Opinion
G054222
01-25-2018
In re Marriage of KIMBERLY A. and JAMES R. STOUT. KIMBERLY A. STOUT, Respondent, v. JAMES R. STOUT, Appellant.
James R. Stout, in pro. per., for Appellant. Tamara E. Farrar; Thomas Pedersen 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 12FL000384) OPINION Appeal from an order of the Superior Court of Orange County, Nathan R. Scott, Judge. Affirmed. James R. Stout, in pro. per., for Appellant. Tamara E. Farrar; Thomas Pedersen for Respondent.
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James R. Stout appeals from an order denying his request to modify his child support obligations. The trial court calculated the presumptively correct child support amount pursuant to the statewide uniform guideline formula set forth in Family Code section 4055. Although that amount was lower than James's current child support obligation, the court determined special circumstances warranted deviating from the guideline amount and leaving in place the amount of the existing obligation.
All subsequent statutory references are to the Family Code unless otherwise indicated.
As is common in marital cases, the parties share the same last name. We consequently refer to them by their first names for the sake of clarity. No disrespect is intended.
Among the reasons given for the court's decision was its concern that James had been inappropriately withdrawing and spending tens of thousands of dollars of his children's money from custodial accounts which he managed as custodian. Specifically, James readily admitted to using his children's custodial account money for expenses such as child support, spousal support, spousal support arrears, and attorney fees to litigate support issues.
James contends the court abused its discretion in determining deviation from the guideline child support amount was appropriate under the circumstances. We disagree and affirm the order.
I
FACTS
Kimberly and James divorced in 2011 after being married for approximately 11 years. They have three children who are minors, currently ages 15, 15 and 9. In the initial divorce proceedings, Kimberly obtained a monetary judgment against James of approximately $105,000. In addition, he was ordered to pay child support and spousal support. Approximately six months later, he unsuccessfully attempted to discharge the monetary judgment in bankruptcy proceedings.
In 2013, James successfully sought to reduce his child support and spousal support obligations. The 2013 order set child support at $1,440 per month and spousal support at $500 per month.
In August 2015, claiming a change in circumstances, James filed a request for order asking the court to: (1) reduce child support from the existing $1,440 per month to the appropriate amount calculated pursuant to the child support guidelines; (2) reduce spousal support from the existing $500 per month to $135; (3) modify an existing order concerning the kids' extracurricular activities, including dance; and (4) modify an existing order requiring James be present with the kids at all times they are with him.
The declaration he filed in support of the request stated he had no assets, had "a negative net worth of more than $100,000, and no credit." In it he also claimed that at the then existing support levels, "there [was] virtually no money left over to support the children" after he paid the monthly court-ordered support.
During discovery, Kimberly learned custodial accounts had been established for each of the children pursuant to the California Uniform Transfer to Minors Act (CUTMA), and James was the custodian for each. James was reluctant to divulge any information concerning the accounts, so Kimberly filed a motion to compel. The court granted the motion with respect to the CUTMA accounts and ordered James to produce "all records of transactions from the CUTMA account[s] from August 2014 to present for all three children." Included in the documents he eventually produced was his own accounting of money deposited into and withdrawn from the accounts, which was largely unsupported by receipts.
Probate Code, section 3900 et seq. --------
At the time of the hearing on James's request, it was undisputed that between the time of entry of the 2013 child support order and the filing date of James's request to modify support, the amount of time the kids spent with James increased to approximately 50 percent and Kimberly's income increased. The parties stipulated James's monthly income was $4,400, and Kimberly's monthly income was $3,333.
James testified that, in addition to his business income, he receives money monthly from his mother and stepdad. He estimated he receives about $14,000 to $16,000 per year. Testimony from two forensic accountants, however, stated the yearly totals were closer to $30,000.
On cross-examination, James testified concerning the CUTMA accounts. He explained the money in the accounts comes solely from contributions made by his mother and stepdad, and he has never deposited any of his own money into them. He also unhesitatingly admitted to taking money out of the CUTMA accounts to pay various expenses when, according to him, his other sources of income were insufficient to cover everything. It was James's belief, however, there was nothing wrong with doing so because he, as custodian, had the authority to spend money from the accounts for the benefit of the children.
Papers compiled by James indicated monthly withdrawals from the CUTMA accounts varied, with some exceeding $7,000. Among the types of expenses he admitted paying with money from the CUTMA accounts were the following: child support, spousal support, spousal support arrears, attorney fees to litigate support issues, down payment and monthly rent for an apartment, renter's insurance, car payment, car insurance, nonbusiness related car expenses, tow truck costs, life insurance fees, groceries, restaurant food, entertainment with the kids (e.g., movies, concerts), hotel costs for dance competitions and family vacations, rental car costs for family vacations, private school fees, tutoring costs, school supplies, the kids' cell phone costs, the kids' dance classes, the kids' dental and medical costs, the kids' clothing. With respect to certain of those expenses, including child and spousal support, James explained he would transfer money from the CUTMA accounts to his own personal account, and then would he make the payments from his account via cashier's check or money order.
When asked whether he believed his mother would continue to fund the CUTMA accounts each year if the money she put into them were considered James's income for purposes of calculating child and spousal support, he stated she would not and that they had agreed he would not accept the money in such circumstances.
Kimberly testified she has no one assisting her with living expenses, and if support were reduced as requested by James she "may be homeless."
Based on the evidence concerning gifts directly to James from his mother, the trial court attributed $2,000 per month of additional income to him. Using that figure, the stipulated facts, and the additional evidence, but excluding the CUTMA funds, the court calculated guideline child support under section 4055 to be $660 per month. This amount fell $780 below James's then existing child support obligation, but the court ultimately determined his support obligations should not be reduced due to "special circumstances." Similarly, it denied James's other requests.
In explaining why it was appropriate to deviate from the guideline child support amount under the circumstances, the court emphasized James's wrongful conduct concerning the CUTMA accounts and its impact on the children's best interests. It stated: "It would not be just, appropriate, or in the best interest of the children to lower child support to guideline and make [Kimberly] reimburse over $8,000 to [James] when [James] has paid child support with the children's own money. He has made the children pay their own support. It is no different than if he sold their clothes, sold their toys, sold their jewelry and then gave that money to [Kimberly] as their child support."
Months later, the court issued a detailed minute order in accordance with its oral ruling. Because of the court's concern about James's handling of the CUTMA funds, the court found it in the best interest of the children to order him to provide Kimberly each month with a written "accounting to the penny of every deposit, withdrawal, debit, and any other transaction in the children's CUTMA accounts—and receipts for any expenditure of any kind." James appealed.
II
DISCUSSION
James's appeal is limited to the issue of child support. He contends the trial court abused its discretion by deviating from the guideline child support amount "based exclusively on [his] unclean hands." Among the arguments he makes is that the court violated his due process rights by sua sponte raising the notion of unclean hands when neither of the parties had used such terminology or pursued such a theory. Due to these alleged errors, James argues the court's award of attorney fees to Kimberly should be vacated, and he should be awarded attorney fees instead. We disagree.
"With certain exceptions not applicable here, the trial court may modify or terminate a child support order at any time the court deems it necessary." (In re Marriage of Williams (2007) 150 Cal.App.4th 1221, 1234; see § 3651, subd. (a).) "The statutory procedures for modification of a child support order 'require a party to introduce admissible evidence of changed circumstances as a necessary predicate for modification.'" (In re Marriage of Williams, supra, 150 Cal.App.4th at p. 1234; see §§ 3650-3693.) "'The burden of proof to establish that changed circumstances warrant a downward adjustment in child support rests with the supporting spouse.'" (In re Marriage of Williams, supra, 150 Cal.App.4th at p. 1234.)
As to the amount of child support, the amount calculated by using the statewide uniform guideline formula set forth in section 4055 is presumed to be correct. (§ 4057, subd. (a).) The presumption may be rebutted with admissible evidence showing application of the formula would be unjust or inappropriate in the particular case because one or more of five factors is found to be applicable by a preponderance of the evidence. (§ 4057, subd. (b).) One of those factors is that "[a]pplication of the formula would be unjust or inappropriate due to special circumstances in the particular case." (§ 4057, subd. (b)(5).) Though the statute lists a few examples of "special circumstances," the list is nonexhaustive. (In re Marriage of Corman (1997) 59 Cal.App.4th 1492, 1500-1501.)
When a court deviates from the guideline amount, it must state in writing or on the record (1) "[t]he amount of support that would have been ordered under the guideline formula"; (2) "[t]he reasons the amount of support ordered differs from the guideline formula amount"; and (3) "[t]he reasons the amount of support ordered is consistent with the best interests of the children." (§ 4056, subd. (a).) We review a court's decision to deviate from the formula for a prejudicial abuse of discretion. (In re Marriage of Wood (1995) 37 Cal.App.4th 1059, 1066, disapproved on another ground in In re Marriage of Fellows (2006) 39 Cal.4th 179, 187.)
Here, the trial court followed the necessary steps. After extensive testimony and argument from the parties, the court first calculated the guideline child support amount. Thereafter, it explained why it was going to maintain the existing level of support rather than lower it to the guideline amount, and why doing so was consistent with the best interests of the children.
James's arguments concerning the scope of the court's discretion lack merit. Although a trial court's discretion concerning child support is not boundless (In re Marriage of Williams, supra, 150 Cal.App.4th at p. 1234), it is broad when it comes to determining whether special circumstances justify deviating from the guideline support amount. (In re Marriage of De Guigne (2002) 97 Cal.App.4th 1353, 1361.) The court "is not just supposed to punch numbers into a computer and award the parties the computer's result without considering circumstances in a particular case." (In re Marriage of Fini (1994) 26 Cal.App.4th 1033, 1043.)
We find no error in the court's determination; James has not met his burden of demonstrating an abuse of discretion. (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 769 [abuse of discretion "'only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made'"].) Because his argument concerning attorney fees is premised on the alleged error concerning child support, we reject his claimed error concerning attorney fees as well. Notwithstanding these conclusions, we decline Kimberly's request to award her attorney fees on appeal.
Separate from the merits of James's appeal, we find his conduct in relation to his children's CUTMA accounts troubling. The money contributed by his mother into the accounts belongs to his children, not him. (Prob. Code, §§ 3911, subd. (b), 3912, subds. (b), (d) & (e).) It may not be used to satisfy his own business or personal obligations, including those concerning child support. (Prob. Code, § 3914, subd. (c); Newman v. Newman (1981) 123 Cal.App.3d 618, 621.)
Yet, it appears from the undisputed evidence James uses the money as his own without any qualms, spending it on things such as child support, spousal support, spousal support arrears, attorney fees to litigate support issues, a down payment and monthly rent for his apartment, renter's insurance, his car payment, car insurance, his nonbusiness related car expenses, tow truck costs, and his life insurance fees. Because James did not pay support or other expenditures directly from the CUTMA accounts, but instead transferred CUTMA funds to his own personal account to make payments, James's activities were not readily apparent until the court ordered him to provide Kimberly with an accounting of all CUTMA deposits and withdrawals.
While the record before us does not include a copy of the accounting James assembled for the CUTMA accounts, or the reports or testimony of the forensic accountants who reviewed them and provided opinions in the proceedings below, we are able to glean from James's testimony, the trial court's pronouncements and other documents in the record that the amounts James has withdrawn from the CUTMA accounts are by no means trivial. For example, in 2015 alone, the withdrawals exceeded $80,000. And, during the roughly 11-month pendency of James's request in the court below, James used nearly $16,000 of CUTMA money to pay child support, $5,500 to pay spousal support, and "at least $11,100 to pay his own attorney fees as he litigates this divorce." At oral argument, both sides agreed the trial court faces decisions regarding James's obligations based on its review of any accounting produced by him and any additional papers the parties may file.
III
DISPOSITION
The order is affirmed. Respondent shall recover her costs on appeal.
MOORE, J. WE CONCUR: O'LEARY, P. J. FYBEL, J.