Opinion
G056862
08-03-2020
In re Marriage of JOHN and DAWN PELSZYNSKI WORD. JOHN M. WORD III, Appellant, v. DAWN PELSZYNSKI WORD, Respondent.
Law Offices of Patrick A. McCall and Patrick A. McCall; Law Offices of Gregory R. Ellis and Gregory R. Ellis for Appellant. Hughes & Hughes, Lisa Hughes and James Brenner 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 14D005050) OPINION Appeal from an order of the Superior Court of Orange County, Julie A. Palafox, Judge. Affirmed in part, reversed in part. Law Offices of Patrick A. McCall and Patrick A. McCall; Law Offices of Gregory R. Ellis and Gregory R. Ellis for Appellant. Hughes & Hughes, Lisa Hughes and James Brenner for Respondent.
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This appeal involving a complex divorce proceeding begins with a fundamental disagreement about the type of judgment at issue. Appellant John Word argues the judgment on the reserved issue of spousal support awarded temporary support only, while respondent Dawn Word contends the judgment awarded permanent spousal support. There is no dispute over the amount the court ordered John to pay, which is $185,000 per month before taxes.
Because the parties share a surname, we subsequently refer to them by their first names for ease of reference. (See, e.g., In re Marriage of Smith (1990) 225 Cal.App.3d 469, 475, fn. 1.)
John does not dispute his ability to pay, only the amount ordered, asserting the court improperly attributed certain expenditures to the marital standard of living, which he argues was an abuse of discretion. Further, even if the court's judgment was for permanent spousal support, he contends, the court should not have made a permanent award before the division of property. We agree on that point and therefore reverse that part of the order, deeming the judgment to apply to temporary support only.
With respect to the amount ordered, we conclude, based on ample authority, that the marital standard of living is merely one factor for the court to take into account. Given the facts of this case, we find no abuse of discretion in setting the amount of temporary support at $185,000 per month, and we affirm that part of the judgment.
I
FACTS
John and Dawn met in 1994 and were married on August 14, 1999. Prior to their marriage, John was 50 percent owner of Word & Brown Insurance Administrators, Inc. (Word & Brown). John, according to the court, built "his company into an industry . . . leader," as a health care administration company that provided large-scale health insurance programs to large companies and government entities. Dawn, a high school graduate, worked briefly in retail and then as a nail technician. John had three children from a prior marriage, who were adults by the date of separation.
On August 10, 1999, four days before they were married, the parties executed a premarital agreement stating that John's net worth exceeded $19 million while Dawn's was $32,500. The agreement stated that John's ownership and future monetary interests in Word & Brown, along with other assets, were to be his separate property. Certain property was designated as community property, and the agreement stated John was to provide $50,000 per month for joint living expenses, increasing by three percent per year.
The couple separated in June 2014, a few months before their 15th anniversary, and John filed for dissolution a few days later. Dawn filed a response. Shortly thereafter, John filed a request for order "for property control, property restraint, and spousal support for Dawn." John alleged his monthly income was $80,000 and the parties' joint expenses exceeded $107,000 per month; he requested the court set spousal support based on his income. Dawn disagreed, arguing the parties "lived an extraordinarily extravagant lifestyle" which included her personal expenditure of $60,000 to $80,000 per month during the prior eight to 10 years. She asked for $208,397 per month in temporary support based on John's alleged income of $6.6 million per year.
At a hearing in 2014, the court determined John's monthly income was $80,000, finding the parties were living on an "artificial" marital standard because their expenses exceeded John's income. The court ordered spousal support of $25,000 per month as of August 15, 2014. Dawn was ordered to pay her own vehicle and living expenses, assuming she was residing at a home owned by the parties.
"On September 30, 2014, Dawn filed a motion for reconsideration of the temporary support order," which John opposed and the court denied. While the motion was pending, Dawn filed her own request for order to modify the temporary support order, arguing $25,000 per month did not meet the marital standard of living. She argued her needs were $125,000 per month, separate from housing expenses. Thereafter, Dawn retained a new attorney, and continuances were obtained via stipulation.
In a bifurcated proceeding in May 2016, the court deemed the premarital agreement valid and enforceable, and judgment on that issue was entered thereafter.
At a trial readiness conference in June 2016, the parties jointly requested the court bifurcate the issue of spousal support. The court agreed and issued a number of orders, including confirming that it would consider Dawn's request for order regarding modification of spousal support at the time of trial.
The parties appeared for trial in September 2016. At that time, the court stated: "Today starts the bifurcated trial on permanent spousal support. It also includes [Dawn's] Request for Orders to modify temporary support, which was filed on October 3rd, 2014 . . . ."
The court heard evidence on the relevant issues, which we shall discuss in greater detail below. The court ultimately issued an 80-page judgment with detailed findings. With respect to temporary support, the court determined, based on its findings, that an appropriate amount of temporary support was $185,000 per month, retroactive to the date of filing, October 3, 2014.
With regard to permanent support, the court noted that because "the parties are still legally married, the Court has no authority to make a permanent spousal support award" and that "[u]ntil a Status Judgment is entered, the temporary order of the Court as modified herein will be the only spousal support order of the Court." But the court went on to say that once the parties terminate their marital status and a judgment of dissolution is entered, the temporary order would end by operation of law. "Given the parties answered ready for trial on a permanent spousal support award on the day the trial began and the Court sat through sixteen days of evidence consisting of testimony from seven witnesses and having received thousands of pages of documentary evidence and neither party asked to reserve or re-open evidence, the Court finds the issue of permanent support is submitted." The absence of a property division, however, was "crucial" to determining "what would be a just and reasonable permanent support award." "Given the unusual facts and circumstances of the parties' marriage without a property division once the marital status terminates, the Court finds it is just and equitable to make the temporary order of the Court as modified herein the permanent order of the Court."
Further, once a property division occurred, "the Court will consider evidence of a property division to be a change in circumstances." But "[w]hether the property division will be found to be a material change of circumstances warranting . . . a modification of the permanent support award will depend on the facts and circumstances surrounding the property division to be presented to the Court."
The court went on to state that in accordance with general principles applying to dissolution cases, the parties had the right to start new, financially independent lives. "However, in this case their financial independence is premature given the parties answered ready for trial on support before they completed a property division." The court went on to state: "Notwithstanding the absence of a critical statutory factor, over sixteen days of trial the Court had sufficient time and multiple opportunities to consider the parties' marital standard of living and all of the other circumstances specified in Family Code [section] 4320 and is prepared to make a permanent support order." Presumably, the "critical statutory factor" was the assets of each party. (Fam. Code, § 4320, subd. (e).) After reviewing the statutory factors and the marital standard of living, the court found that "without a property division, this Court finds the only just and reasonable permanent order it can make is to maintain the temporary order in the amount of $185,000 per month. Once a property division has been made, whether by settlement or trial, the Court will have the necessary evidence it currently lacks and needs to further nuance a permanent support award for Dawn."
Subsequent statutory references are to the Family Code unless otherwise indicated.
In the court's summary of orders, it stated that John was to pay Dawn $185,000 per month. "Given the absence of a property division weighted [sic] heavily and was critical to the Court's determination of permanent support, once the parties have completed a property division whether by way of settlement or trial, the Court will consider a property division to be a limited material change of circumstances for purposes of modification."
John now appeals.
II
DISCUSSION
Scope of the Judgment
John argues that the court only awarded temporary support. Dawn contends the court decided both temporary and permanent support. It is clear from the court's judgment and findings that it intended to decide both, with the court specifically deeming the final property settlement as "a limited material change of circumstances for purposes of modification." If the court did issue a judgment on both temporary and permanent support, John claims, it is reversible error.
While we note the judgment is somewhat self-contradictory, we concur with the court that the assets of the parties is "a critical statutory factor" in determining a final spousal support award, and we agree with the court's initial statement that in the absence of this information, the right call was that "the temporary order of the Court as modified herein will be the only spousal support order of the Court." Accordingly, to the extent the judgment purports to address the issue of permanent spousal support, it is reversed. The court's determination was of temporary support, reviewable and amendable after property division.
Marital Standard of Living
The rest of John's appeal relates to the amount of the temporary spousal support award. He contends the court erroneously included various expenses that were not properly part of the marital standard.
Our review of a temporary spousal support award is for abuse of discretion. (In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 93; see In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327.) The same standard applies to a modification of temporary spousal support. (In re Marriage of Samson (2011) 197 Cal.App.4th 23, 28-29.) We determine whether factual findings are supported by substantial evidence, and if so, affirm if any reasonable judge could have made such an award. (In re Marriage of Alter (2009) 171 Cal.App.4th 718, 730-731.)
The purpose of temporary spousal support is to maintain the parties' standards of living as closely as possible to the status quo as it existed prior to separation. (In re Marriage of Ciprari (2019) 32 Cal.App.5th 83, 103-104.) "Trial courts may properly look to the parties' accustomed marital lifestyle as the main basis for a temporary support order." (In re Marriage of Wittgrove, supra, 120 Cal.App.4th at p. 1327.)
At trial, Dawn described the marital standard of living as "luxury upper class" while John described it as "upper class," also describing himself as a "simple country boy." John maintained that during "the last two years of the marriage, the marital standard of living was based on $50,000" a month in community expenses.
The court made the following factual findings with respect to the marital standard of living. With respect to marital homes, it determined the parties had for their use or the use of their family and friends six residences, the total market value of which exceeded $17 million. They had access to 11 luxury vehicles, the total market value of which exceeded $2.4 million, and a yacht and mooring in Catalina Island that together exceeded $550,000.
The parties took trips together and with family and friends on the Word & Brown corporate jet, or flew commercial first class. "This luxury afforded the parties regular trips to Las Vegas, Mexico (Puerto Vallarta, Cancun, Cabo), Florida (to see Dawn's parents), Cincinnati (to see John's daughter), and New Orleans (John's annual birthday trip). [¶] The parties also took vacations to the Cayman Islands, Australia, New Zealand, Europe, American Samoa, Bora Bora, Costa Rica, Hawaii, Montana, Mammoth, Puerto Rico and Colorado" as well as to "AMG race events in Monterrey."
With respect to Dawn's spending, the court found that Dawn did not work outside the home, and she was assisted by a housekeeper and a house manager/personal assistant. She frequently purchased designer clothing, shoes, and accessories, "owned a fur coat and regularly bought herself a nice piece of jewelry every month," and "regularly had her hair and nails done and received facials."
Other luxuries included a race horse the parties owned at one point during their marriage, season tickets to various local professional sports teams, and memberships to bay, golf and country clubs. Both parties had elective dental work and cosmetic surgery. "When Dawn's beloved cat died in 2010, the parties sent the cat's DNA to a facility where the cat was cloned at a cost of $25,000." An injury to Dawn's dog was treated with ACL surgery.
Additionally, the parties were involved in charitable endeavors, generous with extended family members, hosted large annual Christmas parties, spent over $1 million remodeling one of their homes and purchased another because John wanted a swimming pool, and added to their savings and investment portfolios. The parties agreed the marital estate was worth between $100 and $200 million. Based on these facts, the court characterized the parties' marital standard of living as an extraordinarily lavish lifestyle.
With regard to spending, Dawn contended she personally spent $60,000 to $80,000 per month independent of housing expenses. John, however, maintained that with the exception of the marriage's last two years, they lived on $50,000 a month. Both parties offered expert testimony on the marital standard of living. The court noted: "Like all other factors considered by the court, standard of living circumstances must be established by competent evidence. In determining the marital standard of living, the actual standard (i.e. actual expenditures) will normally control. Ordinarily, to the extent marital expenses reflect marital lifestyle, the focus should be on actual expenditures during the marriage - not on the applicant spouse's 'estimated' expenses based on 'wishes and desires' for a particular lifestyle."
The parties' experts reviewed bank and credit card statements during slightly different periods shortly before the end of the marriage. John's expert found the parties' average expenditures were "$262,522 a month or $131,261 per party in monthly marital spending closest in time to the date of separation," while Dawn's expert found an average of "$244,336 a month or $122,168 per party in monthly marital spending." The experts then allocated a percentage of the spending between the parties, with John's expert allocating $107,000 per month before taxes and $60,344 per month after taxes. Dawn's expert allocated $260,068 and $137,836 per month before and after taxes, respectively.
The court found the differences in the time period were de minimis. --------
The differences, the court found, were apparently because John's expert excluded certain "non-standard of living" expenses, including "gifts, advances to family members for real property owned by family members, personal loans, investments and misc. cash advances." The court declined "to give the experts' allocated expense opinions significant weight, finding it is the Court's function to make allocations given the amount of discretion involved." The court noted, however, that the premarital agreement defined "the parties['] joint living expenses to include everything Dawn's expert included in his allocation opinion with the exception of investments," and observed the parties regularly invested $10,000 per month. Finding that regular savings were part of the marital standard of living, the court concluded they should be considered "an element of 'need' for support." The court further found that Dawn's expert's allocation was "closer" to the marital standard of living and the definitions in the premarital agreement than John's expert's allocation.
Based on the opinions of both experts, the court found it was "clear to the Court the parties were spending significantly more than the $50,000 a month John claims was the marital standard in the two years closest to their date of separation," and found that the parties were actually spending $250,000 per month. John, the court found, failed to offer independent evidence of his claim that the couple lived on $50,000 a month at any time during their marriage, which "left this Court doubting his credibility as to the parties' marital standard of living." The experts' analysis, the court stated, was "more reliable than John's memory." The differences between the two experts, the court noted, were "de minimis given they were within seven percent of each other." Thus, the court concluded the marital standard of living based on spending was $250,000 per month, and Dawn's personal spending was $125,000 per month.
Ultimately, in arriving at the amount of temporary support, the court considered "the 'big picture' and what it will reasonably take for Dawn to maintain the status quo" pending a division of assets. Including taxes, the court found that amount was between $180,000 and $190,000 per month, and ultimately settled on the figure of $185,000.
John's complaint in this appeal is that the court, in arriving at the $250,000 per month marital standard of living figure, should "have excluded a variety of other expenses which did not contribute to or reflect the marital standard. These included John's use of his separate property funds for his separate property interests, with no involvement from Dawn and with no resulting benefit to the community." John lists specific amounts he believes should have been excluded from the marital standard of living calculation.
What John misses in this argument, however, is what the trial court specifically pointed out in its discussion at arriving at an amount of temporary support, which is that marital standard of living "is not an 'absolute' measure of reasonable need but merely a 'basis or reference point' for determining need and support." The court was correct. Further, "[t]he 'marital standard of living,' . . . is 'a general description of the station in life the parties had achieved by the date of separation,' rather than a 'mathematical standard.'" (In re Marriage of Ciprari, supra, 32 Cal.App.5th at p. 110.) The marital standard of living "'is merely a threshold or reference point . . . . [Citation.] It is neither a floor nor a ceiling for a spousal support award.'" (Ibid.)
But John claims the error here was precisely that - failing to apply a rigid mathematical standard and subtracting everything he claims should have been excluded from that calculation. First, as the case law makes clear, such rigid calculations are not required, and second, even if the court had done so, it was not obligated to reach his desired amount of temporary support, nor is there any indication it would have done so. The court stated it was examining the "big picture" in terms of the parties' lifestyle and Dawn's needs. Even if John's enumerated expenses had been deducted, the court still could have reasonably found that "'the station in life the parties had achieved by the date of separation'" (In re Marriage of Ciprari, supra, 32 Cal.App.5th at p. 110) was, by any measure, "extraordinarily lavish."
This was a completely permissible finding well-supported by substantial evidence. "[I]n exercising its broad discretion, the court may properly consider the 'big picture' concerning the parties['] assets and income available for support in light of the marriage standard of living. [Citation.] Subject only to the general 'need' and 'the ability to pay,' the amount of a temporary spousal support award lies within the court's sound discretion, which will only be reversed on appeal on a showing of clear abuse of discretion." (In re Marriage of Wittgrove, supra, 120 Cal.App.4th at p. 1327.) Moreover, "the trial court may fix spousal support at an amount greater than, equal to or less than what the supported spouse may require to maintain the marital standard of living, in order to achieve a just and reasonable result under the facts and circumstances of the case." (In re Marriage of Smith, supra, 225 Cal.App.3d at p. 475.)
Given the court's findings about the parties' lifestyle prior to separation, as well as its additional findings about Dawn's needs and John's ability to pay, we conclude the trial court did not err in setting temporary support at $185,000 per month. This amount was well within the trial court's discretion.
III
DISPOSITION
The portion of the order awarding permanent spousal support is reversed. In all other respects, the order is affirmed. Each party shall pay its own costs on appeal.
MOORE, J. WE CONCUR: BEDSWORTH, ACTING P. J. GOETHALS, J.