O'Grady v. Superior Court

Filed 5/26/06

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

            APPEAL from an order of the Superior Court of San Diego County, Thomas C. Hendrix, Judge.  Affirmed.

            Bruce M. Beals for Appellant.

            C. Greg Shaughnessy, in pro. per.; Feuerstein & Murphy, Richard P. Feuerstein; and Stephen Temko for Respondent.

Story continue from Part I ……….

Michelle contends that a trial court may not consider monetary gifts to a supported spouse in considering whether to modify a spousal support award.

            In April 2003, the trial court made no findings pertaining to any monetary gifts to Michelle.  In 2005, the trial court found that Michelle's parents gave her $20,000 per year.^[1] 

            There is no provision in the Family Code that expressly addresses whether a trial court may consider monetary gifts in awarding spousal support.^[2]  However, section 4320, subdivision (n), directs trial courts to consider " any other factors the court determines are just and equitable" in awarding spousal support. 

            In In re Marriage of Smith  (1990) 225 Cal.App.3d 469, 480-482, the court explained that equitable considerations are paramount in fashioning spousal support awards:

" Some members of the bench and bar have been critical of the Legislature, contending it has failed to specify the purpose of spousal support.  This criticism is unjustified and demonstrates a lack of understanding about why the Legislature and appellate decisions have vested trial courts with such broad discretion to decide this issue, whether at trial or upon a later request for modification or termination.  The purposes of spousal support inevitably vary from case to case, depending upon the parties and the facts and circumstances of the case.

" In other words, the purpose of spousal support cannot be defined by the Legislature; it is a determination to be made by the trial court in each case before it, based upon the facts and equities of that case, weighing each of the circumstances or guidelines specified by the Legislature in [former] section 4801, subdivision (a) [current section 4320], which are applicable to that case, as well as those specified by appropriate appellate case law.  In making its order on the issue of spousal support, it is essential that the trial court possess broad discretion in order to fairly exercise the weighing process contemplated by [former] section 4801, subdivision (a), with the goal of accomplishing substantial justice for the parties in the case before the court.  The issue of spousal support, including its purpose, is one which is truly personal to the parties. 

" Equitable considerations are the most significant factor in these cases.  The Legislature and the appellate courts specify guidelines which must be considered by trial courts in deciding spousal support issues, but in the final analysis trial courts must possess broad discretion to decide the applicability and weight of these guidelines as they apply to the facts and equities of each case."

            The express provision in section 4320, subdivision (n) that a trial court is to consider any factors the court determines are just and equitable in awarding spousal support, the underlying purpose of California's spousal support statutes as outlined by the Smith court, and the absence of a specific provision on the issue, all support the conclusion that there is no per se rule precluding a trial court's considering monetary gifts a supported spouse may receive, in determining spousal support.

            The parties have not cited, and our independent research has not uncovered, any California case that specifically addresses whether a trial court may consider monetary gifts to a supported spouse in determining spousal support.  Michelle relies on In re Marriage of McQuoid  (1991) 9 Cal.App.4th 1353 (McQuoid) for the proposition that " [t]he court should not expect Michelle's parents to supplement her monthly living expenses as a replacement for spousal support."   In McQuoid, the court addressed whether the trial court erred in determining the supported spouse's needs for purposes of awarding spousal support when, in setting the amount of spousal support, it considered expenses that the supported spouse did not actually incur:

" Husband argues that wife's nursing income is adequate to meet 'basic living costs.'  He maintains that her expense claim is inflated because it includes 'desirable' costs as well as 'necessary' ones.  He apparently refers to the fact that wife's expense declaration estimated rent payments of $850 a month, although she was admittedly paying far less because she and her daughters were living in the home of wife's mother who was also providing free child care.  Husband's argument apparently is since his mother-in-law is subsidizing his wife and children's living expenses he has no support obligation for the value of that subsidy.  He misconstrues the law.

" In awarding spousal support the court is obliged to consider a number of factors including '[t]he needs of each party based on the standard of living established during the marriage.'  ([Former] §  4801 [current §  4320, subd. (d)].)  Reasonable rent and child care costs were appropriately considered in determining wife's monthly expenses."   (Id. at p. 1360.)

            The McQuoid court did not address the issue presented in this case, namely, whether a trial court is precluded from considering monetary gifts to the supported spouse in awarding spousal support.  Rather, the McQuoid court held that the trial court had not abused it discretion in considering certain expenses that the supported spouse had not actually incurred in determining one of the statutory factors (§  4320, subd. (d)) a trial court must consider in awarding spousal support.  The McQuoid court did not address whether a trial court could properly consider the value of the in kind contributions pursuant to section 4320, subdivision (n)'s requirement that a court consider, " [a]ny other factors the court determines are just and equitable."

            In In re Marriage of Loh (2001) 93 Cal.App.4th 325 (Loh), the court determined that a trial court could consider in kind contributions in setting child support pursuant to section 4057, subdivision (b)(5), which authorizes a trial court to award an amount of child support other than that calculated by use of the guideline formula provided in section 4055 when " [a]pplication of the formula would be unjust or inappropriate due to special circumstances in the particular case."   (§  4057, subd. (b)(5); see Loh, supra, 93 Cal.App.4th at p. 335.)  Both section 4057, subdivision (b)(5) and section 4320, subdivision (n) are " catch-all" provisions that clarify the court's authority to

consider special circumstances in a particular case in determining child support (§  4057, subd. (b)(5)) and spousal support (§  4320, subd. (n)).  (Hogoboom and King, Cal. Practice Guide: Family Law (The Rutter Group 2005) (hereafter Hogoboom and King) ¶  6:261, p. 6-116.6 [section 4057, subdivision (b)(5) is a " catch-all" provision], ¶  6:927, p.  6-338 [section 4320, subdivision (n) is a " catch-all" provision].)

            There is more reason to conclude that a trial court may consider gifts in setting spousal support than in setting child support, because the purpose of spousal support varies on a case by case basis while " [t]he overriding policy behind the child support statutes is to assure that children share in their parents' standard of living and have adequate support."   (In re Marriage of Cheriton  (2001) 92 Cal.App.4th 269, 312.)  Unlike child support, which courts generally calculate in accordance with the mathematical formula set forth in the mandatory guidelines (id. at p. 284), in awarding spousal support, a trial court has broad discretion in weighing numerous statutory factors.  (Id. at p.  283.)  If a trial court has the authority to consider gifts made to a spouse in determining child support, it follows that a trial court may consider gifts when exercising its broader discretion in fashioning an award of spousal support.^[3]

            In holding that a trial court may exercise its discretion to consider third party gifts to a supported spouse in determining a spousal support award, we emphasize that we do not hold that the trial court must mechanically decrease a supported spouse's award by the amount of any gifts received, or even that the trial court should in every case consider such gifts in determining the appropriate level of support.  Rather, we hold only that it is within the trial court's broad discretion to consider evidence of monetary gifts as one factor, together with evidence pertaining to all of the other section 4320 factors, in determining the appropriate spousal support award.^[4]

            c.         The court determined that Michelle's benign tumor would not affect

                        her ability to become self-supporting

            New information concerning Michelle's health constituted a change of circumstances supporting the court's modification of the spousal support award.

            Section 4320, subdivision (k) provides that the court must consider the health of the parties in ordering spousal support.  (See, e.g., In re Marriage of Brantner  (1977) 67 Cal.App.3d 416, 417  [concluding trial court abused its discretion in reducing spousal support in view of, among other factors, the possibility the former spouse might become blind in the near future].)

            In its original judgment, the trial court noted that Michelle's earning capacity was not sufficient to meet her needs because, among other reasons, the court was unable to determine the effect her health might have on her in the future.  At the hearing on which the initial support order was based, the court stated:

" As far as the age and health of the parties  .  .  .  .  [¶] As far as [Michelle], there was significant evidence submitted that she has depression, which the Court does not feel is going to interfere with her ability to gain employment.  However, she does also have a benign tumor, which requires her to maintain medication.  And that is her ─ her health is an unknown factor, therefore, and as far as the effect it will have on her in the future and also the effect it will have on her ─ on her ability to obtain health insurance to be insured."

            In the April 2005 order modifying the original support order, the trial court concluded that Michelle's benign tumor did not affect her ability to become self-supporting.  This finding was supported by the findings of Dr. Jeffrey Sandler, who performed the independent medical examination of Michelle.  In a letter dated December 14, 2004, Sandler stated that Michelle was able to work on a full time basis and that she had no current work restrictions.  Sandler did not anticipate that there would be any change in Michelle's physical condition in the future that would affect her ability to work.

            Thus, while in 2003, the court was " unable to determine" the effect the tumor would have on Michelle's ability to work, by April 2005, the court had sufficient information to determine that Michelle's tumor would not affect her ability to become self-supporting.  The trial court's April 2005 finding concerning Michelle's health constituted a change of circumstances supporting the court's  modification of spousal support.  (Compare Hogoboom and King, supra, at ¶  6:921, p. 6-332 [" it may be error to set a fixed termination date where the supported party  .  .  .  has unresolved medical or psychiatric problems requiring further treatment]" .)

            3.         In view of the changed circumstances, the trial court did not abuse its

                        discretion in weighing the section 4320 factors

            In weighing the section 4320 factors in light of the changed circumstances, the trial court could have reasonably concluded that a modification of the prior spousal support award was warranted.  By the time of the 2005 hearing on Greg's OSC, Greg had been paying spousal support for nearly 10 years.  Michelle was still relatively young at 46  years of age, was working and continued to be employable, and was receiving $20,000 per year from her parents.  She had failed to diligently seek to obtain retraining or to otherwise become self-supporting, as required by the terms of the prior spousal support award.  In addition, Michelle owned investments valued at $500,000.  Michelle notes that since the time of the initial support order, her yearly health care expenses had increased by approximately $6,000 and Greg's yearly earnings had increased by approximately $10,000.  However, we conclude that the trial court did not abuse its discretion by failing to consider these facts.  Rather, the court considered this information together with all of the other section 4320 factors in modifying the April 2003 spousal support award.  This was not an abuse of discretion.

C.        The trial court did not abuse its discretion in finding that Michelle would be

            sufficiently self-supporting by the dates the court set for the reduction and

            termination of support

            Michelle claims the trial court abused its discretion in finding that she would be sufficiently self-supporting by the dates the court set for the reduction and termination of support.

            1.         Applicable law

            In In re Marriage of Morrison  (1978) 20 Cal.3d 437, 453 (Morrison), the California Supreme Court held that courts should be reticent about terminating support in lengthy marriages:

" A trial court should not terminate jurisdiction to extend a future support order after a lengthy marriage, unless the record clearly indicates that the supported spouse will be able to adequately meet his or her financial needs at the time selected for termination of jurisdiction.  In making its decision concerning the retention of jurisdiction, the court must rely only on the evidence in the record and the reasonable inferences to be drawn therefrom.  It must not engage in speculation.  If the record does not contain evidence of the supported spouse's ability to meet his or her future needs, the court should not 'burn its bridges' and fail to retain jurisdiction. [Citation.]"

            However, the Morrison court emphasized that this standard does not require that a trial court retain jurisdiction in every case involving a lengthy marriage, particularly where the supported spouse is employed:

" These standards will not require a trial court to retain jurisdiction in every case involving a lengthy marriage.  In some instances the record will indicate that both spouses are employed, an increasingly prevalent situation today, or that there are sufficient assets available to enable each to provide for his or her needs.  In that event, no support or support for only a limited time, without a retention of jurisdiction, would be appropriate.  [Citation.]  Where jurisdiction has been retained in the original order, future modification hearings may well reveal that the supported spouse has found adequate employment, has delayed seeking employment, or has refused available employment. At that time, the court may appropriately consider such factors in deciding whether or not to modify its original order."   (Morrison, supra, 20 Cal.3d at p. 453.)

          " If the court feels the evidence justifies an order terminating jurisdiction at a future date, but is concerned about unforeseeable circumstances which might arise prior to that date, the proper approach would be to issue the kind of order approved by In re Marriage of Richmond (1980) 105 Cal.App.3d 352; what has become known as a " Richmond" order."   (In re Marriage of Prietsch & Calhoun  (1987)  190 Cal.App.3d 645, 665  (Prietsch).  The Prietsch court described the use of a " Richmond" order as follows:

" In order to avoid the Morrison prohibition against the trial court burning its bridges by fixing a definite date in the future at which time jurisdiction over spousal support will terminate, the court in a 'Richmond' order retains jurisdiction to modify both the amount and term for jurisdiction over spousal support conditioned upon the supported spouse, prior to the date set for termination of jurisdiction, filing a motion and showing good cause why the order should be modified either as to amount or term of jurisdiction, or both.

" The effect of a 'Richmond' order is to tell each spouse that the supported spouse has a specified period of time to become self-supporting, after which the obligation of the supporting spouse will cease."   (Prietsch, supra, 190 Cal.App.3d at p. 665.)

            " [A] 'Richmond' order is the most appropriate form of order for spousal support in all cases except (1) where spousal support is either not ordered, or is ordered for a fixed term of short duration, (2) in the most lengthy marriages where the circumstances justify truly " permanent" spousal support, or (3) where the supported spouse does not possess the capacity to become self-sufficient."   (Prietsch, supra, 190 Cal.App.3d at p. 665.)

          Trial courts have broad discretion in determining the meaning of " self-supporting" in any particular case.  Although in general, the meaning of the term self-supporting is achieving the martial standard of living (see Hogoboom and King, supra, at ¶  6:926.1, p.  6-336), the concept of the marital standard of living is itself often quite broad.  Further, courts have held that the goal of achieving the marital standard of living may decrease in relative importance over time.  (See In re Marriage of Rising (1999) 76 Cal.App.4th 472, 479, fn. 9 [concluding trial court did not abuse its discretion in determining, 13 years after the dissolution, that " it was not necessary (or appropriate) to award wife the amount of support required to allow her to maintain the marital standard of living" ].)  Finally, although the marital standard of living is an important factor in determining spousal support, it is not the only factor, and its importance in determining whether it is " just and reasonable" (§  4330) to award spousal support will vary based on the court's evaluation of the section 4320 factors.

            In this case, the trial court could reasonably have found that Michelle had the immediate capacity to earn $30,000 per year, and that if she had opted for retraining as she was directed to do in 2003, her earnings would likely exceed $30,000 per year in the future.  In addition, the trial court was presented with new information that Michelle had been receiving $20,000 per year from her parents, that she owned liquid assets with a value of approximately $517,000 and that the equity in her house exceeded $400,000.  Further, by the time the court entered its order reducing and then terminating spousal support, Michelle had been receiving spousal support for approximately 10  years.

            The trial court could have reasonably concluded that in view of all of these circumstances, Michelle could become, and should become, sufficiently self-supporting within the dates the court set for the reduction and termination of spousal support.  Further, in view of the fact that the date for termination of spousal support was approximately 11 years after the date of separation, the court could reasonably conclude that achieving the martial standard of living was at this point in time deserving of less weight in balancing the section 4320 factors.  (See In re Marriage of Rising, supra, 76 Cal.App.4th at p.  479, fn.  9.)

D.        The trial court provided Michelle with adequate notice of her obligation to

            attempt to become self-supporting

            Michelle claims the trial court abused its discretion by ordering support reduced and then terminated without providing her with adequate notice of her obligation to attempt to become self-supporting.

            In In re Marriage of Gavron (1988) 203 Cal.App.3d 705, 712 (Gavron), the Court of Appeal concluded that the trial court erred in reducing a party's spousal support from $1,100 per month to $0 after a 25-year marriage and approximately eight years of support, where " the record d[id] not indicate that th[e] unemployed 57-year-old wife had any prior awareness that the court would require her to become self-sufficient."   The Gavron court held that a supported spouse must be made aware of the court's expectation that the spouse will attempt to become self-supporting:

" Inherent in the concept that the supported spouse's failure to at least make good-faith efforts to become self-sufficient can constitute a change in circumstances which could warrant a modification in spousal support is the premise that the supported spouse be made aware of the obligation to become self-supporting.  It is particularly appropriate here that there should have been some reasonable advance warning that after an appropriate period of time the supported spouse was expected to become self-sufficient or face onerous legal and financial consequences.  .  .  .  For example, there may be an explicit statement by the court at the time of its original support order regarding employment expectations of the supported spouse [citation]  .  .  .  ."   (Ibid.)

            In the court's original judgment in this case, the court checked a box indicating the applicability of the following provision:

" NOTICE: It is the goal of this state that each party shall make reasonable good faith efforts to become self-supporting as provided for in Family Code section 4320.  The failure to make reasonable good faith efforts may be one of the factors considered by the court as a basis for modifying or terminating spousal support."

            Further, the court's April 2003 judgment states:

" 2.  The court finds that [Michelle's] earning capacity is not sufficient to meet her needs for the following reasons:

" a.  [Michelle] does not possess marketable employment skills for the current job market.  [Michelle] has a journalism degree, however, she has been a florist during most of the marriage.  [Michelle] needs to be retrained and obtain computer skills.

[¶]  .  .  .  [¶]

" j.  The requirement that parties should be self-supporting after one-half the length of the marriage does not apply to a marriage of long duration.  [Michelle] began to realize one year ago she needs marketable skills and needs to look at retraining options."

            In addition, at the February 2003 hearing on which the original judgment was based, the court stated:

" Well, in this situation we have a marriage of long duration.  So at a minimum, we'd be looking at seven years as a sort of starting off point as far as a reasonable period of time to begin to be self-supporting  .  .  .  . [Michelle] began to realize that the floral business that she was generating was not going to be a long-term answer for her economic needs.  And she now recognizes that she needs new marketable skills and is beginning to or should begin to look into further retraining in that regard."

            The court's statements at the February 2003 hearing and in its original judgment, provided Michelle with notice that the court expected her to become self-supporting.  The court referred to the statutory goal that former spouses become self-supporting and noted that Michelle would require retraining in order to achieve that goal.  The court thus clearly communicated to Michelle its expectation that she would attempt to become self-supporting.  Further, Michelle was significantly younger than the supported spouse in Gavron and was working at the time the court made its original support award and Greg had been paying support for 10 years after a 15-year marriage, while the husband in Gavron had been paying support for eight years after a 25-year marriage.

            Although the marriage in this case was a lengthy one, that fact alone does not justify an unlimited spousal support award.  In the absence of circumstances demonstrating that a spouse is incapable of becoming self-supporting, a person in Michelle's position cannot reasonably expect to receive spousal support indefinitely.  Rather, the spouse should expect to be required to become self-supporting within a reasonable period of time.  As noted above, Michelle was a college educated 35 year old at the time she and Greg separated, and had no children from their marriage.  She has had nearly 11 years since their separation to pursue more lucrative employment, but has failed to do so.  Under these circumstances, receiving support for more than 10 years after a 15-year marriage, as Michelle has, is more than reasonable. 

IV.

DISPOSITION

            The order is affirmed.  Respondent is entitled to costs on appeal.

CERTIFIED FOR PUBLICATION

AARON, J.

WE CONCUR:

                            McCONNELL, P. J.

                                           NARES, J.

Publication courtesy of California free legal advice.

Analysis and review provided by Carlsbad Apartment Manager Attorneys.

^[1]           Although the record is not entirely clear as to the number of years Michelle's parents had been making these gifts, Michelle raises no claim with respect to the court's factual finding that she " is gifted $20,000 per year from her parents."   Further, Michelle acknowledges in her brief that she " confirmed receiving gift income from her parents" in the trial court.

^[2]           When the Legislature intends to preclude a trial court from considering certain types of income in determining spousal support, it has done so expressly.  For example, section 4323, subdivision (b) provides, " The income of a supporting spouse's subsequent spouse or nonmarital partner shall not be considered when determining or modifying spousal support."   The absence of such an exception with respect to monetary gifts suggests that a trial court is not precluded from considering such gifts in determining a spousal support award.  (See Moncharsh v. Heily & Blase  (1992) 3 Cal.4th 1, 26 [" '" 'Where a statute, with reference to one subject contains a given provision, the omission of such provision from a similar statute concerning a related subject  .  .  .  is significant to show that a different intention existed.'"   [Citation.]'  [Citation]" ].)

^[3]           In re Marriage of Schulze  (1997) 60 Cal.App.4th 519 (Schulze), on which Michelle relies, is not to the contrary.  In Schulze the court stated, in dicta, " Gifts are not mentioned in section 4058, and, judging from the use of language lifted straight from the Internal Revenue Code, should logically be outside the purview of the child support statute."   (Schulze, supra, 60 Cal.App.4th at p. 529.)  However, the Schulze court also noted, " Because the record here is susceptible of the finding that the condominium subsidy and the use of the Mercedes were both employment perquisites and therefore within section 4058, we are spared the problem of whether they still might be used as factors to increase support even if they were gifts outside section 4058."   (Id. at p. 530, fn. 10.)  In Loh, Presiding Justice Sills, the author of both Schulze and Loh, explained that courts may consider such in kind contributions in awarding child support pursuant to section 4057.  (Loh, supra, 93 Cal.App.4th at p. 335.)

^[4]           Although Michelle contends that the trial court abused its discretion in weighing all of the section 4320 factors, an argument we reject in part III.B.3, post, her sole argument with specific reference to the monetary gifts she receives from her parents is that such gifts are " not an appropriate consideration in modifying support."   We reject this broad proposition for the reasons stated in the body of the opinion.