Marriage of Munn CA1/5 ( 2015 )

Filed 10/20/15 Marriage of Munn CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
In re the Marriage of RUSSELL MUNN
and VERA MUNN.
RUSSELL MUNN,
Respondent,
v. A140673
VERA MUNN, (Alameda County
Appellant. Super. Ct. No. AF11592156)
Russell Munn filed a petition to dissolve his marriage to Vera Munn and moved
out of the family home they shared with their children. Vera1 appeals from an order
modifying the amount of child support and temporary spousal support payable by
Russell, arguing the trial court abused its discretion by imputing $75,000 in income to her
when calculating those figures. She also contends a $1,000 sanctions order against
Russell was insufficient in light of his misconduct during the litigation. We affirm.
FACTUAL AND PROCEDURAL HISTORY
A. Family Background
Russell and Vera were married in 2002 and have four children: Milla (born in
2002), Lilia (born in 2004), Boris (born in 2006) and Ivan (born in 2007). Lilia suffers
from Rett syndrome, a neurological disorder that prevents her from walking, talking or
1
We use the parties’ first names because they share a surname.
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using her arms, and which necessitates her constant care. She is not cognitively disabled
and attends public school with the help of an attendant. At the times relevant to this
proceeding the family lived in a home they owned in Piedmont, though Russell’s work
required him to travel to other parts of the country.
Vera worked as a marketing executive during the early years of the marriage. She
was employed by Nestle Ice Cream Company between 2001 and 2005, where she earned
between $150,000 and $240,000. Vera left her chosen field after Lilia was diagnosed
with Rett syndrome so she could care for Lilia and the other children.
By all accounts, Vera has been a tireless advocate for Lilia and has spent a
tremendous amount of time participating in early intervention programs, training and
therapies designed to improve her condition. She has navigated the maze of health care,
public education and Regional Center services on Lilia’s behalf. In 2005, she began her
own part-time business as a consultant and advocate for children with disabilities,
assisting families in their dealings with school districts and Regional Centers.
Russell, who worked as an investment banker, became the family’s primary source
of financial support after Vera left the field of marketing. Though his income was
significantly higher in previous years, since 2011 he has worked at a real estate
investment firm in Los Angeles for a gross base salary of $20,000 a month plus a year-
end bonus. In 2013, the gross amount of his yearly bonus was almost $136,000, or an
average of $11,333 a month.
B. Divorce Proceedings
Russell filed a petition for dissolution of the marriage on August 25, 2011,
commencing what the trial court described as a “high-conflict case.” Because an
exhaustive description of the filings and hearings would be of little value in explaining
the issues before this court and would sidetrack the reader, we give an abbreviated
overview to provide context for the challenged orders, namely, the imputation of income
to Vera and the imposition of $1,000 in sanctions against Russell.
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Vera has been prolific in her filings of pleadings and motions, having presented a
total of 29 motions between August 2011 and September 2013. She has repeatedly
sought to limit Russell’s custody and visitation with the children, alleging he has been
controlling and abusive toward his family and is unable to adequately supervise and care
for the children during visits. Vera has also filed a number of motions claiming Russell
has failed to timely reimburse her or pay for various “add-on” expenses as ordered by the
court. She has brought multiple motions to compel discovery and filed three separate
contempt charges against Russell, asking in one such proceeding that he be thrown in jail.
A harassment complaint was filed by Vera against Russell’s girlfriend. Heated and
accusatory emails have been exchanged between Russell and Vera and between Russell
and a former friend of his who has since loaned Vera a considerable amount of money.
The portrait of the family painted by Vera throughout this case has been that she and her
children are on the verge of homelessness while Russell lives rent free with his girlfriend
in Los Angeles.
Russell’s response has been to vociferously deny Vera’s characterization of him as
abusive or inept at caring for the children, pointing to the favorable observations of a
visitation supervisor who was appointed for a period of time to assess their contacts.
(The trial court has allowed Russell visitation over Vera’s objection.) Russell has taken
the position that Vera spends money too freely, and he has opposed many of her
expenditures, including what he characterizes as uninsured experimental drugs for Lilia’s
treatment, and camps, classes and recreational activities for the children that are outside
the family’s budget. According to Russell, he is unable to make ends meet despite his
high salary because of the amount of support he is required to pay, the costs of traveling
to and from visitations, and Vera’s failure to take reasonable steps to secure employment
outside the home.
The trial court has repeatedly expressed frustration with the parties’ inability to
resolve issues outside of court. In a hearing held on February 27, 2012, it worried aloud
that the case could become “the lengthiest, most protracted, and unpleasant of the
thousands that the Court has dealt with over the last few years.” On May 29, 2012, the
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court described the case as “coming close to setting an all-time world record for the
thickest file that hasn’t been on file with this court for that long.” At a hearing on July
16, 2012, the court stated it was “pretty close to shock” at the parties’ “demonizing” of
each other, chastised them for their inability to resolve basic issues without court
intervention, and ordered them both to attend anger management courses or counseling.
In an attempt to manage the conflict between the parties regarding visitation
issues, the court ordered Russell and Vera to retain a parenting coordinator, with Russell
to advance the coordinator’s retainer fee. This appointment led to another round of
conflict when Russell was unable to pay the coordinator’s fee as he had been ordered to
do, a circumstance that points to another defining characteristic of this case: financial
hardship notwithstanding a household income that could, under other circumstances,
support a comfortable lifestyle. The family had little if anything in the way of savings,
assets or equity in real property when the dissolution proceeding began, and their
expenses were high due primarily (though not exclusively) to the uninsured costs of
Lilia’s care. The family has relied primarily on Russell’s year-end bonuses to pay
outstanding debts. The trial court admonished the parties that their spending was
“unsustainable” and they were “living beyond their needs.” A special master over the
family’s finances was ultimately appointed at the same time as the orders challenged in
this appeal.
Vera was granted permission to move to Chicago with the children, where her
family lives.
C. December 2011 Support Order
On December 20, 2011, the parties stipulated that Russell would pay family
support of $7,200 for that month, and would pay $4,553 in child support and $2,560 in
temporary spousal support for the month of January, with support to be revisited at the
next scheduled hearing. Other expenses were to be split evenly between Russell and
Vera and Vera was to provide Russell with a log of her job search efforts on a biweekly
basis. Also pursuant to the parties’ stipulation, the court issued a Gavron warning to
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Vera (In re Marriage of Gavron (1988) 203 Cal.App.3d 705, 712), advising her she
needed to make reasonable efforts to become self-supporting.
D. January 2012 Support Order
On January 17, 2012, the court ordered that Russell pay Vera the guideline amount
of $4,816 in monthly child support and $3,500 in monthly temporary spousal support.
E. April 2012 Support Order
In an income and expense declaration filed February 27, 2012, Russell indicated
he was earning $20,000 in gross income each month plus a $500 car allowance, had
$7,537 in monthly expenses that included $1,700 in rent, and had paid his attorney
$21,217 to date and owed an additional $3,500 in legal fees. In an income and expense
declaration filed on April 3, 2012, Vera indicated that she earned $1,868 in gross monthly
income as an in-home supportive services worker (reflecting monies received from Medi-
Cal for caring for Lilia), had received an average of $204 each month in her business as
an advocate for families with disabled children, and had total monthly expenses of
$31,149, including $2,714 in mortgage payments, $2,353 in property taxes, $6,026 in
unreimbursed health care, $5,520 in the children’s education expenses and $4,500 in
insurance payments. She owed $2,420 to her attorney.
At a hearing held April 9, 2012, the court ordered Russell to pay Vera $9,750 in
combined monthly child and spousal support ($5,220 in child support, $2,983 in spousal
support, and $1,550 add-on expenses). The court also issued a wage assignment order.
F. September 2012 Support Order
On September 18, 2012, Russell filed a motion to reduce child and spousal support
on the ground that Ivan was no longer in preschool and Russell’s visitation time-share
was 10 percent rather than 5 percent. At a hearing on September 24, 2012, the court
recalculated support to arrive at a guideline amount of $4,979 for child support, $2,758 in
spousal support, and recurring add-on expenses of $336 for speech therapy and
hippotherapy for Lilia, for a total of $8,073 a month.
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G. Vera’s Unpaid Position at Greenteaspoon
At a hearing on October 18, 2012, Vera advised the court she had a job at a start-
up company called Greenteaspoon, but no one there was drawing a salary because it had
not yet raised sufficient capital. She was “essentially” volunteering about 20 hours a
week in an attempt to get back into her industry after a seven-year absence.
In an update to a settlement conference statement filed on November 20, 2012,
Vera supplied an email from the chief executive officer of Greenteaspoon stating Vera
was not an employee, had not been paid, and had not declined compensation. Vera
explained in her update that her previous work in marketing for large corporations had
involved long hours and overnight travel, which was no longer possible in light of Lilia’s
condition. An unsuccessful job search had demonstrated she was uncompetitive after her
absence from marketing, and the unpaid position with Greenteaspoon enabled her to
renew her work experience and regain a foothold in her former field of employment.
In a settlement conference statement filed March 15, 2013, Russell stated that
Vera was working 40 hours a week for Greenteaspoon and urged the court to impute
$248,000 in annual income to her, reflecting the median income for chief marketing
officers (CMOs) with comparable education and experience. Vera submitted a settlement
conference statement on March 15, 2013, in which she proposed that Russell be ordered
to pay guideline child support plus add-on expenses and continue to pay spousal support
until she was paid by Greenteaspoon or found a paying position. She argued that any
imputation of income to her would impair her ability to care for the children because she
could not take a job that required her to travel and would require significantly more at-
home assistance if she found another position.
At a hearing on March 23, 2013, Vera advised the court she was working full time
at Greenteaspoon for no compensation because the start-up had not yet received venture
capital funding. Her position there required her to travel to Palo Alto for meetings on
Tuesdays and Thursdays, but she could work the rest of the time at home, permitting her
to care for the children. She had started looking for work when the marriage started
having problems in 2010, interviewing with companies such as Clorox and Basic
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American Foods, but realized after about two years without success she would need to
take steps to get back into the work force. She had obtained state funding for 56 hours of
nursing care each week for Lilia, but there was a shortage of nurses doing that kind of
work so she received only about 25 hours a week of assistance, turning to private nurses
to fill in the gaps.
H. May 20, 2013, Add-On Expenses
At a hearing on May 20, 2013, Vera was given full discretionary authority over
medical decisions with the parties to share equally in those expenses, and a procedure for
negotiating extracurricular activities for the children was established. Russell was
ordered to pay one-half of child care for a trip Vera was taking to Chicago to seek
employment. Russell was ordered to pay $4,778 (one-half of $9,556) in monthly add-ons
in addition to child and spousal support.
I. Income and Expense Declarations—July and August 2013
In an income and expense declaration filed by Vera on July 24, 2013, she listed
her occupation as a CMO with Greenteaspoon, but declared no income other than spousal
support of $2,982. Her monthly expenses were $18,051, and she had paid attorney fees
of $66,000 to date and owed an additional $14,700.
In August 15, 2013, Russell filed an income and expense declaration indicating a
gross monthly income of $21,385 and an average gross monthly bonus income of
$11,333. He claimed total monthly expenses of $6,865, including $1,500 in rent and
costs of $1,800 relating to visitation. He had paid attorneys $19,000 to date and owed an
additional $13,500.
J. Motion to Impute Income to Vera
On September 24, 2013, Russell filed a motion requesting that the court impute
$150,000 in annual income to Vera and reduce support accordingly. In his
accompanying declaration, he stated the following reasons for his request: (1) Vera had
been working 40 hours a week for zero compensation for over a year and had made “next
to no effort to obtain gainful employment”; (2) due primarily to Lilia’s special needs, the
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children’s uninsured health care expenses were approximately $8,000 a month, and his
salary alone was insufficient to cover this amount in addition to support and other
expenses; (3) because he could not afford to support the family on his salary alone, he
had to wait for his semiannual bonus payments to cover certain expenses, which
completely depleted those bonus payments; and (4) reducing his support obligations in an
amount commensurate with Vera’s earning capacity would enable him to make timely
payments on these obligations “consistent with our children’s best interests.” Russell
stated in his declaration that Vera had not provided him with regular reports about her job
search as required by court order.
Russell retained the services of Phillip Sidlow, a vocational economic analyst with
the firm of Vocational Economics, Inc., to render an opinion about Vera’s employability
and earning capacity. Sidlow submitted a declaration stating that in his opinion, Vera had
an earning capacity of $135,000 to $240,000 a year based on her education and work
experience.
Sidlow considered that Vera had a B.A. in economics and finance and an M.B.A.
with a concentration in marketing. She was fluent in Ukrainian, Russian and Serbo-
Croatian and proficient in Microsoft Office and other business-oriented software. From
1996 to 1998, she had worked for Kraft Foods as a group assistant brand manager and
earned approximately $125,000 a year. From 1999 to 2001, she had worked as a
freelance marketing consultant, providing strategic and branding expertise to packaged
goods and dot-com companies. From 2001 to 2005, Vera was the senior marketing
manager for Nestle Ice Cream Company (Dreyer’s) and the general manager of the
Starbucks Ice Cream Partnership, launching a number of products and overseeing the
development, manufacture and distribution of Starbucks Ice Cream. Her salary between
2001 to 2005 ranged from $150,000 to $240,000.
Sidlow noted that Vera had a daughter with Rett syndrome who required constant
care, though she attended a public school and was entitled to 55 hours of home nursing
care provided by the state. From 2005 to 2010, after leaving the marketing field, Vera
became a consultant for families of children with disabilities and assisted over 30
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families under the auspices of her own firm, charging an hourly rate of $150. From 2010
to 2012, Vera volunteered as marketing director for Cook! SF, an Inner City Advisors
(ICA) portfolio company. She advised ICA, a firm that backed companies with revenues
in the range of $1 million that provided jobs for inner city residents and had socially
responsible policies.
From 2012 to the present, Vera had worked in an unpaid position as the CMO for
Greenteaspoon, a start-up whose business was the production of foods designed to relieve
digestive distress. She had been responsible for building the company’s marketing
organization from the bottom up, helped create materials for investors, and pitched the
company to venture capital firms and “angel” investors. The firm had not raised
sufficient capital to launch the products into the retail sector, and the position did not
seem to have long-term potential.
Vera’s efforts to obtain paying employment included job logs showing five efforts
in April 2012, five efforts in January/February (no year provided), and seven efforts in
July 2012; email correspondence with representatives of several companies in May 2013
regarding open positions, including Del Monte, Optimum Nutrition, thinkThin, Inc.,
Diamond Foods, Fair Oaks Farms Brands and Levi Strauss; email correspondence in June
2013 with a proposal for Shrek Gummy Vitamin Company; email correspondence with
Global Executive Associates in 2013 indicating she was not being considered for a
position; and email correspondence in August 2013 regarding a position at Gap, Inc.
Sidlow noted that Vera appeared to be familiar with good faith job search methods and
had been utilizing her network of contacts, executive search firms and the Internet, but
the documented search efforts occurred primarily after May 2013 and he could not say
whether she had made similar efforts before that time.
Relying on salary data from the Economic Research Institute, Sidlow reported that
the 2013 median annual base salary of CMOs in the Oakland area working for companies
with revenues of $1 million was $134,079. For companies with revenues of $2 million,
the median base salary is $151,270, and for companies with revenues of $5 million it was
$175,549. The median base salary for CMOs in companies with annual revenues of $10
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million was $197,719, and for companies with annual revenues of $100 million, the base
salary was $283,300. Base salaries would be about 8 percent less in the Chicago area,
where Vera wished to move. Sidlow listed a number of open marketing positions
advertised in September 2013 in the Bay Area, Chicago and Los Angeles.
K. Vera’s October 2013 Request for Attorney Fees and Sanctions/Opposition to
Imputation of Income or Reduced Support
On October 3, 2013, Vera filed a motion seeking $80,000 for attorney fees and
sanctions under Family Code sections 271 and 2030,2 inclusive of $30,000 in sanctions
she had previously requested. She alleged that Russell’s failure to comply with court
orders had necessitated most of the fees she had incurred during the litigation and urged
the court to find that the circumstances of the case supported an award of need-based fees
under Family Code section 2030. Vera urged the court to deny Russell’s request to
impute income to her, noting it was not realistic for her to earn her former salary in light
of Lilia’s needs and that any imputation would be offset by the cost of a nanny and
private nursing that would be necessary if she were to go to work.
Vera asked for an upward departure in guideline child support based on Lilia’s
disability, as well as greater add-on expenses to cover a prescription for Increlex, a
medication to promote Lilia’s growth, on an ongoing basis. She submitted a declaration
from Dr. Mary Jones, Lilia’s treating physician, who praised Vera’s extraordinary efforts
in caring for Lilia, enumerated Lilia’s prescriptions and therapies, confirmed the shortage
of in-home nursing care in California, and commented on the “unbearable amount of
stress” caused by caring for four children alone on limited funds. Dr. Jones noted that
Lilia had severe reflux problems and potential seizure activity at night, along with general
sleeplessness, meaning that any employment requiring Vera to travel would be difficult
to sustain.
2
Further references are to the Family Code unless otherwise indicated.
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In replies and supplemental papers to the pending motions, the parties disputed (as
they had throughout the litigation) whether Russell had paid everything he owed to Vera
and whether he had provided the discovery she requested.
L. October 10, 2013, Hearing
On October 10, 2013, the court held a hearing on the various matters, including
Russell’s request for a modification of the support orders and Vera’s request for need-
based attorney fees and sanctions. The parties discussed various medical and child care
expenses. Vera advised the court that because the hours of nursing care that had been
allocated by the state were not being fulfilled, she required an additional 32.5 hours of
paid care during the week and 12 hours each day on the weekend, for a total of 56.5
hours. Assuming a cost of $20 per hour, this would amount to $4,898.67, which the court
noted was higher than the base monthly amount for child support. The court indicated,
“[T]his is where we get to a question of I don’t know how the families are going to
financially survive this.”
Vera asked the court not to impute any income to her, but argued that the
maximum that should be imputed was the $1,868 a month ($22,416 annually) she had
been receiving previously from Medi-Cal for her work with Lilia. She advised the court
she had a job interview in Chicago for a marketing position that would likely pay an
annual salary in the $100,000-plus range, but had no offer as yet.
The court initially indicated it would impute income of $100,000 to Vera, noting
she had been working full time for a year with no salary and had received the benefit of
added support since the beginning of the case. It observed, “The problem with not
imputing an appropriate level of income to [Vera] is it distorts the financial reality of this
situation.”
After further discussions with the parties, the court made a tentative ruling
addressing a number of issues. It imputed $75,000 in annual income to Vera and, based
on a five percent time-share of the children by Russell, ordered Russell to pay Vera base
monthly child support of $4,999, monthly recurring add-on expenses of $4,374, and
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monthly spousal support of $2,115, for a total of $11,488. The add-on expenses included
Russell’s half of the following monthly expenses: $1,440 in physical therapy for Lilia,
$360 in hippotherapy, $120 in speech therapy, $2,710 for Increlex, $228 for a
chiropractor, $2,320 for applied behavioral analysis therapy, $600 for augmentive
communications, and $190 for orthodontia. The add-on support also included $180 a
week for various other therapies for the children. The court deferred a ruling on Vera’s
request for attorney fees and sanctions and set the matter for a hearing on December 2,
2013.
M. Written Tentative Order and Objections
The court issued a written tentative order on October 18, 2013. In addition to its
modification of support as outlined above, the court made a tentative ruling on Vera’s
request for attorney fees and sanctions in view of the extensive briefing and arguments
already presented. The court stated it was “not persuaded by [Vera’s] argument that
[Russell’s] bad conduct necessitated her filing of 22 of the 29 motions filed between
August 25, 2011 and September 23, 2013. Barely a month passed where [Vera] did not
file a motion, in fact, in most months, [Vera] filed multiple motions, often duplicating
issues already pending determination. This Court is aware of few, if any, substantive
meet and confer attempts between the parties prior to the filing of each of these motions,
and the Court finds that [Vera’s] conduct has only served to exacerbate rather than
resolve these already contentious dissolution proceedings.” (Fns. omitted.)
Accordingly, the court denied Vera’s request for “$80,000 on top of the $30,000
initially awarded.” Noting that Russell did “bear some level of responsibility for
unnecessarily prolonging this action” and had greater access to funds (though he had
been unable to pay his own counsel while simultaneously satisfying his support
obligations) the court awarded Vera $25,000 in need-based attorney fees under section
2030, subject to reallocation, and stayed payment of those fees until Russell received his
year-end bonus. The court also ordered Russell to pay $1,000 in sanctions under section
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271, payable at a rate of $200 a month, based primarily on his failure to timely pay add-
on expenses as ordered on May 20, 2013.
Vera filed written objections to the tentative ruling on October 23, 2013. She
noted that she had not been previously awarded $30,000 in fees as assumed by the court’s
order, making it appropriate to increase the current need-based fee award by $30,000 to
reflect an appropriate amount. She argued the court did not act in the best interests of the
children by imputing $75,000 in annual income to her, and that the court’s $75,000 figure
was not based on an adequate evidentiary foundation. Vera requested the appointment of
a special master over financial issues and asked the court to order Russell to pay the cost
of a vocational expert appointed by the court to evaluate her earning capacity.
Russell filed a written objection to the court’s order on October 24, 2013, in which
he asked the court to further reduce the support ordered and objected to the award of
attorney fees and sanctions.
N. Final Order Issued November 7, 2013
The court issued a final written order on November 7, 2013, in which it left intact
its calculation of child and spousal support and its imputation of $75,000 in annual
income to Vera. The court specifically overruled Vera’s objection to the imputation of
income, stating: “[Vera’s] full time employment with Greenteaspoon over the past year
demonstrates her ability to work—arguably at a much higher income level than was
imputed—and [Russell] cannot be expected to continue shouldering 100% of the burden
associated with what [Vera] characterizes as what has ‘essentially been volunteering.’ ”
The court denied Vera’s request for an order requiring Russell to pay the cost of her own
vocational expert.
As to attorney fees and costs, the court indicated that in light of the objections to
the $25,000 attorney fee award from both parties, it would hear argument on this issue on
December 2, 2013, with Vera to file a breakdown of the services underlying her fee
request. As to the $1,000 in sanctions, that order was stayed pending the December 2
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hearing, with the court to consider its modification if Russell paid certain outstanding
expenses and added money to the parties’ escrow account as previously ordered.
Vera appealed from the November 7, 2013, order.
DISCUSSION
I. Imputation of Income to Vera; Child Support
Vera argues the trial court erred when it imputed $75,000 in annual income to her
for the purpose of calculating child support. We reject the claim.
A. General Principles and Standard of Review
Both parents have an obligation to support their children. (§ 3900.) When
determining each parent’s income for purposes of calculating the amount of child
support, the trial court is not limited to a consideration of the parent’s actual income.
(In re Marriage of Destein (2001) 91 Cal.App.4th 1385, 1391 (Destein).) “The court
may, in its discretion, consider the earning capacity of a parent in lieu of the parent’s
income, consistent with the best interests of the children.” (§ 4058, subd. (b).) For
purposes of determining support, “earning capacity” represents the income the parent
“ ‘is reasonably capable of earning based upon the spouse’s age, health, education,
marketable skills, employment history, and the availability of employment
opportunities.’ ” (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 301
(Cheriton).)
“A trial court’s decision to impute income to a parent for child support purposes
based on the parent’s earning capacity is reviewed under the abuse of discretion
standard.” (Destein, supra, 91 Cal.App.4th at p. 1393.) On appeal, “ ‘[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.] . . . “[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.” ’ [Citation.]” (In re Marriage of McHugh
(2014) 231 Cal.App.4th 1238, 1247.) This standard requires us to affirm the trial court’s
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order unless it was arbitrary or capricious. (See In re Marriage of Lim & Carrasco
(2013) 214 Cal.App.4th 768, 778.)
B. Best Interests of the Children
A family court’s discretion to impute income to a parent for the purpose of
calculating child support is circumscribed by the statutory requirement that the
imputation be in the best interests of the children. (§ 4058, subd. (b); Cheriton, supra, 92
Cal.App.4th at p. 301.) Thus, any imputation of income must be accompanied by a best
interests finding. (In re Marriage of Ficke (2013) 217 Cal.App.4th 10, 18-19 (Ficke);
In re Marriage of Cryer (2011) 198 Cal.App.4th 1039, 1051, fn. 3; In re Marriage of
Mosely (2008) 165 Cal.App.4th 1375, 1389 (Mosely).) Vera argues the order modifying
child support must be reversed because the trial court did not expressly find that imputing
$75,000 to her was in the best interests of the children, and, in any event, such a finding
would not be supported by the evidence. We disagree.
Preliminarily, we do not agree with Vera that the best interests finding must be
express. (See Cheriton, supra, 92 Cal.App.4th at p. 301 [“court made no express or
implied finding that imputing income to [custodial parent] would be in children’s best
interest”].) Section 4058 simply provides that a court “may, in its discretion, consider the
earning capacity of a parent in lieu of the parent’s income, consistent with the best
interests of the children.” (Compare In re J.S. (2011) 196 Cal.App.4th 1069, 1078
[express finding necessary where statute at issue required the court to make a “ ‘finding
either in writing or on the record of the basis for its determination’ ”].)
Vera objected to the tentative ruling imputing earning capacity, arguing, among
other things, that imputation was not in the best interests of the children. When the court
issued its final order and did not change this aspect of its tentative ruling, it implicitly
found the imputation was in the children’s best interests.
Viewed in the light most favorable to the prevailing party (In re Marriage of
Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 34), the evidence supports this
implied finding. As the trial court observed on more than one occasion, the family was
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living beyond its means and had little or no savings. Russell’s salary, though high, was
not sufficient to cover the cost of support and the numerous add-on expenses that related
largely to Lilia’s medical care. Russell was not always able to timely pay his share of
additional expenses, and the only way for this family to keep its collective head above
water was for Vera to return to the workplace. The court could reasonably conclude that
while imputing income to Vera would have the immediate effect of reducing the child
support owed by Russell (though not on a dollar-for-dollar basis), it would over time
enable Russell to timely pay his obligations and introduce a degree of stability into the
family’s financial situation.
The court could also conclude that although Vera had made efforts to find a job,
her decision to work full time for over a year in an unpaid position had contributed to her
inability to find paying work, even if that unpaid position had given her the opportunity
to gain current experience after a several-year absence from her chosen field. Imputing
an income to Vera provided an incentive for her to earn an income closer to her actual
capacity, which would, in the long run, benefit the children and serve their best interests.
The base monthly child support payable by Russell with $75,000 imputed to Vera was
$4,999, and the base monthly support payable if the court imputed zero income would
have been $5,364. The court could reasonably conclude that this difference of $365 a
month (which would have been less if the court imputed the $22,416 annually suggested
by Vera) was offset by the increased likelihood that Vera would find a paid position in
response to the court’s order.
Like the trial court, we are cognizant that Lilia’s special needs will limit or
preclude Vera from taking a position that requires extensive traveling. But because Vera
had been working full time for over a year, albeit without pay, it cannot be said that the
demands of child care preclude her outside employment. The trial court did not fail to
take the children’s needs into account, as Vera suggests; rather, the court was faced with
a difficult decision as to how to best address the difficult financial circumstances of this
family.
16
Vera argues that the court did not factor in the increased cost of child care that
would be necessary if Vera were to return to work. The court was well aware that Vera
was the custodial parent of four children, one of whom had special needs, and had
addressed the child care arrangements and costs at several junctures in these proceedings.
We have no reason to conclude the court failed to consider child care costs when
determining the amount of income to be imputed, an amount that was half of the
$150,000 figure sought by Russell based on his vocational expert’s report.
The decision in Ficke, supra, 217 Cal.App.4th 10, on which Vera relies, is
distinguishable. There, the family court imputed average monthly income of $13,333 to a
mother who had 95 percent custody of the children, even though the evidence showed
that her actual monthly income was approximately $250. (Id. at p. 16 & fn. 5.) The
mother had earned as much as $729,000 annually at one point in her marketing career,
but had been laid off and had received only one job offer for a position that paid
$125,000 annually and would have required considerable traveling and evenings away
from her two children. (Id. at p. 14.) She elected instead to start a pet insurance program
modeled after a similar business her mother had started in Arizona, and though she
“worked very hard,” it was not making any money. (Ibid.) Meanwhile, the father earned
over $8,000 a month from his job as a real estate broker and from rental income, and
owned more than double the value of the mother’s assets after factoring in his separate
property. (Id. at p. 15.)
In reversing the trial court’s calculation of child support, the appellate court held
that for purposes of the guideline formula, income may not be imputed to a custodial
parent absent a finding that the imputation is in the best interests of the pertinent children.
(Ficke, supra, 217 Cal.App.4th at p. 13.) The court explained: “[I]t is counterintuitive—
often counterproductive—to impute income to a custodial parent, because the objective
effect of such an imputation will be to reduce the money otherwise available for the
support of any minor children.” (Id. at p. 19.) The court concluded there was no
evidence it was in the best interests of the children to impute income to the mother
because (1) the imputation would have the obvious effect of making less money available
17
to the children; and (2) imputation would give the mother an incentive to leave two
teenagers alone on evenings and weekends.3
Vera and Russell do not have the same disparity of resources as the couple in
Ficke. Though Russell earned much more than Vera at the time of the hearing, he has
paid the majority of his net income for child and spousal support, including extraordinary
expenses incurred for Lilia. His year-end bonuses have been largely consumed by
outstanding expenses. The court appropriately concluded the family’s cumulative levels
of spending were not sustainable on Russell’s salary alone, and neither party had savings
or assets to meet the extraordinary expenses. While the order imputing income to Vera
had the immediate effect of reducing base child support to about $365 a month less than
it would have been if zero income had been imputed, the court could reasonably conclude
that Vera’s return to working outside the home was an imperative, and that an order
imputing income would provide the incentive necessary for her to obtain a paying
position. (See Mosley, supra, 165 Cal.App.4th at p. 1390 [when support provided by
father was insufficient to allow mother and children to live according to the marital
standard of living, imputation of additional income to mother could increase level of
support from her and promote children’s best interests].)
C. Evidence of Employment Opportunities
A party seeking to impute income to the other party for the purpose of calculating
support has the burden of proving that party has an ability and opportunity to work at the
level of income imputed. (In re Marriage of Regnery (1989) 214 Cal.App.3d 1367,
1372-1373.) “The ‘opportunity to work’ exists when there is substantial evidence of a
reasonable ‘likelihood that a party could, with reasonable effort, apply his or her
education, skills and training to produce income.’ [Citation.]” (In re Marriage of Smith
(2001) 90 Cal.App.4th 74, 82 (Smith).) Vera contends Russell did not carry his burden of
showing she had the ability and opportunity to earn $75,000 a year. We disagree.
3
The court in Ficke also reversed an order requiring the mother to pay spousal
support to the father based on the income it imputed to her. (Ficke, supra, 217
Cal.App.4th at p. 24.)
18
As discussed by vocational expert Phillip Sidlow in his declaration, Vera was
highly educated and had extensive employment experience in marketing, even though she
had been raising her children and working outside her field of expertise for several years.
In her last full-time position, she had earned between $130,000 and $240,00 annually.
She had worked for over a year in a full-time but as yet unpaid position with a start-up
company where she had significant responsibilities and had gained current marketing
experience. The children, including Lilia, were in school during the day, and Vera had
secured nursing care for Lilia during non-school hours through the Regional Center, even
if she was not able to find someone to work all the hours that had been authorized. The
median annual salary for a CMO in the Bay Area was between $134,079 and $283,300,
depending on the company’s revenues. It was not unreasonable to expect that Vera could
find a paid position for at least $75,000 a year, even if her responsibilities to her children
made it impossible for her to do the type of traveling she had done in previous positions.
(See Mosley, supra, 165 Cal.App.4th at p. 1391 [imputation of income did not require a
showing that a spouse who was a lawyer would have secured a job had she applied for a
position; vocational evaluation demonstrated she had substantial earning capacity and
could have readily secured a job as an entry-level attorney or paralegal].)
We reject Vera’s argument that Sidlow’s declaration was inadmissible hearsay
under Elkins v. Superior Court (2007) 41 Cal.4th 1337 (Elkins). Although Elkins
confirms that family law litigants have the right to cross-examine declarants during a
contested trial, it also recognized that certain motions may be resolved on the basis of
declarations alone. (Id. at p. 1355; Reifler v. Superior Court (1974) 39 Cal.App.3d 479,
484-485; Code Civ. Proc., § 2009.) Moreover, even if we were to assume a motion to
modify support is a proceeding to which Elkins applied, the parties in this case did not
request live testimony at the hearing and Vera has forfeited any right to challenge the
hearsay nature of the declaration. (Elkins, at p. 1354 [declarations at contested trial are
inadmissible hearsay unless parties stipulate to their admission or fail to enter a hearsay
objection]; Mendoza v. Ramos (2010) 182 Cal.App.4th 680, 687 [father was not denied
19
opportunity to cross-examine mother on issue of earning capacity when case was
submitted on declarations and neither party requested that live testimony be taken].)
Vera claims Sidlow’s status as an expert “was not established through the
procedures under Evidence Code [section] 720 [] et seq.” We disagree. Evidence Code
section 720, subdivision (a) provides, “A person is qualified to testify as an expert if he
has special knowledge, skill, experience, training, or education sufficient to qualify him
as an expert on the subject to which his testimony relates.” Sidlow was a vocational
economic analyst and certified rehabilitation counselor with a bachelor’s degree from
Yale University and a masters degree from California State University, Northridge. He
had been certified as a vocational expert by the United States government and was a
fellow of the American Board of Vocational Experts. He had authored numerous articles
and contributed to reference books concerning earning capacity and employability issues.
Sidlow’s education, training and professional experience gave him an expertise in
evaluating a person’s earning capacity and employability in excess of a lay person. He
was qualified to offer an opinion on these issues and the court did not abuse its discretion
in considering the declaration. (See People v. Jones (2012) 54 Cal.4th 1, 57 [“trial
court’s determination that a witness qualifies as an expert is a matter of discretion that
will not be disturbed absent a showing of manifest abuse”].)
We similarly reject Vera’s argument that Sidlow’s declaration did not meet the
requirements of Evidence Code sections 801 and 802. Section 801 allows an expert to
offer an opinion “(a) Related to a subject that is sufficiently beyond common experience
that the opinion of an expert would assist the trier of fact; and [¶] (b) Based on matter
(including his special knowledge, skill, experience, training, and education) perceived by
or personally known to the witness or made known to him at or before the hearing,
whether or not admissible, that is of a type that reasonably may be relied upon by an
expert in forming an opinion upon the subject to which his testimony relates . . . .”
Section 802 provides: “A witness testifying in the form of an opinion may state on direct
examination the reasons for his opinion and the matter . . . upon which it is based . . . .”
Vera does not explain how Sidlow’s declaration ran afoul of either of these provisions.
20
Earning capacity and employability are issues sufficiently beyond common experience
that an expert would assist the court acting as a trier of fact and Sidlow relied on
appropriate factors in rendering his opinion: Vera’s education and experience, her
previous salaries, the current median salaries in the field, and advertisements for open
positions in the field.
Vera argues that Sidlow’s opinion should not be credited because it does not rest
upon a “sound factual basis.” She complains he did not meet her before forming his
opinion; he relied on Russell’s description about the kind of care their four children
required; he assumed she had 55 hours of in-home nursing care paid for by the state when
in fact these hours had not been satisfied due to a shortage of nurses willing to do this
work; and he did not take into consideration her eight-year absence from the labor force.
Vera’s argument goes to the weight of the declaration rather than its admissibility, and
the trial court, as familiar as it was with the underlying facts, was well equipped to
consider these issues when evaluating Sidlow’s opinion. (See Mora v. Big Lots Stores,
Inc. (2011) 194 Cal.App.4th 496, 511.)
Finally, Vera argues there was no “tangible evidence” of employment
opportunities for a position with a $75,000 annual salary. We are not persuaded. At the
October 10, 2013, hearing at which the income was imputed, Vera had a job interview for
a marketing position she believed to be “in the 100,000 range.” Vera suggests the trial
court based its order on this position alone (for which she was not ultimately hired), but
this was not the only evidence of employment opportunities or salary range presented to
the court. Sidlow’s declaration described the median base salary for CMOs in the three
relevant geographic areas (the Bay Area, Chicago and Los Angeles), all of which
significantly exceeded $75,000. Sidlow also listed a number of advertised positions in
those areas, two of which posted the base salary offered: $200,000 for one and $100,000
to $150,000 for the other. Substantial evidence supports the trial court’s implicit
determination that Vera had the ability and opportunity to earn $75,000 a year.
21
II. Temporary Spousal Support
A trial court may consider earning capacity and impute income when determining
temporary spousal support, just as it may with child support. (Cheriton, supra, 92
Cal.App.4th at p. 308.) Vera argues the imputation of income for purposes of a
temporary spousal support order was erroneous for the same reasons as the imputation of
income when calculating child support. We reject her claims.
Temporary or pendente lite spousal support is governed by section 3600, which
provides: “During the pendency of any proceeding for dissolution of marriage . . . the
court may order . . . either spouse to pay any amount that is necessary for the support of
the other spouse, consistent with the requirements of subdivisions (i) and (m) of Section
4320,” which sets forth the factors to be balanced by the court in making an order for
permanent spousal support.4 A court has broad discretion to set temporary spousal
support, and reversal is appropriate only when the order exceeds the bounds of reason.
(In re Marriage of Blazer (2009) 176 Cal.App.4th 1438, 1442; In re Marriage of
de Guigne (2002) 97 Cal.App.4th 1353, 1366.)
Case law has recognized the court may consider other factors enumerated in
section 4320 when making a temporary spousal support order. (In re Marriage of Left
(2012) 208 Cal.App.4th 1137, 1153, fn. 11.) As relevant here, those factors include the
marketable skills of the supported party and job market for those skills, the extent to
which the supported party’s earning capacity is impaired by periods of unemployment
during the marriage to permit the supported party to devote time to domestic duties, the
ability of the supporting party to pay support, the needs of each party based on the
standard of living established during the marriage, the ability of the supported party to
engage in gainful employment without unduly interfering with the interests of dependent
children in that party’s custody, the age and health of the parties, the balance of the
hardships to each party, and the goal that the supported party be self-supporting within a
reasonable period of time. (§ 4320.) For the reasons already explained, the trial court did
4
Section 4320, subdivisions (i) and (m) allow the court to consider evidence of
domestic violence between the parties and the criminal conviction of an abusive spouse.
22
not abuse its discretion by imputing income to Vera, and the factors listed in sections
3600 and 4320 did not require a contrary result.
Vera argues that her need for spousal support militated against an order imputing
income to her. We disagree. The historically high earnings of both parties had not saved
them from financial distress. The order that Vera challenges requires Russell to pay her
almost $11,500 in total monthly support out of his net monthly income, leaving him with
about $3,500 a month out of which to pay his own monthly expenses and the costs of
traveling to visit the children. His year-end bonus had historically been used to pay
expenses for the family that were then currently owing. Thus, while Russell was
relatively affluent on paper, his actual circumstances were not markedly better than
Vera’s. Vera’s needs, when compared to Russell’s ability to pay, did not render the
court’s decision to impute income an abuse of discretion.
III. Change in Circumstances
The order setting support on October 10, 2013, modified the prior support order
issued September 24, 2012. Vera argues that support should have been maintained at the
previously ordered levels because Russell failed to carry his burden of showing the
family’s circumstances had changed. We disagree.
A change of circumstances is generally required for the modification of support
orders, including temporary ones. (In re Marriage of Samson (2011) 197 Cal.App.4th 23,
29.) “Absent a change of circumstances, a motion for modification is nothing more than
an impermissible collateral attack on a prior final order.” (In re Marriage of Biderman
(1992) 5 Cal.App.4th 409, 412-413; but see In re Marriage of Murray (2002) 101
Cal.App.4th 581, 597, fn. 11 [noting that older cases had held no change of
circumstances is necessary to modify temporary spousal support orders].)
Circumstances had changed since the September 2012 support order and allowed
the court to make an order imputing income to Vera. For one thing, the recurring add-on
expenses had dramatically increased by several thousands of dollars, making it
appropriate to address whether income should be imputed to Vera when calculating
23
support. For another, Vera had elected to work full time for over a year in an unpaid
position, demonstrating that she did have an ability to work full time in a job that offered
her some flexibility.
Moreover, “[i]n this state, when child support is determined based on earning
capacity, courts typically have not approached modification actions in terms of changed
circumstances. This would seem to be so because the court must decide initially whether
circumstances have changed, i.e., whether the parent has voluntarily limited his or her
income such that it is appropriate to substitute earning capacity. If so, the amount of
income has not changed for purposes of the support guideline, only its character (from
actual income to imputed income).” (Smith, supra, 90 Cal.App.4th at pp. 83-84.)
IV. Attorney Fees as Sanctions
Vera argues the trial court should have required Russell to pay more than $1,000
in attorney fees and costs as sanctions under section 271. Russell submits her challenge
is premature, because the order was stayed pending a future hearing, at which point the
court would consider modifying the order (presumably by denying sanctions or reducing
the amount of sanctions) if Russell paid certain outstanding amounts to Vera and the
parties’ escrow account. The record does not reflect whether Russell paid the amounts at
issue or whether the court subsequently modified the sanctions order.
Assuming the order was sufficiently final to be appealable, we find no error.
Section 271, subdivision (a) provides in relevant part: “Notwithstanding any other
provision of this code, the court may base an award of attorney’s fees and costs on the
extent to which the conduct of each party or attorney furthers or frustrates the policy of
the law to promote settlement of litigation and, where possible, to reduce the cost of
litigation by encouraging cooperation between the parties and attorneys. An award of
attorney’s fees and costs pursuant to this section is in the nature of a sanction.” An order
awarding sanctions under section 271 is “committed to the discretion of the trial court,
and will be reversed on appeal only on a showing of abuse of that discretion, that is ‘only
if, considering all of the evidence viewed more favorably in its support and indulging all
24
reasonable inferences in its favor, no judge could reasonably make the order.’ ” (In re
Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1524.)
Vera argues that $1,000 is insufficient to penalize Russell for his defiance of court
orders throughout the litigation. While the court found Russell’s failure to timely transfer
certain bonus funds and pay certain add-on expenses ordered in May 2012 “concerning,”
the record amply supports a determination that Vera’s own conduct over the course of the
case had contributed unnecessarily to litigation costs and the parties’ inability to settle.
And, even if Vera incurred more than $1,000 in fees and costs to recover the add-on
expenses at issue, the sanctions imposed under section 271 need not “compensate for all
fees and costs expended.” (In re Marriage of Battenburg (1994) 28 Cal.App.4th 1338,
1346.)5
DISPOSITION
The judgment is affirmed. In the interests of justice, the parties shall bear their
own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
5
Russell has filed a request for judicial notice of the Statement of Decision and
Judgment on Reserved Issues filed in this case on September 10, 2014 and February 23,
2015, respectively. (Evid. Code, §§ 452, 459.) We deny that request as unnecessary for
our resolution of the issues on appeal. (See JRS Products, Inc. v. Matsushita Electric
Corp. of America (2004) 115 Cal.App.4th 168, 174.)
25
NEEDHAM, J.
We concur.
JONES, P.J.
BRUINIERS, J.
26