Opinion
NOT TO BE PUBLISHED
APPEAL from a post-judgment order of the Superior Court of Los Angeles County No. KD049666 Rocky L. Crabb, Temporary Judge.
Thomas P. Dovidio for Plaintiff and Appellant.
Shirley & Shirley, and Stephen M. Shirley for Defendant and Respondent.
PERLUSS, P. J.
Alexander De Los Rios appeals from the post-judgment order denying his application to modify his obligation to pay child support to his former wife, Ana De Los Rios. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Alexander and Ana, the parents of two minor children, dissolved their marriage in March 2003. The judgment required Alexander to pay $325 per month to Ana in child support. In October 2004 Ana sought and received an increase in child support from $325 to $940 per month. In the order granting the increase, the court found Alexander had a total monthly income of $8,000. When Alexander failed to make the required support payments, Ana sought the assistance of the Los Angeles County Office of Child Support Services to collect past due payments. Through the efforts of that office, Ana obtained a garnishment order; but Alexander’s employer, JSI Cortez Pallets, operated by Julia Cortez (Alexander’s girlfriend by that time), resisted the order until March 2006.
Because Alexander and Ana share the same last name, we refer to them by their first names for convenience and clarity. (See In re Marriage of Herr (2009) 174 Cal.App.4th 1463, 1464, fn. 1.)
On May 1, 2006 Alexander filed an application for an order to show cause seeking modification of the existing orders on child custody, visitation and support, asking the court to grant him custody of the children, then ages 11 and 12, with Ana receiving visitation rights. With his application he submitted an income and expense declaration attesting he had a monthly income of $3,000 and monthly expenses of $3,930. Ana opposed the requested modification and asked that her custodial time and support payments be increased because she had lost her job in December 2004. According to Ana, Julia and Alexander were conspiring to hide Alexander’s true income by shifting cash between the various pallet companies they operated.
At a hearing on November 3, 2006 the court appointed an expert to evaluate the best interests of the children. At a hearing on November 7, 2007 the court resolved the outstanding custody and visitation issues between the parties and scheduled an evidentiary hearing on the financial issues to begin on December 12, 2007.
The court also found Ana, who had remarried, had the ability to earn $4,000 per month.
Through discovery, Ana learned Alexander had purchased a house in August 2006 and had submitted a loan application in connection with the purchase declaring under penalty of perjury his monthly income was $22,078. At the December 12, 2007 hearing Alexander’s father, Gerardo De Los Rios, testified he lived with Alexander and paid him approximately $2,500 per month for house-related expenses. He also assisted Alexander in operating the pallet company he had started recently, which was financially challenged. The court interrupted the testimony to request clarification from Alexander’s counsel about Alexander’s employment history and status. Alexander’s counsel reported Alexander had been employed by several different pallet companies, including entities owned by Julia, as well as companies Alexander had founded and operated himself. All of them operated from the same location.
For the same hearing Alexander had subpoenaed the loan officer who facilitated the loan for the purchase of his home. Alexander contended the loan officer, Bradley Thrush, had directed Alexander to sign a blank loan application, which Thrush subsequently completed using a fictitious income. Thrush did not appear. The court ordered a body attachment issued for Thrush, appointed another expert, M. Daniel Close, to conduct a “forensic evaluation for the Petitioner’s cash flow from all sources, from January 1, 2006 to December 31, 2007, ” and continued the hearing until February 1, 2008.
Thrush appeared on February 1, 2008 and testified the application had been properly completed after a telephone interview. According to Thrush, Alexander had applied for a “stated income verified asset, ” which did not require income documentation. Alexander told Thrush how much he earned on a monthly basis, and Thrush verified Alexander had a certain amount of funds in his bank account. Thrush (or an assistant) prepared the documentation, and a notary met with Alexander to execute the documents. The loan documents had then been submitted to the lender.
The bank verified Alexander’s checking account contained $137,165.
The court continued the hearing to allow Close to prepare his report. The hearing was reconvened on September 3, 2008 after Close reported he had completed his written report, but was continued to October 6, 2008 at the request of Alexander to allow Close to visit his business. Close’s report, issued on September 9, 2008, estimated Alexander’s monthly income ranged between $5,867 and $18,000 based on the documents he had reviewed.
On October 6, 2008 Alexander’s counsel informed the court Alexander had “had some medical issues recently” and had been unable to keep his appointment with Close. The hearing was continued once again to January 6, 2009. On January 6, 2009 Alexander requested yet another continuance to provide Close with financial figures from fiscal year 2008. Pointedly noting the length of time the case had been pending, the court rejected Alexander’s request to continue the hearing further. Close appeared to testify the next day.
The parties had failed to subpoena Close to appear on January 6, 2009, and Alexander reported Close had refused to revise his report due to Ana’s failure to pay her share of his fee. Ana contended the report had been completed, and Close had not been directed to revise the report by the court. The court agreed it had not ordered Close to prepare a supplemental report.
Before Close took the stand, Alexander attempted to move into evidence several summary exhibits prepared within the past year, including a profit and loss statement and a balance sheet for his business. The court refused to admit the documents, noting they did not qualify as business records, had been prepared after the appointment of Close as an expert and lacked any corroborating backup for the assertions they contained.
Under questioning by Alexander’s counsel Close testified he had revised his opinion as to Alexander’s monthly cash flow. He now estimated Alexander’s monthly income was between $6,000 and $8,000 for the period he examined, but acknowledged it could have been higher and the revised estimate was based on Alexander’s own estimate of his monthly income. He also testified Alexander’s company, Pallet Markets, appeared to be operating at a loss. In a separate effort to assess the profit associated with Alexander’s business, Close had evaluated gross receipts and applied a formula for similar businesses; this approach yielded a monthly profit figure in excess of $20,000. Close had also totaled checks made out to cash (according to Alexander, the pallets business is conducted on a cash basis) and identified more than $800,000 in cash payments for 2007 alone. He testified under questioning by the court the total could be higher because he did not know whether he had all of the checks for that year. He further acknowledged none of his calculations was conclusive because of the lack of complete documentation provided by Alexander.
The court’s distrust of the information provided by Alexander was exacerbated by an additional exhibit consisting of receipts issued by one of the pallet companies during 2004 when Alexander was working for the company. The receipts, which purportedly represented payments for pallets, were fraudulent on their face, issued to entities such as Frank Zappa, Minnie Mouse, Mickey Mouse, Stevie Wonder and God. The court admitted the exhibit into evidence over Alexander’s objection. The court also stated on the record it found Alexander’s testimony not credible.
After several days of testimony by Close, Alexander, Gerardo and Ana, the court stated, “The Court takes no confidence in the documentation provided by [Alexander’s] business to Mr. Close. If I have no confidence in the records provided by the business to Mr. Close, then how can I have any confidence in the conclusions of Mr. Close?” The court repeated it had found Alexander’s testimony not credible in several respects. The court found the figure of $22,078 contained in the loan application was the most reliable under the circumstances and imposed a child support obligation of $3,313 per month based on that figure. The court also ordered Alexander to pay approximately $80,000 in arrearages and $14,000 for Ana’s attorney fees.
CONTENTIONS
Alexander contends the trial court violated his right to due process by refusing to continue the January 6, 2009 hearing, abused its discretion by rejecting Alexander’s proffered financial summaries and admitting into evidence the untrustworthy 2004 receipts and improperly circumscribed Close’s testimony. He also contends the trial court erred in accepting the amount stated on the loan application as evidence of his monthly income.
DISCUSSION
1.Standard of Review
As a general rule, a party seeking modification of a child support order must establish that circumstances have changed since the underlying order was made. (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556; In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 298.) The burden of proof to justify a downward modification rests with the supporting party. (In re Marriage of Leonard, at p. 556.)
“‘“‘[T]he trial court’s determination to grant or deny a modification of a support order will ordinarily be upheld on appeal unless an abuse of discretion is demonstrated.’ [Citation.] Reversal will be ordered only if prejudicial error is found after examining the record of the proceedings below. [Citation.]”... [¶] To the extent [appellant] challenges the trial court’s factual findings, our review follows established principles concerning the existence of substantial evidence in support of the findings. On review for substantial evidence, we examine the evidence in the light most favorable to the prevailing party and give that party the benefit of every reasonable inference. [Citation.] We accept all evidence favorable to the prevailing party as true and discard contrary evidence. [Citations.]’ [Citation.] ‘We do not reweigh the evidence or reconsider credibility determinations.’” (In re Marriage of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 34 (Calcaterra).) “The task of the appellate court is limited to searching the record for any substantial evidence which will support the judgment.” (In re Marriage of Jones (1990) 222 Cal.App.3d 505, 515.)
2.The Trial Court Did Not Abuse Its Discretion in Refusing To Continue the Hearing
A trial continuance may be granted only upon an affirmative showing of good cause. (Cal. Rule of Court, rule 3.1332(c).) We review a court’s decision refusing a continuance under the deferential abuse of discretion standard. (Foster v. Civil Service Com. (1983) 142 Cal.App.3d 444, 448.) Under this standard the reviewing court will “only interfere with [the lower court’s] ruling if [it] find[s] that under all the evidence, viewed most favorably in support of the trial court’s action, no judge reasonably could have reached the challenged result.” (Estate of Billings (1991) 228 Cal.App.3d 426, 430.) The trial court abuses its discretion when “‘it has exceeded the limits of legal discretion by making an arbitrary, capricious, or patently absurd determination.’” (Mendoza v. Club Car, Inc. (2000) 81 Cal.App.4th 287, 301.)
“In determining whether a denial [of a continuance] was so arbitrary as to deny due process, the appellate court looks to the circumstances of each case and to the reasons presented for the request.” (People v. Frye (1998) 18 Cal.4th 894, 1013, overruled on another point in People v. Doolin (2009) 45 Cal.4th 390, 421.) Factors to consider include “‘“the benefit which the moving party anticipates[, ]... the likelihood that such benefit will result, the burden on other witnesses, jurors and the court and, above all, whether substantial justice will be accomplished or defeated by a granting of the motion.”’” (People v. Jenkins (2000) 22 Cal.4th 900, 1037; see also People v. Howard (1992) 1 Cal.4th 1132, 1171-1172 [“‘[I]t is not every denial of a request for more time that violates due process even if the party fails to offer evidence or is compelled to defend without counsel.’ [Citation.] Instead, ‘[t]he answer must be found in the circumstances present in every case, particularly in the reasons presented to the trial judge at the time the request is denied.’”].)
We have reviewed the trial transcript and the pleadings filed by both parties. Alexander commenced this proceeding in May 2006. It was continued repeatedly based solely on Alexander’s own failure to promptly and forthrightly disclose his income to his ex-wife, the court and the court-appointed expert. The trial court’s evident frustration in January 2009 when Alexander requested yet another continuance was fully justified. At no time did Alexander provide anything remotely meeting the requirements of “good cause” for a continuance. (See Mahoney v. Southland Mental Health Associates Medical Group (1990) 223 Cal.App.3d 167, 170-172 [denial of continuance motion not abuse of discretion when counsel failed to submit declaration in support of request, give prior notice, make request promptly or show good cause].) Indeed, more than 18 months had passed since Alexander invoked the jurisdiction of the court to modify his existing support obligation (an obligation he had previously failed to meet), and he had yet to fully comply with Close’s requests for documents. There was no abuse of discretion, let alone a denial of due process.
3.Alexander’s Evidentiary Claims Lack Merit
Trial court rulings on the admissibility of evidence, whether in limine or during trial, are generally reviewed for abuse of discretion. (People v. Williams (1997) 16 Cal.4th 153, 196-197 [“In determining the admissibility of evidence, the trial court has broad discretion.... On appeal, a trial court’s decision to admit or not admit evidence, whether made in limine or following a hearing pursuant to Evidence Code section 402, is reviewed for abuse of discretion.”]; accord, People v. Alvarez (1996) 14 Cal.4th 155, 203 [“appellate court reviews any ruling by a trial court as to the admissibility of evidence for abuse of discretion”]; Zhou v. Unisource Worldwide, Inc. (2007) 157 Cal.App.4th 1471, 1476.) “The trial court’s error in excluding evidence is grounds for reversing a judgment only if the party appealing demonstrates a ‘miscarriage of justice’-that is, that a different result would have been probable if the error had not occurred.” (Zhou, at p. 1480; see Evid. Code, § 354; Code Civ. Proc., § 475.)
Alexander challenges two of the court’s evidentiary rulings. First, he contends the court improperly admitted the 2004 receipts under Evidence Code section 1271, the business records exception to the hearsay rule. To qualify as a business record the document’s author must have created the document in the ordinary course of his or her business. (Daniels v. Department of Motor Vehicles (1983) 33 Cal.3d 532, 537-538.) Alexander claims the receipts lacked foundation because he had never seen them.
Evidence Code section 1271 provides, “Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered to prove the act, condition, or event if: [¶] (a) The writing was made in the regular course of a business; [¶] (b) The writing was made at or near the time of the act, condition, or event; [¶] (c) The custodian or other qualified witness testifies to its identity and the mode of its preparation; and [¶] (d) The sources of information and method and time of preparation were such as to indicate its trustworthiness.”
Alexander’s argument is entirely specious. The documents were produced by Alexander in response to a request from the forensic accountant appointed by the court to verify his income. Moreover, Alexander acknowledged one of the receipts was in his own handwriting; and his father, who had previously testified about the operations of pallet companies, testified the receipts were typical of those used by many such companies. Alexander’s knowledge of the company’s record creation and maintenance practices (see County of Sonoma v. Grant W. (1986) 187 Cal.App.3d 1439, 1451), together with his production of the receipts and his father’s recognition of the types of transactions reflected, provided a sufficient basis for the court to admit the exhibit as a business record. (See People v. Hovarter (2008) 44 Cal.4th 983, 1011 [trial court has broad discretion in determining whether sufficient foundation to qualify evidence as a business record].)
More importantly, even if this foundation was deficient for purposes of the business records exception to the hearsay rule, the receipts did not constitute hearsay because they were not offered by Ana for the truth of the matter stated therein. (See Evid. Code, § 1200, subd. (a).) To the contrary, although the receipts were for transactions occurring prior to the dates specified by the court for examination, they were undoubtedly probative of the issue of Alexander’s credibility (or lack thereof) as to his financial dealings, particularly since Alexander claimed the large amounts of money that flowed through his various businesses were related to expenses not income. Under these circumstances, there was no abuse of discretion by the court in admitting the documents.
Alexander also challenges the court’s refusal to admit the 2008 financial summaries he created for the January 6, 2009 hearing. The court excluded the reports because they did not qualify as business records and lacked corroborating backup. (See, e.g., Zanone v. City of Whittier (2008) 162 Cal.App.4th 174, 192 [excluding proffered exit interview summaries because document authors did not have firsthand knowledge of the events recorded or business duty to observe and report and proponent failed to establish exception for hearsay contained in documents].) The summaries were also prepared long after the time established by the court for Close’s inquiry. Alexander had ample opportunity to prepare, document and transmit equivalent summaries to Close before the completion of his original report. There was no error.
For the same reasons the court did not abuse its discretion in limiting Close’s testimony once Close had admitted the inherent unreliability of his conclusions. The testimony amply established the ambiguity of Close’s conclusions had been caused by Alexander’s failure to timely provide accurate and substantiated documentation of his business costs. The court’s decision to terminate the proceeding was well within its broad discretion to control the trial.
4.Substantial Evidence Supports the Trial Court’s Order
Notwithstanding Alexander’s protests, the loan application, standing alone, constitutes substantial evidence to support the court’s order. As stated in Calcaterra, supra, 132 Cal.App.4th at page 31, “[w]here the trial court recognizes deception, it may draw adverse factual inferences and even refer the matter for perjury prosecution.” In Calcaterra, as here, the father appealed from an order increasing his child support obligation from $350 per month to $1789 per month, arguing (among other things) the evidence was insufficient to support the trial court’s determination of his income. The trial court had expressly found the father (and the mother) committed perjury, intentionally misrepresenting their incomes and expenses. (Id.at p. 33.) The father testified that his gross income for the year was $30,483 and his tax returns showed similar amounts. The trial court found he had monthly income of almost $28,000 (id.at p. 34), relying on information in a loan application made by the father on one of his properties.
The Court of Appeal concluded “the presumption of correctness of recent tax returns may be rebutted by a statement of income on a loan application where, as here, the parent owns his own business.” (Calcaterra, supra, 132 Cal.App.4th at pp. 34-35 [“in view of the huge discrepancy between the tax returns, the... loan applications, his income and expense declaration, and testimony, the trial court was not required to accept the statement of income on the tax returns”].) Explaining this conclusion, the Court of Appeal stated, “A judgment based upon factual truth is a legitimate goal of any judicial proceeding. Neither the trial court, nor this court, know the true state of father’s financial affairs. That is his fault. Family law court is a court of equity. [Citation.] Those who seek equity, must do equity and have ‘clean hands.’ [Citation.] Father is in no position to complain that the trial court drew adverse inferences in modifying child support. The trial court’s order is supported by substantial evidence and the reasonable inferences which flow therefrom.” (Id. at p. 38; see also In re Marriage of Chakko (2004) 115 Cal.App.4th 104, 108-109 [upholding child support award based on allegedly forged signature on loan application; “[a] spouse who is the owner of a successful business and who has control of his or her income can structure income and the payment of expenses to depress income. This is not fair if it inures to the detriment of children”].)
The court here acted well within its discretion in disbelieving the income claimed by Alexander and instead crediting the figure stated in the loan application.
DISPOSITION
The order modifying child support is affirmed. Ana is to recover her costs on appeal.
We concur: WOODS, J., JACKSON, J.