Opinion
E066722
05-17-2018
In re the Marriage of DONNA J. and BRIAN J. KELLY. DONNA J. KELLY, Appellant, v. BRIAN J. KELLY, Respondent.
Donna Kelly, in pro. per., for Appellant. Arias & Lockwood and Christopher D. Lockwood for Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RID222667) OPINION APPEAL from the Superior Court of Riverside County. Joan F. Burgess, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed. Donna Kelly, in pro. per., for Appellant. Arias & Lockwood and Christopher D. Lockwood for Respondent.
INTRODUCTION
Donna J. Kelly appeals from an order stepping down and then terminating her spousal support, entered on July 1, 2016. Her briefing includes much irrelevant discussion, including the assertion of issues arising from orders entered as far back as 2008. Family law judgments and orders are in general appealable as they are entered (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 116), but a notice of appeal must be filed within 60 days of the service of a notice of entry of each order or within 180 days of the date of entry of the order, if no notice of entry of the order was served. (Cal. Rules of Court, rule 8.104.) Once those time limits have expired, the order or judgment is final and is not subject to challenge on appeal. (In re Marriage of Eben-King & King, at p. 109, citing Cal. Rules of Court, former rule 2 (now rule 8.104).) Accordingly, we will disregard all arguments pertaining to orders entered prior to July 1, 2016. We will also disregard the many irrelevant facts Donna asserts throughout her briefing, and we will disregard all factual assertions that are not supported by citations to the record. (Cal. Rules of Court, rule 8.204(a)(1)(C); Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856.)
As is customary in appeals in dissolution proceedings, we refer to the parties by their first names for clarity and simplicity. No disrespect is intended.
Although Donna has not made a coherent argument, we conclude that her opening brief sufficiently raises the claim that the trial court abused its discretion in ordering the modification and ultimate termination of spousal support. Accordingly, we will address that issue.
PROCEDURAL BACKGROUND
A petition for dissolution of the parties' 28-year marriage was filed on November 5, 2007. On February 10, 2010, a stipulated judgment of dissolution was entered. It included a stipulation for division of property executed by the parties, along with a waiver of discovery and an acknowledgement by Donna that her attorney was unable to adequately advise her with respect to the value of the community property estate because she directed her attorney to refrain from conducting discovery. A judgment on the reserved issue of spousal support was entered on March 12, 2010. The judgment awarded Donna $7,000 a month in spousal support. It included a so-called Gavron advisement that it is the goal of the State of California that a supported spouse shall become self-supporting within a reasonable time, taking into account the long duration of the marriage. At a hearing on January 24, 2008, i.e., prior to the entry of the stipulated judgment, the court also advised Donna, who was then not working, that it is the goal of the state that each party shall make a reasonable, good faith effort to become self-supporting within a reasonable period of time. The court acknowledged that the parties' marriage was more than 28 years, and told Donna that for that reason, it was not giving her a set period in which to become self-supporting. It emphasized, however, that she still had the obligation to make reasonable, good faith efforts to become self-supporting.
In re Marriage of Gavron (1988) 203 Cal.App.3d 705.
Donna's principal assertion on appeal is that there is some error in the Gavron warning because the trial court referred to it in January 2008 as not being a typical Gavron order. It is not clear what the court meant, but there is nothing erroneous about the warning Donna was given. In any event, because the time to appeal any error in the initial award of spousal support or the Gavron warning expired long ago, we lack jurisdiction to address this issue.
On November 25, 2015, Brian filed a request for an order terminating spousal support, based on his loss of employment, Donna's failure to make reasonable efforts to become self-supporting, and Brian's assertion that Donna was cohabiting. Donna filed a response, in which she detailed her efforts at becoming self-supporting and explained medical and personal reasons that made it difficult to do so. On January 12, 2016, Brian filed a request for an order requiring Donna to reimburse him for the loss of the value of stock options she failed to exercise and which he could have exercised if she had informed him in a timely manner that she was not going to exercise them.
Following testimony on April 29, 2016, and May 10, 2016, on July 1, 2016, the court issued an order reducing support payments to $5,000 a month beginning on June 1, 2016, then stepping down in increments through December 2016. As of January 1, 2017, spousal support was terminated. The court reserved jurisdiction to award spousal support thereafter, and ordered the parties to notify each other if they obtained employment. The court denied Brian's request for reimbursement for the unexercised stock options.
On August 30, 2016, Donna filed a notice of appeal from the July 1, 2016 order.
FACTS
The following is a summary of the facts adduced at the hearing on Brian's requests to terminate spousal support and to require Donna to reimburse him for unexercised stock options. Because the sole issue on appeal is reviewed in part under the substantial evidence standard of review (see legal analysis, post), we state the facts in the light most favorable to the judgment.
Brian and Donna were married for 28 years and two months when they separated in 2007. Brian had worked for Chevron for many years, earning approximately $240,000 to $250,000 a year when the original support order was issued, but his employment was terminated in November 2015 as part of a general layoff. He was then 59 years old. He received his final paycheck in November 2015 and later received a severance payment of $240,000 and a bonus of $50,000. As of the date of the hearing, his only income was unemployment benefits in the amount of $450 a week. He had been looking for work but had not yet found employment.
Donna had been a stay-at-home parent through most of the marriage and had worked only sporadically during the marriage. She had a bachelor's degree in sociology. In 2009, based on a 2008 vocational examination report, the court had determined that Donna had the ability to earn $30,000 a year. The court found at that time that her efforts to become self-supporting had been "worse than bad," despite the Gavron warning. At the hearing in 2016, Donna stated that she had obtained a real estate license and had worked in that field for a time, but admitted that she had not been employed between 2010 and the date of the hearing, except for a brief period when she worked for a real estate agency. She stated that she had not made much of an effort to find employment. She blamed her lack of diligence in part on having to come from her home in northern California to court "quite a bit" and in part on health issues which she said she had had for many years. She testified that she quit her real estate job because she was getting "sicker." However, she had not seen a doctor for her condition since 2008 and was taking only ibuprofen. She had gone to France for 10 days in 2014. With respect to Donna's claim that she was going to court "quite a bit," the court noted that there had been only a few hearings, most of which Donna had not attended.
Donna testified that in or about 2010, she purchased a 10-acre ranch in Nevada City, California, which she intended as an income property, for $400,000. The property includes a main house, which is Donna's residence, and a smaller house with an apartment below it. She bought the ranch with the intention of living in the main house and renting out the other house and apartment. However, she needed to bring the apartment up to code, which, by the time of the hearing, she had still not accomplished. The two houses also needed a lot of work, and the property as a whole required a great deal of manual labor. The only tenant she had was Gregg Sanford, who had lived at times during the past five years in the second house. He was paying her $550 a month in rent. However, Donna paid him $1,500 a month for work he did on the property, and he paid the rent out of that money. She believed she could get the second house ready to rent in about a week. She thought she could rent the top portion of the house for $1,200 a month and the apartment for $500 a month.
Since her separation from Brian in October 2007, through the hearing date in 2016, Donna had received support from Brian in the amount of $6,500 a month from October 2007 through September 2009; $7,000 a month from October 2009 through November 2015; and $5,000 a month from December 2015 through May 2016. She also received a retirement restoration plan lump sum payment of $121,000 and a 401(k) plan withdrawal of approximately $278,000. Taxes "took a big chunk" out of that withdrawal, and by the time of the hearing, nothing was left of that sum because Donna had put most of it into work on the ranch property. The parties' settlement agreement and the judgment in 2010 gave Donna the right to exercise stock options from Brian's former employer, Chevron. Those stock options expire annually from 2013 to 2018. In 2015 and 2016, Donna received $40,877 and $37,000 from exercising the options in 2015 and 2016, respectively.
Despite having received the money listed above, at the time of the hearing, Donna had only $60,000 to $80,000 in a bank account, and she owed $46,000 for two cars she had purchased. Brian testified that he believed that Donna still had $225,000 as her share of a 401(k) account. That information was confirmed informally, after Brian's attorney contacted Chevron during a lunch break in the proceedings.
A second purpose for contacting Chevron was to provide Donna with a contact in its human resources department who could help her determine what funds were available to her.
Despite being notified of her right to exercise the stock options in 2013 and 2014, Donna failed to do so. She also did not notify Brian that she did not intend to exercise those options, as required by the 2010 judgment. Had she notified him, he could have exercised them. The options for those two years would have been worth between $59,000 and $100,000.
Donna met Gregg Sanford in 2008 while she was living in San Luis Obispo. They lived together for a time in his parents' house but maintained separate bedrooms. When she moved to Nevada City, he moved with her. Although Gregg rented the rental house, he often stayed at the main house. They "sometimes" shared a bedroom. When she went to France, he accompanied her. Donna described their relationship as "on-again-off-again," but primarily business at the time of the hearing.
LEGAL ANALYSIS
THE ORDER REDUCING AND TERMINATING SPOUSAL SUPPORT
WAS NOT AN ABUSE OF DISCRETION
A support order may be modified or terminated on a showing of materially changed circumstances. (Fam. Code, § 3651, subd. (a); In re Marriage of Minkin (2017) 11 Cal.App.5th 939, 956 (Minkin).) An order modifying spousal support is reviewed for abuse of discretion. (Minkin, at p. 957.) We presume that the court's decision is correct, and the appealing party must affirmatively show error. (Ibid.) "'"'So long as the court exercised its discretion along legal lines, its decision will not be reversed on appeal if there is substantial evidence to support it.'"' [Citation.]" (Ibid.) Substantial evidence is evidence that is "'reasonable in nature, credible and of solid value' [citation]" (DiMartino v. City of Orinda (2000) 80 Cal.App.4th 329, 336), such that a reasonable trier of fact could conclude that it is "'"'substantial' proof of the essentials which the law requires in a particular case." [Citations.]'" (Ibid.) In determining whether a judgment is supported by substantial evidence, we review the whole record in a light most favorable to the judgment and resolve all conflicts and draw all reasonable inferences in favor of the judgment of the trial court. (Ibid.)
In deciding whether to modify spousal support, a trial court must consider the same factors that apply to the initial determination of spousal support. (Minkin, supra, 11 Cal.App.5th at pp. 956-957.) Those factors are the following:
"(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
"(1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.
"(2) The extent to which the supported party's present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.
"(b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party.
"(c) The ability of the supporting party to pay spousal support, taking into account the supporting party's earning capacity, earned and unearned income, assets, and standard of living.
"(d) The needs of each party based on the standard of living established during the marriage.
"(e) The obligations and assets, including the separate property, of each party.
"(f) The duration of the marriage.
"(g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
"(h) The age and health of the parties.
"(i) Documented evidence, including a plea of nolo contendere, of any history of domestic violence, as defined in Section 6211, between the parties or perpetrated by either party against either party's child, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party, and consideration of any history of violence against the supporting party by the supported party.
"(j) The immediate and specific tax consequences to each party.
"(k) The balance of the hardships to each party.
"(l) The goal that the supported party shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336, a 'reasonable period of time' for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court's discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.
"(m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4324.5 or 4325.
"(n) Any other factors the court determines are just and equitable." (Fam. Code, § 4320.)
All further statutory citations refer to the Family Code. --------
Although trial courts must consider all of the above factors, they have broad discretion in determining the weight to be afforded to the various factors that apply to the particular circumstances of each individual case. The court must weigh the facts and the equities between the parties with the goal of accomplishing substantial justice for the parties. (In re Marriage of Shaughnessy (2006) 139 Cal.App.4th 1225, 1241.) "'The issue of spousal support, including its purpose, is one which is truly personal to the parties.'" (Ibid.)
Here, although the court made findings as to all of the section 4320 factors that apply to this case, it focused on Brian's loss of employment, Donna's ability to become self-supporting, her failure to make reasonable efforts to do so, and her poor financial choices. The court did not abuse its discretion by affording those factors the greatest weight in determining that spousal support should be reduced and then eliminated. Brian's loss of his lucrative employment is, of course, a valid change in circumstances. In determining whether that change in circumstances warrants a reduction or termination of spousal support, the court may consider the supported spouse's efforts to become self- supporting. (In re Marriage of Shaughnessy, supra, 139 Cal.App.4th at p. 1238.) Once a supported spouse has been given a warning and sufficient time to find employment, a court may impute to that spouse the amount of income the court has determined that the spouse could have been earning if he or she had made diligent efforts to obtain employment. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 308-309; In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 53.)
Here, the evidence discussed above supports the court's finding that Donna had the ability to earn at least $2,500 a month but had done "next to nothing" to find a job, despite possessing a bachelor's degree and a real estate license. Donna was first told in January 2008 that she was expected to make reasonable efforts to become self-supporting, but eight years later, she was still nowhere near achieving that goal. A supported spouse also has a duty to make prudent financial decisions in order to contribute to his or her own support. If the evidence shows that the supported spouse is not making prudent financial decisions, it may be appropriate to reduce or terminate support. (In re Marriage of McElwee (1988) 197 Cal.App.3d 902, 909-910; In re Marriage of Terry (2000) 80 Cal.App.4th 921, 930-932.) Here, the evidence supports the conclusion that Donna did not make prudent financial decisions: She spent $400,000 to purchase a large property as an income property but after five years had still not fixed the dilapidated houses to the point where she could rent them out; she failed to exercise stock options that would have provided her with $59,000 to $100,000, depending upon when she exercised them; she took a 401(k) distribution in a lump sum, thus incurring substantial tax liability; she spent most of the 401(k) distribution on the ranch property; and she purchased two cars, for which she still owed $46,000.
Further, the court validly considered Donna's cohabitation with and financial support of Gregg Sanford in determining that Donna did not make prudent financial decisions. The fact of cohabitation is generally considered relevant because the additional household income provided by the cohabitant and the possible resulting economies of scale in living jointly rather than singly can reduce the need for support. (In re Marriage of Bower (2002) 96 Cal.App.4th 893, 899-900.) Here, because the evidence showed that Gregg Sanford's income was provided by Donna herself, Sanford obviously did not contribute to Donna's support. However, the court's concern was that the relationship itself contributed to Donna's poor choices. Based on the evidence discussed above, we cannot say that it was an abuse of discretion for the court to consider it in that light. And, based on the evidence in support of both Donna's lack of effort at obtaining employment and her poor financial choices, we also cannot say it was an abuse of discretion to reduce and then eliminate Donna's support rather than to require Brian to continue to underwrite her choices.
An additional issue Donna attempts to raise pertains to her assertion during the hearing in 2016 that Brian's former employer failed to provide her with sufficient information to enable her to make informed decisions concerning stock options and distributions from Brian's retirement plans. That information, however, was contained in the 2010 judgment. Although the court denied Brian's request for reimbursement for the unexercised stock options, the court did take Donna's failure to exercise the stock options into account in determining that Donna failed to exercise reasonable judgment concerning financial matters. Because there is substantial evidence that Donna received notification, it was not an abuse of discretion for the court to take that into consideration in its decision to terminate spousal support.
DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
J. We concur: RAMIREZ
P. J. MILLER
J.