Opinion
G057548
02-26-2021
In re Marriage of KATHRYN L. and RICHARD T. MARTIN. KATHRYN L. MARTIN, Respondent, v. RICHARD T. MARTIN, Appellant.
Law Offices of Suh & Suh and Ja Hyon Suh for Appellant Richard T. Martin. Law Offices of Lisa R. McCall, Lisa R. McCall and Erica M. Baca for Respondent Kathryn L. Martin.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 08D008496) OPINION Appeal from a judgment of the Superior Court of Orange County, Andre De La Cruz, Judge. Affirmed in part, reversed in part, and remanded as directed. Law Offices of Suh & Suh and Ja Hyon Suh for Appellant Richard T. Martin. Law Offices of Lisa R. McCall, Lisa R. McCall and Erica M. Baca for Respondent Kathryn L. Martin.
* * *
Respondent Kathryn L. Martin (Katie) and appellant Richard T. Martin (Rick) separated on May 1, 2012. During their 25-year marriage, Rick helped found Cresa Partners of Orange County (Cresa). This divorce dispute primarily concerns the characterization of certain assets Rick received from Cresa, including company shares, bonus payments, and proceeds from the eventual sale of the company. Though Cresa granted these assets to Rick after the couple's separation, the trial court found they were all awarded wholly or partially based on Rick's efforts during the marriage, so the community had an interest in them. Rick appeals, arguing they are his separate property. As explained below, we affirm the judgment in part, reverse in part, and remand with directions.
We use first names to avoid confusion, because those involved share a last name.
The primary assets in dispute are two separate groups of shares that Cresa awarded to Rick after the parties' separation. There was substantial evidence the first group of 413 shares was awarded to Rick solely due to his status as an owner and founder of Cresa. Since Rick founded and grew Cresa substantially during the marriage, these shares were awarded to him based on his marital efforts, and the community should have an interest in them. Likewise, there was testimony at trial the second group, which consisted of 1,000 shares, were granted, in part, based on Rick's preseparation performance at Cresa.
The parties also dispute monies allocated to Rick after Cresa was bought in 2017. The buyer divided the sales money into separate tranches: (a) guaranteed money at closing; (b) forgivable loans to certain owners that would amortize as long as they remained employed by the buyer; and (c) earnout payments that would only be awarded if the acquired Cresa team met certain revenue targets after the sale. There is insufficient evidence Rick's share of the forgivable loans and earnout payments were given to him for past performance or in consideration for his ownership interest in Cresa. Rather, all the evidence shows these tranches were provided to incentivize Rick to remain with the buyer and produce revenue for it after the sale. The trial court erred by awarding the community an interest in Rick's share of the forgivable loans and earnout payments.
Rick also disputes the court's characterization of two bank accounts he used to receive payments from Cresa. The court ruled all the funds in these accounts were community property. Though the parties separated on May 1, 2012, the court divided the accounts based on their respective balances on May 31 and July 18, 2012. Rick contends the court erred by failing to analyze whether any deposits into these accounts after May 1 were his separate property. But the burden was on Rick to make this showing. We find he sufficiently showed a portion of one account was his separate property, but he presented no evidence the other account contained any. Thus, we affirm the court's decision as to one account. We reverse it for the other and direct the trial court on remand to calculate the percentage of separate property held within the other account.
Finally, Rick challenges the court's award of $5,000 of monthly spousal support to Katie. He insists the court failed to weigh all the relevant factors in Family Code section 4320. Not so. This argument is disproved by the court's statement of decision, which contains its findings on all the relevant factors. Rick also speculates the court double dipped and improperly considered the forgivable loans and earnout payments as both income for calculating spousal support and as divisible assets. This argument is moot given our finding that the court erred in awarding the community an interest in these assets. On remand, we direct the trial court to consider whether Rick's share of the forgivable loans and earnout payments is income and, if so, whether that warrants an adjustment to the amount of spousal support awarded.
All further undesignated statutory references are to the Family Code.
I
FACTS
Katie and Rick married on July 25, 1987, and separated on May 1, 2012. Katie filed her initial petition for dissolution in September 2008. A status-only dissolution of marriage judgment was granted in September 2017, and a trial was held in October 2018 to resolve issues relating to property disputes, spousal support, and attorney fees and costs. After trial, the court issued a judgment awarding Katie spousal support of $5,000 per month. It also found the community had an interest in numerous assets that Rick claimed to have earned after separation. Rick appeals, arguing these assets are his separate property and the court erred in calculating the amount of spousal support. The disputed property is set forth below. A. Rick's Shares in Cresa
The trial court interchangeably used the terms "units" and "shares" during trial.
Rick founded Cresa in 2004 with Jeff Manley. Cresa was a corporate real estate advisory firm that primarily assisted clients with securing leases or purchases/sales of commercial real estate in Orange County. Rick was the head of the Project Management Group at Cresa (PM Group), which assisted corporate clients with relocating offices.
Rick was awarded 2,500 shares of Cresa at its founding and was awarded additional shares during the marriage that are not at issue. In dispute are two sets of shares that were awarded to Rick at no cost after separation. The first was a set of 413 shares awarded on January 1, 2015, that came with a three-year vesting period. The shares were part of a group of 3,500 shares that were reserved for recruiting new partners when Cresa was formed. The 413 shares were awarded to Rick after the board of directors decided to distribute these excess shares to Cresa's owners on a pro rata basis. Neither past nor future performance was considered when granting the shares. As Manley, Cresa's CEO, testified at trial, the distribution was a "math exercise" to equalize ownership percentages.
Rick was awarded another 1,000 shares on May 1, 2016, which had a one-year vesting period. These shares were awarded to Rick for several reasons, including past performance, future performance, and to stop him from complaining about money. As Manley testified, they were "designed to reward for past performance and to quell the, I call it, the [complaining] of the three people that were awarded shares." "It was a gesture of, you know, you perform and we are tired of listening to you complain." The shares came with a one-year vesting period to prevent Rick from leaving and taking the shares with him, but there was no performance requirement attached to the shares.
Katie's expert, Dennis Retoske, concluded 48.65 percent of the 413 shares and 62.28 percent of the 1,000 shares were community property. He opined the 413 shares were partially community property because "they were not part of a compensation plan. They were not issued pursuant to a taxable award. They weren't compensatory in any way, [and Rick] did not pay for them." Instead, they were issued to Cresa's owners to "reset[] the ownership percentages." They were not awarded for any postseparation work but were "attributable to his overall ownership percentage."
As to the 1,000 shares, Retoske found there was a community interest because "these shares were not compensatory. They were not part of a stock award or membership award based on performance. [¶] . . . We refer to [these shares] oftentimes as chirping shares. [Rick] felt entitled to more shares and higher ownership, and this was a somewhat random award to him or granting of shares, not for services or performance or for future performance but just overall performance over time."
Unsurprisingly, Rick's expert, Greg Raffaele, reached the opposite conclusion and found all 1,413 shares were Rick's separate property. He reasoned they were granted after separation and came with vesting periods, which indicated they were for Rick's future efforts. He also observed that Cresa had awarded the 413 shares after it acquired another group in 2015. Rick's ownership interest prior to that acquisition had been 4.71 percent. After the acquisition, it dropped to 3.46 percent. Raffaele opined that if the 413 shares had really been a rebalancing, they would have restored Rick's ownership to 4.71 percent. But his shares remained diluted after the rebalance. Raffaele does not appear to have stated the percentage of Rick's ownership interest after the 413 shares were awarded.
The court agreed with Retoske's analysis and awarded the community a 48.65 percent in the 413 shares and a 62.28 percent interest in the 1,000 shares. The court explained "it is undisputed that Rick was a cofounder/owner of Cresa since inception in 2004 and remained an owner of the company up until its sale . . . in 2017. The community relied on the income provided by Cresa throughout the length of the marriage and certainly benefited from its growth." It was persuaded by Manley's testimony that the 413 shares were an equalization payment or "'math exercise' in the distribution of units." And based on Manley's testimony, the court found the 1,000 units were given to reward Rick for past performance. Though both sets of shares came with vesting periods, the court found, based on Manley's testimony, that the intent behind them was retrospective. B. Sale of Cresa
On February 7, 2017, Savills Studley, Inc. (Savills) entered into an agreement with Cresa and its principals to purchase the company (purchase agreement). In the deal, nearly all of Cresa's owners, including Rick, became employees of Savills. The money received by Cresa was divided into five tranches: (1) $6,000,000 guaranteed at closing; (2) $3,000,000 following the third anniversary of the sale if certain postclosing revenue targets were met by the acquired Cresa team (first earnout); (3) $4,000,000 following the fourth anniversary of the sale if certain postclosing revenue targets were met by the Cresa team (second earnout); (4) forgivable loans paid within 30 days of closing in the aggregate amount of $4,000,000 to select Cresa owners (first forgivable loan); and (5) forgivable loans paid within 19 months of closing in the aggregate amount of $2,000,000 to the same Cresa owners (second forgivable loan).
To obtain the first earnout, the Cresa team had to collectively generate $30 million in total revenue in two 12-month periods in the first 36 months of acquisition. If that target was met, they could obtain the second earnout by generating $45 million in total revenue in three 12-month periods within the first 48 months of acquisition. So long as the group targets were met, each Cresa owner would receive a share of the earnout. None of the individual owners, including Rick, needed to meet any individual targets to qualify for their share. At the time of trial, the Cresa team was on the verge of hitting the target for the first earnout, and it appeared likely they would also hit the second target.
While every owner was allocated a portion of the potential earnouts, not all of them were awarded forgivable loans. Only owners important to producing future revenue received them. The first forgivable loan was amortized at a rate of 1/72 each month, and the second forgivable loan was amortized at a rate of 1/54 each month. Recipients would have to pay the unamortized portion of their loans if they left Savills before the loans fully amortized, but there were no performance requirements attached to them.
Each owner's portion of the various tranches was determined by a negotiation between the individual owner and the board. The factors considered were the person's percentage interest in Cresa, how each tranche was taxed, how much money would make the person happy, and the person's ability to generate future earnings.
Rick was still employed at Savills at the time of trial. His share of the sale proceeds was comparable to his ownership percentage in Cresa and included the following:
| Tranche | Rick's Share |
|---|---|
| Guaranteed money at closing | |
| First forgivable loan | $230,807 |
| Second forgivable loan | $120,214 |
| First earnout | $169,863 |
| Second earnout | $235,387 |
| Total: | $894,456 |
A total of $234,669 was allocated to Rick but $96,484 of his share was used to repay a loan Cresa had given him to purchase company shares.
The court found the community had an interest in all five tranches because Rick had cofounded Cresa and been an owner from its inception up to its sale, and the community had benefited from Cresa throughout the marriage. Denying Katie an interest in the sale proceeds "would be to deprive her of her share of the community assets that are rightfully hers." The court allocated the community a 56.0406 percent share in the monies from all five tranches but clarified the interest only extended to the portion of the loans forgiven and to the earnouts obtained. C. Wells Fargo Accounts
In 2012, Rick established Clear Thought Corporation as a pass through entity to receive payments from Cresa. Clear Thought had two Wells Fargo bank accounts, one ending in 2642 (Wells 2642) and the other in 5740 (Wells 5740). Wells 2642 had a balance of $179,758.31 as of May 31, 2012, while Wells 5740 had a balance of $421,180 as of July 18, 2012. The court found the funds in both accounts as of those dates were entirely community property. They were earned prior to the date of separation but received after separation. It explained this was "attributable to the nature of Rick's employment as Project Manager with Cresa," in which "Rick was paid subsequent to the conclusion of a project [that] may have lasted from weeks or over a year, dependent on the magnitude of the contracted project." D. Spousal Support
The parties completed a form with their positions on the spousal support factors set forth in section 4320. The court used this form to calculate the amount of support Rick would pay Katie. The court noted the parties had "enjoyed an upper middle class lifestyle" and that their income varied from $200,000 to $400,000 per year. Rick had worked full time for 30 years, while Katie had worked part time until their child started high school. Katie had a monthly income of $1,000 while Rick's was $30,000. The court found Katie's earning capacity was inadequate to meet the marital standard of living and ordered Rick to pay her $5,000 per month in spousal support.
II
DISCUSSION
A. Characterization of Assets
"[T]he basic concept of community property is that marriage is a partnership where spouses devote their particular talents, energies, and resources to their common good. [Citation.] Acquisitions and gains which are directly or indirectly attributable to community expenditures of labor and resources are shared equally by the community." (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850-851.) In determining the character of an asset, "'each spouse's time, skill, and labor are community assets, and whatever each spouse earns from them during marriage is community property.'" (In re Marriage of Harrison (1986) 179 Cal.App.3d 1216, 1226.) Fringe benefits such as stock or stock options "are not a gift from the employer but are earned by the employee as part of the compensation for services. [Citation.] Thus fringe benefits . . . are community property to the extent they are earned by the time, skill and effort of a spouse during marriage." (Ibid.)
In conducting our review, we presume the trial court's order is correct and the burden is on Rick to affirmatively show any error. (Tanguilig v. Valdez (2019) 36 Cal.App.5th 514, 520.) Appellate "[c]ourts typically apply a substantial evidence standard of review to the [trial] court's characterization of property as separate or community. [Citations.] In that situation, '[o]ur review is limited to a determination whether there is any substantial evidence, contradicted or uncontradicted, that supports the finding. [Citation.] In so reviewing, all conflicts must be resolved in favor of [the prevailing party] and all legitimate and reasonable inferences must be indulged to uphold the finding.' [Citation.] 'However, when the resolution of the issue "'requires a critical consideration, in a factual context, of legal principles and their underlying values,'" the issue is a mixed question of law and fact in which legal issues predominate, and de novo review applies.'" (In re Marriage of Brandes (2015) 239 Cal.App.4th 1461, 1472.)
1. The Cresa shares
Rick asserts the 1,413 shares are entirely his separate property because he was granted the rights to them after separation. We disagree. As explained below, Manley's testimony establishes Rick was granted these rights, in part, based on his preseparation work. The court found "Manley's testimony to be very credible," and we do not question this finding on review. (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1265.)
At issue is whether the shares were awarded to Rick based on work he performed before or after separation. This is generally a factual determination that is reviewed for substantial evidence, not a de novo review. For example, in In re Marriage of Nelson (1986) 177 Cal.App.3d 150, the husband received a grant of stock options 25 days after the couple separated and his year-end bonus eight months after separation. (Id. at pp. 156-157.) The court explained "that contractual rights earned wholly or in part during marriage, even if not vested at the time of separation, are partially community assets." (Id. at p. 157.) Thus, characterization of the bonus and stock options required a factual analysis of whether each asset had wholly or partially accrued to the husband before separation. (Ibid.) The court concluded substantial evidence supported the trial court's ruling that the assets were awarded for the husband's work after separation. (Id. at pp. 157-158.) Likewise, here we must examine the record and determine whether substantial evidence supports the trial court's finding that the shares were partially earned prior to the parties' separation.
There is substantial evidence Rick was granted the rights to the 413 shares based on work he performed prior to separation. Manley testified the shares were granted on a pro rata basis to equalize the ownership interests of Cresa's owners. In other words, the shares were granted to Rick solely due to his ownership of Cresa. The basis of the award was retrospective. It was compensation awarded to Rick due to his history as a founder and owner of Cresa, which overlapped substantially with the marriage. Thus, the shares were awarded in part based on Rick's time and efforts during the marriage, and the court did not err by finding the community had an interest in them.
Similarly, there is substantial evidence the 1,000 shares were awarded in part based on Rick's preseparation efforts. Manley recalled these shares were "designed to reward for past performance" and to stop Rick from complaining. He further testified that in awarding these shares, "future income and future performance was a consideration, as well as the fact that [Rick] was already a partner and had already performed in the past[.]" Manley also expressly confirmed Rick's preseparation performance was considered in granting the shares:
Q: "Would you have looked at performance preceding May 1st, 2012 [the date of separation], in granting these 1,000 units?"
A: "Yes. Yes, we would have."
There appears to be some conflict in Manley's testimony, as he also stated that in awarding the 1,000 shares, "there wasn't a formula. I didn't look four years back [i.e., prior to May 1, 2012]." However, under the substantial evidence standard all conflicts are resolved in favor of the prevailing party and all reasonable inferences are made in favor of the court's findings. (In re Marriage of Brandes, supra, 239 Cal.App.4th at p. 1472.) Thus, we must resolve this conflict in favor of Katie.
Though both awards of shares had vesting periods, unvested awards of shares are "susceptible of division in spite of being contingent or not having vested." (In re Marriage of Nelson, supra, 177 Cal.App.3d at p. 154.) The relevant question is when the shares were earned. (Id. at pp. 156-157.) And here, they were earned in part during the marriage. We also note Rick does not challenge the trial court's calculation of the 48.65 percent community interest in the 413 shares or the 62.28 percent community interest in the 1,000 shares. He only denies the community has any interest in them. Thus, we do not consider whether the court correctly calculated these percentages.
2. Funds relating to Cresa's sale
Rick agrees the community has an interest in the $138,185 in guaranteed proceeds he received upon the sale's closing, but he contends the monies from the forgivable loans and the earnouts are his separate property. The court found that since Rick had founded and grown Cresa during the marriage, the community should be entitled to a share of the sale proceeds. We agree the community has an interest in the money Savills paid in exchange for Rick's ownership interest in Cresa. But the court failed to individually assess each tranche of money to determine whether it was provided for his interest or to encourage his future productivity. Based on our review of the record, there is insufficient evidence to establish that the monies from the forgivable loans and the earnouts were provided for the former. Instead, these monies were paid to incentivize Rick to remain with Savills and to encourage his future productivity. As such, they are his separate property.
As for the forgivable loans, the purchase agreement states they were to be "treated, for Tax purposes, as a loan by [Savills] to the applicable Partner or Principal, and not as part of the Purchase Price for the Equity Interests, and any amount forgiven under a Loan . . . shall be treated as compensation paid by [Savills] to the applicable Partner or Principal at the time of the forgiveness." (Italics added.) Likewise, Cresa's accountant stated in a letter to the owners following the sale that "some of [you] received 'Forgivable Loan' arrangements in exchange for future services to Savills Studley. It is important for you and your CPA to note that the Forgivable Loan arrangements are between you and Savills Studley for future services and are not related to the sale of the [Cresa] partnership interest by Management. As such, these Forgivable Loan proceeds are not included in the gain on sale or any other income reported on your Cresa Management K-1." (Italics added.)
Moreover, not every owner received a forgivable loan, which shows the loans were not given in exchange for their ownership interests. Manley testified that owners only received forgivable loans if they were needed "[m]oving forward to produce revenues . . . ." Though Rick did not have to meet any targets to have the loans forgiven, Manley's testimony shows they were designed to incentivize him to remain at Savills after the sale. As Raffaele also explained, they were "to keep the employee, because [Savills] want[s] them there to produce. Because [Savills] bought an assembled work force. They bought an acquired team. And that's how they incentivized the acquired team. [¶] . . . [¶] [T]here are members that did not get the forgivable loans, so they were less valuable. . . . But they did get compensation or consideration for their units and that's tranche number one [guaranteed money at closing]."
Similarly, the earnouts were provided to incentivize Rick and the acquired Cresa team to meet certain revenue goals within the first 36 and 48 months of the sale. They would receive nothing if the targets were not met. Thus, the clear intent of the earnouts was to encourage the future production of the acquired Cresa team, which included Rick. It is immaterial that Rick did not have to meet any individual targets to qualify for the earnouts. The expectation was that he would contribute to the group effort to meet the revenue goals. For example, the terms of the Cresa sale required Rick to "devote [his] full business time and attention to furthering the interests of [Savills] and not engage in any other business or employment."
Katie believes all five tranches should be analyzed together but does not point us to any material evidence supporting the trial court's ruling. Instead, she suggests all five tranches were paid in consideration for Rick's ownership interest because his share of the tranches roughly matched his ownership percentage in Cresa. Without more, this is insufficient to establish the forgivable loans and earnouts were paid to Rick in exchange for his ownership interest. While his ownership percentage was used to calculate his potential share of these tranches, that does not mean these monies were paid to him in exchange for his interest. Rather, ownership percentage was simply an expedient metric to determine each owner's share of the tranches and was taken into consideration along with a variety of other factors. But the purpose of the forgivable loans and earnouts was prospective: to encourage Rick to generate revenue for Savills.
Katie also analogizes to In re Marriage of Finby (2013) 222 Cal.App.4th 977, in which the court determined that certain performance-based bonuses paid to a wife after separation were partially community property. But in Finby, "the contractual right to receive each bonus and at least some of the effort necessary to qualify for them occurred before the couple separated." (Id. at pp. 990-991.) Not so here. Rick's right to receive the forgivable loans and the earnouts arose years after the couple's separation and was not based on any preseparation efforts.
3. Wells Fargo accounts
The majority of the $421,180 held in Wells 5740 was from a $411,065.39 bonus that Rick received for the second quarter of 2012, which ran from the beginning of April to the end of June. In its oral ruling, the court stated this bonus "was for labor and effort that occurred during the marital relationship at least in part. And accordingly, Katie [was] entitled to a 50 percent interest in those monies even though they were paid after the date of separation." (Italics added.) Rick seizes on the "in part" language and argues the trial court erred by failing to determine the specific amount attributable to pre- and postseparation work. He also contends the court failed to make any finding as to why the remaining $10,114.61 in Wells 5740 was community property. As for Wells 2642, the balance of this account was $119,330.43 on May 1, 2012 (the date of separation), yet the trial court found the entire balance of $ 179,758.31 on May 31, 2012, belonged to the community. Rick insists there is no evidence the $60,427.88 deposited into this account after May 1 was community property.
Katie asserts Rick has waived these challenges by failing to present evidence at trial identifying the amount of separate property in these accounts. Rick replies it was Katie's duty to present evidence showing the community had an interest in any sums deposited into the accounts after separation. As explained below, Rick had the burden to establish which funds were his separate property. While he did not meet that burden for Wells 2642, he did show certain funds in Wells 5740 are separate property.
It is undisputed that Wells 2642 contained some community property, namely, the existing balance of $119,330.43 on May 1, 2012. None of these funds were withdrawn prior to May 31, 2012. If Rick deposited any separate property into the account, as he claims, then he commingled separate and community funds and had the burden of identifying his separate property. (In re Marriage of Braud (1996) 45 Cal.App.4th 797, 822-823.) As Rick provided no evidence any of the funds in this account were his separate property, the trial court correctly found the entire account belonged to the community. (Ibid.)
Wells 5740 involves a similar issue. But unlike Wells 2642, Rick maintains the entire balance of Wells 5740 is his separate property. Thus, unlike the other account, Wells 5740 does not present a straightforward case of commingling. Nonetheless, we find Rick also had the burden of establishing the funds in this account were his separate property. The bulk of the dispute involves Rick's $411,065.39 second quarter bonus that covers the period before and after the couple's separation. In such a scenario, the burden should be on the bonus recipient to establish the amount that is separate property. This issue is similar to the commingling of a bank account, except the allegedly mixed funds are contained in the same bonus payment. (Cf. In re Marriage of Brand, supra, 45 Cal.App.4th at pp. 822-823.) Further, the recipient will have more knowledge concerning the nature of the bonus and will generally have better access to records demonstrating his or her proposed allocation. (See In re Marriage of Prentis-Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1267-1268.) Thus, it is more reasonable to place the burden on the bonus recipient.
Here, the court's ruling that the entirety of Wells 5740 is community property is not supported by substantial evidence. The bonuses for Rick and the PM Group were based on the revenues generated from various projects. For the second quarter of 2012, their total commission pool came from two different revenue streams. The first stream came from revenues the PM Group generated. They received 60 percent of these revenues after expenses were deducted. We will refer to this stream as the "earned commission," which was $433,377.14 for the second quarter of 2012. The second stream consisted of a percentage of nonproject management related revenues, and was $27,338.17 for the second quarter. Together, the total commission pool for Rick and the PM Group for the second quarter was $460,715.31. Out of this pool, Rick paid bonuses to the PM Group members and paid Cresa for various liabilities. After these deductions, the remaining balance of $411,065.39 was awarded to Rick as a bonus, which he deposited into Wells 5740.
A large portion of the $433,377.14 earned commission derived from the PM Group's share of two payments totaling $436,260.26 that Cresa received from Microsemi on June 30, 2012. The PM Group's share of these revenues was $240,510.36, which made up 55.5 percent of their $433,377.14 earned commission. The record establishes these two payments were for work the PM Group performed for Microsemi after May 1, 2012. Rick testified the checks covered work his team performed after the separation. His testimony is supported by the services contract, which required Cresa "provide to [Microsemi], on a monthly basis, an invoice for the preceding month's portion of the fee for the Services." Microsemi was then required to "pay [Cresa's] fees pursuant to said statement within thirty (30) days after receipt of same." Thus, an invoice paid at the end of June would most likely reflect an invoice received earlier that month for work performed in May. This is further supported by the fact that Cresa received a payment of $398,305.08 from Microsemi on June 4, 2012, which appears to be a payment for services performed prior to May. Together, these pieces of evidence - Rick's testimony, the contract language, and the dates of payment - show the checks received by Cresa on June 30 covered services performed by the PM Group after May 1, 2012.
Rick does not argue the PM Group's share of the June 4 payment is separate property.
Nothing cited by Katie substantially supports the trial court's decision to deem as community property the portion of Rick's bonus derived from the June 30 Microsemi payments. Katie claims Rick's work on the Microsemi project ended in March 2012, because the last expense report he filed for the project was dated March 16, 2012, for a flight to visit the project site. But the date of Rick's last expense report by itself reveals little about when his work on the project ended. A person can work on a project without incurring any reimbursable expenses. And Rick testified two of his subordinates in the PM Group were responsible for the day-to-day activities on the project. His primary role was overseeing their work, which continued after May 1.
Given the state of the record, there was insufficient evidence for the court to conclude the entire balance in Wells 5740 was community property. However, Rick has cited no evidence showing any other portion of his second quarter bonus was separate property. And though Rick contends the court's statement of decision failed to make any specific findings that the remaining $10,114.61 in Wells 5740 was community property, we must infer that it did so under the doctrine of implied findings. (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 494.) Thus, the only portion of Wells 5740 that can be characterized as separate property is the amount of Rick's $411,065.39 bonus attributable to the June 30 Microsemi payments. Given the actual bonus Rick received was calculated using two streams of revenue and after making various deductions to the PM Group's $433,377.14 earned commission, we direct the court on remand to calculate the amount of separate property held in Wells 5740. B. Spousal Support
"A trial court has broad discretion in setting both the amount and duration of spousal support upon the dissolution of marriage. [Citation.] The court's discretion is abused only when it 'exceeds the bounds of reason' in light of all the circumstances." (In re Marriage of Harrison (1986) 179 Cal.App.3d 1216, 1230.)
Rick insists the court failed to weigh all the relevant factors under section 4320. Not so. The court reviewed the information listed on the parties' section 4320 form and then awarded Katie $5,000 a month in spousal support. The statement of decision confirms the court considered all relevant factors in arriving at its decision. While Rick believes the court simply recited this information and failed to actually weigh it, this is only speculation. It is not enough to overcome the presumption that the trial court's judgment is correct.
Rick also argues the court improperly double dipped by considering the forgivable loans and earnout payments as income for spousal support after awarding the community an interest in them. This argument is moot given our finding that the forgivable loans and earnouts are Rick's separate property. On remand, we direct the court to consider whether these monies constitute income and, if so, whether that warrants an adjustment to the spousal support order
We also note this argument is controverted by the record, as the court expressly stated it did not consider the earnouts and forgivable loans when calculating spousal support. --------
III
DISPOSITION
The trial court's judgment is reversed as to the forgivable loans, earnouts, and Wells 5740. On remand, we direct the court to consider the issues as set forth within this opinion. In all other respects, the judgment is affirmed. Each party shall bear their own costs on this appeal.
MOORE, ACTING P. J. WE CONCUR: ARONSON, J. FYBEL, J.