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In re Marriage of Sanders

California Court of Appeals, Fourth District, Third Division
May 27, 2010
No. G041721 (Cal. Ct. App. May. 27, 2010)

Opinion

NOT TO BE PUBLISHED

Appeal from orders of the Superior Court of Orange County, No. 01D010882 Nancy A. Pollard, Judge.

Dawn E. Wardlaw, Steven R. Grecco and Craig A. Darling for Appellant.

Polly Sanders, in pro. per., for Respondent.


SILLS, P. J.

Todd Sanders appeals from the denial of his postjudgment requests to modify child support payments and order the sale of the family home. We affirm the order denying modification of child support; we reverse the order denying the sale of the family home and remand for further proceedings.

BACKGROUND

Todd and Polly Sanders dissolved their marriage in March 2002. They have one child, Zachary, born October 2000. At the time the stipulated judgment was executed, the parties were in the process of purchasing a residence, which was in escrow. The judgment provides that escrow would close upon execution of the judgment, title would be held by both parties as tenants in common, Todd would make all principal and interest payments, and Polly would have exclusive use and possession. Upon the occurrence of one of the events set out in the judgment, the residence would be sold and the proceeds divided equally between the parties.

The events triggering the sale of the residence are as follows: “(1) The death of either party; [¶] (2) [Polly’s] remarriage; [¶] (3) [Polly] and/or the child cease to use the Residence as their primary place of abode; [¶] (4) Any adult, who is not a member of [Polly’s] immediate family, uses the Residence as his or her primary place of abode; [¶] (5) [Todd] has not made the payments on the promissory note secured by deed of trust on the Residence, and the holder of a deed of trust files a notice of default or otherwise takes action to have recourse to its security; [¶] (6) The structure is totally destroyed or partially destroyed to an extent that it is not economically feasible to repair; [¶] (7) The parties agree in writing to the sale of the Residence; [¶] (8) October 21, 2018; [¶] (9) [Polly] fails to maintain the Residence in good repair; [¶] (10) Court Order.”

The stipulated judgment provides that the court reserves jurisdiction to enforce the provisions regarding the residence “in the event a dispute arises between the parties, or at any time when it is fair to do so, and to make further orders as may be required, including but not limited to, ordering the sale of the Residence.... Either party may apply to the Court for any such Court Orders....”

The parties stipulated to joint custody of Zachary. Todd received a 20 percent timeshare initially, which was to increase by 10 percent each year on Zachary’s birthday until it reached 50 percent in 2005. Todd agreed to pay child support of $4000 per month; the parties agreed that this amount was in the best interests of the child and would adequately meet his needs. But they also “acknowledge[d] and agree[d] that the amount of child support shall have to be recalculated on an annual basis based upon [Todd’s] increased timeshare with Zach....”

In December 2007, Polly filed an order to show cause (OSC) seeking a modification of child support to $7500 per month and orders compelling Todd to pay arrearages in child support, mortgage payments, and property taxes. In her accompanying declaration, she stated Todd had paid $3000 per month in child support from March 2002 to July 2007, then $1000 in August 2007. He had made no child support payments since then. He ceased making monthly mortgage payments in October 2006 and had made no property tax payments for two years. Polly declared she had borrowed funds to pay the taxes and to prevent the residence from going into foreclosure.

Todd filed a responsive declaration in February 2008, stating he had a judgment against him in the amount of $7 million because he was the guarantor of a failed business. He had no income, had exhausted his savings, and was borrowing money to live on each month. At the same time, Todd filed an OSC, requesting an order to sell the residence because he no longer could afford to make the payments.

Polly filed an income and expense declaration in December 2007 showing $3,500 in income for the year in miscellaneous photography jobs. She had monthly expenses of $14,600 (including the mortgage), which she listed as “paid by others, ” and credit card debt approaching $40,000. Her updated income and expense declaration filed in June 2008 showed reduced monthly expenses of $11,176. Todd’s income and expense declaration filed in June 2008 showed no income for the last 12 months, monthly expenses of $8,500, paid by others, and debts of $12,870,176.

Both orders to show cause were heard on June 24, 2008. By that time, Polly had withdrawn her request for child support modification and only Todd’s was before the court. Polly testified that during the past year, “friends” had been making mortgage payments on her behalf. Most of the payments had been made by a friend named Andrew Getz, whom Polly had known for two years. The payments were a gift. “He just wants to make sure that Zach and I are safe. He’s not looking to get money back or anything like that.” Getz had offered to make future mortgage payments “if [the house] gets in trouble....” He occasionally gives Polly gas money and takes her and Zach out to dinner. Once, he made a payment to keep her telephone from being shut off. Polly could not remember from whom she borrowed to pay the property taxes. Another friend, Rick Bloon, has been paying for her car for the last two to four years. When asked if she had ever dated Rick, Polly replied, “Uhm, probably four years ago, I think I did.” She said he “hasn’t stopped” making the monthly car payment. “He just says he’s not going to do it anymore.” She does not owe him anything in return.

Polly testified she had taken several vacations during the previous year. Once she traveled to Europe with a “friend who flew me over. He’s an international business person, has so many points he can’t use them all.” Another time she traveled to St. Tropez with “a gentleman” who “paid for everything.” She also traveled to St. John with Zach and another adult with two children. “[A] gentleman” paid all the expenses. An elderly man named Fosterman has given Polly money in an amount somewhere “between 50 and 80” thousand dollars. He has been a friend of hers for five years.

Polly testified she was currently pregnant by her former boyfriend, Thomas Morf, who lives in Switzerland. He had not agreed to support her and the baby, and she was not planning to pursue a support action against him “[b]ecause he’s being very rude and he’s not calling me and he’s always been a dear friend for five years and he’s just so shocked that we are having a baby, he’s acting very immature. I don’t want him around.”

Todd testified in September 2006 he was having “extreme difficulties” with his business, and he “pleaded with [Polly] to sell the house, take her share of the money; or... if she wanted to stay in the house than to either look to refinance and buy me out of my portion of the house. And she simply refused to do so.” Todd testified he had borrowed a total of $164,000 from his parents and two friends to pay his living expenses. He was president of Sunset Holdings, which “was a corporate finance consulting and investment firm. The sole shareholder “is owned by a trust” of which both Todd and Zach are beneficiaries. When asked who was the settlor of the trust, Todd replied, “The trust itself has a trustee and the – I don’t know if I’m considered the settlor or not. I’m not – I have heard the term before, but I don’t know exactly what the definition of that is.”

Todd pays $4,000 monthly rent on a house in Newport Coast. He did not complete a financial application for the landlord; “[t]he application was done by the – by the trust of which myself and my son are beneficiary.” He recently leased a new car with a monthly lease payment of $920. He was not required to make a substantial deposit to lease the vehicle. “[T]he trust had money to put up for the lease. And because... this is the third car that I have leased with Ford Motor Credit.” When pressed about the credit report he gave to the leasing agency, Todd stated, “Actually, it was the trust and it was a corporate entity that leased the car, not myself personally.” Todd testified the trustee is Fidelity Corp., which charges $1500 per year to manage the trust. Todd maintained “there is little or no assets in the trust” and offered to produce financial records of the trust to prove it.

Todd testified he used the money he borrowed from his parents to restart his business, where he works full time. The office rent is approximately $2000 per month; he has no employees. The business was just starting to generate revenue; “over the last seven months, revenues would be somewhere between, I don’t know, seventy-five to a hundred thousand dollars.” When asked where the money had gone, Todd explained, “How the company generates revenues is by exercising stock options in companies. So the revenue may actually be a hundred thousand dollars but the cost on that revenue could very easily be in the 85, 000-dollar range.” Todd had taken $12,000 in draws from his business during last two weeks; these were the first draws he had taken since restarting the business.

The court denied modification of child support, stating it did not believe Todd when he testified he had no income. “His testimony that all of his funds are in a trust fund in his name and that of his son, lead[s] the Court to believe that he is attempting to defraud creditors in light of the fact that [he] allowed large judgments to go into default against him.... His testimony lead[s] the Court to believe that he has available to him money as needed. Therefore, the Court cannot find a change of circumstances, in spite of the numerous judgments and tax liens against [him]....” The court also denied Todd’s request for an order to sell the residence. “[T]he Stipulated Judgment... contains ten (10) conditions, any one of which is a condition precedent to the sale of the residence. The Court, having heard testimony from both parties, finds that not one of these conditions has been met.”

DISCUSSION

Todd contends the trial court erred in applying the change of circumstances standard to the modification proceedings. He argues because there was no evidence of the parties’ financial circumstances presented when the trial court made the underlying child support order, the order could be modified based on the parties’ current circumstances alone. We disagree.

As a general rule, a party seeking modification of a child support order must establish that circumstances have changed since the underlying order was made. (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556; In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 298.) The burden of proof to justify a downward modification rests with the supporting party. (In re Marriage of Leonard, supra, 119 Cal.App.4th at p. 556.) A stipulated child support order is no different, unless it is below the statewide guideline amount. In that case, the amount may be adjusted upward without a showing of changed circumstances. (Fam. Code, § 4065, subd. (d).) In all other circumstances, however, a stipulated child support order is subject to the requirement that changed circumstances must be shown before a modification can be made. (In re Marriage of Laudeman (2001) 92 Cal.App.4th 1009, 1015.)

Todd cites In re Marriage of Thomas (1981) 120 Cal.App.3d 33 and In re Marriage of Catalano (1988) 204 Cal.App.3d 543 in support of his argument that a trial court can modify a child support order based on current circumstances where there is no evidence of the circumstances on which the underlying order was based. But these cases predate the adoption of the statewide guidelines, which occurred in 1992. The cases decided since that time require a showing of changed circumstances to modify a stipulated child support order. (In re Marriage of Williams (2007) 150 Cal.App.4th 1221, 1236; In re Marriage of Laudeman, supra, 92 Cal.App.4th at p. 1015.) Where there is no evidence of the parties’ finances at the time of the stipulated order, it is “impossible to determine from the record whether anything changed.” (Id. at p. 1016, fn. 5.) Although he could have done so, Todd presented no evidence of the parties’ financial circumstances at the time of the stipulated child support order. He thus failed to meet his burden of proof.

Todd also contends the trial court erred in failing to order the sale of the residence in response to his OSC. He claims the trial court’s comments indicate it mistakenly thought it could not order the sale of the house because none of the triggering events in the stipulated judgment had occurred. After reading the record, we reach the same conclusion.

The stipulated judgment provides that the residence will be sold upon the occurrence of one of a list of specified events, which includes a court order. The judgment states the court retains jurisdiction to enforce its provisions regarding the residence, expressly providing the trial court may “make further orders as may be required, including... ordering the sale of the Residence....” Such an express reservation of jurisdiction is proper. (In re Marriage of Curtis (1989) 208 Cal.App.3d 387, 390.) Thus, the trial court had the discretion to make the order Todd requested.

The trial court, however, failed to exercise that discretion due to its misreading of the stipulated judgment. “A trial court’s failure to exercise its discretion is itself an abuse of discretion....” (In re Marriage of Gray (2007) 155 Cal.App.4th 504, 515.) Accordingly, we remand the matter to the trial court so it can exercise its discretion on Todd’s request to order the residence sold.

At oral argument, Polly informed this court that the residence had been sold at a foreclosure sale earlier that day and she had 30 days to move out. Todd’s attorney was not aware of this development. We leave it to the trial court to sort this out on remand.

DISPOSITION

The order denying modification of child support is affirmed. The order denying the request to order the residence sold is reversed and remanded for further proceedings. Each party shall bear his or her own costs on appeal.

WE CONCUR: RYLAARSDAM, J., BEDSWORTH, J.


Summaries of

In re Marriage of Sanders

California Court of Appeals, Fourth District, Third Division
May 27, 2010
No. G041721 (Cal. Ct. App. May. 27, 2010)
Case details for

In re Marriage of Sanders

Case Details

Full title:In re Marriage of POLLY and TODD SANDERS. POLLY SANDERS, Respondent, v…

Court:California Court of Appeals, Fourth District, Third Division

Date published: May 27, 2010

Citations

No. G041721 (Cal. Ct. App. May. 27, 2010)