Raisch
v. Raisch
Filed 8/27/13 Raisch v. Raisch CA6
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opinion has not been certified for publication or ordered published for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
SIXTH
APPELLATE DISTRICT
DOUGLAS E. RAISCH,
Plaintiff and
Appellant,
v.
LAUREN K. RAISCH,
Defendant and
Respondent.
H037520
(Santa Clara
County
Super. Ct.
No. FL098687)
Appellant
Douglas Raisch and respondent Lauren Raisch are the parents of four
children. They separated in 2000 and
thereafter divorced. A 2006 stipulated
judgment provided that Douglas was to pay specific
amounts of child support and spousal support, and that he was to share college
expenses equally with Lauren. Douglas
ceased paying spousal and child support in early 2010, and he filed a motion in
April 2010 seeking a modification of child support to zero. In December 2010, he ceased paying for
college expenses for the two children who were then in college. In April 2011, Lauren brought a
sought to recover attorney’s fees.
Both
motions were heard in June 2011 and decided in August 2011. The court granted Douglas’s
motion to modify child support and reduced the amount of child support, but it
declined to make the modification retroactive to the April 2010 filing of the
motion. The court ordered Douglas
to reimburse Lauren for college expenses that he was required to share with her
under the 2006 judgment, and it ordered Douglas to pay
$75,000 of Lauren’s attorney’s fees under Family Code section 2030. Douglas claims that
the court abused its discretion in refusing to make the child support
modification retroactive, requiring him to reimburse Lauren for college
expenses, and awarding Lauren attorney’s fees.
We reject his contentions and affirm the trial court’s order.
I. Background
Douglas and
Lauren separated in 2000 after a 16-year marriage that produced four
children. In 2005, Douglas and Lauren
agreed to a stipulated order setting the amount of child support and spousal
support and providing for annual adjustments based on the consumer price index
(CPI). Spousal support was set to
terminate on December 31, 2010. The 2005 order also provided that Douglas and
Lauren would equally share college expenses for the four children up to a total
of $480,000 per parent. Douglas
was also obligated under the 2005 stipulation to pay “one half of private
school tuition for the children . . . .†The 2005 stipulated order was incorporated
into a 2006 judgment.
name="_ftnref1" title="">[1] Lauren had primary custody of the
children.
In February
2010, when his child support obligation was over $8,000 per month and his
spousal support obligation was just under $20,000 per month, Douglas
unilaterally ceased paying both child and spousal support.
1, 2010, Douglas filed a motion for
modification of his child support obligation.
At that point, two of the children were still minors, and the other two
children were in college. Douglas
claimed in his April 2010 income and expense declaration that his monthly
expenses were over $34,000 per month, including $19,668 per month in spousal
support. He declared that his business
had “ceased all operations in November [2009] and is insolvent.†Neither the business nor Douglas
had filed for bankruptcy. Douglas
declared that he had “no current income†other than unemployment benefits of
$920 every two weeks. He claimed that
his gross pay for the year 2009 was less than $20,000. Douglas asserted that
he “has no current prospects for being obligated to advance further educational
funds†for his children’s college expenses.
Douglas’s
motion claimed he had “an inability to pay any child support†and “request[ed]
a current modification, effective as of this filing.†Douglas asked that
child support “be reduced to zero†and asserted that “orders for private
schooling and for college funding need to be
eliminated . . . .â€
(Underscore omitted.) He did not
obtain a hearing date for his motion.
Despite repeated requests by Lauren and her attorney after the filing of
the motion, Douglas refused to provide any documentation
to support his motion. In December 2010,
Douglas informed the two children who were in college that he would no longer
be contributing toward their college expenses.
In April
2011, Lauren filed a motion to enforce the 2006 judgment. She sought unpaid child support and spousal
support, and she sought reimbursement from Douglas “for his half of payments
made by Respondent toward the children’s college
expenses . . . .†In
addition, she sought reimbursement for Douglas’s half of the minor children’s
private school expenses. Lauren further
asked the court to award her $250,000 in attorney’s fees under Family Code
section 2030 and sanctions of $150,000.
On April 29, 2011, Douglas and Lauren agreed to a stipulated order
resolving the issue of spousal support, and Douglas paid Lauren $207,500 in
spousal support arrears.
In May
2011, Douglas filed another income and expense declaration in which he claimed
that his monthly expenses were $7,684, and that $5,784 of this amount was “paid
by others†(his current wife Lisa). He
also reported that the minor children spent 95 percent of their time with
Lauren and 5 percent of their time with him.
On May 11, 2011, Douglas filed an ex parte motion seeking, for the first
time since he had filed his April 2010 motion, to set it for hearing.
Lauren
opposed Douglas’s motion to modify child support. She asserted that his child support
obligation should not be modified at all because he had plenty of money
available to him, including money from tax refunds he had received, to provide
him with the ability to continue to pay the child support due under the 2006
judgment. Alternatively, she urged that
there was good cause to deny retroactivity of any modification.
Both
motions were heard in June 2011 and resolved in a lengthy written order in
August 2011.
title="">[4] The court granted Douglas’s motion to modify
child support, modified his child support obligation to reduce it to $1,352 per
month, and made the modification effective on July 1, 2011.
disclose in his income and expense declaration or otherwise the funds that he
had received from income tax refunds and other sources between the filing of
his April 2010 motion and July 1, 2011. Due to “the substantial non taxable income
received by [Douglas] during the period of time for which a modification is
sought,†the court decided that the modification should not be retroactive. The court granted Lauren’s request for
reimbursement of college expenses. It
also ordered Douglas to pay $75,000 toward Lauren’s attorney’s fees and costs
under Family Code section 2030. Douglas
timely filed a notice of appeal from the court’s August 2011 order.
II. Discussion
A. Denial of Retroactivity
Douglas
does not challenge the court’s modification of his child support obligation,
but he argues that the trial court abused its discretion in refusing to make
the modification order retroactive.
The general
rule is that it is a discretionary decision for the trial court whether to make
retroactive a child support modification order.
(Fam. Code, § 3653, subd. (a).)
Where the child support modification order “is entered due to the unemployment
of . . . the support obligor,†it “shall be†retroactive
“unless the court finds good cause not to make the order retroactive and states
its reasons on the record.†(Fam. Code,
§ 3653, subd. (b).)
Douglas
claims that the trial court’s modification order was “entered due to [his]
unemployment†and therefore was required to be retroactive in the absence of a
good cause finding with reasons stated on the record. Even if we assume that Family Code section
3653, subdivision (b) applies rather than subdivision (a), we can find no abuse
of discretion in the trial court’s order, which was supported by a good cause
finding with reasons stated in a written order.
“[A] trial
court’s decision whether to make an order for child support retroactive is reviewed
under an abuse of discretion standard.â€
(Leonard, supra, 119 Cal.App.4th at p. 555.) Douglas acknowledges that
the “good cause†requirement in Family Code section 3653, subdivision (b). “ ‘[G]ood
cause’ under section 3653(b) requires the court to make a good faith finding
that nonretroactivity is justified by ‘ “real
circumstances, substantial reasons, [and] objective conditions.†’
[Citation.] A determination under
section 3653(b) that there is good cause to make nonretroactive the
modification or termination of a prior child support order must give due
consideration to the above stated statutory principles concerning child
support.†(Leonard, at p. 559.) These
statutory principles require a parent to make the support of the children his
or her first priority and to support the children to the best of his or her
ability. (Leonard, at p. 556.)
“[W]hether there is good cause to deny retroactivity under section
3653(b) requires an evaluation of the children’s needs at the time. Those needs of the children must be examined
in the context of the then-existing ability of the parents—both custodial and
noncustodial—to provide child support.â€
(Leonard, at p. 560.)
“[D]etermining
good cause under section 3653(b) requires a balancing of interests, with the
primary focus being to ensure, if possible, that ‘ “children actually receive fair, timely, and
[Citation.] [¶] This balancing includes an evaluation of the
needs of the minor children and the potential hardship resulting to them from
the retroactive reduction or termination of support. Since each parent is obligated to provide
support according to his or her ability (§ 4053, subd. (d)), the court must
examine the then-existing financial circumstances of both parents. The court balances the needs of the children
against the interests of the supporting parent not to be faced with an unjust
and unreasonable financial burden resulting from a nonretroactive order. This latter inquiry examines the supporting
parent’s then-existing financial resources and ability to pay for the support
of the children during the period of potential retroactivity being
considered. Since the needs of the children
are of paramount concern, where retroactivity would result in demonstrable
hardship to them, good cause may exist to deny a retroactive support reduction
or termination when the supporting parent has the ability to bear that
financial burden.†(Leonard, supra, 119
Cal.App.4th at pp. 560-561.)
Under
retroactivity are the “real circumstances†affecting the children’s needs and
the parents’ financial circumstances during the potential period of
retroactivity. Although Douglas claims
that he “was in no better financial position than Lauren,†the record indicates
the opposite. Throughout the potential
retroactivity period, Lauren, as the primary caretaker of the children,
incurred expenses of more than $40,000 per month despite her lack of income,
minimal liquid assets, and significant debts.
Her financial circumstances placed her in a precarious position to bear
the full weight of the children’s expenses during this period of more than a
year. Since Douglas’s discontinuation of
support was abrupt, it did not allow for a gradual period of adjustment to a
lower level of expenses, but instead required Lauren to pay ongoing expenses to
which she and the children were already committed.
In
contrast, Douglas, who spent little time caring for the children during the
potential period of retroactivity, was not burdened with their financial
support. Although he claimed no income
April 2010 to June 2011, he received unemployment benefits and a total of
nearly $1 million in other funds in 2010, which included $650,000 in income tax
refunds that he received in November 2010.
Douglas acquired no debts or delinquencies during this period. Instead of using any of these very
substantial funds to pay his child support obligation, which amounted to
between $110,000 and $120,000 during the potential retroactive period and was
statutorily required to be his first priority, Douglas paid $80,000 to $100,000
to his attorneys, put a $140,000 down payment on a new home without selling his
existing home (which was on the market for $1.5 million), and paid $7,600 per
year to send his daughter with his current wife to private school.
Despite
Douglas’s argument to the contrary, the good cause inquiry under
financial resources to be viewed through a restrictive filter that limits the
court’s consideration of a parent’s “financial resources†to “income†as it is
defined in Family Code sections 4055 and 4058.
As this court stressed in Leonard,
the relevant inquiry depends on “ ‘real
circumstances, substantial reasons, [and] objective conditions’ †bearing on the children’s needs and
the parents “financial circumstances†and “financial resources.†Family Code sections 4055 and 4058 are
concerned with identifying the types of income that are considered in
calculating the amount of child support.
(Fam. Code, § 4055 [uniform guidelines for calculating child support],
Fam. Code, § 4058 [income to use in calculating child support].) Family Code section 3653, which governs the
retroactivity of a modification order, makes no mention of Family Code sections
4055 and 4058 or of their definitions of “income.†In making the good cause decision, the trial
court is not required to calculate a child support amount for the potential
retroactive period, as the child support amount for that period will either be
the previously ordered amount, if the new order is not retroactive, or the new
amount if the new order is retroactive.
Since no calculation of a separate child support amount is necessary,
the parents’ “income†for child support purposes is not the relevant measure of
the parents’ financial resources for purposes of determining whether a
modification order should be retroactive.
Douglas
asserts otherwise, but the record is clear that the trial court did not use
Douglas’s income tax refunds to calculate child support. In its August 2011 order, the trial court
explicitly found that Douglas’s income tax refunds were not “income available for support on an ongoing basis†because
there was no evidence that “these will be recurring in the future.†Therefore, the court did not consider those
refunds in calculating Douglas’s income for child support purposes going
forward. It is true that the trial court
also made a finding in its August 2011 order that the funds that Douglas
received between April 2010 and June 2011 (the potential retroactive period),
including income tax refunds, were “income available for support†within the
meaning of Family Code section 4058, but this finding had no materiality. Douglas claims that this finding reflects
that the trial court improperly used his receipt of income tax refunds. It did not.
The only improper impact that this finding could have had would have
been if the income tax refunds were utilized to calculate child support. They were not. The trial court’s denial of retroactivity was
not required to be based on Douglas’s “income available for support,†and the
reason provided by the court for denying retroactivity did not hinge on this
characterization of the nature of Douglas’s income. The trial court’s denial of retroactivity was
premised on Douglas’s receipt of “substantial non taxable income†between the
filing of his motion and the hearing of his motion. Whether this income was “income available for
support†or not, it still provided Douglas with the financial resources
necessary to pay his child support obligation during the potential retroactive
period.
The trial
court’s “balancing of the hardships†under Leonard
led to a decision that was well within the bounds of its discretion. Douglas had nearly $1 million at his disposal
in the relevant period and chose to use none of it to support his children
though just $110,000 to $120,000 would have satisfied their needs. Instead, he paid lawyers $80,000 to $100,000,
put $140,000 into a new home without disposing of his existing home, and
continued to send his daughter with his new wife to private school. Clearly, Douglas had the financial resources
available to pay the child support that his children needed, but he instead
chose to devote his considerable financial resources to other things and left
Lauren, with no income, little in liquid assets, and substantial debt, to bear
all of the children’s considerable expenses.
Douglas never contended that the children did not need these funds
during the potential retroactive period to pay for their schooling, food,
shelter, and activities. On this record,
we can find no abuse of discretion in the trial court’s conclusion that there was
good cause to deny retroactivity.
Douglas
also contends that the trial court failed to state reasons on the record. We disagree.
Although the trial court could have provided more explanation of its
reasoning, it expressly identified as a reason underlying its good cause
finding the fact that Douglas had received “substantial†funds during the
potential retroactive period. This
finding established that Douglas’s financial resources gave him the ability to
pay the child support due during that period and that he simply chose not to do
so. The court’s reasoning supported a finding of good cause to deny
retroactivity. We uphold the trial
court’s denial of retroactivity.
B. Reimbursement of College
Expenses
Douglas
claims that the trial court erred in ordering him to reimburse Lauren for his
share of their children’s college expenses as required by the 2006 judgment.
1. Background
The 2005
stipulation, which was incorporated into the 2006 judgment, provided that
“[e]ach party shall be responsible for one half of the cost of tuition, board,
books and reasonable living expenses for a college or vocational program for
each child†with the limitation that college expenses “shall in no event be
higher than a total of $480,000 for the four children per party.â€
[(the trial court)] has jurisdiction to resolve any disputes related to the
choice of college or program and the
expenses each parent may be held responsible for.†(Italics added.)
Beginning
in December 2010, Douglas ceased paying any college expenses, and Lauren bore
the full amount of the college expenses for the two children who were then in
college. She sought reimbursement of the
expenses that she had paid instead of Douglas.
obligation to pay college expenses.
The court
rejected Douglas’s request on the ground that this was “a contractual
obligation in the stipulation agreement such that the Court is without
jurisdiction at this time to modify the same.â€
The court granted Lauren’s request for reimbursement of college expenses
and confirmed that Douglas “is obligated to fund his half of the college
expenses pursuant to the Order up to the cap of $480,000.â€
2. Analysis
Douglas
relies on one case and a comment to a section of the Restatement Second of
Contracts to support his claim that reimbursement could not be ordered. Neither of them supports his claim.
The case,
(1993) 21 Cal.App.4th 100 (Smith),
involved a Massachusetts dissolution judgment that incorporated a marital
settlement agreement (MSA) requiring the husband to pay the colleges expenses
for the children. (Smith, at pp. 103-104.) The
MSA stated: “The Husband agrees,
provided that he is financially capable to do so, to provide for the
undergraduate college education of both children at an accredited institution
of higher learning.†(
college for one child, the husband stopped paying the child’s college
expenses. The wife then paid the child’s
college expenses for a fourth year. (
The child failed to complete college, but the husband then gave the
child $10,000 and suggested that the child use it to reimburse the wife. The wife refused to accept the money from the
child. (Smith, at pp. 104-105.) The
wife filed a civil action in California to recover as damages the college
expenses of $11,109 she had expended for the child’s fourth year of
college. (Smith, at p. 105.) The issue
in Smith was whether the wife could
“maintain a damage action†for breach of a third-party beneficiary
contract. (Ibid.) The Court of Appeal
concluded that the wife had a “right to enforce†the husband’s promise, but she
did not have a right to bring an action for damages. (Smith,
at p. 106.) The court explicitly did not
address “the issue of whether [the wife] may have a remedy against [the
husband] for reimbursement . . . .†(Smith,
at p. 108, fn. 7.)
for damages against Douglas. Lauren
asked the court that had entered the 2006 judgment to enforce it. This issue was not addressed in
that it was not considering whether the wife had a remedy for
reimbursement. “A judgment or order made
or entered pursuant to [the Family Code] may
be enforced by the court by execution, the appointment of a receiver, or
contempt, or by any other order as the
court in its discretion determines from time to time to be necessary.†(Fam. Code, § 290, italics added.) Thus, the trial court had discretion to
enforce the 2006 judgment by ordering Douglas to reimburse Lauren.
The
Restatement Second of Contracts comment upon which Douglas relies is similarly
unhelpful. Restatement Second of
Contracts, section 307 states: “Where
specific performance is otherwise an appropriate remedy, either the promisee or
the beneficiary may maintain a suit for specific enforcement of a duty owed to
an intended beneficiary.†Comment d,
the one to which Douglas refers, reads:
“d. Gift promise. Where the promisee intends to make a gift of
the promised performance to the beneficiary, the beneficiary ordinarily has an
economic interest in the performance but the promisee does not. Thus the promisee may suffer no damages as
the result of breach by the promisor. In
such cases the promisee’s remedy in damages is not an adequate remedy within
the rules stated in §§ 359 and 360, and specific performance may be
appropriate. See Illustration 1 to §
305. The court may of course so fashion
its decree as to protect the interests of the promisee and beneficiary without
unnecessary injury to the promisor or innocent third persons. See § 358.â€
(Rest.2d Contracts, § 307, com. d.) As was the case with Smith, this comment concerns the propriety of an action for
damages. Lauren’s request that the court
enforce the 2006 judgment was not an action for damages.
Lauren
sought enforcement of the 2006 judgment under Family Code section 290. The court ordered Douglas to comply with the
2006 judgment by reimbursing Lauren for college expenses that he was obligated
to pay but had not paid. Douglas has
failed to demonstrate that the court lacked the power to require him to comply
with the 2006 judgment by reimbursing Lauren.
C. Attorney’s Fees
Douglas
contends that the trial court abused its discretion in awarding Lauren $75,000
in attorney’s fees under Family Code section 2030. He claims that the parties’ relative
circumstances did not justify such an award.
The court
found that Lauren had incurred more than $350,000 in attorney’s fees and
costs. The court found that Douglas had
had available to him substantial funds that he could have used to pay his child
support and spousal support obligations.
Instead, he unilaterally stopped paying these obligations and
“conceal[ed]†these funds, thereby prolonging and complicating the
litigation. “Based on the entire circumstances
of the case and the respective financial positions of the parties,†the court
ordered Douglas to pay $75,000 to Lauren as his contribution toward her
attorney’s fees and costs under Family Code section 2030.
Family Code
section 2030 authorizes a court to make an award of attorney’s fees and costs
where there is a “disparity†in “ability to pay†for legal representation. Douglas had received nearly $1 million in
2010 but had triggered this litigation by refusing to pay child support,
spousal support, or college expenses that he was obligated to pay under the
2006 judgment. Yet he had managed to pay
his own attorney’s fees. At the time of
the June 2011 hearing, Douglas was employed, and the court found that his
income was $5,000 per month.
name="_ftnref10" title="">[10] In contrast, Lauren had no income at all and
significant debts, and she had had to bear all of the children’s expenses
throughout the litigation. She had not
been employed since 1989, and she had not been able to obtain “meaningful
employment†due to her responsibilities as the minor children’s primary
caretaker. The trial court could have
reasonably concluded that there was a significant financial disparity between
the parties. Douglas had received large
amounts of funds in 2010 and had a regular income at the time of the hearing,
while Lauren had no income at all. The
court did not abuse its discretion in requiring Douglas to bear a small portion
of Lauren’s burdensome attorney’s fees and costs for litigation that Douglas
triggered by failing to comply with the 2006 judgment.
III. Disposition
The trial
court’s order is affirmed.
_______________________________
Mihara,
J.
WE CONCUR:
_____________________________
Premo,
Acting P. J.
_____________________________
Márquez,
J.
name="_ftn1" title="">[1]
A 2003 stipulated order set the
amount of child support differently, but it also required Douglas to equally
share with Lauren the cost of college education for each of their four children
up to a total of $480,000 from each parent.
It was stipulated in the 2003 order that Douglas’s gross monthly income
was $76,500. The 2003 order required
Douglas and Lauren to “split equally private schooling
costs . . . .†The
2005 order superseded the 2003 order.
name="_ftn2" title="">[2]
At the time he filed his April
2010 motion, Douglas’s child support obligation was $8,276.75 per month. It continued at that level through August
2010 and thereafter increased, due to the annual adjustment, to $8,279.45 per
month.
