been disabled since January of 2016, but he was still running his business until during the middle of trial on the issue of spousal support.

When questioned by the Court whether he could run his business by hiring employees to do the work while he ran the operational-side of the business, he testified that he could not. However, it would seem that essentially was what he was doing between January and July of 2016.” The court concluded that he “ha[d] the present ability to pay spousal support[; however, i]t would appear that his ability to do so is diminished by his disability, but not totally removed. That is, he still has business contacts after having developed business goodwill for the last 30 years.”

Joseph faults the court for presuming he could continue to run his business, contending that to do so would result in the loss of his disability benefits. We disagree. Joseph may be disabled from manually getting on the roof and performing the job of a roofer; however, he is not disabled from running the business. In fact, that is what he did from January through May 2016, earning $2,095 a month. According to the evidence, the Social Security Administration found him to be disabled on January 29, 2016; however, he did not qualify for disability benefits until he had been disabled for five full calendar months, i.e., February through June, inclusive. Joseph began receiving disability benefits in August 2016, for July 2016. Based on his admission, during the five-month qualification period, he operated the business and received income without affecting his qualification for disability benefits.

Notwithstanding the above, Joseph contends that the court failed to state the amount of income it was imputing to him based on his roofing business. (In re Marriage of Cohn (1998) 65 Cal.App.4th 923, 931 [“Figures for earning capacity cannot be drawn from thin air; they must have some tangible evidentiary foundation.”]; Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2018) ¶ 6:455.9, p. 6-295 [“A conclusory allegation and finding to the effect that the obligor ‘could make more’ will not support an imputed income order; there must be some specific quantification, or at least a range, and the basis therefor in the record.”].) We agree. However, this is not a case where spousal support was determined based on imputed income only. As we previously stated, the court considered Joseph’s actual monthly earnings of $2,860 and concluded that he had “the ability to pay spousal support, but at a reduced rate pursuant to his current financial situation.”

Joseph testified that his income from his roofing business was as follows: $35,440 in 2011; $37,787 in 2012; $15,644 in 2013; and $9,491 in 2014. For 2016, he estimated $30,000 in income for the first five months of that calendar year. Despite this evidence, the court did not quantify, nor did it indicate it was relying upon, the amount of income that it was imputing to Joseph based on his roofing business. Considering the evidence of his actual earnings, the court did not need to impute income to Joseph because his disability income was within the range of predisability income, which supported temporary spousal support in the amount of $841 a month. Recognizing Joseph’s diminished ability to pay spousal support, the court reduced that amount $800 a month. Since Joseph’s monthly earnings changed from $3,149[6] pre-July 2016, to $2,860 thereafter, the reduction was warranted.[7]

In short, while the court did not err in imputing income to Joseph from his roofing business, it did err in failing to quantify the imputed amount. However, the error does not warrant reversal or remand for clarification since Joseph’s actual earnings, which are quantifiable, support the spousal support award.

b. The Court Did Not Err in Choosing Not to Impute Income to Linda.

Joseph contends the court erred in not imputing income to Linda based on her earning capacity, intimate relationship with a man she was renting a room from, and income from her share of the equity in the marital home. We find no error.

Joseph argues that the court erred in failing to impute a minimum wage income to Linda given her failure to obtain a high school diploma and diligently seek work for over three years following the court’s Gavron warning. We disagree. Linda presented evidence that she had been trying to find a job; however, in addition to her lack of a high school diploma, she was 59 years old and in poor health. Her job skills were further limited based on her primary role as a homemaker during her 35 years of marriage to Joseph. While she had acquired a cosmetology license, she suffered from arthritis in her hands, preventing her from holding scissors. She applied to nearly 40 jobs but had not been hired. A “temp agency” advised her to get her high school diploma. Because there is evidence to support a finding that Linda was not simply choosing to be voluntarily unemployed, we cannot conclude that the court abused its discretion in declining to impute income to her. (See In re Marriage of McLain (2017) 7 Cal.App.5th 262, 270-272 [family court does not abuse its discretion regarding spousal support by considering, and affording greater weight to, the age of parties in their ability to obtain employment].)

Next, Joseph claims that because Linda admitted that she had engaged in sexual activity with Anthony Laymon, whom she lived with and considered her best friend, “there is no disputing that the relationship between [the two] goes well beyond a boarding arrangement, and qualifies as cohabitation under Section 4323.” We disagree.

Section 4323, subdivision (a)(1), provides, in part: “Except as otherwise agreed to by the parties in writing, there is a rebuttable presumption, affecting the burden of proof, of decreased need for spousal support if the supported party is cohabiting with a nonmarital partner.” To determine whether the supported spouse’s cohabitation with another is sufficient to trigger this presumption, courts consider the personal, financial, and residential aspects of the parties’ relationship. The question is whether the parties are involved in a committed personal relationship, whether it is sexual, romantic, or homemaker-companion. (In re Marriage of Thweatt (1979) 96 Cal.App.3d 530, 535.)

Here, in finding that Linda was renting a room from her friend and “not cohabitating with him,” the court observed that “there was no evidence of any physical or sexual relationship between [Linda] and her friend.” Technically speaking, the court was correct in its observation. While Linda admitted to occasionally having sex with Mr. Laymon, such admission did not equate to the two engaging in a sexual relationship. Rather, the two were merely “friends with benefits” absent other evidence of a committed personal relationship. The record therefore supports the court’s determination that cohabitation had not been proved.

Finally, Joseph claims the court erred in declining to impute income to Linda from the $110,000 that she received for her share of the equity in the family home. We disagree.

In determining spousal support, a court considers the “obligations and assets” of each party, along with the “balance of the hardships” to each party. (§ 4320, subds. (e) & (k).) Here, the trial court considered such factors and found that Linda “should not be required to drain her assets simply to pay her expenses.” The court noted that Linda received $110,000 from her share of the equity in the family home, adding that “the share of the net equity of the home was not a gift to [Linda], it was rightfully her property.” The court recognized and considered that Linda was “struggling to make ends meet” and “in order to live she relocated to live with her friend as she struggled financially while living in Southern California.” In contrast, Joseph had “been able to provide for himself post-separation.”

All things considered (including evidence that Linda was a 59-year-old former homemaker with limited job skills and no high school diploma), the court’s refusal to impute income to Linda from her share of the equity in the family home did not amount to an abuse of discretion.

III. DISPOSITION

The judgment is affirmed. Linda is awarded costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

McKINSTER

J.

We concur:

RAMIREZ

P. J.

FIELDS

J.