Marriage of Dobbs

Filed 2/11/10 Marriage of Dobbs CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

Richard Dobbs appeals from a judgment of dissolution that determined support and the division of his and his former wife Toninas property following their 29-year marriage. He contends that the court erred in (1) determining that certain credit card debt was a community debt subject to an equal division by the parties; (2) calculating the amount and retroactivity of spousal support; and (3) ordering Richard to pay for all of Toninas attorney fees. We conclude that the amount and retroactivity of the spousal support award requires reconsideration in light of factors that we shall discuss, but we shall affirm the judgment in all other respects.

Background

Richard and Tonina were married on July 20, 1974. Tonina filed for dissolution of their marriage in January 2004. The date of their legal separation, as previously determined by the court, is January 30, 2004. Despite their separation, the parties continue to reside together in the family home, using different bedrooms, eating separately and maintaining separate lives as they did for many years prior to separation. Pursuant to a stipulation approved by the court, since separation Richard has been paying all housing-related expenses, without a right to reimbursement, and $600 a month in temporary spousal support.

In February 2008, the court held a two-day hearing to determine permanent spousal support, the division of real and personal property, the allocation of community debt and Toninas right to attorney fees. On June 30, 2008, the court issued its statement of decision. The resulting judgment, however, was not entered until May 1, 2009. Richards appeal was timely filed on June 29, 2009.

In its statement of decision, the court found that while married the couple enjoyed a middle class standard of living. Tonina earns approximately $2,800 a month as a kindergarten teacher at a private school, though . . . there is a credible question whether she will be able to retain that position for the 2008-2009 school year. [Tonina] will not be able to enjoy the standard of living she had during the marriage solely on her salary as a private-school kindergarten teacher. [] [Richard] is an engineer, earning $8,500 a month. There was no testimony that he was at risk of losing his position or earning less than what he now earns in the future. It is likely that [Richard] will be able to enjoy the standard of living he had during the marriage on his income. The court concluded that with his earnings of $8,500 a month, Richard had the ability to pay spousal support. The court found that exclusive of any housing related payments Tonina needs approximately $4,000 to meet her current expenses, which includes almost $2,000 a month in credit card payments. The court ordered Richard to pay Tonina $3,000 a month in spousal support beginning March 1, 2007.

With respect to the parties credit card debt, the court found that all charges made by Tonina prior to the date of separation were community obligations. The court found that Toninas charges on a Sears charge card, including the purchase of a new $870 refrigerator and payment of Toninas income taxes in 2002, 2003 and 2004, were all community obligations. The court found that the charges on other credit card accounts, including purchases of food and other necessities such as clothes for the children and repairs to her cars when it broke down, were also community obligations. The court ordered each party to assume one-half of the community debt and specified that [t]he community portion of the balances on [Toninas] accounts . . . [be] paid by a loan or withdrawal from [Richards] 401(k) or IRA accounts. The court reserved jurisdiction to resolve disputes over the calculation of the amount of community debt

Finally, the court found that the disparity in income between the parties and respondents ability to pay warrant an award of attorneys fees to [Tonina] in the amount of $24,000 less any credit for payments previously made. (Fn. omitted.)

Discussion

Appellate review of a trial court's finding that a particular item is separate or community property is limited to a determination of whether any substantial evidence supports the finding. (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 849.) The challenged award of spousal support is reviewed for an abuse of discretion. (In re Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1366.) Although the family court has broad discretion to determine an amount of spousal support that is  just and reasonable, based on the standard of living established during the marriage,  the court's decision must be based on the evidence, such as the resources of the parties. (Ibid.) We review the attorney fee award for abuse of discretion. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 315.)

1.      Community Debt

The record reflects that the parties owed $71,321 on various credit cards, $56,189 of which was incurred between 1992 and 2004 by Tonina on credit cards issued solely in her name, and on which interest had continued to accrue. Tonina testified that while both of their children were living at home, Richard gave her $180 a week to purchase food for the family. That amount was reduced to between $100 and $140 a month when their older child left for college and was eliminated entirely when the second child left for college. She explained that she opened the credit cards in her name basically as an emergency backup; if a need was told to me by one of the children or there was something else that I needed that was non food, I would sometimes use the food money I had in my wallet from him to pay it. Then we had to bring home a receipt and show it to him at which time he would decide whether he would reimburse or not. [] . . . [] If he didnt reimburse, then I ran into a problem and thats when sometimes in order to then come up with the food or whether it be the groceries for home or because the theatre expense [for their daughter] and coming home at 11:00 or 12:00 at night and getting the kids something to eat up in that area, I charged it on the credit card. Until 1997 when the younger child graduated from private school, her salary was used to pay the tuition. The amount of tuition is not included in the record, but Tonina testified that her salary was not always sufficient to cover the tuition and on occasion she wrote a check from the family checking account or borrowed the money from her mother. When the tuition obligation ended, she began using her salary to pay the credit card bills that had built up. She also charged some repairs to her car on the credit cards when Richard refused to pay for the repairs.

The court found that the amounts Tonina charged on the various credit cards during the marriage were community debts that should be divided equally between the parties. The court added that [i]f the parties are unable to agree on the balance as of the date of separation and finance charges attributable to those balances by ten days after the judgment in this case becomes final, they are ordered to hire an accountant or other appropriate expert to perform the calculations for them at Richards expense.

In general, debts incurred by either spouse after the date of marriage but prior to separation are to be divided equally, unless community debts exceed community assets. [Citation.] However, [section 2526] provides that all separate debts, including those debts incurred by a spouse during marriage and before the date of separation that were not incurred for the benefit of the community, shall be confirmed without offset to the spouse who incurred the debt. [Citation.] In other words, once the court characterizes a liability as a separate debt, that debt does not factor into the equal community property division.  (In re Marriage of Cairo (1988) 204 Cal.App.3d 1255, 1267.)

Richard contends that the evidence does not support the finding that the credit card debt was a community obligation. Acknowledging that it is possible that some of the debt had legitimate community purposes, Richard argues that Toninas self-serving testimony is insufficient to establish that all of the debt served a legitimate community interest and that absent a sufficient record, the court erred in presuming that the debt as a whole was a community debt. However, the only evidence in the record supports the conclusion that the charges made by Tonina during the marriage were for the benefit of the community. While every dollar spent over a 12-year period was not accounted for, Toninas testimony establishes a pattern from which the court reasonably concluded that the total amount of the debt was incurred for the benefit of the community. While Richard suggests that Tonina demonstrated a lack of restraint with credit, he did not offer any evidence of extravagant purchases or specific debts that were not incurred for the benefit of the community. Accordingly, the court did not err in confirming the debt as a community obligation and dividing it equally between the parties.

2.      Spousal Support

Richard does not dispute that Tonina is entitled to spousal support. He argues, however, that the award is excessive and that the court erred by making it retroactive to March 2007.

Family Code section 4320 lists a number of circumstances to be considered by the trial court in awarding spousal support. These include [t]he needs of each party based on the standard of living established during the marriage. [Citation.] Case law has described the marital standard of living (MSL) as reasonable needs commensurate with the parties' general station in life. [Citation.] [Citation.] In evaluating the relevant statutory factors to determine permanent spousal support, the actual marital standard of living is not an absolute measure of reasonable need, but merely a basis or reference point for determining need and support. [Citation.] While the trial court must consider the statutory guidelines, the ultimate decision rests within its broad discretion. The purposes of spousal support inevitably vary from case to case, depending upon the parties and the facts and circumstances of the case. [Citation.] Weighing the factors specified [by statute] and by appellate case law, the trial court, in exercising its discretion on the issue of spousal support, must endeavor to make an order which will achieve a just and reasonable result in each case. [Citation.]  Because trial courts have such broad discretion, appellate courts must act with cautious judicial restraint in reviewing these orders.   (In re Marriage of Drapeau (2001) 93 Cal.App.4th 1086, 1095-1096, fn. omitted.)

After weighing the relevant factors, the court determined that Richard should pay Tonina $3,000 a month in spousal support. The court found that Tonina needs approximately $4,000 a month to meet her current expenses, which includes almost $2,000 a month in credit card payments. This is exclusive of any housing related payments. Further, the court found that Toninas gross earnings are approximately $2,800 a month and that Richards monthly gross salary is approximately $8,500. Taking the $3,000 a month support payment into account, Toninas gross monthly income would be $5,800 and Richards gross monthly earning would be $5,500. The court attempted to equalize the parties monthly income taking into consideration its conclusion that Toninas present and future earning capacity was impaired by her unemployment [during] the early years of the marriage and her underemployment while the children were in school. The court also relied on the fact that even if Tonina returned to school to obtain a teaching credential, it was not likely that she would have any significant increase in her current income and that Richard had enjoyed regular increases in pay over the years and [t]here is no reason to believe he will not continue to receive cost of living increases.

Initially, we reject Richards contention that the court gave undue weight to the question of Toninas earning capacity where the evidence supports self-reliance. He argues that Tonina has known that she needed to complete her degree for a number of years but has failed to take any steps toward completing that goal and that the court failed to acknowledge Toninas failure to mitigate any deficiency in her ability to be self-sufficient. The trial court found that there was credible evidence that although Tonina was originally hired to teach kindergarten without a college degree, her employer now requires her to obtain a college degree in order to retain that teaching position. Tonina testified that if she returned to school part-time and continued to work, it would take approximately three years to obtain a college degree and an additional year and a half to obtain a teaching credential. The court concluded that even [a]ssuming . . . that her current employer will permit her to remain employed until she obtains her degree, she will not have a significant increase in her current income. Thus, even if Tonina could be faulted for failing to return to school sooner, her failure to do so is relevant more with respect to her job security than to her present ability to be self-sufficient financially. The court calculated the amount of support needed by Tonina based on the assumption that she would retain her teaching position. We find no error in this aspect of the trial courts analysis.

We also reject Richards contention that the court erred in analyzing his ability to pay spousal support. He argues that the court abused its discretion because after the payment of spousal support, his $5,500 gross monthly income is insufficient to cover the $5,855 in monthly expenses reflected on his income and expense declaration. He suggests that [l]ooking solely at the gross income figures and comparing them to the parties respective expenses, Tonina obtains an income that is $145% of her needs while Richard Dobbs experiences a 7% deficit. We shall consider separately the courts analysis of Toninas needs, but Richards declaration appears to understate his own financial abilities by inflating his expenses. His declaration includes as expenses $612 in credit card payments, some of which relate to payments on the Sears card that was determined to be community debt, and $850 a month in savings and investments. In light of the totality of the circumstances, Richard has not established that the court abused its discretion in concluding that he has the ability to pay $3,000 a month in spousal support.[1]

However, we question whether the trial court properly assessed Toninas needs in determining an equitable support obligation. As indicated above, the court found that Tonina needs $4,000 a month to meet her current expenses, including almost $2,000 a month in credit card payments. The $2,000 monthly credit card payment is drawn from Toninas February 2008 income and expense declaration, which shows that her monthly payments on the $71,321 debt amount to $1,939. Richard argues that Toninas monthly payments, and thus her monthly needs, will be significantly reduced under other terms of the judgment because the court ordered that community assets be used to pay off the community portion of the credit card debt, which will substantially reduce the credit card obligation. Tonina contends that Richards argument is premature because the court has reserved jurisdiction over the calculation and allocation of the debt and alternatively, that the court did not base its order of support mainly on [Toninas] needs but on a finding of all the relevant factors that the court cited in its decision.

There is some merit to the latter argument, because the trial court did properly consider the multitude of factors that bear upon the equitable determination of spousal support. However, there is also some merit to her initial argument concerning the prematurity of the issue. The court clearly and unambiguously determined that the pre-separation debt is a community debt and ordered that [t]he community portion of the balances on these accounts [be] paid by a loan or withdrawal from respondents 401(k) or IRA accounts.[2] A significant reduction in Toninas credit card debt undoubtedly will have an impact on her monthly payments but, as Tonina points out, the amount of that reduction cannot yet be definitively determined. Moreover, Toninas future housing expenses remain unpredictable. At the time of the hearing, Richard was paying approximately $1,380 per month in housing related expenses for the two parties. The judgment gives Tonina the option to buy out [Richards] interest in [their home] if she can finance a buy out, but must tender the buy out amount to [Richard] no later than 60 days after Judgment becomes final. If [Tonina] no longer wishes to buy out [Richards] interest, or is unable to do so by the deadline provided, the property shall be listed for sale immediately and the parties are to share the proceeds of the sale. The trial court apparently made no attempt to estimate the amount by which Toninas needs will be affected by the certain change in housing arrangements, nor reduced by virtue of paying off the credit card debts. While the court may well have considered these factors too speculative to permit reliable estimation, the fact remains that a reasonable assessment of Toninas needs, and a fair level of support, are dependent on their ascertainment. We believe that the trial court should reevaluate its support order in light of these factors, updated by such additional evidence bearing upon these factors as the parties may present on remand.

There is another related issue that also requires remand. Richard contends that the court erred in making the spousal support award retroactive to March 2007. This matter was heard on February 28 and 29, 2008. The courts decision states, the court orders respondent to pay petitioner $3,000 a month beginning March 1, 2007 . . . . (Italics added.) In his objection to the courts intended statement of decision, Richard called the apparent mistake to the courts attention, noting that he believed the court meant the date to be 2008. Despite this objection, the courts statement of decision does not offer any explanation for the retroactive award.[3] In the absence of any articulated reasons, we cannot ascertain whether the court properly exercised its discretion with due consideration for the parties respective economic needs during the relevant time period. (See In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 313, citing In re Marriage of Rising (1999) 76 Cal.App.4th 472, 474 [failure to articulate reasons as an abuse of discretion].) Accordingly, we shall also remand the question of retroactivity of spousal support to the trial court for its reconsideration. (In re Marriage of Cheriton, supra, at p. 313.)

3.      Attorney Fees

The exercise of the trial courts broad discretion to award attorney fees in marital dissolution proceedings is guided by section 2032, which as relevant here, permits an award of attorney fees and costs where just and reasonable under the relative circumstances of the respective parties. ( 2032, subd. (a).) In determining what is just and reasonable under the relative circumstances, the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the partys case adequately . . . . ( 2032, subd. (b).)

The trial court ordered Richard to pay Tonina $24,000 in attorney fees less any credit for payments previously made. Initially, Richard argues that the court erred by ignoring the evidence that Richard has already paid $6,712 of Toninas attorney fees. The record reflects that between October 2003 and April 2006, Tonina charged $10,805 in payments to her attorney on the Sears charge card. It is undisputed that Tonina made regular payments on this charge card until May 2006, when Richard began making the payments. Richard requests that payments made to pay down the Sears card should . . . be deemed payments toward this attorney fee award. Richard unquestionably is entitled to receive a credit for fees charged to the credit card that he has paid, and the court undoubtedly intended that he receive such credit. The amount of credit to which he is entitled will be determined as part of the accounting process to fix the portion of the balances on the credit cards that is community debt.

Richard also asserts that ordering him to pay 100 percent of Toninas attorney fees was inconsistent with the evidence, which he argues shows her ability to pay a least a portion of her fees. However, Richards financial circumstances throughout these proceedings undeniably have been superior to Toninas. Her salary in addition to the $600 a month in temporary spousal support she received is insufficient to cover the cost of a reasonable attorney in light of the oppressive credit card burden she has been carrying on behalf of the community. The court did not abuse its discretion by requiring Richard to pay for Toninas attorney fees.

Disposition

The judgment is remanded for reconsideration of the amount and retroactivity of spousal support consistent with this opinion, and is affirmed in all other respects. The parties shall bear their respective costs on appeal.

_________________________

Pollak, Acting P. J.

We concur:

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Siggins, J.

_________________________

Jenkins, J.

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[1] Since we affirm the trial courts finding that Richards salary provides him with the ability to make the monthly support payments, we do not reach Richards additional argument that the award is excessive because it requires him to invade, at a penalty, his retirement accounts in order to cover a shortfall between his salary and monthly obligations.

[2] To pay the community portion of the debt, Richard was given the option between invading the retirement accounts, which are community assets subject to equal division, or securing a personal loan, presumably with an offset to Toninas share of the retirement accounts.

[3] The decision does not use the word retroactive or offer any explanation for the March 2007 start date.