Opinion
D058420 Super. Ct. No. DN144807
01-13-2012
In re the Marriage of DEBRA and MICHAEL FORGIONE. DEBRA FORGIONE, Respondent, v. MICHAEL FORGIONE, Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
APPEAL from an order of the Superior Court of San Diego County, Randall W. Magnuson, Commissioner. Affirmed.
Michael Forgione (Father) and his former spouse (Mother) reached an agreement on spousal and child support obligations during their marital dissolution proceedings. Shortly after, Father moved to reduce these obligations based on a recent job loss. The court (Judge Joseph Brannigan) denied the motion. Father did not appeal from this order.
Father then brought a second motion to reduce his support obligations again based on the same job loss and assertions that he was earning substantially less than in his prior job. The court (Commissioner Randall Magnuson) denied the motion, finding Father did not meet his burden to show a change of circumstances from the prior order.
Father appeals from the denial of his second motion. His primary appellate contention is that Judge Brannigan misapplied the law in denying the first motion. However, Father's challenges to the first order are untimely and are not properly before us. We further conclude that Father did not meet his burden to show the court abused its discretion in denying his second motion. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Background
Father and Mother were married in 1993. After about 13 years of marriage, Mother filed for dissolution of the marriage. In May 2008, the parties signed a settlement agreement. The parents agreed to share joint legal custody of their two children. The parties also agreed Father would pay monthly child support of $1,625 and spousal support of $1,175. At the time, the parents were in their mid-30's. Father was employed by Hoehn Motors, Inc. (Hoehn Motors) as a service manager, earning approximately $100,000 per year. Mother was not employed outside the home during the last several years of the marriage.
First Modification Motion
Six months later, on November 21, 2008, Father filed a motion to reduce his child and spousal support obligations based on facts showing Hoehn Motors terminated his employment one week earlier. In a supporting declaration, Father said he lost his job "due to circumstances [he] could not control." Father claimed the termination "was without warning" or "provocation"; the cause of the termination was that the "car industry as a whole is bankrupt"; and he "was one of 15 people [who] lost their jobs" at Hoehn Motors on the same day. Father said he was "concerned" he would be unable to get another job because the automobile industry "has one of the largest unemployment rates" and he did not have a high school diploma or training in any other field. Father acknowledged he was currently operating his own business, a bicycle parts company (World Champion Trading Company, Inc. (World Champion)), through the Internet, but claimed he was operating the business at a loss.
Mother opposed the motion, arguing there was no material change of circumstances. She maintained that Father voluntarily "shirked his job duties" in an attempt to reduce his support obligation. Mother proffered a copy of Hoehn Motors's job termination report, which stated Father was terminated because of "Declining relationship with the Acura Factory, Lack [of] leadership, lack of commitment, preoccupation with personal business."
Mother also requested that the court impute a $100,000 annual income to Father (equivalent to his prior job earnings). In this regard, Mother presented evidence of several job openings for which she said Father was qualified based on his eight years of experience as a service manager. Mother also challenged the validity of Father's claims regarding his self-employment income, and produced evidence that his gross receipts during a recent three-month period were about $17,000. She also argued Father was not making reasonable efforts to obtain employment, and instead that Father had gone on two recent vacations, including to Aruba and New York.
Mother also submitted information received from PayPal, which is a service allowing individuals to purchase items with credit cards over the Internet. The PayPal information showed Father had substantial gross receipts from his business, and based on these facts, Mother argued Father had misrepresented that he was operating his business at a loss.
Several weeks later, Father filed a supplemental declaration, asserting he had received unemployment benefits of $4,500, which he said confirmed that he lost his job involuntarily and that the job termination was not his fault. He also reiterated his assertions that he was unable to obtain another job in the automobile (or related) industry, but did not produce supporting information.
At the May 4, 2009 hearing, Father's counsel argued that Father was receiving unemployment insurance benefits and therefore his job termination was involuntary and not for good cause. Mother's counsel responded that the documentary evidence showed the job termination was Father's fault because he devoted work time to his personal business. Mother's counsel alternatively argued that regardless of the reason for the job loss, the court should find no change in circumstances based on a finding of imputed income. Mother argued it was proper to impute income because Father had the ability and opportunity to earn the same amount as his previous job and Father appeared to be earning substantial income in his own business.
At the conclusion of counsels' arguments, the court noted that Father was "probably" terminated because he was working on his personal business and the record was unclear as to "exactly" how much Father was currently making at this business. The court then concluded that Father did not meet his burden to show the requisite change of circumstances warranting modification of the parties' prior agreement on support amounts. The court said it was making this finding "without prejudice to either party coming back if there is a change in circumstances."
Judge Brannigan entered the order denying Father's motion on June 4, 2009. Father did not appeal the order.
Second Modification Motion
About seven months later, in January 2010, Father filed a second motion for modification of child and spousal support, which is the motion at issue on this appeal. The primary ground for this motion was the same November 2008 job termination from Hoehn Motors. Father acknowledged he had previously raised this issue, but stated he "[u]nfortunately . . . did not provide the Judge with sufficient evidence to prove that my employment was terminated involuntarily. . . ." He also argued that he was earning only $2,500 per month, and therefore he could not afford his support obligations.
Father filed an income and expense declaration, and attached one pay statement showing he paid himself $2,500 in February 2010. He also filed declarations from three former and/or current Hoehn Motors employees, each of whom claimed Hoehn Motors had terminated employees because of the difficult economic climate and not because of the merits of the employee's work.
In opposition, Mother asserted that Father provided no new facts because Judge Brannigan had considered Father's claims regarding his job loss and found the job loss did not constitute a change of circumstance warranting modification. Mother also submitted additional Hoehn Motors employment records showing that Father was terminated for cause, including based on complaints that Father was spending work time on his personal (World Champion) business. Mother also argued that Father's claim he was earning only $2,500 per month from his business was misleading and not credible. In support, she produced documents provided by PayPal under a subpoena. Although these documents were not made part of the appellate record, Mother claimed below that they showed Father's World Champion business generated about $828,544 in gross sales from March 2009 to April 2010. Mother argued it was unlikely Father made only $2,500 per month based on this gross sales amount.
Mother also tabulated discrepancies in Father's reported cash assets and his account balances in various financial institutions, and pointed out unexplained withdrawals from Father's business accounts. Mother further argued that Father's claim he was "on the brink of bankruptcy" was highly questionable because he moved back into his rental property and refurnished the place with new luxury items.
In a supplemental declaration, Father claimed he has been unable to find a similar position after his job loss. He attached lists of 22 car dealerships that he said he contacted on a single day (January 11, 2010), and indicated that none of the dealerships had open service manager positions. The lists are not signed and the column with respect to the time Father contacted each dealership was left blank.
Father also said he has "borrowed thousands and thousands from my parents and banks" and he is "trying" to make his World Championship business a success. He said he no longer receives unemployment benefits because his business has become profitable, allowing him to take a monthly salary of $2,500 per month. He claimed his gross profit margins are between 18 to 23 percent, and his gross receipts for the past year were $472,131.
At the August 6, 2010 hearing on Father's second motion, Father's counsel argued the court should grant Father's motion based on two undisputed facts: (1) Father's job was terminated in November 2008; and (2) Father received unemployment benefits from December 2008 through January 2010. Father's counsel acknowledged that these facts were before the court in the prior hearing, but urged the court to reconsider the issue because Judge Brannigan had made remarks at the prior hearing reflecting an erroneous belief that an individual is entitled to unemployment benefits regardless of the reasons for the job termination. He argued that Judge Brannigan did not "understand" the legal principles underlying eligibility for unemployment benefits.
Mother's counsel responded that Father was essentially asking for a "do-over in front of a new court" and argued that Father was not entitled to a reconsideration of the law or facts in a second proceeding. Mother's counsel additionally argued that the court's prior ruling was correct, noting the facts showed Father was terminated for cause and that Father was not disclosing the true amount of income he was generating from his business.
After considering the parties' arguments, the court (Commissioner Magnuson) found Father did not meet his burden to show a change of circumstances from the prior hearing. Later during the same hearing, Father's counsel asked the court to reconsider its decision because Father "doesn't make $100,000 a year. He didn't make it [at the time of the prior hearing]. He doesn't make it now." Father's counsel argued the court should credit his claim on his income and expense declaration "where he states his income is only $2,500 a month." The court responded by questioning the accuracy of the $2,500 monthly income in light of the documented "substantial amount of gross income" earned from the business. In response, Father's counsel acknowledged that Father sells "expensive bike equipment" and his "gross sales are 800,000 for the year." Counsel also said she thought Father's "gross [profit] margin is . . . between 14 and 16 percent."
The court then entered an order denying Father's motion for reduction of his support amounts based on changed circumstances. The court also denied Father's subsequent reconsideration motion.
Father appeals from the order denying his second motion.
DISCUSSION
Father contends the court erred in failing to reduce his support obligations based on a change of circumstances.
I. Generally Applicable Appellate Principles
It is a fundamental tenet of appellate law that the lower court's judgment is presumed to be correct. We make all reasonable inferences favoring the court's order, and affirm the judgment if any possible grounds exist for the trial court to have reached its factual conclusions. (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.) Any ambiguity in the record is resolved in favor of the judgment. (Ibid.) It is the appellant's burden to provide an adequate record to overcome the presumption of correctness and show prejudicial error. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564; Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132.)
Father is not represented by an attorney in this appeal. However, unrepresented litigants are held to the same standards as attorneys. (See Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984-985; Kobayashi v. Superior Court (2009) 175 Cal.App.4th 536, 543.)
II. Legal Principles Applicable to a Modification of a Support Order
A child support order "may be modified or terminated at any time as the court determines to be necessary." (Fam. Code, § 3651, subd. (a).) Where, as here, the parties stipulated to a child support order consistent with the statewide uniform guidelines, to prevail on a motion seeking a downward adjustment, the supporting spouse must introduce admissible evidence of a material change of circumstances. (See In re Marriage of Bodo (2011) 198 Cal.App.4th 373, 386-392; In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 298.) When a party seeks to modify spousal support, the party must likewise proffer admissible evidence of a material change of factual circumstances. (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 298; see In re Marriage of Dietz (2009) 176 Cal.App.4th 387, 398; In re Marriage of Tydlaska (2003) 114 Cal.App.4th 572, 575.)
Although the rules pertaining to spousal and child support differ in certain important respects (In re Marriage of Blazer (2009) 176 Cal.App.4th 1438, 1446, fn. 3), Father does not discuss these distinctions and we do not find them relevant for purposes of the modification issues raised in this appeal. (See In re Marriage of Eggers (2005) 131 Cal.App.4th 695, 699 (Aggers).)
If the supporting spouse seeks a reduction in spousal and/or child support based on a job loss, courts generally invoke income imputation rules to determine whether there has been a change of circumstances. (See Eggers, supra, 131 Cal.App.4th at pp. 699-701; see also Moss v. Superior Court (1998) 17 Cal.4th 396, 424; In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1302.) Under these rules, the court does not merely compare the spouse's prior salary with his or her current income. Instead, the court examines whether the spouse has an ability and opportunity to earn the same level of income as before the job loss. (In re Marriage of Bardzik, supra, 165 Cal.App.4th at p. 1304.) The relevant focus is on the party's earning capacity, which "represents the income the spouse is reasonably capable of earning based upon the spouse's age, health, education, marketable skills, employment history, and the availability of employment opportunities." (In re Marriage of Simpson (1992) 4 Cal.4th 225, 234; see In re Marriage of Paulin (1996) 46 Cal.App.4th 1378, 1383.)
The supporting spouse has the burden to establish with admissible evidence the lack of ability and opportunity to earn the same income, i.e., that despite reasonable efforts, he or she could not secure employment with a similar income level. (Eggers, supra, 131 Cal.App.4th at p. 701; see In re Marriage of Bardzik, supra, 165 Cal.App.4th at pp. 1303-1304; In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1339.) The spouse must present facts showing he or she either lacked the ability to find employment or had no reasonable opportunities to obtain employment. (Bardzik, supra, at p. 1304; Eggers, supra, at p. 701)
Under these principles, the court may impute income to the supporting spouse regardless whether he or she left the job voluntarily or was terminated for misconduct. (See Eggers, supra, 131 Cal.App.4th at pp. 700-702; see also Moss v. Superior Court, supra, 17 Cal.4th at p. 424; In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 998.) Although the reason for the job loss may be a relevant and important factor in the analysis, it is not necessarily the controlling factor. Instead, the court should determine the supporting spouse's earning capacity based on an evaluation of the totality of the circumstances. (See Eggers, supra, 131 Cal.App.4th at p. 701; In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 81, fn. 4.)
Further, the moving party must show a "material change since the entry of the previous order." (In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47, italics added.) If the claimed new circumstances existed at the time of the previous order, those facts were presumably considered when the previous order was made and thus do not constitute a "change" in the circumstances. (Ibid.) "The support order sought to be modified is conclusive as to circumstances existing when entered. Any attack on that order may . . . be made . . . only directly (by appeal, motion for new trial, timely set-aside motion, etc.). Once final, the prior order cannot be challenged by request for modification, since a dispute with the court's prior findings (e.g., failure to properly consider then-existing circumstances) is not tantamount to an allegation of change; rather, it is 'no more than an attempt to [impermissibly] collaterally attack the prior decree.' " (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2011) ¶ 17:151, p. 17-37, quoting In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 364; see also In re Marriage of Mulhern (1973) 29 Cal.App.3d 988, 992.)
A court has broad discretion in determining whether the changed circumstances warrant a modification. (In re Marriage of Berger (2009) 170 Cal.App.4th 1070, 1079.) On appeal, we consider only " 'whether the court's factual determinations are supported by substantial evidence and whether the court acted reasonably in exercising its discretion.' " (Berger, supra, 170 Cal.App.4th at p. 1079.) Absent an abuse of discretion, we must uphold the trial court's order even if we would have reached a different factual conclusion. (In re Marriage of Schmir, supra, 134 Cal.App.4th at p. 47.) We must affirm unless there was a manifest abuse of discretion and the error was prejudicial. (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 555.)
III. Analysis
A. Father's Challenges to Prior Order Are Without Merit
On appeal, Father devotes most of his appellate brief to challenging Judge Brannigan's statements at the first hearing suggesting Father was terminated for cause. However, even assuming the court's statements were erroneous, we have no jurisdiction to consider these arguments. Father did not file a notice of appeal from the first order. "If a party fails to appeal an appealable order within the prescribed time, [the reviewing] court is without jurisdiction to review that order on a subsequent appeal." (In re Marriage of Lloyd(1997) 55 Cal.App.4th 216, 219; accord, Carson Gardens, L.L.C. v. City of Carson Mobilehome Park Rental Review Board (2006) 135 Cal.App.4th 856, 866; Mauro B. v. Superior Court (1991) 230 Cal.App.3d 949, 953.) By failing to appeal the first denial order, Father waived his right to challenge the evidence and findings underlying the order.
Moreover, even if we could consider Father's current challenge to the court's prior order, his arguments are without merit. At the hearing on the first motion, Mother presented evidence that Father was terminated for cause, including that he lacked leadership skills and was spending work time on his personal business. The court made comments indicating it found this evidence credible. Father now argues Judge Brannigan's reliance on this evidence was erroneous as a matter of law because Father received unemployment benefits, which are not permitted if an employee was discharged for misconduct. (See Unemp. Ins. Code, § 100.) Father says that Judge Brannigan made comments at the first hearing indicating he did not "understand" that unemployment insurance benefits are generally not permitted if the employee was terminated for misconduct.
Father's arguments do not show legal error. The Legislature has specifically provided that administrative determinations made pertaining to an applicant's eligibility for unemployment insurance benefits "shall not be conclusive or binding in any separate or subsequent action or proceeding . . . ." (Unemp. Ins. Code, § 1960; see Mahon v. Safeco Title Ins. Co. (1988) 199 Cal.App.3d 616, 619; see also People v. Damon (1996) 51 Cal.App.4th 958, 969-970.) Moreover, because Mother was not a party in the unemployment insurance benefit action she is not bound by any findings made in the administrative proceeding. (See Beets v. County of Los Angeles (2011) 200 Cal.App.4th 916.) Thus, the fact that Father received unemployment benefits did not preclude the family court from reaching its independent determination that Father was terminated for cause.
Father's arguments are also unavailing because the record does not show Judge Brannigan's conclusions regarding the reasons Father was terminated had a material effect on his ultimate decision that Father did not meet his burden to show the requisite changed circumstances. Regardless whether Father caused his termination and the precise reasons for Father's job termination, the issue for the court's determination was whether Father met his burden to prove a change of circumstances, i.e., that he lacked the ability and opportunity to earn the same level of income. In ruling on Father's first motion, the court had a substantial basis to conclude that Father did not meet this burden based on the factual record before it, including that Father did not present specific evidence regarding his attempts to obtain other employment, the fact that Father appeared to be successfully operating his own business for a profit and failed to present clear and credible evidence as to the amount of that profit, and Father took several vacations during the time that he should have been looking for a job.
In this regard, Father's reliance on Eggers, supra, 131 Cal.App.4th 695 is misplaced. In Eggers, the court held the lower court abused its discretion by imputing income to father solely because the father's job termination resulted from his misconduct. (Id. at pp. 698-699.) The court remanded the matter for a factual determination whether the father had the ability and opportunity to obtain similar employment or had available assets to pay the support amounts. (Id. at p. 701.) This case is different from Eggers because there is no indication the trial court imputed income to Father (and thus found no change in circumstances) based solely on the reasons for Father's termination. Instead, viewing the parties' written submissions and the transcript of the hearing, the record shows the court considered the totality of the circumstances, and not only the grounds for Father's termination.
B. Court Did Not Abuse its Discretion in Denying Father's Second Motion
In his appellate brief, Father also challenges the second modification order, contending there was insufficient evidence to support Commissioner Magnuson's conclusion there was no change of circumstances. The contention is waived because Father did not discuss the evidence presented by both parties in connection with the motion. A party who challenges the factual basis for a court's conclusion must set forth, discuss, and analyze all the evidence on that point, both favorable and unfavorable. (See Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 738.) If the appellant fails to cite and discuss all of the relevant evidence, we may treat the issue as waived. (Ibid.)
Moreover, even if we were to consider Father's challenge to the court's second order, his arguments are without merit. The new facts asserted by Father to show a change of circumstances were: (1) Father's claim that he was earning only $2,500 per month from his business; and (2) Father's claim that he contacted 22 car dealerships, but was unable to find a job in the industry. The court had a reasonable basis to conclude Father failed to satisfy his burden of proof based on these facts.
First, with respect to the $2,500 monthly income, Father presented only a single pay stub from a paycheck from his own business. However, Mother presented evidence showing that Father earned $828,544 in gross sales during the previous year, and Father stated in his moving papers that his gross profit margins were 18 to 23 percent. At the second hearing, Father's counsel acknowledged that Father had gross sales of $800,000 and said his profit margins were 14 to 16 percent.
Even when relying on Father's most conservative estimate, Father's gross profit would have been $112,000 (14 percent of $800,000), which is more than the $100,000 that Father previously earned as a service manager. Moreover, the claimed $2,500 amount was supported only by a single pay stub prepared by Father, without accounting for the remaining business profits. On this record, the court had a reasonable basis to conclude that the $2,500 monthly income figure claimed on Father's income and expense report was not accurate. Although an income and expense declaration may be used as evidence to support a parent's claimed income, the facts in the declaration may be rebutted by evidence showing the figures lack support or credibility.
Likewise, the court had an ample factual basis to reject Father's assertions that he made reasonable efforts to find another similar job. The only new evidence presented on this issue was Father's written list of about 22 car dealerships and their service managers with a notation next to each dealership that there was no job opening for a service manager. Even assuming the court believed that Father did call each of these dealerships on January 11, 2010, these telephone contacts do not necessarily show that Father could not have obtained a job in another similar industry, or that he was not making a comparable income in his personal business.
We have reviewed the entire record and are satisfied the court acted within its discretion in denying Father's motion to modify the support obligation. On the record before it, the court had a reasonable basis to reject Father's claims that he did not have sufficient funds to pay his child and spousal support obligations, particularly in light of Father's substantial earnings from his personal business. If Father finds that the circumstances have changed and new facts show he no longer has the ability and opportunity to earn a similar salary, Father would be entitled to bring a new modification motion.
In the proceedings below, Father argued that Mother had the ability to earn more income than she was earning in her part-time job. The court rejected this argument and/or found it was not properly raised. Father does not challenge this ruling on appeal. Thus, the issues concerning Mother's income are not before us.
DISPOSITION
Affirmed. Appellant to pay respondent's costs on appeal.
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HALLER, J.
WE CONCUR:
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NARES, Acting P. J.
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AARON, J.