Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 1-00-FL092701
Premo, J.
In this family law matter, respondent Stacy Lynn Marcus appeals from two postjudgment orders. The first is an order denying her request to modify child support. Stacy challenges that order on the ground, among others, that the existing child support amount was below the statutory guideline. (Fam. Code, § 4050 et seq.) The second order determined the status of assets that Stacy claimed were omitted from the original division of community property. As to it, Stacy argues that she was deprived of due process when the trial court met with the forensic accountants in her absence. She also maintains that the court erred in awarding petitioner Ittai Bareket his attorney fees as the prevailing party in a prior motion. Stacy has demonstrated error only with regard to the final argument. We shall modify the order to strike the attorney fees award and, as modified, affirm.
Consistent with the tradition in marital dissolution cases, we refer to the parties by their given names for the sake of clarity and mean no disrespect in doing so. (Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.)
Hereafter, all unspecified section references are to the Family Code.
I. Factual and Procedural Background
A. Introduction
The parties were married in 1992. Their only child, a daughter, was born in 1997. The family was residing in California when Ittai petitioned for dissolution of the marriage in May 2000. Stacy and the child moved to New York. A status-only judgment of dissolution was entered and Ittai has remarried. There are two children of that marriage and one minor stepchild now residing with Ittai in California.
In 2004, after “extensive negotiations and compromise,” the parties entered into a stipulation by which they settled a number of property issues. The parties’ property division was set forth in a spreadsheet prepared by Ittai’s accountant, James Butera, and attached to the stipulation. The stipulation included the parties’ agreement that certain assets, including several assets located in Israel, would be divided equally once their value was determined. The parties agreed to cooperate in securing an accounting of those assets and waived any claim to reimbursement. The stipulation was reduced to judgment May 3, 2004. A judgment after trial on reserved issues, including child support, was entered November 5, 2004.
B.The June 2006 Stipulation
On June 26, 2006, the trial court entered an order pursuant to the parties’ stipulation (the June 2006 Stipulation), which purported to resolve a number of lingering disputes pertaining to child support and the documentation needed to finalize the division of property. The parties agreed to the appointment of Commissioner John G. Schroeder as a temporary judge for all purposes. The purpose of the stipulation was “to resolve any and all claims that either party may have against the other up to May 5, 2006, with the exception of those items specifically reserved” in the 2004 judgments.
The June 2006 Stipulation required Ittai to pay Stacy child support of $3,500 per month “as a compromise of the disputed claims of the parties.” There were to be no additional add-ons other than health care deductibles, copayments, and half of any expenses incurred in connection with the child’s attendance at public school. Ittai was relieved of any claims for past due child support of “whatever nature” and all such claims up to April 30, 2006, were “wrapped into” the agreement. For his part, Ittai released his $100,000 attorney fees claim against Stacy, which had been awarded to him in prior proceedings.
The parties agreed that the court would retain jurisdiction to retroactively modify child support. The parties would exchange information about the previous year’s income by March 15 every year and the court could “retroactively modify the previous year[’s] support based on the information exchanged.” The agreement specified, “[Ittai’s] yearly compensation from all sources must exceed $600,000 before there would be a sufficient change of circumstances to modify child support. [¶] [Stacy’s] yearly compensation from all sources must exceed $100,000 before that would be a sufficient change of circumstances to modify child support.”
The parties further agreed, “No motions shall be filed in this action by either party without first scheduling a Case Management Conference.”
C. Stacy’s Motions to Set Aside and to Enforce the 2004 Judgments
On August 22, 2006, Stacy filed two motions: a motion to set aside the 2004 judgments on the ground of fraud and a motion to enforce the court’s prior orders. Stacy demanded the appointment of a neutral attorney in Israel to investigate assets she believed had been omitted from the property settlement. Stacy concluded the motion to set aside the judgments with a brief request that the court “correct” the child support based upon an accurate calculation of Ittai’s assets and compensation. In a combined opposition to both motions Ittai asked the court to award attorney fees and costs if the court found that Stacy’s allegations were “not based on fact and designed for purposes of harassment.”
On November 8, 2006, the court denied Stacy’s motion to set aside the 2004 judgments, finding “no evidence of active concealment or fraud.” The court made no mention of attorney fees. As to the motion to enforce the prior orders, the trial court noted that Stacy had raised some issues pertaining to omitted assets that warranted further investigation. The court needed to be able to “trace the changes” in the couple’s assets to determine if anything had been omitted from the 2004 property division. The court directed Stacy to submit clarifying documentation pertaining to her allegations and set a further hearing on the issue of omitted assets for January 2007.
Following the January 2007 hearing, the parties attempted to settle their property dispute. Failing that, the trial court entered an order on April 30, 2007, in which the court ordered the parties to substantiate their contentions. The court ordered the parties to liquidate all identified assets that had not yet been divided and to divide the net proceeds forthwith. The court also ordered the appointment of an attorney in Israel to assist the court in ascertaining the status of Israeli assets and tax matters. Again, there was no mention of attorney fees.
D. The January 25, 2008 Order Regarding Child Support
In a memorandum of points and authorities filed on or about December 11, 2007, Stacy argued that the $3,500 child support payment was below the statutory guideline amount when it was made and that the June 2006 Stipulation was against public policy. At the hearing held January 25, 2008, Stacy also argued that Ittai had earned more than $600,000 in 2006 and, therefore, that the circumstances warranted an upward modification of the order. By minute order entered on January 25, 2008, the trial court denied Stacy’s request to modify child support, finding that Stacy had not shown that Ittai’s 2006 income had exceeded the $600,000 threshold for modification.
E. The February 15, 2008 Order Regarding Omitted Assets
Early in 2007 the trial court had ordered Ittai and his accountant, James Butera, to produce documents pertaining to Stacy’s contention that assets had been omitted from the 2004 division of property. Ittai repeatedly maintained that he had produced all the documents Stacy had requested. Stacy repeatedly insisted that he had not. The parties reached an impasse. In an intended decision issued November 20, 2007, the trial court noted its frustration with “the extent of the continuing litigation in this case” and the fact that some assets had yet to be divided. The court had asked the parties to present their positions and the resulting correspondence was “voluminous and extensive.” “[Stacy] had claimed that not all of the accounts were properly divided, so the Court felt that it was necessary to investigate further. It was clear that both sides needed to have resolution. It was therefore, the Court’s suggestion that the Court meet informally with the accountants to resolve this dispute. Both parties consented to that meeting.”
The court went on to state that on October 12, 2007, the court met with Ittai’s accountant and the accountant who had represented Stacy in connection with the 2004 property settlement, Michael Thompson. Thompson made it clear that he no longer represented Stacy but he participated as a “ ‘friend of the court’ in order to assist the Court in its analysis of the claims by [Stacy].” The purpose of the meeting was to have the accountants help the court “resolve the impasse.”
The court then turned to Stacy’s correspondence to the court, which included a lengthy list of items reflecting assets she claimed had been omitted from the 2004 judgments. The court examined all the items separately and concluded that some had already been divided, some had been transferred prior to the date of separation, and some had been identified but not yet divided. The court again directed an accounting and division of the assets that still had not been divided.
The intended decision was made an order of the court on February 15, 2008. In its final order adopting the intended decision, the trial court listed five categories of assets over which it specifically reserved jurisdiction for resolution in the future.
II. Discussion
A. Child Support Order--January 25, 2008
Stacy first argues that the $3,500 child support payment specified by the June 2006 Stipulation was below the statutory guideline amount (§ 4050 et seq.) and is, therefore, modifiable per se. She also argues that in denying her request for modification, the trial court failed to state its reasons for departing from the guidelines, that the $600,000 minimum required for modification was contrary to the best interests of the child, that her reduced income for 2006 was a change in circumstances warranting modification of the order, and that Ittai’s 2006 earnings actually exceeded the $600,000 threshold.
We review a judgment for child support under the abuse of discretion standard. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 282-283.) That standard limits us to determine whether the court’s factual determinations are supported by substantial evidence. (Ibid.) “We do not substitute our judgment for that of the trial court, but confine ourselves to determining whether any judge could have reasonably made the challenged order.” (In re Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1360.) Of course, the trial court’s discretion must be exercised within the limits of the child support statutes. (In re Marriage of Fini (1994) 26 Cal.App.4th 1033, 1044.) However, we uphold “the exercise of discretion as broadly as possible under the statute.” (Id. at p. 1043.)
Although Stacy does not mention it, section 3651 is the general rule for modifying or terminating support orders, “whether or not the support order is based upon an agreement between the parties.” (§ 3651, subd. (e).) Section 3651, subdivision (a), provides: “Except as provided in subdivisions (c) and (d) and subject to [Family Code provisions not pertinent here], a support order may be modified or terminated at any time as the court determines to be necessary.” Subdivision (c) prohibits modification of “an amount that accrued before the date of the filing of the notice of motion.” And subdivision (d) prohibits modification of a spousal support order based upon the parties’ agreement that the parties have agreed is not nonmodifiable. Thus, under section 3651, all child support orders are modifiable prospectively from the date of the noticed motion seeking modification, regardless of the terms of any existing child support agreement. (In re Marriage of Alter (2009)171 Cal.App.4th 718, 726-727.)
In this case, there is no notice of motion to modify child support in the record before us. Stacy’s concluding remarks in her 2006 motion to set aside the judgment asked the court to “correct” the child support amount but the trial court denied that motion in November 2006. The only other indication of a request for modification is the December 11, 2007 memorandum of points and authorities. Assuming that that memorandum was sufficient to constitute the “noticed motion” called for by section 3651, Stacy was entitled to prospective modification of child support as governed by the Family Code. But she had no statutory right to retrospective modification of support. Any right to retrospective modification would be governed solely by the June 2006 Stipulation.
The June 2006 Stipulation contemplated an annual retrospective adjustment of child support based upon the parties’ income for the prior year. The agreement was that Stacy would not be entitled to an increase in child support unless Ittai’s income exceeded $600,000 for that year. Ittai’s 2006 W-2 form showed wages of $447,572. His 2006 tax return showed other income of $44,445. If the latter was attributable solely to Ittai (and not to his wife), his income for 2006 was $492,017, well below the $600,000 threshold set by the June 2006 Stipulation.
Stacy argues that the trial court erred in refusing to add in a profit sharing bonus Ittai earned in 2006 but was scheduled to receive in January 2007. That was not error. The overall focus of the child support calculation is to determine the parent’s ability to contribute to the child’s support. (Cf. In re Marriage of Alter, supra, 171 Cal.App.4th at p. 737.) If the money was not to be paid until 2007, Ittai would not have had it available to contribute to Sydney’s support in 2006.
Some of the figures quoted in Stacy’s brief do not match the figures in the record. We have relied on the record.
Stacy also argues that the trial court erred in refusing to take into account Ittai’s equity interest in his employer, Netformx, Inc. This appears to be the same argument we rejected in a prior appeal. (In re Marriage of Bareket (Apr. 18, 2006, H028332) [nonpub. opn.].) Absent different facts, Stacy should have been estopped from relitigating this issue. (Whittlesey v. Aiello (2002) 104 Cal.App.4th 1221, 1226.) In any event, the argument fails on the merits. Stock and stock options are not income but they may warrant the imputation of income in some cases. (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 292.) For example, in Cheriton, the father had stock and stock options worth “tens of millions of dollars” principally from Cisco, a publicly traded company. (Id. at pp. 289-290.) Cheriton concluded that the trial court’s refusal to consider the father’s substantial wealth resulted in an order that was too low to be in the best interests of his children. (Id. at p. 292.) Here there is no evidence that Ittai’s equity interest in the privately held Netformx, Inc., was substantial enough to affect his or his daughter’s lifestyle.
In short, the trial court did not abuse its discretion in determining that Ittai’s income for 2006 did not include the profit sharing or equity interest as Stacy urged. Thus, Stacy did not show that Ittai’s income met the threshold requirement for retroactive modification of the 2006 child support payment.
As to Stacy’s request for a prospective modification of the child support amount, Stacy would be entitled to modification from the date of her motion to modify child support, which, so far as we can discern from the record, was on or about December 11, 2007. But the precise date is not crucial to our analysis. The main point is that, to the extent Stacy sought prospective modification of the support order, the trial court was bound to comply with statutory requirements.
The presumptively correct amount of child support is that determined by an algebraic formula set forth in the Family Code. (§ 4050 et seq.) Whenever the court orders an amount that differs from that obtained by use of the formula, the court must state on the record the “reasons the amount of support ordered differs from the guideline formula amount” (§ 4056, subd. (a)(2)) and the “reasons the amount of support ordered is consistent with the best interests of the children.” (Id., subd. (a)(3).) These findings are mandatory and the failure to make them precludes effective appellate review and may constitute reversible error if the missing information is not otherwise discernible from the record. (In re Marriage of Hubner (2001) 94 Cal.App.4th 175, 183.)
At the time of the June 2006 Stipulation, the trial court noted that, if Ittai earned $600,000 per year and Stacy earned $100,000, the guideline amount would have been $4,360 per month. Stacy maintains that this shows that the $3,500 per month was less than the guideline amount. But the parties’ incomes were not $600,000 and $100,000, so the $4,360 figure is meaningless. More pertinent is the calculation the trial court performed prior to the 2008 hearing. In that calculation the trial court assumed Ittai’s income to be $41,687 per month ($500,244 per year--a bit more than the $492,017 shown on his 2006 tax returns) and that Stacy’s income to be $1,898 per month ($22,776 per year--a bit more than the $17,489 shown on Stacy’s 2006 tax return). Allowing Ittai one or two hardship deductions (§§ 4059, 4072) for support of the children of his current marriage, the court determined that the guideline payment would have been $3,989 or $3,519, respectively. The latter figure is almost exactly the amount of the June 2006 Stipulation. Thus, the court undertook a rough analysis and was aware of what the guideline amounts would have been if based solely upon the 2006 income.
Section 4059 provides that in calculating the net disposable income of parents, the trial court may make a deduction from gross income “hardship.” (§ 4059, subd. (g).) The court may allow a hardship deduction to meet the “minimum basic living expenses of either parent’s natural or adopted children for whom the parent has the obligation to support from other marriages or relationships who reside with the parent.” (§ 4071, subd. (a)(2).)
Stacy is incorrect in characterizing as law of the case this court’s conclusion in a prior appeal striking a hardship deduction used to calculate a 2004 child support order because the court did not state its reasons for allowing the deduction. (In re Marriage of Bareket, supra,(H028332) [nonpub. opn.].) Whether Ittai would be allowed a hardship deduction if and when the June 2006 child support order is modified is entirely an issue of fact to be decided at the time the order is modified. (In re Marriage of Carlsen (1996) 50 Cal.App.4th 212, 217.) As the name implies, the doctrine of law of the case is exclusively concerned with issues of law and not fact. (People v. Shuey (1975)13 Cal.3d 835, 842.) We have not and do not express an opinion on whether Ittai would be entitled to a hardship deduction now or any time in the future.
But the court had more than just the parties’ 2006 income in mind when it denied Stacy’s motion to modify the child support at the January 2008 hearing. The bench officer presiding over Stacy’s request was the same person, Commissioner Schroeder, who had presided over and entered the June 2006 Stipulation. Consequently, he was familiar with the bases for that agreement and the various claims the parties had released when they agreed upon the $3,500 per month. He was also necessarily aware that under the June 2006 Stipulation the parties would be exchanging income information for 2007 in just two months’ time. Depending upon the outcome of that exchange, they would be entitled to retroactive modification of the child support payment for all of 2007, effectively mooting any order the trial court might make in January 2008. Thus, to the extent the $3,500 differed from the guideline amount based upon the parties’ 2006 income, we can easily discern from the record the trial court’s reasons for allowing that amount to stand. Under these circumstances, any judge could have reasonably refused to modify the existing child support order.
Stacy also argues that the provision in the June 2006 Stipulation setting an income threshold for modification is contrary to public policy. Since we have concluded that under the circumstance here the trial court’s order was reasonable and consistent with the statutory requirements, we do not reach that argument.
B. Omitted Assets--February 15, 2008
Stacy challenges the February 15, 2008 order on the ground that she was denied due process of law when the trial court decided substantive issues based upon a meeting with the accountants, a process to which she did not consent. But in its February 15, 2008 order, the trial court stated that its meeting with the accountants had been undertaken with the consent of both parties. That statement is neither supported nor contradicted by the record.
As we have frequently stressed, “to be successful on appeal, an appellant must be able to affirmatively demonstrate error on the record before the court. ‘ “ ‘A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.’ [Citations.]” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.)’ (In re Marriage of Bower (2002) 96 Cal.App.4th 893, 898.)” (In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 822.) Since it is the appellant’s burden to show error, the appellant’s failure to provide an adequate record on an issue requires that the issue be resolved against the appellant. (Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.)
The importance of these principles cannot be overstated. In this case, our review has been sorely hampered by the state of the record Stacy has provided on appeal. Indeed, the actual progress of this case is impossible to discern with any certainty from the record we have. This is partly due to the informality of the proceedings below. Pursuant to the June 2006 Stipulation, the parties were to withhold filing any noticed motions until the issues in dispute could be discussed at a case management conference. Although the apparent intent of this provision was to streamline matters and encourage settlement, it only seems to have complicated things. Stacy raised many issues by way of lengthy informal correspondence sent directly to the court. The issues were discussed and decided by way of further informal correspondence and telephonic case management conferences. As far as we can tell, Stacy’s document demands and Ittai’s responses were also made by the exchange of informal correspondence. The result is that there is much uncertainty in the record as to which motions were pending and when they were decided. Indeed, the issues themselves are vague, at best.
The other problem contributing to the uncertainty in the record is that Stacy’s compilation of the record on appeal contains some puzzling gaps. The most glaring example is the apparent omission of any record of the proceeding that took place on October 5, 2007. A minute order dated November 2, 2007, indicates that the proceedings that day were continued from October 5, 2007. October 5, 2007 was just one week before the court met with the accountants, but no corresponding minute order or reporter’s transcript for October 5 appears in the record. Since it was Stacy’s burden to provide an adequate record for review, the inadequacy of the record works only to her detriment.
Turning back to the question of whether Stacy consented to the trial court’s process, we note that Stacy admits that she “did not object to the court meeting with [Ittai’s] accountant” for the purpose of determining what documents had or had not been produced. She argues, however, that the court’s action went beyond the scope of her consent by actually ruling upon the status of the challenged assets. Since the record contains no reference to Stacy’s consent other than the trial court’s statement, Stacy cannot show that the court’s actions exceeded the scope of her consent. Accordingly, we reject Stacy’s due process argument.
Stacy argues, in the alternative, that the trial court’s rulings were erroneous. By way of background, we note that it appears that what Stacy did here was to compile a list of account numbers and references to specific sums of money, which she gleaned from letters and other documents going as far back as 2000. Stacy claimed that any of those items that did not expressly appear on the spreadsheet attached to the 2004 stipulated judgment were omitted assets that had not been divided. For the last several years she has been insisting that Ittai or his accountant produce “back up” material to support his position that the assets she identified had, in fact, been divided or did not exist at the time of separation. Stacy also repeatedly demanded further documents to support Ittai’s claim that other assets over which the court had expressly retained jurisdiction either had no value or had been divided. Ittai responded with further documents or with the assertion that all such documentation had been provided. The trial court understandably struggled to sort out Stacy’s claims. Butera and Thompson were the accountants involved in the 2004 property division. That is why the trial court turned to them to sort out the conflict and to decide if, in fact, further documentation was required.
Following its meeting with the accountants, the trial court determined that no further documents were needed. The trial court found, with the exception of the five classes of assets over which it retained jurisdiction, that all the assets Stacy sought had either been considered and dealt with in the 2004 stipulated judgment or that there was nothing to be divided. To the extent the assets had been transferred prior to separation, Stacy waived her right to reimbursement in connection with the 2004 stipulated judgment, and, therefore, was barred from pursuing them.
Stacy challenges these conclusions as to six classes of assets. Her approach with respect to four of them (Cater Allen accounts, Israel Discount Bank accounts, assets mentioned in the Hunsinger letter, and severance and matched savings payments received or due from Mercury Interactive), is to incorporate the arguments she made in her opposition papers in the trial court. We do not consider those arguments. (Paterno v. State of California (1999) 74 Cal.App.4th 68, 109 [party does not satisfy rule requiring it to set forth argument and supporting authority by incorporating by reference arguments contained in trial briefs].) Accordingly, we need not consider these claims. (See Garrick Development Co. v. Hayward Unified School Dist. (1992) 3 Cal.App.4th 320, 334 [“Rather than brief th[e] arguments, [appellants] purport to ‘incorporate’ them from papers filed below. We do not consider such arguments on appeal.”].)
As to three sets of assets (Cater Allen accounts, pension accounts and assets mentioned in the Seiler letter), Stacy maintains that Ittai did not produce sufficient documentation to satisfy her that these assets had been divided or did not exist. In light of the incompleteness of the record, Stacy cannot affirmatively demonstrate that the trial court’s decision was erroneous.
Finally, Stacy also argues that the trial court misinterpreted the waiver contained in the 2004 stipulated judgment. She maintains that assets that were not mentioned in the 2004 stipulated judgment were, by definition, omitted assets and are subject to division in the future. As such, the waiver of reimbursement would not apply. But Stacy bases her argument on her allegations, not upon the trial court’s factual findings, which were that there were no omitted assets. Since Stacy has not demonstrated that this finding was error, she is bound by the trial court’s determination.
C. Attorney Fees
In his opposition to Stacy’s 2006 motions to vacate or enforce the 2004 judgments, Ittai requested an award of attorney fees. The trial court disposed of those motions on their merits in April 2007. The court did not mention attorney fees and did not expressly contemplate further consideration of either motion aside from further investigation of the omitted assets question. In its intended decision on the omitted asset issue, which was issued in November 2007, the court stated, “With respect to the motions to set aside the prior judgments, the Court finds that [Ittai] is the prevailing party thereby entitling him to an award of fees and costs.” Shortly thereafter, Ittai sent a letter asking that the court make the intended decision an order of the court and requesting an award of attorney fees under section 271. Stacy opposed the attorney fees request on the ground the court had not reserved jurisdiction over that issue in its 2006 orders. The court made the intended decision an order of the court on February 15, 2008, leaving the “prevailing party” award intact. Stacy now challenges the award, arguing that there is no statutory basis for it and that it came “[o]ut of the blue.” Ittai argues that his initial request, contained his opposition to Stacy’s motion to set aside the judgment, was an adequate basis for the award. Stacy has the better argument.
It is the rule that unless a contract, statute, or law provides otherwise, a party must pay his or her own attorney fees. (Code Civ. Proc., §§ 1021, 1033.5, subd. (a)(10).) Section 271 allows a court to base an award of attorney fees in a family law matter on “the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation.” (§ 271, subd. (a).) Such an award is in the nature of a sanction. (Ibid.) We ordinarily decline to interfere with an order for sanctions unless the trial court abused its broad discretion in making it. (In re Marriage of Petropoulos (2001) 91 Cal.App.4th 161, 177-178.) In the present case, the court did not purport to award fees as a sanction but expressly based the award upon the finding that Ittai was the “prevailing party.” We are not aware of any Family Code provision, or any provision among the parties’ several agreements, that allows for an award of attorney fees based solely upon the party’s success in litigation. Accordingly, we agree with Stacy that the award was an abuse of discretion.
III.Disposition
The trial court’s order dated January 25, 2008, is affirmed.
The trial court’s order dated February 15, 2008, is modified as follows:
On page 23 of the Intended Decision, which is attached to the order, in the last sentence of the order, the words “fees and” are stricken so that it shall read: “With respect to the motions to set aside the prior judgment, the Court finds that Mr. Bareket is the prevailing party thereby entitling him to an award of costs.”
As modified the order is affirmed.
The parties shall bear their own costs on appeal.
WE CONCUR: Rushing, P.J., Elia, J.