Court of Appeal, Second District, California. IN RE: the Marriage of SPENCER and TERESA RICE SPENCER N. RICE, Respondent, v. TERESA S. RICE, Appellant. B226640 Decided: March 02, 2011

Law Offices of Jeffrey W. Doeringer and Jeffrey W. Doeringer for Appellant. No appearance for Respondent.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Appellant Teresa S. Rice (Teresa) appeals from the trial court's order for interim child support to be paid by her husband, Spencer N. Rice (Spencer), for the couple's two minor children after she unsuccessfully sought to modify the order to increase Spencer's monthly support obligation. Teresa contends the order must be reversed because the method used to calculate the support payments was improper, the monthly support payments should have been higher, the enforcement provisions of the order should have been self-executing, and the order should have included child care expenses and attorney fees. We disagree and affirm the interim child support order.

BACKGROUND

Teresa and Spencer were married in 2004 and separated approximately three years later. They have two minor children, both born in 2006. In July 2008, Teresa sought an order for sole custody of the children, child support in the amount of $6,030 per month, monthly child care expenses of $7,265, and $50,000 in attorney fees. On October 21, 2008, the day of the hearing on Teresa's request, Spencer filed an income and expense declaration in which he listed average monthly income of $16,458.

After the hearing, the trial court issued an order awarding Teresa sole custody of the children and requiring Spencer to pay monthly child support in the amount of $3,395, based on a DissoMaster calculation showing Spencer's monthly income as $17,333. The court further ordered Spencer to pay $10,000 of Teresa's attorney fees.

Ten months later, Teresa filed a request to modify the support order on the ground that bank statements and other documents produced by Spencer in discovery showed he had income that exceeded the amount disclosed in his income and expense declaration. In support of the motion, Teresa's attorney filed a declaration stating that Spencer's bank statements showed average monthly deposits of $50,753 in 2008 and $59,382 in 2009. Teresa asked the court to increase the monthly support payments to $7,984, to include child care expenses as part of Spencer's support obligation, and to require Spencer to pay her $25,000 in attorney fees.

Spencer responded with a request to reduce his child support obligation to an amount commensurate with his fluctuating income. He submitted a declaration in which he stated that the income and expense statement he had filed in October 2008 erroneously overstated his monthly income. Spencer also submitted declarations stating that he was unemployed as of January 2010 and that the only income he expected to receive was residual income of approximately $5,000 per month for work he had previously performed.

After a January 12, 2010 hearing on the matter, the trial court concluded that because of Spencer's fluctuating income, interim child support payments should be calculated using a base amount and a variable percentage of any income in excess of that base amount. The court denied Teresa's request for child care expenses, noting that Teresa was not working, but granted her request for preschool tuition.

On June 24, 2010, the trial court issued a written order requiring Spencer to pay child support in the amount of $1,295 per month, plus 13.45 percent of all income he receives in excess of $5,000 per month, retroactive to October 1, 2009, as well as one-half of the children's preschool tuition. The trial court further ordered Spencer to provide Teresa with a quarterly accounting of his income within 10 days after the end of each calendar quarter. The court's order specified that the quarterly accountings must include a profit and loss statement detailing Spencer's income by source, copies of all bank statements, copies of checks over $1,000, all new contracts executed by Spencer, and copies of all distribution reports for any recording or DVD income. The order further provided that if Spencer failed to provide timely quarterly accountings, or failed to provide all of the required documents, his child support obligation would increase to $5,196 per month and that Teresa could file an ex parte application to increase the support payments in the event of Spencer's noncompliance. The trial court reserved for trial Teresa's request for attorney fees and costs.

On July 2, 2010, Teresa filed another request to modify the child support order, on the ground that Spencer had failed to comply with the court ordered reporting requirement. In response, Spencer claimed to have complied with the court order and requested the appointment of a neutral forensic accountant to receive the required documents.

At the August 10, 2010 hearing on the matter, the trial court concluded that Teresa had not satisfied her burden of proving that Spencer had failed to comply with the reporting requirements. The court ordered the appointment of a joint forensic accountant mutually agreeable to the parties, to serve as a clearinghouse for the documents required as part of Spencer's quarterly reporting obligation and to whom Spencer would provide copies of all contracts relating to a motion picture and a television show on which he had previously worked. The court ordered Spencer to advance the costs of the forensic accountant, but reserved jurisdiction to reallocate the cost at the time of trial. The court further provided that the forensic accountant could directly request the court to issue any further orders necessary to enforce the trial court's prior orders.

This appeal followed.

DISCUSSION

I. Standard of Review

Appellate courts apply the abuse of discretion standard to the trial court's discretionary rulings on child support and attorney fees. (In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 753 (Schlafly ); In re Marriage of Sullivan (1984) 37 Cal.3d 762, 767-769 (Sullivan ).) A trial court's decision to modify a support order is also reviewed under the abuse of discretion standard, and that decision “will be reversed only if prejudicial error is found upon examination of the record.” (In re Marriage of Rothrock (2008) 159 Cal.App.4th 223, 229 (Rothrock ).)

We review the trial court's factual findings under the substantial evidence standard. (In re Marriage f Drake (1997) 53 Cal.App.4th 1139, 1150-1151.)

II. Applicable Law

“Statutory guidelines regulate the determination of child support in California.” (Schlafly, supra, 149 Cal.App.4th at p. 753.) Those guidelines, set forth in division 9, chapter 2, article 2 of the Family Code, delineate several important principles relating to child support determinations, including the following: “ ‘A parent's first and principal obligation is to support his or her minor children according to the parent's circumstances and station in life.’ [Citation.] ‘Each parent should pay for the support of the children according to his or her ability.’ [Citation.] ‘Children should share in the standard of living of both parents․' [Citation.]” (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 283 (Cheriton ).) “[A]dherence to the guidelines is mandatory, and the trial court may not depart from them except in the special circumstances enumerated in the statutes. [Citations.]” (Id. at p. 284.)

To implement the guidelines, courts are required to calculate child support in accordance with a mathematical formula set forth in section 4055. (Cheriton, supra, 92 Cal.App.4th at p. 284.) In order to do so, the trial court must first determine the income of the parents. (§ 4055; County of Orange v. Smith (2005) 132 Cal.App.4th 1434, 1446.)

“ ‘Income’ is generally defined as ‘the gain or recurrent benefit that is derived from labor, business, or property [citation] or from any other investment of capital [citation].’ [Citation.]” (Rothrock, supra, 159 Cal.App.4th at pp. 230-231.) In addition to this common law definition of income, there is also a statutory definition. Section 4058, subdivision (a)(1) defines annual gross income as “income from whatever source derived” including “commissions, salaries, royalties, wages, bonuses, rents, dividends, pensions, interest, trust income, annuities, workers' compensation benefits, unemployment insurance benefits, disability insurance benefits, social security benefits, and spousal support actually received from a person not a party to the proceeding to establish a child support order under this article.” This statutory definition of income, while broad, is not unlimited. “It does not extend to every type of payment or economic benefit received by a parent.” (In re Marriage of Scheppers (2001) 86 Cal.App.4th 646, 649.) “To be considered income, the amount at issue both must fall within the terms of section 4058 and meet the common law definition of income, i.e., the gain or recurrent benefit derived from labor, business or property. [Citation.]” (Rothrock, supra, 159 Cal.App.4th at p. 231.)

When a parent's income is seasonal or fluctuating, a trial court has statutory discretion to adjust the income figure used to determine a child support obligation order. Section 4064 gives the court the authority to adjust a child support order “as appropriate to accommodate seasonal or fluctuating income of either parent.”

III. Spencer's Income and Modification of Support Order

Teresa contends the trial court erred by not finding that approximately $50,000 in average monthly deposits made into Spencer's bank account in 2008 and 2009 was conclusive evidence that Spencer had underreported his income. She argues that the trial court abused its discretion by not modifying Spencer's support obligation on that basis. Teresa further argues that once she presented evidence of the deposits into Spencer's bank account, the burden shifted to Spencer to explain the sources of the deposits and to refute any argument that those deposits constituted income for purposes of determining his support obligation.

As the party moving to modify the support order, Teresa bore the burden of proving an increase in Spencer's net income. (In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1303, fn. 10.) By denying Teresa's motion, and instead reducing Spencer's support obligation to accommodate his fluctuating income, the trial court implicitly found that Teresa had failed to sustain her burden. Nothing in the record contravenes that finding. There is no evidence concerning the source of the deposits into Spencer's bank accounts. Accordingly, there is no evidence to support Teresa's claim that the deposits were “gain or recurrent benefit derived from labor, business or property” or that they came within the statutory definition of income in section 4058. (Rothrock, supra, 159 Cal.App.4th at p. 231; § 4058.)

Substantial evidence supports the trial court's downward modification of the support order. Until the end of 2008, Spencer's regular source of income was a television show called “Kenny versus Spenny” that he produced and in which he appeared as an actor. The show was discontinued, and Spencer was thereafter unemployed and living on residual income of approximately $5,000 per month for work he had previously performed. Given the change in circumstances, the trial court did not err by adjusting Spencer's support obligation by ordering a support payment of $1,295 per month, and as additional support, a percentage of Spencer's earnings in excess of $5,000 per month. (In re Marriage of Riddle (2005) 125 Cal.App.4th 1075, 1081; In re Marriage of Ostler & Smith (1990) 223 Cal.App.3d 33, 37; § 4064.)

The trial court's modification of the support order was not an abuse of discretion.

IV. Method for Enforcing the Support Order

The support order provides that in the event Spencer fails to comply with his quarterly financial reporting obligations, Teresa may file an ex parte application for an order increasing Spencer's monthly support obligation from $1,295 to $5,196. Teresa contends this provision of the order should be self-executing and that she should not have to seek ex parte relief to enforce it.

Family law courts have discretion to determine the method of enforcement of judgments and orders and to exercise broad equitable authority concerning the terms of enforcement. (§ 290.) Besides according Teresa the opportunity to seek ex parte relief, the trial court also authorized the parties' joint forensic accountant to ask the court for any further orders necessary to enforce prior court orders. The trial court's selected method for enforcing the financial reporting requirements was not an abuse of discretion.

V. Child Care Expenses

Teresa contends the trial court erred by denying her request to include child care expenses in the support order. Under section 4062, a court must order as additional child support “[c]hild care costs related to employment or to reasonably necessary education or training for employment skills” and may order additional child support for “[c]osts related to the educational or other special needs of the children” as well as travel expenses for visitation. This statutory list of “add-on” child support items is exclusive; a trial court has no discretion to fashion other items as child support. (Boutte v. Nears (1996) 50 Cal.App.4th 162, 166.)

Teresa was not employed at the time she made her request for child care expenses, nor was there any evidence that she was taking classes or undergoing training for employment. The trial court's denial of her request accordingly was not an abuse of discretion.

VI. Attorney Fees

Teresa contends the trial court abused its discretion by granting her only $10,000 in attorney fees and by deferring until trial her request for additional attorney fees and costs.

The trial court has broad discretion in awarding attorney fees in dissolution proceedings and we will not disturb its determination on appeal absent a clear showing of an abuse of discretion. (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1132 [ascertaining fee amount is left to the trial court's sound discretion; trial judges are entrusted with this discretionary determination because they are in the best position to assess the value of the professional services rendered in their courts]; Sullivan, supra, 37 Cal.3d at pp. 768-769 [need based order for attorney fees is reviewed under abuse of discretion standard].) The record here discloses no such abuse of discretion.

DISPOSITION

The trial court's interim child support order is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

CHAVEZ

We concur:

FOOTNOTES

FN1. We refer to the parties by their given names for purposes of clarity and not of out disrespect. (See Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.). FN1. We refer to the parties by their given names for purposes of clarity and not of out disrespect. (See Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.)

FN2. “The DissoMaster is one of two privately developed computer programs used to calculate guideline child support as required by [Family Code] section 4055, which involves, literally, an algebraic formula.” (In re Marriage of Schulze (1997) 60 Cal.App.4th 519, 523-524, fn. 2.). FN2. “The DissoMaster is one of two privately developed computer programs used to calculate guideline child support as required by [Family Code] section 4055, which involves, literally, an algebraic formula.” (In re Marriage of Schulze (1997) 60 Cal.App.4th 519, 523-524, fn. 2.)

FN3. All further statutory references are to the Family Code unless otherwise indicated.. FN3. All further statutory references are to the Family Code unless otherwise indicated.

FN4. Section 4064 provides: “The court may adjust the child support order as appropriate to accommodate seasonal or fluctuating income of either parent.” In addition, section 4060 provides: “The monthly net disposable income shall be computed by dividing the annual net disposable income by 12. If the monthly net disposable income figure does not accurately reflect the actual or prospective earnings of the parties at the time the determination of support is made, the court may adjust the amount appropriately.”. FN4. Section 4064 provides: “The court may adjust the child support order as appropriate to accommodate seasonal or fluctuating income of either parent.” In addition, section 4060 provides: “The monthly net disposable income shall be computed by dividing the annual net disposable income by 12. If the monthly net disposable income figure does not accurately reflect the actual or prospective earnings of the parties at the time the determination of support is made, the court may adjust the amount appropriately.”

_, P.J. BOREN _, J. DOI TODD