Filed 12/20/18 Miguel v. Yue CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

Joseph Miguel has filed consolidated appeals from two orders concerning his duty to pay child support to his ex-wife Katie Yue. One appeal challenges a 2016 order that denied Miguel’s motion to reduce the amount of support based on a reduction in his income and increase in Yue’s income. The second appeal challenges two 2017 orders, one approving a stipulated agreement to adjust the support level and the other quashing a subpoena for Yue’s financial records. We conclude that the 2016 order, although applying to only a limited time period, must be reversed and remanded because the trial court failed to address Miguel’s argument that his support for the period in question should be reduced because Yue’s income had increased. We find no error in the 2017 orders.[1]

1. The 2016 Order

The proceedings

When this proceeding began in 2005, the couple had two small children. The 2008 judgment of dissolution required Miguel to pay child support.

In May 2015, Miguel suffered an injury that allegedly left him unable to perform his job, leading him to move to reduce his child support obligation. On September 1, 2015, the day before a hearing on his motion, Yue filed an income-and-expense (I&E) declaration stating that her income was $0.

After a hearing at which Miguel offered evidence that he was receiving disability benefits equal to 60 percent of his prior earnings The order directed each party to inform the other “immediately” of any change in income. At the hearing, Yue told the court that she had a job offer, and a background check was underway.

On March 9, 2016, Miguel filed a motion to further reduce the amount of support. His supporting declaration stated that he was no longer receiving disability payments or a paycheck, was unemployed, and was subject to work restrictions limiting his computer use. His declaration also noted that Yue was not complying with the order to document her attempts to find work, and he requested that the court impute income to her.

At an April 2016 hearing about custody issues before a different judicial officer, Miguel’s counsel attempted to raise the child support issues but the court stated that those matters would be continued to another department and that the eventual ruling would be retroactive to March 9, 2016. Nonetheless, the court inquired into the parties’ finances. Yue advised the court that she “actually found some part-time jobs, contracted works, and it’s ended already.” Yue told the court that her part-time work “averages about a couple thousand a month” before deducting taxes.

In June 2016 a third judicial officer ruled on the motion to modify. When the court asked what change in circumstances warranted a reduction in support, Miguel’s counsel stated that Miguel had received disability benefits equal to 60 percent of his salary for several months, but the payments had ended in November 2015, and he was “on leave without pay . . . as a non-active employee.” Counsel also discussed his recent receipt of unemployment benefits.

The court asked if Miguel wanted to raise any other changed circumstances, and his counsel noted that Yue had “admitted at the last court hearing that she had received work[],” adding that she had “refused to turn over pay stubs [or information about] that work.” The attorney reiterated that “she has obtained unemployment [sic].^[[2]] She admitted it at the prior hearing. She indicates her income is [$]2,000. I don’t know if that’s net or gross . . . . She’s refused to turn [the records] over.” The Court stated that, in reading Miguel’s motion to modify, it had been unsure of the basis for the request. Miguel’s counsel replied, “[H]is income—he was receiving 60 percent. He’s no longer receiving it is the first basis. [¶] The second basis is that they’ll discover in the hearing, however, is [Yue] has obtained unemployment.” (Ante, fn. 2.)

The court stated that Miguel needed to quantify how the alleged change in circumstances “affects the bottom line,” and his counsel offered a proposed DissoMaster. After a recess, the court identified earnings as “the biggest piece of the puzzle” and questioned Miguel’s attorney about his earnings and leave from work. Counsel offered evidence that the leave was without pay, but the court found the evidence inadequate. Counsel asked if he could elicit the information from Miguel under oath, but the court declined, stating that it had “spent an inordinate amount of time this morning giving you the opportunity to present evidence of a change in circumstances.” The court stated that Miguel had not shown “a change in circumstances that affects the bottom line child support,” and that the motion was denied.

Miguel’s counsel then asked the court, “[M]ay I request before that [ruling] is made final that I bring up another fact?” leading to this exchange: “The court: You want to bring up another fact now? [Counsel]: One that I tried to address, it was addressed at the original [hearing]. The court: If you’ve already tried to address it, you’ve done so adequately. The request is denied. [¶] Thank you. There’s nothing further that needs to be said.” The court later entered a written order denying Miguel’s request for modification, and he timely appealed.

On July 18, 2016, Miguel filed another motion to modify child support. The court eventually issued an order reducing the support level retroactive to that date. As a result, the order on appeal affected only the amount of support Miguel owed from March 9 through July 17, 2016.

Analysis

“An order of child support ‘may be modified . . . at any time as the court determines to be necessary.’ ” (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556, quoting § 3651, subd. (a).[3]) The code “ ‘require[s] a party to introduce admissible evidence of changed circumstances as a necessary predicate for modification.’ [Citations.] The burden of proof to establish that changed circumstances warrant a downward adjustment in child support rests with the supporting spouse. [Citation.] [¶] ‘Ordinarily, a factual change of circumstances is required . . . (e.g., increase or decrease in either party’s income available to pay child support).’ [Citation.] . . . The ultimate determination of whether the . . . facts warrant modification . . . is within the discretion of the trial court.” (Ibid.)

Miguel contends that the court abused its discretion at the June 2016 hearing by finding that he had not proven a reduction in his income warranting a modification, and by failing to consider whether Yue’s income from her employment justified a reduction in the amount of his support obligation. We question whether the court properly rejected Miguel’s efforts to establish the reduction of his income, but in all events it is clear that the court’s failure to consider the effect of Yue’s admitted income on his support obligation was arbitrary and requires reversal. A parent may base a request to modify child support on “ ‘an increase or decrease in either party’s income available to pay child support.’ ” (In re Marriage of Leonard, supra, 119 Cal.App.4th at p. 556.) By denying the motion without considering one of its two clearly stated bases, the trial court abused its discretion. (See, e.g., Keenan v. Superior Court (1982) 31 Cal.3d 424, 434 [trial court abused discretion in failing to address reasons advanced in support of motion]; In re Marriage of Kern (1978) 87 Cal.App.3d 402, 411 [because trial court did not apply proper legal standard and did not consider all available evidence in making custody determination, “an abuse of discretion must be said to exist as a matter of law”].)

Thus, the order of August 1, 2016, denying the motion filed on March 9, 2016, must be vacated and the matter remanded for the court to reconsider the amount of Miguel’s child support obligation for the period of March 9 through July 17, 2016, taking into account Yue’s income during that period as well as any reduction in Miguel’s income.

2. The 2017 Orders

The Proceedings

In September 2017, the court held a hearing on issues related to child support, including requests by both parties to modify the amount and a motion by Yue to quash a subpoena for records of her income. After argument on many aspects of the parties’ finances and the court’s indication that it would continue the hearing to permit Miguel to provide more information, Yue and Miguel negotiated an agreement for the court to impute income to each of them and base support on such income. With the assistance of counsel for the Department of Child Support Services (DCSS), the parties calculated the support due, given the agreed-upon levels of imputed income.

After a recess, DCSS counsel outlined an agreement the parties had reached on a monthly support level, a schedule for paying arrearages, and other issues. The court asked Miguel, “Are you prepared to enter into this agreement, if I am prepared to make an order that [Yue] provide an updated income-and-expense declaration, along with recent paystubs?” He answered, “Yep. Yes, sir.” The court recited the agreement and stated, “It is an order based on stipulation of the parties, which is why, although it’s a DissoMaster-run guideline support order, it includes some aspects in the inputs that may or may not be true, to be perfectly frank. . . . [I]t’s a reflection of a stipulation of both parties. [¶] With that in mind, [Yue’s] motion to quash the subpoena [is] granted.”

An order after hearing was filed on October 25, 2017 (although the order is not in the record on appeal).

Analysis

Although the order after the September 2017 hearing approved a stipulated agreement to resolve the parties’ disputes about child support, Miguel appeals from that order and from the related order quashing his subpoena for Yue’s financial records.

Miguel’s argument as to why the court erred in approving the stipulated agreement is as follows: Yue had not filed a “legitimate I&E [declaration]” for many months before the hearing; the Family Code bars a court from entering judgment in a dissolution proceeding unless the parties have disclosed their income and expenses; parties cannot stipulate to waive the right to such disclosure unless the waiver includes five specific representations that were not made here; and, if parties have neither complied with nor validly waived the disclosure requirement, the entry of judgment cannot constitute harmless error. (§ 2105, subds. (a) & (d); § 2107, subd. (d).)

This argument fails because the provisions on which Miguel relies apply only to the entry of a judgment of dissolution—as occurred here in 2008—and not to the entry of a postjudgment order modifying child support.

The provisions Miguel cites appear in the “Disclosure of Assets and Liabilities” chapter of the division of the Family Code governing dissolution. (§§ 2100–2113) That chapter requires parties to dissolution proceedings to serve preliminary and final declarations of disclosure, and I&E declarations, at specific times. (§ 2103.) Section 2104 requires service of preliminary declarations early in a proceeding. (§ 2104, subd. (f).) Section 2105 requires final declarations of disclosure and current I&E declarations “before or at the time the parties enter into an agreement for the resolution of property or support issues . . . or, if the case goes to trial, no later than 45 days before [trial].” (§ 2105, subd. (a).) Parties can stipulate to waive the right to final declarations, but only if they make five specific representations in writing or in open court. (Id., subd. (d).) With some exceptions, a court cannot enter a judgment regarding the parties’ property rights unless each party satisfies section 2105. (§ 2106) A judgment entered in violation of that rule must be set aside; its entry “does not constitute harmless error.” (§ 2107, subd. (d).[4])

Because this dissolution proceeding began in 2005, these provisions were triggered years ago. Indeed, the 2008 judgment of dissolution includes a “Waiver of Final Declaration of Disclosure” meant to satisfy section 2105. Since the marriage has been dissolved by a judgment imposing the duty to pay child support, modifications of that duty are not subject to the provisions Miguel cites, but to the provisions in another chapter of another division of the Family Code. (§§ 3650–3693 [modification, termination, or set aside of support orders].) That chapter does not impose special requirements for a waiver of the right to a current I&E declaration, or state that the absence of such a declaration invalidates an order modifying support. (Compare §§ 3650–3693 with §§ 2105–2107.)

The trial court thus did not violate any applicable statute in approving the parties’ stipulated agreement to modify the child support order. Miguel was well aware, in entering that agreement, that Yue had not provided a current I&E declaration. Indeed, he insisted on including in the order approving the agreement a provision requiring Yue to provide an updated I&E declaration. Although he asserts that she has not complied with that provision, her failure to comply, if any, does not render the order invalid.

Miguel also argues that the court erred in quashing his subpoena for documents relevant to Yue’s income. He complains that “no justification was given” for that order, but the justification was obvious. The court had just approved a stipulated agreement to resolve the underlying dispute and had included in its order a requirement that Yue “update her [I&E] declaration and provide the two most recent paystubs to [Miguel] . . . within two weeks . . . .” The order thus made compliance with the subpoena doubly unnecessary: It resolved the underlying dispute, and it required Yue to provide the information sought. Accordingly, the court did not abuse its discretion in quashing the subpoena. Whether Yue has since complied with the order to provide financial information is not an issue now before us.

Disposition

The order of August 1, 2016, denying the motion filed on March 9, 2016, is reversed and the matter remanded for reconsideration of the amount of Miguel’s child support obligation for the period of March 9 through July 17, 2016. The orders entered following the September 2017 hearing are affirmed.

POLLAK, P.J.

We concur:

STREETER, J.

LEE, J.*