Vlaovic v. Vlaovic CA1/5 ( 2023 )

Filed 12/21/23 Vlaovic v. Vlaovic 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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
STEVAN VLAOVIC,
Appellant,
A165784
v.
KRISTINA D. VLAOVIC, (San Mateo County
Super. Ct. No. 16FAM01503)
Respondent.
Plaintiff and appellant Stevan Vlaovic (appellant) appeals from the
trial court’s denial of his request to modify child support to defendant and
respondent Kristina D. Vlaovic (respondent). Because the court properly
concluded it lacked authority to modify the support award, we affirm.
In the present case, a Judgment of Dissolution was filed in 2020 with
an attached Marital Settlement Agreement (MSA). Among other things, the
MSA provided that neither party owed spousal support; that the parties
would share custody of their twin boys; and that child support was payable
annually and calculated in the following year. The MSA provided: “Neither
Party shall pay child support to the other on a monthly basis, but they shall
complete an annual true-up to determine if any child support is owed by one
party to the other for the prior year. By March 1st of each year, the parties
shall exchange income information, including year-end paystubs, W-2s,
1
1099s, and other documents evidencing income and itemized deductions used
for calculating guideline child support. . . . The amount of any child support
owed by one party to the other shall then be calculated and any child support
due and owing shall be paid in full on or before April 30th. . . .” As the MSA
makes clear, the amount of support to be paid on or before April 30 is support
due for the prior year and is based on income earned by the parties in the
prior year.
Importantly, the MSA expressly addresses how and when stock options
granted by an employer are counted as income for child support purposes.
The MSA states, “In the case of stock options, the party who has received
such option shall have income for the purposes of child support at the
following two points. First, income is available for support when the option
vests and once any legal restrictions on the exercise and/or sale of the options
are removed, at which point the income available for support shall be
calculated as the delta between the fair market value and the strike price to
exercise the options. The fair market value shall be equal to the price at the
close of the day on which the options are exercisable (this may be the day the
options vest or the day on which restrictions on the exercise of the options are
lifted). Thereafter, there shall be income available for support when the
stock is sold, at which point the income shall be calculated as the delta
between the sales price and the higher of the strike price or the price used to
calculate support at the time of vest or lifting of any restrictions on exercise.”
On December 29, 2021, appellant filed a request for modification of
2021 child support (Request). In a declaration, he averred he had a one-time,
dramatic increase in income in 2021. In particular, his 2021 income
increased from $931,892 in 2020 to over $21 million due to the sale of stock
granted by a former employer. Appellant requested that the court find that
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an award under the MSA for 2021 would “exceed the needs of the children”
and that his child support for the year should be capped at 50% of $13,688
per month (or $6,844 per month, due to the shared custody). Appellant
submitted an expert declaration estimating 2021 child support under the
MSA would be $104,985 per month (calculated based on respondent’s 2020
earnings).
Appellant served the Request on respondent on January 3, 2022.
Respondent argued appellant’s Request constituted a prohibited request for
retroactive modification of child support. At the hearing on the Request, the
parties stipulated that, “The agreement of the parties was they would run a
calculation in 2022 after they exchanged their information for 2021. Until
April 30, 2022, it was impossible for them to know how much child support
was owing for 2021.” At the conclusion of the hearing and in a subsequent
written order, the trial court denied the Request, concluding it did not have
“jurisdiction” to modify support before January 3, 2022—the date of service of
the Request on respondent. The written order explained, “the child support
obligation accrued on the date the income was earned and . . . it was just
subject to a true-up following the end of the year to determine how much each
party owed to each other, but the amount was owed . . . on the date the
income was earned.” The present appeal followed.
Subject to certain limitations, “a support order may be modified or
terminated at any time as the court determines to be necessary.” (Fam.
Code, § 3651.)1 As relevant in the present case, “a support order may not be
modified or terminated as to an amount that accrued before the date of the
filing of the notice of motion or order to show cause to modify or terminate.”
1 All undesignated statutory references are to the Family Code.
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(§ 3651, subd. (c)(1);2 see also S.C. v. G.S. (2019) 38 Cal.App.5th 591, 598–599
[“ ‘ “[t]he Legislature has established a bright-line rule that accrued child
support vests and may not be adjusted up or down. [Citations.] If a parent
feels the amount ordered is too high—or too low—he or she must seek
prospective modification.” ’ ”]; § 3692 [“a support order may not be set aside
simply because the court finds that it was inequitable when made, nor simply
because subsequent circumstances caused the support ordered to become
excessive or inadequate” (italics added)].) On appeal, appellant contends the
trial court erred because, under the MSA, the 2021 child support did not
accrue until the support was actually due later in 2022.
Both parties acknowledge the relevant definition of the term “accrue” is
found in the decision in Hangen v. Hangen (1966) 241 Cal.App.2d 11(Hangen). That case involved an appeal from an order that reduced monthly
spousal and child support payments. (Id. at p. 11.) Although the case was
decided before the enactment of the Family Code and section 3651, it
involved parallel language in former Civil Code section 137.2, providing that
a support order “may be modified or revoked at any time during the pendency
of the action except as to any amount that may have accrued prior to the
order of modification or revocation.” (See § 2 [“A provision of this code,
insofar as it is substantially the same as a previously existing provision
relating to the same subject matter, shall be considered as a restatement and
continuation thereof and not as a new enactment”]; see also In re Marriage of
2 In his opening brief, appellant mistakenly cites to similar language in
section 3603, which applies to support orders during the pendency of
dissolution proceedings. Respondent also argues section 3653 and section
666(a)(9) of title 42 of the United States Code prohibited the Request.
Because we conclude the Request was a prohibited retroactive request for
modification of support under section 3651, we need not consider those
additional statutes.
4
Fellows (2006) 39 Cal.4th 179, 186.) The Hangen court observed that “the
word ‘accrue’ means ‘To come into existence as an enforceable claim; to vest
as a right.’ ” (Hangen, at p. 14.) The court further observed that, under the
support order at issue in the case, the support was “ ‘payable’ ” on the first
day of each month, which meant that the “monthly support payments accrued
on the first of each month.” (Id. at pp. 13–14.) The lower court had erred in
reducing support retroactive to the start of the month the order was made.
(Id. at p. 14.)
Appellant argues that, under the reasoning of Hangen, no 2021 support
amount had accrued by the time appellant filed and served the Request,
because no amount was due until months later under the terms of the MSA.
However, as respondent points out, appellant disregards the second part of
the definition of “accrue” in Hangen: “ ‘to vest as a right.’ ” (Hangen, supra,
241 Cal.App.2d at p. 14.)3 As explained by the Supreme Court in In re
Marriage of Skaden (1977) 19 Cal.3d 679, 685, “a ‘vested’ right may be either
‘matured’ or ‘immature.’ If payment is subject to one or more conditions . . .
the right is said to be ‘vested’ but ‘immature.’ If on the other hand it is
subject to no conditions and constitutes an ‘unconditional right to immediate
3 Appellant points out that, for its definition of “accrue,” Hangen cited
both a dictionary and a prior decision that cited a longer version of the same
dictionary definition. In particular, in Leahey v. Department of Water &
Power (1946) 76 Cal.App.2d 281, the court stated, “The term ‘accrue’ means:
‘To come into existence as an enforceable claim; to vest as a right; as, a cause
of action has accrued when the right to sue has become vested.’ ” (Id. at
p. 286.) Appellant points out that the third clause included in Leahey
contemplates an immediately enforceable right. However, it appears that
third clause is just an example of the use of the word “accrued,” rather than a
narrowing of the definition. In any event, Hangen did not choose to include
the third clause in defining “accrue” in the context of modification of support.
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payment,’ it is said to be ‘matured.’ ” Interpreting the child support provision
of the MSA in light of Hangen and Skaden, we affirm.
Under the express language of the MSA, each party “shall have [stock
option] income for the purposes of child support” at two points in time. First,
the “income is available for support when the option vests” and there are no
restrictions on sale of stock. And, second, “there shall be income available for
support when the stock is sold.” Both of those events occurred in 2021, and,
under the MSA, appellant had income available for support when the stocks
first vested and whenever shares of stock were sold. Thus, under the MSA,
respondent had a vested right to support based on the income from
appellant’s stock options when the options vested and when the stocks were
sold. Each such event occurred soon after the execution of the MSA in
December 2020.4 And each event occurred before the filing of the Request on
December 29, 2021.5 The inclusion of such express provisions regarding stock
options in the MSA demonstrates unambiguously that the parties intended
that the full value of any options that vested in 2021 would be available in
the calculation of 2021 support. At the time of the drafting of the MSA,
Hangen was the leading authority on the meaning of “accrue,” and appellant
and respondent both currently acknowledge it as such. Thus, during the
drafting process, the parties should have been aware that the MSA accorded
4 The first sale of vested stock by appellant occurred about two months
after the execution of the MSA.
5 Respondent argues that, in the alternative, appellant’s “support
obligation vested on December 31, 2021 when all the variables needed to
determine the amount were fixed.” Because the trial court properly
concluded respondent’s right to support vested at earlier points in 2021 under
the express language of the MSA, we do not address respondent’s alternative
argument.
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vested rights that would affect the timing of requests for modification of
support.
In his briefing on appeal, appellant makes no substantial rebuttal to
these points. He argues the Legislature referred to “accrued” support rather
than “vested” support, but Hangen defined “accrued” support to include
vested rights. (Hangen, supra, 241 Cal.App.2d at p. 14.) When the
Legislature enacted section 3651 it made no attempt to narrow the definition
adopted in Hangen. In these circumstances, we may rely on the proposition
that “ ‘ “[t]here is a strong presumption that when the Legislature reenacts a
statute which has been judicially construed it adopts the construction placed
on the statute by the courts.” ’ [Citation.] That is because, ‘ “[w]hen the
Legislature amends a statute without changing those portions . . . that have
previously been construed by the courts, the Legislature is presumed to have
known of and to have acquiesced in the previous judicial construction.” ’
[Citation.]” (Sharon S. v. Superior Court (2003) 31 Cal.4th 417, 433–434;
accord Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1151.)
Furthermore, appellant identifies no reason why respondent did not have a
vested right to child support based on appellant’s income from his stock
options when the income became “available for support” as defined by the
MSA. In particular, he identifies no reason why respondent’s vested right to
child support under the MSA turned on a calculation of the precise amount
due. At most, appellant argues only that respondent’s right to support was
“immature,” because the payment obligation depended on satisfaction of a
condition—the “true-up” process described in the MSA.6
6 We agree with appellant’s observation that interest on the 2021
support did not start to accumulate until after the support became due, but
appellant cites no authority that interest must begin to run on support in
order to consider the support accrued.
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We conclude appellant seeks to retroactively modify support. In
Hangen, the support payment became payable (mature) and vested on the
same date—the first day of the month. (Hangen, supra, 241 Cal.App.2d at
pp. 13–14.) In the present case, under the plain language of the MSA, the
date the 2021 support payment was due and the dates respondent became
entitled to support based on appellant’s 2021 stock option income were not
the same dates. Because respondent had a vested, albeit “immature,” right to
child support based on appellant’s 2021 income from the stock options before
appellant filed and served the Request, the trial court did not err in
concluding the Request improperly sought retroactive modification of accrued
support. (§ 3651, subd. (c)(1).)7
DISPOSITION
The trial court’s order is affirmed. Costs on appeal are awarded to
respondent.
SIMONS, J.
We concur.
JACKSON, P. J.
CHOU, J.
(A165784)
7 Because we conclude the trial court did not err, we need not address
respondent’s contention that appellant has not shown prejudice.
8