O'Grady v. Superior Court
Filed 5/26/06
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
In re the Marriage of C. GREG and MICHELLE SHAUGHNESSY. | |
C. GREG SHAUGHNESSY, Respondent, v. MICHELLE SHAUGHNESSY, Appellant. | D046465 (Super. Ct. No. D460893) |
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.
I.
INTRODUCTION
Michelle Shaughnessy (Michelle) appeals from a postjudgment order entered on April 14, 2005, modifying a 2003 judgment that required her former husband, C. Greg Shaughnessy (Greg), to pay her spousal support. Michelle and Greg were married for 15 years and had no children. At the time they separated in March 1995, Michelle was 35 years old. By 2005, Greg had been paying Michelle spousal support for nearly 10 years, supplementing her income as a self-employed florist. In the 2005 order modifying the judgment, the trial court ordered that the amount of spousal support be reduced from $2,000 per month to $1,000 per month beginning January 1, 2006, and that support terminate on June 30, 2006, unless Michelle demonstrates a compelling reason to extend the period of support.
On appeal, Michelle claims the trial court abused its discretion in ordering that spousal support be reduced and then terminated. Specifically, Michelle contends that there has been no material change in circumstances since the issuance of the prior spousal support award that would justify a change in the support order, and that the evidence did not support the court's finding that Michelle would be sufficiently self-supporting by the dates the court set for the reduction and termination of support. Michelle also claims that the trial court abused its discretion in ordering her support reduced and then terminated without first providing her with adequate warning of the court's expectation that she become self-supporting.
We conclude that the trial court did not abuse its discretion in modifying the prior spousal support award, based on the following changed circumstances: Michelle failed to diligently seek to become self-supporting, as required by the terms of the prior spousal support award; Michelle was currently receiving $20,000 per year from her parents; and the trial court could now determine that Michelle's benign tumor would not affect her ability to become self-supporting. We also conclude that 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. Finally, we conclude that the court provided Michelle with adequate notice of her obligation to attempt to become self-supporting. Accordingly, we affirm the order.
II.
FACTUAL AND PROCEDURAL BACKGROUND
Greg and Michelle married in November 1979 and separated in March 1995. They had no children together. In August 2000, Greg filed a petition for dissolution of the marriage. In February 2003, Michelle filed an amended request for dissolution of the marriage in which she requested that Greg pay her spousal support.
In February 2003, the court held a hearing regarding Michelle's request for spousal support, among other issues. By that time, Greg had been paying support for nearly eight years. In March 2003, the court entered a judgment dissolving the parties' marital status as of December 31, 2002 and reserving jurisdiction over other issues, including spousal support. On April 24, 2003, the court entered a partial judgment on the reserved issues.
In its April 2003 judgment, with respect to spousal support, the court stated:
" 1. The court finds that as of the date of separation the parties enjoyed an upper middle class lifestyle as evidenced by the fact that the parties traveled frequently and they owned two pieces of property.
" 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.
" b. [Greg] earns a high wage and has the ability to pay a reasonable spousal support award.
" c. Based on [Michelle's] needs as established during the marriage [Michelle]'s income and earning capacity are insufficient to meet her needs. [Michelle's] expenses are high as currently presented but even if the amount was reduced to a reasonable amount, [Michelle] still needs spousal support.
" d. [Michelle] has significant separate property assets that produce income for the benefit of [Michelle]. The rate of return on [Michelle's] investments is not enough to sustain her life expectancy since [Michelle] is still a young woman.
" e. The marriage was of long duration, lasting more than fifteen years. The support order is presumed to be open ended in marriages of long duration.
" f. On the issue of health, the court finds there was significant evidence of [Michelle's] depression, however, this factor will not interfere with [Michelle's] ability to obtain employment. [Michelle] is being treated for a benign tumor with medication. The court is unable to determine the effect of that medical condition on [Michelle] in the future and on the issue of ongoing health insurance for [Michelle]. [Greg] appears to be in good health.
" g. The court finds the evidence regarding the issue of domestic violence by [Michelle] against [Greg] to be situational. There was no documentation at the time of the alleged domestic violence.
" h. There are no other tax consequences to the parties except those related to the sale of the parties' rental property. The tax consequences are considered by the court in determining the spousal support award.
" i. The balance of hardships weigh in favor of [Michelle].
" 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."
" 3. [Greg] will pay $2,000 per month in spousal support to [Michelle] effective January 1, 2003. [Greg] will receive credit for any amount of support he paid to [Michelle] in the months of January and February 2003.
" 4. The court retains jurisdiction on the matter of spousal support."
In May 2004, Greg filed an application for an order to show cause (OSC) seeking to require that Michelle submit to a vocational examination and an independent medical examination. In a companion declaration filed with his application, Greg requested that the court terminate spousal support, or in the alternative, modify the prior spousal support award. As a second alternative, Greg requested that the court issue a jurisdictional step-down order pertaining to spousal support. In July 2004, the court ordered that Michelle submit to a vocational examination and an independent medical examination, based on a stipulation between the parties. During December 2004, Michelle underwent the vocational and medical examinations.
In February 2005, after the parties filed briefs with accompanying declarations, and lodged exhibits, the court held a hearing regarding Greg's request to terminate or modify spousal support. On April 14, 2005, the court entered an order that provided that the amount of spousal support would be reduced to $1,000 per month beginning January 1, 2006. The court also ordered that spousal support terminate on June 30, 2006, unless Michelle is able to demonstrate a compelling reason to extend the period of support.
The trial court's April 2005 order states in relevant part:
" Findings:
" 1. The parties were married for 15 years.
" 2. [Greg] has been paying spousal support to [Michelle] for almost 10 years.
" 3. [Michelle][1] was forewarned by the trial judge that she should be looking at seven years to begin to be self-supporting.
" 4. [Michelle] does have a benign tumor, but that does not affect her ability to become self-supporting; it only affects her higher health care premiums.
" 5. [Michelle] is still relatively young at 46 years of age.
" 6. [Michelle] now has separate property investments in the amount of $500,000.
" 7. [Michelle] has continued in her floral business despite the fact[] that she now claims she nets only around $650 per month from the business. [Michelle] should have been aware that if the above is true, the floral business is not the means for her continued long term economic well being. On the other hand, [Michelle] stated to the vocational expert that she netted $30,000 ($2,500 per month) from the business.
" 8. [Michelle] states she is gifted $20,000 per year from her parents.
" 9. The court has considered the Family Law [section] 4320 factors and finds there has been a change in circumstances that warrants modification of spousal support.
" Orders:
" 1. [Greg] shall continue to pay [Michelle] spousal support in the amount of $2,000 per month through December 31, 2005.
" 2. Commencing January 1, 2006, spousal support shall be reduced to $1,000 per month.
" 3. Spousal support shall terminate on June 30, 2006, unless [Michelle] can demonstrate in a motion filed prior to June 30, 2006 a compelling reason to extend the time period.
" 4. The court finds the above step-down order is sufficient time for [Michelle] to achieve the goal of becoming self-supporting.
" 5. Each party shall pay his/her respective attorney fees in that each has sufficient liquid property assets."
Michelle timely appeals.
III.
DISCUSSION
The court did not abuse its discretion in modifying the
April 2003 spousal support award
Michelle claims the trial court abused its discretion in modifying the April 2003 spousal support award.
A. Standard of review
In In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47, the court noted that a trial court's order modifying a spousal support award is reviewed for an abuse of discretion:
" The modification of a spousal support order is reviewed on appeal for abuse of discretion. In exercising its discretion the trial court must follow established legal principles and base its findings on substantial evidence. [Citation.] If the trial court conforms to these requirements its order will be upheld whether or not the appellate court agrees with it or would make the same order if it were a trial court."
B. The trial court did not abuse its discretion in determining that changed
circumstances warranted modifying the April 2003 spousal support award
Michelle claims the trial court abused its discretion in determining that changed circumstances supported modifying the April 2003 spousal support award.
1. The law governing a trial court's exercise of its discretion to modify
a spousal support order
" In exercising discretion whether to modify a spousal support order, 'the court considers the same criteria set forth in [Family Code] section 4320 as it considered when making the initial order . . . . [Citation.]'" (In re Marriage of Bower (2002) 96 Cal.App.4th 893, 899.) Family Code[2] section 4320 provides:
" In ordering spousal support under this part, the court shall consider all of the following circumstances:
" (a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
" (1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.
" (2) The extent to which the supported party's present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.
" (b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party.
" (c) The ability of the supporting party to pay spousal support, taking into account the supporting party's earning capacity, earned and unearned income, assets, and standard of living.
" (d) The needs of each party based on the standard of living established during the marriage.
" (e) The obligations and assets, including the separate property, of each party.
" (f) The duration of the marriage.
" (g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
" (h) The age and health of the parties.
" (i) Documented evidence of any history of domestic violence, as defined in Section 6211, between the parties, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party, and consideration of any history of violence against the supporting party by the supported party.
" (j) The immediate and specific tax consequences to each party.
" (k) The balance of the hardships to each party.
" (l) The goal that the supported party shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336,[[3]] a 'reasonable period of time' for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court's discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.
" (m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4325.
" (n) Any other factors the court determines are just and equitable."
" '" Modification of spousal support . . . requires a material change of circumstances since the last order.'" [Citations.]" (In re Marriage of Bower, supra, 96 Cal.App.4th at p. 899.) However, " [t]he standard rule that modifications in support orders may only be granted if there has been a material change of circumstances since the last order [citation] was . . . not [designed] to circumvent the goal that supported spouses become self-supporting within a reasonable period of time. [Citation.]" (In re Marriage of Schaffer (1999) 69 Cal.App.4th 801, 803-804.)
2. Change of circumstances
The trial court's April 2005 order contained several findings relevant to whether changed circumstances warranted modification of the April 2003 award.
a. Michelle's failure to diligently seek to become self-supporting
constitutes a change in circumstances justifying a modification of
the spousal support award
Michelle contends that she diligently sought to become self-supporting through employment.
(i) Applicable law
Section 4320, subdivision (a) requires that in awarding spousal support, the court consider the extent to which the supported party possesses, or may come to possess, marketable employment skills sufficient to achieve the marital standard of living. Section 4320, subdivision (l) directs that the court also consider " [t]he goal that the supported party shall be self-supporting within a reasonable period of time."
A trial court acts within its discretion in denying spousal support where the supported spouse has failed to diligently seek employment sufficient to become self-supporting. (In re Marriage of Sheridan (1983) 140 Cal.App.3d 742, 749 [trial court acted within its discretion in refusing to continue spousal support after five years following a 13-year marriage, where supported spouse " had done little to prepare herself for or to seek gainful employment" ]; In re Marriage of Rosan (1972) 24 Cal.App.3d 885, 896 [" When evidence exists that the party to be supported has unreasonably delayed or refused to seek employment consistent with her or his ability . . . that factor may be taken into consideration by the trial court in fixing the amount of support in the first instance or in modification proceedings" ].) " Whether there has been such unreasonable delay is a question addressed peculiarly to the trial court which heard the party's testimony and observed the party's demeanor at trial." (In re Marriage of Sheridan, supra, 140 Cal.App.3d at p. 749.) There is no requirement that the failure to exercise diligence in seeking gainful employment has been in bad faith. (Ibid.)
In In re Marriage of Schaffer, supra, 69 Cal.App.4th at page 812, in affirming the trial court's refusal to continue spousal support after 15 years of support, following a 24-year marriage, the Shaffer court observed that the supporting spouse had " been forced to pay for [the supported spouse's] unwillingness to consider more suitable employment for a period of 15 years." The Shaffer court explained that, " a supported spouse cannot make unwise decisions which have the effect of preventing him or her from becoming self-supporting and expect the supporting spouse to pick up the tab." (Ibid.)
Further, a material change of circumstances warranting a modification of spousal support may stem from unrealized expectations embodied in the previous order. (In re Marriage of Lautsbaugh (1999) 72 Cal.App.4th 1131, 1133.) Specifically, changed expectations pertaining to the ability of a supported spouse to become self-supporting may constitute a change of circumstances warranting a modification of spousal support. (In re Marriage of Beust (1994) 23 Cal.App.4th 24, 29.) Thus, if a court's initial spousal support award contemplates that a supported spouse will take some action to decrease the need for spousal support following the issuance of the order and the supported spouse fails to take that action, the court may modify the award on the ground of changed circumstances.
(ii) Factual background
In its initial spousal support award, the trial court found that Michelle did " not possess marketable employment skills for the current job market." The court further found that Michelle was a florist and that she would have to be " retrained" in order to find more lucrative employment. The court noted that Michelle had begun to realize, a year earlier, that she would have to obtain marketable employment skills and consider employment retraining options.
What Michelle's income was, both at the time of the initial support award in 2003, and in 2005, when the trial court modified the award, is not entirely clear. In a February 2003 income and expense declaration, Michelle stated that she earned an average of $2,102 per month ($25,224 per year) in net business income from her floral business. However, she submitted a profit and loss statement for her business that indicated that she had earned a total net profit for calendar year 2002 of only $2,566 ($213.83 per month). The difference between the two net income figures appears to be attributable to the fact that the figure in the income and expense declaration was not a true self-employment net income figure because it did not include deductions for the expenses incurred in running the business, such as the cost of flowers and advertising.
In her February 2005 income and expense declaration, Michelle stated that she had earned an average of $641 per month in net income over the previous 12 months ($7,692 per year) from self-employment as a florist. Michelle also filed a 2004 federal income tax profit statement for her floral business in which she reported gross receipts of $37,771 and, after deducting $13,779 for the costs of goods sold, gross income of $24,212. Michelle's profit statement indicated that she had net income of $7,697, after deducting from her gross income $5,011 in car and truck expenses and $6,269 for the business use of her home, among other items. In a vocational evaluation dated January 7, 2005, evaluator Kathleen Young stated that Michelle had said that " she nets approximately $30,000 per year," from self-employment.
In a July 6, 2004 rebuttal declaration submitted in support of her order to show cause to increase spousal support, Michelle stated: " To further increase my skills, next month I begin a computer instruction course designed toward developing an internet business. I am hoping that this venture may ultimately replace my floral income altogether." Vocational evaluator Young stated that Michelle had informed her that " her short-term goal is to continue with her floral arranging business," and that " she has considered starting some type of Internet/E-Bay business, but currently, does not have any specific plan of action." Young also stated that Michelle had informed her that " she is very confident she will continue earning a stable income long-term, in her floral design business." Young opined that Michelle's " current earnings of $25,000 ─ 30,000 per year is her maximum current wage earning capacity." With respect to future earning capacity, Young stated that with retraining to become a graphic designer, which would take approximately two to three full-time semesters to complete, Michelle's " earnings would most likely start out close to $30,000 per year, and increase with time on the job."
In its April 2005 order modifying spousal support, the trial court noted that Michelle had continued in the floral business despite claiming to net only approximately $650 per month.
(iii) Michelle failed to diligently seek to become self-supporting,
as required by the terms of the prior spousal support award
The trial court's initial spousal support award was premised, in part, on the court's stated expectation that Michelle would obtain retraining in order to increase her income and become self-supporting. However, by April 2005, the evidence presented to the trial court indicated that Michelle had done little, if anything, to obtain retraining to increase her income, and that she had not otherwise been diligent in attempting to become self-supporting.
We conclude that Michelle's failure to diligently pursue retraining in order to attempt to become self-supporting constituted a change in circumstances justifying a modification of the spousal support order.
b. The trial court did not abuse its discretion in considering the fact that
Michelle's parents gave her monetary gifts in the amount of $20,000 per
year
Story continue, please see Part II ……….
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[1] The order actually refers to Greg, but it is clear from the record the trial court intended to refer to Michelle.
[2] Unless otherwise specified, all subsequent statutory references are to the Family Code.
[3] Section 4336 provides a presumption that a marriage of 10 years or more is a marriage of long duration.
