Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of San Diego County, No. DN130735, Joseph P. Brannigan, Judge.
McCONNELL, P. J.
In this case, we must decide whether a provision in a marital settlement agreement requiring payment of additional child and spousal support if the paying party receives a bonus or profit distribution from the party's employer applies to monies the party receives from the party's sole proprietorship. We conclude it does and reverse and remand the matter for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Michael A. Cornelius (Michael) and Barbara Gail Cornelius (Barbara) entered into a marital settlement agreement (Agreement). Four months later, the trial court approved the Agreement and incorporated it into a judgment of dissolution.
The Agreement requires Michael to pay Barbara fixed amounts of monthly spousal support. In addition to the fixed amounts, the Agreement requires Michael to pay Barbara "a percentage of the gross bonus or irregular periodic profit distributions from [Michael's then employer], or any other employer, within 10 days of receipt of the funds by [Michael]." The percentage is to be determined by referencing the "DissoMaster" bonus income table.
The spousal and child support provisions were based on several facts and circumstances existing at the time of the Agreement. These facts and circumstances included that Michael had income from employment of $8,223 a month, Michael may have bonus or periodic profit distributions from employment, and Barbara had no income from employment. The spousal support provisions were based on two other pertinent facts: the parties enjoyed an upper middle class standard of living during their marriage, and the level of support set forth in the Agreement is not sufficient to maintain this standard of living.
The same month the trial court entered the judgment, Michael became self-employed as the sole-proprietor of Cornelius Consultants, a civil engineering consulting business. In 2007, the business generated income of $191,703.17. After subtracting the salary Michael paid himself and other claimed expenses, the business's income exceeded its expenses by $25,650.80.
A forensic accountant reviewed the claimed business expenses and opined some of them were actually personal expenses, which if, disallowed, would increase the amount the business's income exceeded its expenses. The trial court did not decide this issue nor is it before this court on appeal.
Barbara applied for an order to enforce the judgment of dissolution and other relief. Of specific relevance to this appeal, she requested the court order Michael to pay her a percentage of the business's profits per the Agreement's additional support provisions. The trial court denied the application, finding Michael's self-employment income did not constitute a bonus or profit distribution within the meaning of the Agreement.
Barbara appeals, contending the trial court's ruling fails to give effect to the parties' mutual intent under the Agreement. We agree and reverse the trial court's order.
DISCUSSION
I
Additional Support Obligation Applies to Bonuses and Profit Distributions From Self-employment
Construing a marital settlement agreement incorporated into a judgment of dissolution presents a question of law we review independently. (In re Marriage of Davis (2004) 120 Cal.App.4th 1007, 1017-1018 (Davis).) We construe such agreements under the statutory rules governing the interpretations of contracts generally. (In re Marriage of Iberti (1997) 55 Cal.App.4th 1434, 1439 (Iberti); In re Marriage of Corona (2009) 172 Cal.App.4th 1205,1221.) " 'The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. [Citation.] If contractual language is clear and explicit, it governs. [Citation.] On the other hand, "[i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it." [Citations.]' [Citation.] 'The mutual intention to which the courts give effect is determined by objective manifestations of the parties' intent, including the words used in the agreement, as well as extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties. [Citations.]' [Citations.]" (People v. Shelton (2006) 37 Cal.4th 759, 767; accord, In re Marriage of Simundza (2004) 121 Cal.App.4th 1513, 1518; Davis, supra, 120 Cal.App.4th at p. 1018; Iberti, supra, 55 Cal.App.4th at pp. 1439-1440.)
In this case, it is apparent from the plain language of the Agreement, the parties intended for Michael to pay Barbara a percentage of any future bonuses or profit distributions he might receive from an employer as additional spousal and child support. Michael does not dispute this intention as to future bonuses and profit distributions he might receive from third-party employment; however, he contends the parties did not intend for the additional support obligation to apply to self-employment.
Michael also contends any ambiguity in the Agreement must be construed against Barbara because her attorney drafted it. We do not address this issue because, as Barbara notes in her reply brief, the parties expressly waived this point in the Agreement.
The plain language of the Agreement does not support Michael's contention because the Agreement contains no qualifications on the type of employment to which the additional support obligation applies. Moreover, the Agreement indicates the additional support obligation is based in part on the fact that the fixed monthly support payments are insufficient to maintain the standard of living established during the parties' marriage. This evidences the parties' intent for a broad, rather than limited, application of the additional support obligation. Further, Michael's employer at the time he signed the Agreement was a company he founded, once controlled, and still partially owned. The additional support obligation specifically applies to any future bonuses and profit distributions Michael received from this company, which belies any intent by the parties to limit the additional support obligation to bonuses and profit distributions from third-party employment.
The circumstances surrounding the negotiations also do not support Michael's position. A major issue in the dissolution proceedings was whether Michael colluded with his then employer to artificially lower his income. Although the trial court determined Michael had not done so, Barbara remained skeptical and persisted in efforts to determine whether Michael had more income available for support than he was disclosing. Given this history, it is implausible Barbara intended, or that Michael believed she intended, to limit the sources of employment to which the additional support obligation applies. Accordingly, we conclude the Agreement's additional support obligation applies to bonuses and profit distributions Michael receives from any employment, including self-employment.
II
Trial Court Erred in Finding Cornelius Consultants Did Not Have Profits
Michael furthers contends his income from Cornelius Consultants is not subject to the Agreement's additional support obligation because it is regular income, rather than a bonus or a profit distribution. However, according to the business's profit and loss statement, after Michael paid himself a salary and other business expenses, the business's income exceeded its expenses by more than $25,000. Although the profit and loss statement characterizes the excess amount as "net income," it is also properly characterized as "profit." (Black's Law Dict. (6th ed. 1990) p. 1211, col. 1 [profit is the "[g]ain realized from business or investment over and above expenditures" and is "sometimes used synonymously with net income"].) To the extent this profit was available to be distributed to Michael, the plain language of the Agreement requires him to pay a percentage of it to Barbara as additional support and the trial court erred in finding to the contrary. In view of our conclusion, we do not reach Michael's contention that Barbara should have filed a motion to modify support based on changed circumstances rather attempt to enforce the additional support provisions of the Agreement.
DISPOSITION
The order is reversed. The matter is remanded for further proceedings consistent with this decision. Appellant is awarded costs on appeal.
WE CONCUR: NARES, J., McDONALD, J.