Opinion
NOT TO BE PUBLISHED
Superior Court County of Ventura, Super. Ct. No. 022781, Charles W. Campbell, Jr., Judge.
Stephen R. Onstot, in pro per, Appellant.
Taylor, McCord, Praver & Cherry, a Law Corporation, Patrick G. Cherry, for Respondent.
YEGAN, J.
Stephen Onstot (Husband) appeals from the trial court's order denying his order to show cause (OSC) for modification of child support paid to Amber Onstot (Wife) for their three young children. Husband sought the modification after he left a high paying job as a litigation partner in a large Los Angeles law firm for a lower-paid but less demanding job in a smaller firm. He contended the job change was required for health reasons. The trial court rejected that claim, found the job change was not justified and re-calculated child support based on Husband's prior income. As a result, Husband's child support payment increased from $3,000 per month to $5,467. He contends the trial court erred. We affirm.
In the same order, the trial court eliminated Husband's obligation to pay spousal support, reducing his total monthly support payments from $6,000 to $5,467.
Facts
The parties married in April 1997 and separated in May 2003. They have three children, a daughter born in 1997, and a son and daughter who are twins born in 1999. Wife moved to Washington State with the children in 2005. Husband did not object. The parties agreed that Husband would pay child support of $3,000 and spousal support of $3,000 per month. At that time, Husband was employed as a partner in a large law firm and earned more than $300,000 per year. Wife did not work outside the home.
In June 2006, Husband had an emergency angioplasty to correct blockages in three coronary arteries. He testified that he began looking for another job soon after the procedure, when the "cardiologist informed me that I had to make drastic lifestyle changes, including reducing stress...." He explained that one artery was "completely blocked," and two others were "blocked 80 percent." Husband has both high cholesterol and diabetes. He also has a family history of heart disease; many of his relatives, including his father, died prematurely from the condition. He decided that he "needed a change in lifestyle[]" for "medical reasons[.]"
Six months after the angioplasty, at the end of December 2006, Husband resigned his partnership in the law firm. He continued working there, on a contract basis, for a couple of months. In May 2007, Husband began work at an insurance defense firm. The new position pays Husband a percentage of his hourly rate for each hour he bills. This results in an income between $10,000 and $15,000 per month, approximately one-third his prior income.
Between February and August 2007, Husband took three separate overseas trips without his current wife or any of his children, traveling to the Philippines, to Cambodia, Thailand and Taiwan, and to Costa Rica. He remarried on May 4, 2007. Ten days later, Husband filed the OSC to reduce child support.
Husband purchased Wife's interest in the family home in Moorpark as part of their property settlement. At the time, the house was worth about $930,000. Its value has since plummeted. Husband stopped paying the mortgage in December 2007. It was in foreclosure by the time of the OSC hearing in April 2008. Husband owed almost $700,000 on the first mortgage and $94,000 on a home equity line of credit. The house had been on the market for one year at an asking price of $729,000, but Husband had received no offers for it. Husband testified, "I did not anticipate the housing market taking a slide as it did. Otherwise, actually I probably wouldn't have left.... [¶].... I wouldn't have left [my prior law firm] if I would have known that the equity would have dried up in my house."
At the OSC hearing, Husband testified about his medical condition, job change and finances. His cardiologist did not testify. Instead, Husband described the advice he received and offered a written report from the cardiologist. The report describes Husband's physical condition but does not include a recommendation that he change jobs or make other lifestyle changes to reduce stress. In response to Wife's hearsay objections, Husband argued that his testimony and the doctor's report were not hearsay because they were not offered "for the truth." They were instead offered to "corroborate[] the state of mind and [his] reasons for leaving" his prior employment. The trial court overruled Wife's objections and admitted the testimony and medical report into evidence for that limited purpose.
At the conclusion of the hearing, the trial court terminated spousal support based on Wife's unsatisfactory progress in becoming self-sufficient, a finding that is not challenged on appeal. It declined, however, to reduce Husband's child support obligation. The trial court explained, "I have absolutely no evidence in front of me except for your statements that your doctor told you that you needed to get a less stressful job. What I have is you having a heart condition which may be hereditary, but I have no evidence that you needed to change your job to protect your health, not a shred of admissible evidence to support that. [¶] So I'm having a hard time justifying you giving up this position to make an income that's less than half of that when there is no evidence. And it seems to me it would have been extremely easy to at least have gotten a declaration from your heart doctor that this was something that you needed to do to protect your health. It is absolutely missing. So I don't find that you leaving this job is justified."
The trial court found that Husband had an earning capacity of $30,000 per month, the income he earned at his prior job. It recalculated child support based on that income and ordered Husband to pay 5,467 per month. In addition, the trial court ordered Husband to pay $5000 toward Wife's attorney's fees. It rejected Husband's argument that he should not have to pay Wife's attorney's fees because his net worth is lower than hers. The trial court explained, "... I'm having a hard time being sympathetic to your situation because of the way this hearing went. I would have expected, if what you said was correct, you could have proved it. It wouldn't have been that hard. [¶] So I have to think that you purposely reduced your income for reasons that are unknown to me.... [¶] But it doesn't look like you had to leave [your prior job], and in fact, you said that, if you would have known your house was going to go down, you would have stayed. This is a self-created situation."
Contentions
Husband contends the trial court erred when it found his job change was unjustified and that he has an earning capacity of $30,000 per month. He further contends the order violates the full faith and credit clause of the United States Constitution because it is so high, Husband cannot afford to travel to Washington State to exercise visitation rights granted to him by the courts of that state.
Standard of Review
We review an order awarding child support for abuse of discretion. (In re Marriage of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 34.) The same deferential standard applies to the "decision to impute income to a parent for child support purposes based on the parent's earning capacity.... 'Under this standard, "[t]he appellate court should not substitute its own judgment for that of the trial court; it should determine only if any judge reasonably could have made such an order. [Citation.]" [Citation.]' " (In re Marriage of Destein (2001) 91 Cal.App.4th 1385, 1393, quoting In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 994.) We view the evidence in the light most favorable to the prevailing party and give that party the benefit of every reasonable inference. (In re Marriage of Calcaterra & Badakhsh, surpa, 132 Cal.App.4th at p. 34.) "We do not reweigh the evidence or reconsider credibility determinations." (In re Marriage of Dandona & Araluce (2001) 91 Cal.App.4th 1120, 1126.)
Discussion
Earning Capacity
Payment of child support is a parent's primary obligation and " 'must be taken into account whenever an obligor wishes to pursue a different lifestyle or endeavor....' " (In re Marriage of Ilas (1993) 12 Cal.App.4th 1630, 1635.) A supporting parent does " 'not have the right to divest himself [or herself] of his [or her] earning ability at the expense of... minor children.' " (Id., see also In re Marriage of Padilla (1995) 38 Cal.App.4th 1212,1218.) Thus, Family Code section 4058, subdivision (b) expressly grants the trial court discretion to impute income to a parent based on the parent's earning capacity, as opposed to actual income "when doing so would be in the child's best interests." (Moss v. Superior Court (Ortiz) (1998) 17 Cal.4th 396, 424. See also In re Marriage of Calcaterra and Badakhsh, supra, 132 Cal.App.4th at p. 37.)
The trial court's discretion to rely on earning capacity rather than actual income is not limited to cases in which the parent acts in bad faith or deliberately suppresses income to reduce child support. (Moss, supra, 17 Cal.4th at pp. 423-424.) California courts have, however, consistently "approved support awards based upon the earning capacity, instead of the actual income, of the supporting spouse in cases where ' "it appears from the record that there is a deliberate attempt on the part of the [spouse] to avoid his or her financial family responsibilities....' " (In re Marriage of Simpson (1992) 4 Cal.4th 225, 232.)
A parent's earning capacity is the income that the parent currently has both the ability and the opportunity to earn, regardless of the parent's actual income. (In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1294, 1302.) "When a parent decides not to seek employment to the best of his or her ability, the court must retain discretion to impute income -- otherwise 'one parent by a unilateral decision could eliminate his or her own responsibility to contribute to the support of the child, causing the entire burden of supporting the child to fall upon the [fully] employed parent.' (In re Marriage of Paulin (1996) 46 Cal.App.4th 1378, 1384, fn. 5....)" (In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1339.)
At the same time, however, the determination of a parent's earning capacity must remain tethered to the reality of his or her current employment prospects. Past earnings are not always an accurate predictor of future earnings. (County of Placer v. Andrade (1997) 55 Cal.App.4th 1393, 1396.) For example, a parent who is paid a bonus in one year may not earn a bonus in the next year. The parent's child support obligation should reflect that uncertainty. (In re Marriage of Mosely (2008) 165 Cal.App.4th 1375, 1385-1387.) Similarly, it is an abuse of discretion to base child support on a parent's past income where the parent is incarcerated and has no opportunity to work. (El Dorado County Dept. of Child Support Services v. Nutt (2008) 167 Cal.App.4th 990, 993.) Even a parent who has been terminated from a highly-compensated position due to his own misconduct may be entitled to a reduction in child support where the evidence shows that he has no reasonable prospect of finding another job at a comparable salary. (In re Marriage of Eggers (2005) 131 Cal.App.4th 695, 700-701; see also In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373 [spousal support reduced where 65-year old physician was terminated and had no realistic employment prospects].)
Husband relies on In re Marriage of Berger (2009) 170 Cal.App.4th 1070, another recent case involving a parent's voluntary reduction in income. There, the father voluntarily resigned his partnership at a national accounting firm to work at a start-up company, reducing his income from about $600,000 per year to less than $200,000. After about five years, the "start-up" was still unstable, so the father voluntarily deferred collection of most of his salary. He then sought a reduction in child support based on his reduced income. Recognizing that the father may have permanently destroyed his chances of returning to his prior profession and income, the court of appeal held, "it would be improper to impute to [the father] the income he had formerly earned in the finance industry in the absence of evidence demonstrating he could still earn such an income if he were to return to that industry today...." (Id. at p. 1074.) It further held, however, that the trial court erred in limiting father's earning capacity to his actual income. The total amount of father's deferred salary and other assets should have been included when the trial court calculated his earning capacity because the father was not entitled to "unilaterally and voluntarily arrange his business affairs in such a way as to effectively preclude his children from sharing in the benefits of his current standard of living." (Id. at p. 1082.)
A parent who seeks a reduction in child support based on voluntarily reduced income thus has the burden to prove his or her current earning capacity. (In re Marriage of Bardzik, supra, 165 Cal.App.4th at pp. 1304-1305.) If the evidence supports a reasonable inference that the parent has the ability and opportunity to earn more than his or her actual income by, for example, taking a better paying job or investing assets for a higher rate of return, the trial court may impute a higher income to the parent. (In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 753-754.) But when a parent proves that he or she cannot climb the ladder back up to the income rung that parent previously occupied, then the trial court's finding of earning capacity must reflect that reality. (In re Marriage of Berger, supra, 170 Cal.App.4th at p. 1079; In re Marriage of Bardzik 165 Cal.App.4th at p. 1304; In re Marriage of Eggers, supra, 131 Cal.App.4th at p. 701.) Throughout this process, it is the parent seeking modification who bears the burden of proof. The parent opposing the reduction in child support bears "no burden to convince the court that [the other parent] would have secured a full-time job had [he or she] applied." (In re Marriage of LaBass & Munsee, supra, 56 Cal.App.4th at p. 1339.)
Here, Husband claimed he was forced by his heart condition to reduce the level of stress in his life by accepting a less demanding job, along with a 60 percent pay cut. The trial court rejected that testimony, finding that it was not credible. This credibility determination was, we conclude, entirely appropriate. Even if we disagreed, however, we would not second guess it. (In re Marriage of Dandona & Araluce, supra, 91 Cal.App.4th at p. 1126.)
Husband's contention on appeal that his testimony was not hearsay is beside the point. The testimony was admitted for the limited purpose of explaining Husband's state of mind, but the trial court chose not to rely on it because it found the testimony was not credible. Thus, the issue here is one of credibility, not admissibility.
Husband's testimony was the only evidence that he changed jobs for medical reasons. There was, for example, no evidence that less drastic measures, such as reducing his work hours or delegating some of his management responsibilities, would have been inadequate to protect Husband's health while preserving more of his income. Nor did Husband corroborate his claim of medical necessity even though, in the trial court's words, "it would have been extremely easy to at least have gotten a declaration from your heart doctor that this was something that you needed to do to protect your health." Husband's credibility was further damaged by evidence that he waited six months after the angioplasty to resign from his partnership and nearly six more months before starting his new job. In the interim, Husband remarried and took three overseas vacations. Moreover, Husband testified that he probably would not have changed jobs had he known that his house was going to decline in value so dramatically. This testimony supports an inference that Husband did not believe the job change was a matter of life and death. We conclude the trial court was entitled to give his testimony little or no weight. (Evid. Code, § 412.)
Husband had the burden to prove that his child support obligation should be reduced because he no longer has the ability or opportunity to earn his prior salary. (In re Marriage of Bardzik, supra, 164 Cal.App.4th at p. 1304.) He failed to carry that burden because he presented no credible evidence that his job change was motivated by medical necessity or that he lacked any reasonable prospect of finding a higher paying job. In the absence of evidence to the contrary, the trial court properly found that Husband's reduced income was "a self-created situation." Its decision to impute to Husband the income he earned at his prior position was therefore not an abuse of discretion. (In re Marriage of LaBass & Munsee, supra, 56 Cal.App.4th at p. 1339.)
Husband further contends the trial court abused its discretion when it imputed to him the unreasonably high income of $30,000 per month. At his present salary, Husband claims he would have to work 475 hours each month to meet his support obligation and pay his own expenses. He concludes the trial court erred because its order requires him to adopt an unreasonable work schedule. (In re Marriage of Simpson, supra, 4 Cal.4th at pp. 235-236.) But Husband bore the burden of proof on this issue as well. He presented no evidence that he is unable, despite reasonable efforts, to find a job that demands reasonable hours and pays a salary commensurate with his earning capacity. In the absence of such evidence, the trial court was entitled to infer that Husband's earning capacity was not reduced by his voluntary and unjustified job change.
Full Faith and Credit
The children presently reside in Washington State with Wife. The courts of that state have entered a judgment establishing a visitation schedule. Husband contends the trial court's order sets child support so high that he cannot exercise his visitation rights under the Washington judgment because he cannot afford travel to that state. As a result, he contends, the trial court's order violates the full faith and credit clause of the United States Constitution because it conflicts with the Washington judgment. (U.S. Const., art. IV, § 1.) We are not persuaded.
We note that this contention has been waived because Husband did not raise it in the trial court. Had it not been waived, we would reject it. The full faith and credit clause requires a California court to recognize and enforce a final child custody or support judgment entered in another state, if that judgment is "rendered by a court with adjudicatory authority over the subject matter and persons governed by the judgment...." (Baker v. General Motors Corp. (1998) 522 U.S. 222, 233; see also Keith G. v. Suzanne H. (1998) 62 Cal.App.4th 853, 861.) It does not require a California court to manage a parent's finances so that the parent can take full advantage of visitation rights granted by such a judgment. The trial court's order does not contradict or modify the Washington court's visitation schedule. There was no constitutional violation.
Conclusion
The judgment (findings and order after hearing) is affirmed. Costs to Wife.
We concur, GILBERT, P. J., COFFEE, J.