Trial court did not err by amortizing Dad’s bonus . . .
In affirmance, Fourth District holds that clause in parents’ stipulated disso judgment, requiring trial court to review any future child support modification requests de novo, does not supersede the usual changed circumstances rule
In re Marriage of Cohen
(September 7, 2016; ordered partially published October 3, 2016)
California Court of Appeal 4 Civil G052058 (Div 3) 3 Cal.App.5 th 1014, 207 Cal.Rptr.3d 846, 2016 FA 1760, per Bedsworth, J (O’Leary, PJ and Thompson, J, concurring). Orange County: Scott, J, affirmed. For appellant: John Schilling, CFLS, (949) 833-8833. For respondent: Brian Saylin, CFLS, (714) 971-1979. CFLP §E.74.1.
Lauralin and Richard Cohen were married in 1990. They later became the parents of four children, all of whom have special needs. The couple separated in 2006 and in 2011, they executed a stipulated disso judgment. That judgment provided, among other things, that Richard, who was earning more than $800,000 annually at the time, would pay in excess of $17,000 a month for child support, and that in any future child support modification proceedings, the trial court would review the matter de novo. The judgment also required Richard to pay spousal support of $19,000 a month to Lauralin, which would be reduced by a specified percentage if she remarried, and reduced to zero if she married someone who earned more than $400,000 a year. Richard’s spousal support obligation was to terminate if Lauralin remarried less than 24 months after the entry of the disso judgment.
In January 2014, Richard filed a motion to reduce his child support payments, based on “significant declines in his income incurred in the years 2012 and 2013.” He also sought to terminate spousal support. The parties later dealt with this issue by stipulation as to the years prior to January 1, 2014, but the matter proceeded as to the ensuing years. By the time of the February 2015 hearing, Richard had a new job that paid $41,000 a month, plus a $500,000 “signing bonus” provided he met certain goals.
After the hearing, the trial court noted that Richard was now earning more than he had at the time of the disso judgment, amortized his signing bonus prospectively from May 2014 forward, and gave Richard a child support reduction only for the first four months of 2014, finding no adverse changed circumstances after that. As for spousal support, the lower court noted that Lauralin and Richard had earlier modified the disso provision regarding her remarriage to read 18 months instead of 24 months, and that Lauralin had remarried shortly thereafter, just a little more than 18 months after the disso judgment. Moreover, since her new spouse did not earn more than $400,000 annually, her spousal support payments should continue. The trial court specified that the disso provision constituted a waiver of Fam C §4337 [spousal support terminates on remarriage] and Fam C §4323 [rebuttable presumption of decreased need for support on remarriage]. And, it denied Richard’s request to reduce spousal support for the first four months of 2014, based on his failure to show a material change in any of the Fam C §4320 factors.
Richard appealed, but in a partially published opinion, the Fourth District affirmed.
Just be fair . . .
Richard first contended that the lower court should have used a “12-month January-to-December 2014 calendar year average” in calculating how his bonus affected his monthly income for child support purposes because those months would have clearly shown the reduction in his income. The justices acknowledged that this would be true, but reminded Richard that there is more than one way to deal with bonuses in child support calculations. Moreover, after having reviewed several cases on this issue, they had found that the only general rule was that “the treatment must be ‘fair and representative.’ ” In this instance, the justices continued, “the trial court’s decision to average out Richard’s bonus over the two years prospectively May 2014 to May 2016” was fair and representative because the bonus was intended to cover the amortization period and was not payment for any work that Richard did during the first four months of 2014.
No getting around it . . .
The panel then turned to Richard’s assertion that the trial court erred by applying the changed circumstances rule to its child support mod instead of the disso provision that required it to review the matter de novo. The justices saw this as an impermissible attempt to “ contract around the change-of-circumstances rule.” (Emphasis in opinion.) They reminded Richard of the “well-established family law rule” that child support obligations are imposed under the law and not by contractual provisions, which must always take a back seat to the law-imposed requirements. And, they explained that the changed circumstances rule is based on the doctrine of res judicata, which precludes the court from altering an original award issued after the parties had their day in court and based on the circumstances as they existed at the time. If they were to require the trial court to follow the de novo clause in the parties’ disso judgment, the panel concluded, it “would reduce family law orders and judgments to mere temporary placeholders in contravention of res judicata.”
Non-pub . . .
In the unpublished part of the opinion, the justices affirmed the trial court’s ruling regarding spousal support, finding that the parties had validly stipulated that spousal support would not terminate on Lauralin’s remarriage and that Richard failed to show a material change in any of the Fam C §4320 factors.
New family law attorneys soon learn that divorcing parties cannot stipulate away the child’s right to support. Here, we learn that they cannot stipulate away the changed circumstances rule either. And, while we are on the subject of “do’s and don’ts” in family law practice, the justices, in a footnote, give a pat on the back to the parties for presenting the figures supporting Richard’s child support request “in a spreadsheet labeled Exhibit 1 and agreed to by both parties.” “Nice work,” they say. Something to remember the next time your client has a somewhat complex financial situation that you need to clarify for the trial court.