Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Kern County No. FL-579014. James L. Compton, Commissioner.
Law Offices of Marjorie G. Fuller, Marjorie G. Fuller, Lisa R. Wiley; and Edward J. Thomas for Appellant.
Law Offices of Edward J. Quirk, Jr. and Edward J. Quirk, Jr. for Respondent.
OPINION
LEVY, J.
When appellant, Kari L. Honstein (Kari), and respondent, John G. Honstein (John), dissolved their marriage, they entered into a stipulated judgment fixing amounts for child support and spousal support payable to Kari. The amounts were calculated using what John was then earning as the base support plus a percentage of any annual bonuses John received from his employer.
As is customary in family law cases, the parties will be referred to by their first names for clarity. No disrespect is intended.
Several years later, John moved to modify child support for his son, Ryan, on the ground that Ryan’s expenses were being paid for by a trust. Through this motion, Kari discovered that John’s income had dramatically increased due to his having become a part owner of the company that had previously employed him. Kari then filed a motion to determine arrearages claiming that all of John’s income in excess of the base support was a bonus.
Although the trial court made certain adjustments to the child support due, it found that John had paid the proper amounts of support when he based the additional compensation on the industry standard for an annual bonus. The court denied John’s request for child support reimbursement but determined that after Ryan turned 18 without graduating from high school, he was no longer a full-time high school student and therefore John was entitled to reimbursement for the support paid between Ryan’s 18th and 19th birthdays.
Kari challenges the trial court’s order denying her request to determine arrearages. She further contends that, although Ryan was attending alternative schools and did not pass any classes, he nevertheless was a full-time student until he turned 19. Finally, Kari argues that when her nonmodifiable spousal support terminated in August 2008, additional support was due based on a percentage of the 2008 bonus.
As discussed below, the trial court correctly interpreted the marital settlement agreement regarding the bonus portion of John’s support obligation. Further, substantial evidence supports the trial court’s finding that Ryan was not a full-time high school student. Therefore, the order will be affirmed.
BACKGROUND
Kari and John divorced in 2002. At the time they had two minor children, Nichole and Ryan.
John, a petroleum engineer, became an employee of Driltek, Inc. (Driltek) in 1999. In 2002, John was earning $8,000 per month plus a discretionary annual bonus.
The parties calculated support based on $8,000 as John’s monthly salary and $381 as Kari’s. This produced a guideline child support figure of $1,601 for the two children and a spousal support figure of $913 for Kari per month. The parties agreed that this was appropriate base support and entered into a stipulated judgment providing that John was to pay to Kari, “as child support, the sum of $1,601.00 per month” and to pay to Kari, “as spousal support, the sum of $913.00 per month.” The stipulated judgment further provided:
“Each year, in addition to his regular salary, [John] also receives an annual bonus. In calculating [John’s] child support obligation to [Kari], neither the court nor the parties took into consideration [John’s] annual bonus. Therefore, [John] shall pay to [Kari], as child support, an amount equal to 20.01% of the gross amount of his bonus each year. In other words, when and if [John] receives a bonus from his employer, he shall pay to [Kari] an amount equal to 20.01% of the gross amount of his bonus check as additional child support.”
An identical provision was included for spousal support except that the additional support was 11.41 percent of the gross amount of John’s bonus each year.
Two months after the dissolution judgment was entered, the parties entered into a stipulated order modifying custody, visitation and support. The parties agreed that Kari could move the principal residence of the children to Colorado and that child support would stay the same. However, spousal support was lowered to $500 per month, plus 11.41 percent of John’s annual bonus as in the original judgment, was nonmodifiable, and would terminate no later than August 31, 2008.
In January 2005, John purchased a 25 percent interest in Driltek and thus became a part owner of the business. Driltek is a subchapter ‘S’ corporation. John’s income went from $174,000 in 2004 to $469,075 in 2005. John’s regular salary was increased from $9,500 to $14,167 per month and he received stockholder distributions of the company’s profits. In 2007, John’s regular salary and corporate distributions totaled approximately $1.2 million. Beginning in 2005, John paid the base support amounts and used the figure of $50,000 to calculate the “bonus” percentages. According to John, a $50,000 bonus is what the top 25 percent of petroleum engineers were receiving.
Ryan was expelled from high school in 2005 for lack of attendance. Thereafter, the parties decided to send Ryan to Spring Creek Lodge Academy, a year-round boarding school in Montana. Ryan attended Spring Creek Lodge Academy from June 17, 2005, until he turned 18 on July 25, 2006. A trust paid most of Ryan’s expenses.
In May 2006, John filed a motion to modify child support to zero on the ground that the trust had been paying substantially all of Ryan’s expenses while he was living at Spring Creek Lodge Academy. This motion was continued numerous times.
When Ryan returned to Colorado from Montana, he had not earned enough high school credits to graduate. During September and October 2006, Ryan attended McLain High School, an alternative public high school.
Ryan left McLain High School to attend McLain Community School between October 23 and December 23, 2006. This school gives its students a course of study to follow and most classes are attended from home online. Ryan’s course schedule listed “Learning Svc Lrng Hadley/FT Job AM” from 9:00 a.m. to 1:15 p.m. on Monday through Thursday. Kari testified that she did not know what this course was but thought it had something to do with job credit. On Monday through Thursday from 6:00 p.m. to 8:00 p.m. Ryan’s schedule listed math, reading, writing and social studies. Fridays were “empty.”
In February 2007, Ryan began attending Front Range Academy, a private online high school. However, within two weeks, Ryan broke his right arm and was in a cast for 12 weeks. Ryan could not write and did not complete any of the courses that semester. After Ryan turned 19, he enrolled at Questar Academy and earned a high school diploma.
In January 2008, Kari filed a motion to determine arrearages in support since September 1, 2002. Kari asserted that John owed her approximately $470,000 through 2006. According to Kari, John should have paid her a percentage of whatever income he received above his $8,000 per month salary. Kari also requested $33,000 in attorney fees and costs. At trial, Kari claimed she was owed approximately $671,000 through May 14, 2008.
The trial court found that John’s payment of the ongoing monthly support, i.e., $1,601 for child support and $500 for spousal support, plus the percentages of his actual bonuses through 2004 and $50,000 per year thereafter was proper under the court order. The court concluded that John’s request for child support modification was moot but that John was entitled to be reimbursed for the support he paid between July 25, 2006, when Ryan turned 18, and July 24, 2007, because Ryan was not a full-time high school student during that period. The court awarded no fees to Kari.
DISCUSSION
1. The trial court correctly interpreted the dissolution judgment.
A marital settlement agreement, incorporated into a dissolution judgment, is construed under the rules applicable to contracts generally. (In re Marriage of Davis (2004) 120 Cal.App.4th 1007, 1018; In re Marriage of Iberti (1997) 55 Cal.App.4th 1434, 1439.) Accordingly, the mutual intention of the parties at the time the agreement is entered into governs its interpretation. If possible, such intent is to be inferred solely from the written provisions of the agreement. (In re Marriage of Davis, supra, 120 Cal.App.4th at p. 1018.) When the agreement is clear, explicit, and unequivocal, and there is no ambiguity, the court will enforce the express language. (In re Marriage of Iberti, supra, 55 Cal.App.4th at p. 1440.) When no conflicting extrinsic evidence is offered of an interpretation as to which the agreement is reasonably susceptible, and the facts are otherwise undisputed, the appellate court applies the unambiguous contract terms to the undisputed facts as a matter of law. (Id. at p. 1439.)
As outlined above, the support agreement set a base monthly amount of $1,601 for child support and $500 for spousal support. In addition, John was to pay an amount equal to a certain percentage of his bonus check each year, 20.01 percent for child support and 11.41 percent for spousal support. According to Kari, “it is apparent from the plain language of the agreement, and any reasonable interpretation thereof, that the parties, and the court, intended for John to pay Kari as additional support a percentage of any future income over a base salary of $8,000 per month that he might receive.”
However, Kari’s interpretation is inconsistent with the agreement’s definition of a “bonus.” After setting forth the percentage of the bonus to be allocated to additional support, the agreement states, “In other words, when and if [John] receives a bonus from his employer, he shall pay to [Kari]” amounts equal to the set percentages of the gross amount of his bonus check (italics added). Thus, the agreement is very specific. The bonus subject to support is an additional check from John’s employer. This is not equivalent to any future income over an $8,000 per month base salary. Accordingly, the express language of the agreement is contrary to Kari’s position. If the parties had intended that John pay a percentage of all income over $8,000 per month, the agreement would have so stated.
Kari asserts that John’s conduct in 2002, 2003 and 2004 demonstrates that he interpreted the agreement as requiring that he pay fixed support based on his salary plus a fixed percentage of all his income over that amount. Thereafter, Kari claims, John proceeded to circumvent the agreement by designating a portion of his income, i.e., $50,000, as “bonus” and exempting the rest.
To support her claim for 2002 through 2004, Kari relies on an arrearage calculation that was prepared by an accountant. However, Kari has misconstrued this evidence. Although the schedule calculates child and spousal support based on what the accountant terms “Bonus & Excess Compensation,” the schedule lists substantially lower numbers for the support that was actually paid. For the years in question, John paid the base amount plus the fixed percentages of a $5,000 bonus for 2002, a $7,500 bonus for 2003, and a $10,000 bonus for 2004. Thus, John’s conduct was consistent with the trial court’s construction of the agreement.
Kari additionally argues that the trial court erred in applying the concept of fairness and in adding terms to the stipulated judgment. This contention pertains to the court’s conclusion that John properly based support on a $50,000 bonus beginning in 2005. Kari objects to the court’s finding that her position was erroneous because “no one, least of all the court, anticipated” that John “would become a part owner in the business where he was formerly only an employee and that his income would increase some 700 percent” and that “[t]o adopt [Kari’s] strained interpretation would be to chose to ignore the calculations of mandatory child support which have percentage of child support to gross earnings decreasing as the person paying income increases.” According to Kari, the plain terms of the contract must be followed.
However, beginning in 2005, John did not receive a “bonus” as defined by the support agreement. John was no longer an employee of Driltek. Thus, under the plain terms of the contract, John did not owe Kari any more than the base support amounts. When the trial court stated that it appeared that the parties anticipated “a fair amount of child support would be paid by” John, and that basing the additional amount upon a $50,000 bonus approximated the situation at the time the agreement was entered, the court was neither interpreting the agreement using a fairness concept nor adding terms. Rather, the trial court was commenting that, based on industry standards, John was complying with the terms of the agreement as if he were still an employee receiving a bonus from his employer, i.e., the situation that existed when the agreement was entered into. Kari is essentially seeking a retroactive support modification. However, support is modifiable prospectively only. (Fam. Code, § 3651; In re Marriage of Acosta (1977) 67 Cal.App.3d 899, 902.)
Kari further asserts that John breached his duty of good faith and fair dealing by not interpreting “bonus” to mean all of his income over $8,000 per month and by making his own determination regarding how much of his income should be designated as bonus rather than salary. However, the terms of the support agreement were stipulated to as part of the dissolution judgment and thereafter modified by stipulated order. Accordingly, the agreement’s obligations are not those imposed by contract and are not enforceable as such. (In re Marriage of Corona (2009) 172 Cal.App.4th 1205, 1221.) Therefore, there is no basis to imply a covenant of good faith and fair dealing and corresponding duty into the terms of the support judgment. (Ibid.)
2. Substantial evidence supports the trial court’s finding that Ryan was not a full-time high school student following his 18th birthday.
As outlined above, the trial court determined that Ryan was not a full-time high school student between the time he left the Spring Creek Lodge Academy on his 18th birthday and his 19th birthday. Therefore, the court ordered Kari to reimburse John for the child support he paid during that period.
Kari contends that this finding is not supported by substantial evidence. According to Kari, although Ryan enrolled in, but then withdrew from, three different schools and did not complete a class or earn any high school credit, the evidence nevertheless demonstrates that he was a full-time high school student.
Under the substantial evidence standard of review, the trial court’s resolution of a disputed factual issue must be affirmed if there is any substantial evidence, contradicted or uncontradicted, to support the finding. (Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429.) Accordingly, the appellate court must view the evidence in the light most favorable to the trial court’s finding, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. (Jessup Farms v. Baldwin (1983) 33 Cal.3d 639, 660.) However, to be substantial, the evidence must be of ponderable legal significance, i.e., reasonable, credible and of solid value. (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)
Here, although Ryan was in and out of three high school programs between his 18th and 19th birthdays, the evidence supports the trial court’s conclusion that he was not a full-time student during that period.
In the fall after Ryan returned from Colorado, he attended McLain High School, a continuation high school. However, after a few weeks, Ryan withdrew from the school without completing any course work.
Ryan then spent approximately two months at McLain Community School taking online courses. His class schedule indicates that most of the work was some type of job credit class with only four hours per week devoted to substantive classes. Thus, the evidence supports the finding that he went only part-time to McLain Community School.
After a two month break, Ryan began attending Front Range Academy, another online school. However, within two weeks Ryan was unable to continue with the course work due to having had surgery on a broken arm. Thus, again, no classes were completed and no credit was earned. It was not until after Ryan turned 19 that he enrolled in another institution and earned his high school diploma.
Thus, in addition to not earning any class credit, the evidence indicates that between July 25, 2006 and July 24, 2007, Ryan attended school full-time, whether in person or online, for a few weeks at most. The rest of that time he was either attending school part-time or not at all. Therefore, viewing the evidence in the light most favorable to the trial court’s finding that Ryan was not a full-time student, it must be concluded that this finding is supported by substantial evidence.
3. Spousal support for the year support terminated.
Pursuant to the terms of the stipulated order, spousal support terminated on August 31, 2008. John paid the base support of $500 per month through that date. The trial court found that because John’s obligation to pay spousal support absolutely terminated on August 31, there was no legal basis to order additional support based on income received by John after that date, i.e., a percentage of the “bonus” income. Kari argues that, because a yearly bonus is compensation for the entire year, not just the month it is paid, she is entitled to a prorated percentage of John’s 2008 bonus.
In the stipulated order for spousal support the parties acknowledged that, in calculating the support amount, John’s potential annual bonus was not taken into consideration. Accordingly, John was to pay Kari 11.41 percent of the gross amount of his bonus check. Thus, any bonus actually received by John would be counted as part of John’s annual gross income for the purposes of his spousal support obligation. (Cf. In re Marriage of Mosley (2008) 165 Cal.App.4th 1375, 1387.) This structure provided support based on the income actually received and prevented John from having monthly cash flow problems. (Id. at pp. 1386-1387.)
However, as discussed above, John did not receive a bonus as defined in the stipulated order in 2008. In fact, although John paid support based on a $50,000 bonus beginning in 2005, he was not obligated to do so. Accordingly, John paid Kari what he was required to pay, i.e., $500 per month, through the date spousal support absolutely terminated. Kari is not entitled to additional support for 2008.
4. Attorney fees.
Kari requested that she be awarded attorney fees and costs in the amount of $33,000 when she responded to John’s motion to modify child support and moved for a determination of arrearages. However, Kari provided no support for this request. She did not produce either the discovery associated with her income that was demanded by John or any evidence regarding her attorney fees and costs. Aside from the initial request in her motion, Kari did not raise the issue again. She neither argued the question in her posttrial brief nor requested the court to include fees and costs in its statement of decision.
Kari argues that that the court erroneously ignored her request for fees. According to Kari, the disparity between her income and John’s income alone justifies a fee award.
In a dissolution proceeding, a motion for attorney fees and costs is left to the sound discretion of the trial court. Accordingly, in the absence of a clear showing of abuse, its determination will not be disturbed on appeal. (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 630.) Thus, the trial court’s order will be overturned only if, viewing all the evidence most favorably in support of the order, no judge could reasonably have made it. (In re Marriage of Keech (1999) 75 Cal.App.4th 860, 866 (Keech).)
While discrepancy in the parties’ incomes is a factor to be considered in awarding fees and costs, it is only one factor for the court to consider in determining how to apportion the overall cost of the litigation equitably between the parties under their relative circumstances. (Fam. Code, § 2032, subd. (b).) Further, before ordering one party to pay the other party’s attorney fees, the court must inquire into the reasonableness of those fees. (Keech, supra, 75 Cal.App.4th at p. 870.) The court must be apprised of the nature and extent of the services rendered so it can determine their reasonable value. (Ibid.)
Here, Kari provided no evidence of the nature and extent of the services rendered. She also failed to produce accurate evidence of her earnings. Under these circumstances, the court did not err in failing to award fees. (Keech, supra, 75 Cal.App.4th at pp. 870-871.)
DISPOSITION
The order is affirmed. Costs on appeal are awarded to respondent.
WE CONCUR: WISEMAN, Acting P.J., CORNELL, J.