Opinion
B159908.
10-15-2003
In re Marriage of SUSAN and RICHARD W. BRANCH. SUSAN L. BRANCH, Respondent, v. RICHARD W. BRANCH, Appellant.
Berna Warner for Appellant. Ronald F. Brot for Respondent.
Richard Branch appeals from the order: (1) denying his request to terminate spousal support; and (2) awarding his former spouse, Susan Branch attorneys fees and costs in connection with the request. Appellant argues the court should have terminated monthly support because he had shown a change in circumstances since the original support order. Specifically, appellant claimed he had been laid off from his job and respondent had a sufficient separate estate to support herself. The trial court disagreed, finding appellant had used the elimination of his job as an opportunity to take retirement even though he was only 55 years old at the time and still able to work. The court concluded appellants voluntary, early retirement was not a sufficient change in circumstance to justify the elimination of spousal support. In addition, the court found Family Code section 4322 did not warrant ending support because respondents separate estate was not sufficient, standing alone, to provide for her support. Finally, the court awarded respondent attorneys fees based on its finding respondent needed assistance in paying the fees and appellant had the means to do so. As set forth more fully below, appellant has not shown any reversible error in the trial courts resolution of these matters and accordingly, we affirm.
FACTUAL AND PROCEDURAL HISTORY
Appellant and respondent were married in 1968 and divorced in 1998. For most of their marriage, appellant worked for Nestle, while respondent raised their children and was primarily a homemaker.
When she filed for divorce, respondent was working as a teachers aide making approximately $5,000 a year while appellant was earning approximately $116,000 in his management position at Nestle. At the time, respondent indicated her monthly expenses were $4,795. During the divorce proceedings, appellant indicated the future of his position was uncertain because Nestle was closing down certain operations in southern California and transferring others to Ohio. Nonetheless, the parties stipulated appellant would pay $3,500 a month in spousal support to respondent. As part of their marital settlement agreement, community assets were divided with each party receiving approximately $782,000 and one-half of appellants retirement pension. Appellant was also ordered to maintain respondent as a beneficiary on a $300,000 life insurance policy.
In December of 1999, appellant was notified his position with Nestle was being eliminated. He was given one year of salary as severance pay. Although he was only 55 years old when he was laid-off, in good health and capable of working, appellant decided not to seek any other employment, opting instead to retire. He continued to pay $3,500 in monthly spousal support during the year he received severance pay.
In December 2000, appellant stopped paying monthly spousal support and filed an Order to Show Cause (OSC) seeking to terminate spousal support and the obligation to maintain life insurance. He argued his retirement and the size of the separate estate respondent received at dissolution warranted the termination of support and the life insurance policy. Information disclosed during a subsequent deposition of appellant indicated he had a separate estate of over $2.2 million.
Appellants June 2001 income and expense declaration disclosed he had monthly expenses of $3,720 and that his second wife earned $3,583 in monthly income.
Respondent requested appellant participate in a vocational evaluation to determine whether appellant was employable. Appellant refused and consequently, respondent filed a motion to continue the OSC and a motion for an order for a vocational examination. Appellant also requested an award of fees, costs and sanctions in connection with the motions. After arguing that an examination was unnecessary because earning capacity was irrelevant, appellant ultimately agreed to participate in the evaluation. The court continued the request for a fees and costs award until the OSC.
The vocational examination of appellant disclosed he had the ability, but not the desire to work. The exam concluded that after a couple of months of updating his computer skills he would be employable as an industrial engineer or operations manager earning $60,000-$80,000 a year, or after other training he could also work as a grant writer earning between $33,000-$40,000 a year.
The vocational examination of respondent showed she could apply for a teachers aid position in a neighboring school district and earn a few dollars extra per hour. It also showed that if she continued to pursue an addiction studies certificate she was working on, she could eventually earn between $21,000 and $25,000 a year as an addiction counselor. Thereafter, if she were to earn additional state certification, she could, after three years of additional training and experience as a full time addiction counselor earn between $33,300 and $41,600 a year.
Respondents June 2001 income and expense declaration showed she had a net disposable income of $2,240.27 and monthly expenses of $5,480.57. The declaration also showed she had total assets of $678,609 of which $239,415 were liquid assets.
The fixed assets consisted of $329,694 in an IRA, $75,000 in home equity and a $15,000 automobile. Respondents estate had decreased in value by as much as $100,000 from January 2001 to June 2001, according to respondent because appellant had stopped paying spousal support and because of a downturn in the stock market.
The court heard appellants OSC in September 2001 and subsequently denied it. Specifically, the court concluded that although appellants termination from Nestle was involuntary, his decision to retire rather than seek additional employment amounted to a decision to take an early retirement. The court found that while appellant was free to retire at any age, his early retirement did not entitle him to end his obligation to pay spousal support. In addition, the court refused to terminate support under Family Code section 4322, finding respondents separate estate was not sufficient for her support. The court also awarded respondent $22,500 in costs and attorneys fees because appellants refusal to agree to a vocational examination had caused her to incur additional litigation expenses and because appellant had the means to pay a portion of the fees and respondent needed assistance with them.
This appeal followed.
DISCUSSION
I. The Court Did Not Err in Denying Appellants Request to Eliminate Monthly Spousal Support.
On appeal, appellant contends the court should have ended monthly spousal support because he lost his job at Nestle and based on Family Code section 4322 respondent had a sufficient separate estate at dissolution to support herself. We disagree.
All statutory references are to the Family Code unless otherwise indicated.
A. Appellants Termination from Nestle.
A court decides whether to order spousal support based on number of factors under section 4320, including an examination the needs of the parties, their respective abilities to meet those needs, the length of the marriage, and the age and health of the parties. (Fam. Code, § 4320.) In deciding whether to order support, the trial court has broad discretion; an abuse occurs only where it can be said no judge reasonably could have made the same order. (In re Marriage of Meegan (1992) 11 Cal.App.4th 156, 161.)
Similarly, the decision on whether to modify a spousal support order also rests within the sound discretion of the trial court. (Ibid.) The proponent of modification of a support order must show a material change of circumstances since the last spousal support order. (Id.) To determine whether a change of circumstances has occurred, the trial court is required to reconsider the same standard and criteria set forth in section 4320. (In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 77-78.)
On appeal, this court accepts as true the trial courts factual findings with respect to section 4320, resolving all conflicts in the evidence in favor of the prevailing party and giving all legitimate inferences to uphold the courts decision. (In re Marriage of Meegan, supra, 11 Cal.App.4th at p. 161.) "An appealing party must demonstrate the existence of a material change in facts or circumstances and that as a matter of law, an abuse of discretion has occurred." (In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373, 1377.)
Here, appellant asserts the court should have terminated spousal support as a matter of law because he had shown the requisite change of circumstances, namely, that he had been laid off from his job at Nestle. Relying on language in In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 594, he argues that because he did not voluntarily quit his job or retire to avoid his spousal support obligations then he has shown a sufficient change in circumstances, as a matter of law, to warrant the elimination of spousal support. In Sinks, the court of appeal affirmed the trial courts denial of the husbands motion to terminate spousal support after the husband retired. The trial court denied the motion because it concluded the husbands retirement was motivated by his desire to avoid paying spousal support. (Id. at pp. 591-593.) To support his position, appellant has seized upon the following dicta from Sinks: "If the circumstances here were different and the motivation behind the retirement were not suspect, the case would raise an issue of first impression in this state: Is a supporting spouse who is eligible for retirement, obligated to continue working to provide spousal support?" (Id. at p. 594.)
Appellants reliance on Sinks is unavailing for several reasons. First, he reads too much into the case. While Sinks, and other cases of its vintage, examined the motivations of the retiree in deciding whether to modify support, Sinks does not stand for the proposition that the motivation behind the retirement was the only factor in that determination. (In re Marriage of Sinks, supra, 204 Cal.App.3d at p. 595.) Second, the dicta in Sinks, suggesting that the bona fide retirement of a supporting spouse may show a change of circumstance, is premised on the notion that the supporting spouse is eligible to retire. Here, while appellant retired at 55 years of age, he never demonstrated he was eligible to retire at that age. Appellant has presented no legal authority or factual evidence that age 55 is an eligible retirement age. In contemporary society and under current legal notions, permanently leaving the workforce at age 55 is still considered an "early retirement."
In any event, more recent case law has resolved the issues raised in Sinks. In Stephenson, the court held the cause for retirement is immaterial in determining whether to modify support. Specifically the court stated:
"the nature of cessation of employment, be it retirement, quitting or layoff, whether voluntary or involuntary in character, is irrelevant when it comes to the trial courts duty to consider statutory criteria before determining support obligations. For a spouses obligation to continue support is predicated upon enumerated statutory criteria [i.e., section 4320] including reasonable earning capacity under the circumstances regardless whether there is any evidence of deliberate avoidance of support obligation." (In re Marriage of Stephenson, supra, 39 Cal.App.4th at p. 74.)
The Stephenson court further concluded that where a supporting spouse elects to retire early and to not seek additional employment, the court can impute income to that supporting spouse given the spouses obligation to provide support. (Id. at p. 80.) The court further noted, that a supporting spouse early retirement does not automatically compel a finding of a sufficient change in circumstance to warrant a decrease or the termination of support. (Ibid.) Thus, even if the supporting spouse shows a change of circumstances in actual income because of retirement, modification is not necessarily mandated given the courts obligation to reconsider the section 4320 factors. (Id. at p. 78.)
Stephenson does not resolve the issue of whether a spouse, having reached the usual retirement age, must continue to provide support after he or she timely retires. That factual scenario was addressed in In re Marriage of Reynolds, supra, 63 Cal.App.4th at page 1379, where the retiring husband sought to reduce support upon his retirement at age 67. There the court found no evidence of the husbands ability or capacity to work. In any event the court concluded: "no one may be compelled to work after the usual retirement age of 65 in order to pay the same level of spousal support as when he was employed." (Id. at p. 1379.)
This situation is clearly governed by Stephenson. Appellants involuntary termination from Nestle does not give him sufficient cause to terminate spousal support. It makes no difference why appellant left Nestle. Instead, what matters is that after losing his job, he decided not to rejoin the workforce and elected early retirement. Consequently, the trial court properly considered evidence under section 4320, including appellants earning capacity, the relative needs of the parties, their obligations, assets, their ages, health and the length of the marriage. The evidence before the trial court established that on the balance of the section 4320 considerations, appellant had the ability to continue earning a significant income, and that respondent continued to need spousal support. In our view, appellant has not shown the trial court abused its discretion in denying his request to terminate support.
We observe that on appeal, Appellant asserts that as an alternative to terminating support, the trial court should have reduced it. This contention is problematic because Appellant never properly raised this proposition below. Our review of the record reveals one single reference in his OSC to "terminate/modify" support. This notwithstanding, the only modification Appellant urged in the trial court was to terminate support. He never suggested anything short of eliminating all spousal support. Throughout the proceedings appellant took an all or nothing approach. Consequently, he cannot now complain the trial court erred in failing to order a reduction in support.
B. Section 4322.
As a separate ground for terminating support, appellant argues the trial court should have applied section 4322. This section provides that in original or modification proceedings, "where there are no children, and a party has or acquires a separate estate, including income from employment, sufficient for the partys proper support, no support shall be ordered or continued against the other party." (Fam. Code, § 4322.) Denial of continued support is mandatory if the sufficiency threshold is met, irrespective of circumstances where the court would otherwise order support under section 4320. (In re Marriage of Terry (2000) 80 Cal.App.4th 921, 928.)
Appellant asserts the separate estate respondent acquired at dissolution was substantial and therefore sufficient to trigger ending monthly spousal support under section 4322. The trial court did not agree.
The application of section 4322 presents a mixed question of fact and law. On appeal, this court reviews the trial courts findings with respect to historical facts, that is the value and character of respondents estate and her support needs, for substantial evidence. However, the application of those findings to the legal standard of sufficiency, that is, whether the separate estate is sufficient for proper support, represents a legal conclusion, which we review de novo. (Id. at pp. 928-929.)
Under section 4322, in absence of evidence that the estate has been mismanaged, the court need not look beyond the actual income produced by the estate to determine whether it is sufficient to meet the support needs. (Id. at pp. 930-931.)
In 1998 at dissolution of the marriage, respondent received community assets valued at $782,000 (plus one-half of appellants retirement pension), employment income was about $5,000 a year and monthly expenses of $4,795. Although her divorce estate was by no means insubstantial, at the time it was not deemed sufficient to meet her needs in absence of spousal support.
There is nothing in the record we have found to indicate her current estate, which has depreciated since 1998, is now sufficient under section 4322 to warrant ending monthly support. Especially in view of the fact that her monthly expenses have increased and her yearly salary has remained roughly the same. Though, appellant argued the value of respondents estate should have increased, he failed to present any admissible evidence of mismanagement of the estate on respondents part. Nor did he offer any evidence that her estate should have achieved a particular rate of return since 1998. Consequently, appellant has not demonstrated reversible error in the trial courts refusal to apply section 4322.
II. The Court Did Not Err in Awarding Respondent Costs and Fees.
Below, respondent sought an award of fees and costs in connection with her motion to compel appellant to submit to a vocational examination and in connection with her opposition to the OSC. Appellant refused to agree to the exam because in his view it was unnecessary. Ultimately, after respondent filed an ex parte motion for the order for an exam, appellant agreed to participate. Thereafter, respondent submitted a costs and fees bill for $26,500. The trial court ultimately awarded respondent $22,500 in costs and attorneys fees because appellants refusal to agree to a vocational examination caused her to incur additional litigation expenses and because appellant had the means to pay a portion of the fees and respondent needed assistance with those fees.
On appeal, appellant assails the award because he claims respondent was also uncooperative during the proceedings and because the parties have financial parity.
This court reviews awards for attorney fees and costs for abuse of discretion. (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 630.) Under section 2030, the trial court may in its discretion award costs and fees reasonably necessary to maintain or defend any proceeding. (Fam. Code, § 2030, subd. (c).) The trial court decides what is "just and reasonable under the relative circumstances," taking into consideration "the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the partys case adequately . . . The fact that the party requesting an award of fees an costs has resources from which the party could pay the partys own fees and costs is not itself a bar to an order that the other party pay. . . . Financial resources are only one factor for the court to consider in determining how to apportion the overall cost of the litigation equitably between the parties under the relative circumstances." (Fam. Code, § 2030, subd. (b).)
A disparity in the parties respective circumstances may itself demonstrate relative need. (In re Marriage of Drake (1997) 53 Cal.App.4th 1139, 1167.) In assessing need and the ability to pay, the court may consider all evidence concerning the parties incomes, assets, abilities, investment and income producing properties as well as a partys litigation behavior. (Ibid.)
The record before this court shows a clear disparity of circumstances between these parties with respect to need and the ability to pay fees. Given the admissible evidence in the record showed appellants assets exceeded those of the respondent, the trial court did not abuse its discretion in awarding respondent costs and fees.
In reaching this conclusion we note appellants reply brief makes mention of events and lower court orders which post-date the order under review. We have not, nor are we required to, consider developments between parties or in the trial court occurring during the pendency of this appeal.
DISPOSITION
The order is affirmed. Respondent is entitled to costs on appeal.
We concur: PERLUSS, P.J. and MUÑOZ (AURELIO), J.