Opinion
H044217 H044783
04-10-2018
In re the Marriage of EDNA and ERNESTO BUERA. EDNA BUERA, Respondent, v. ERNESTO BUERA, Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Monterey County Super. Ct. No. DR37846)
These two appeals are from (1) an October 18, 2016 order modifying spousal support (case No. H044217), and (2) a May 12, 2017 order denying motion to quash earnings assignment order (case No. H044783).
In the interests of justice, we will consider these two appeals together.
On February 8, 2006, the trial court had ordered appellant and former husband Ernesto Buera to pay respondent and former wife Edna Buera spousal support of $750 per month, commencing December 1, 2005. (Although unclear from the record, it appears that Ernesto had paid temporary spousal support to Edna since 2001.) In August 2016, Ernesto filed a form "Request for Order" (with accompanying documents; hereafter, the Motion.) He sought in the Motion a modification of the prior spousal support order, requesting that the court terminate spousal support. Ernesto contended there was a material change in circumstances justifying the relief: He had become blind in one eye, had lost his job as a postal worker, and had retired on permanent disability. These circumstances resulted in a reduction in his monthly income from $5,464 (as reported by him in October 2009) to $1,845. He requested that, under the circumstances, spousal support be terminated. At the hearing on Ernesto's Motion, the trial court found a material change of circumstances. It ordered Ernesto to continue to pay spousal of support of $750 per month through November 30, 2016, and thereafter to pay support in the amount of $500 per month. A formal order was filed on October 18, 2016 (hereafter, the Support Modification Order, or Order). Ernesto filed an appeal from the court's Order (case No. H044217).
"Hereafter, we refer to the parties by their first names, as a convenience to the reader. We do not intend this informality to reflect a lack of respect. [Citation.]" (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1513, fn. 2.)
In March 2017, Ernesto filed a motion to quash an earnings assignment order served on the California Public Employees' Retirement System (CalPERS) by Edna, in which she had sought to attach $750 per month from Ernesto's monthly retirement benefits. The court denied the motion, and it entered a formal order on May 12, 2017. Ernesto filed an appeal from the court's order of May 12, 2017 (case No. H044783).
Ernesto contends on appeal (case No. H044217) that the court abused its discretion by reducing support to $500, effective December 1, 2016. He urges that spousal support should have been suspended to the retroactive date of August 1, 2016. In the alternative, he requests that the support be reduced to $154 per month, effective August 1, 2016. He contends that the trial court failed to consider all of the statutory factors as required by law, and that requiring that he continue to pay support to Edna in the amount of $500 where he had no reasonable ability to do so "was an arbitrary decision." Ernesto contends further in case No. H044783 that the court erred in denying his motion to quash.
We conclude in case No. H044217 that the court properly found a material change of circumstances justifying a reduction in spousal support. We further hold that the court did not abuse its discretion by denying Ernesto's request to terminate spousal support. We find, however, that the court's reduction of monthly spousal support from $750 to $500, effective December 1, 2016, constituted an abuse of discretion. We conclude further that the court abused its discretion by failing to make the modification order retroactive to the date of Ernesto's retirement or service of the Motion, whichever occurred later. We will therefore reverse the Support Modification Order and remand the case to the trial court for reconsideration.
Because the order of May 12, 2017 denying Ernesto's motion to quash is directly connected with the Support Modification Order in case No. H044217, we will also reverse the order denying motion to quash in case No. H044783. We will remand the case to the trial court for further proceedings consistent with this opinion.
I. PROCEDURAL HISTORY
A. Prior Proceedings
Edna filed a petition for dissolution of her marriage with Ernesto on September 26, 2001, alleging that the parties had been married for approximately 21 years and had no minor children. A judgment of dissolution was filed on October 28, 2002. In the judgment, the court, inter alia, ordered that "[t]he existing [s]pousal [s]upport order will be modified effective August 1, 2002," with the court reserving jurisdiction to make the modification order. The parties were ordered to exchange information and attempt to reach agreement on the modified amount of spousal support.
The record does not reflect the date or nature of "[t]he existing [s]pousal [s]upport order" identified in the court's judgment of October 28, 2002.
The court filed an order on reserved issues on February 8, 2006. Among the matters addressed, the court ordered that Ernesto pay Edna spousal support of $750 per month, commencing December 1, 2005. It ordered further that such support would continue until the death of one of the parties, upon Edna's remarriage, or upon further order of the court.
Ernesto stated in the Motion that he had been paying spousal support to Edna since 2001. That statement cannot be confirmed from any documents that are part of the record herein.
B. Spousal Support Modification Request and Order (H044217)
1. Ernesto's Motion
On August 1, 2016, Ernesto, as a self-represented litigant, filed the Motion seeking a modification of the prior spousal support order of October 28, 2009. He requested that the court terminate the current spousal support order requiring that he pay $750 per month, and that the court reduce the support amount to $0. He stated in the form Request for Order that he had become blind in one eye and could no longer work. He alleged that he had been a mail carrier with the United States Postal Service (USPS), and that his physician had placed him "on permanent disability effective 7/28/16." Ernesto included with the Request for Order an income and expense declaration (I&E declaration), and a separate declaration setting forth the circumstances upon which he sought the relief.
The date "10-28-2009" is hand-printed in Ernesto's form request for order. It is the only handwriting on the form (other than Ernesto's signature), suggesting it may have been added later. There is no order of October 28, 2009, that appears in the record, and, as noted, there was a spousal support order of February 8, 2006. requiring Ernesto to pay $750 per month, effective December 1, 2005. And the court's Support Modification Order challenged here identifies the judgment or order of "8/2/2002" as being the support order being modified. That judgment or order also does not appear in the record. There is, however, no dispute between the parties that the substance of the spousal support order for which Ernesto sought modification in his Motion was that he be required to pay Edna $750 per month until further order of the court.
In his I&E declaration and accompanying declaration, Ernesto stated that his sole monthly income was $1,845, which constituted his retirement benefits received from CalPERS. He declared further that he resided in a "tiny in-law unit" with his current (third) wife and his 11-year-old son, which they rented at a cost of $1,400 per month. He noted that he had "joint physical (50-50) and legal custody" of his son from his second marriage, paid monthly child support of $168, and incurred additional expenses for his son, such as expenses for clothing, school materials, and extracurricular activities. Ernesto declared that he also contributed to the support of his current wife. He stated in the I&E declaration that his total monthly expenses (including rent of $1,400) were $4,052.
In his separate supporting declaration, Ernesto stated he had been supporting Edna for 15 years since their divorce. He declared that Edna in the past had worked as a caregiver and later at a grocery store. She had told him that she "always worked 'under the table' " and therefore her tax returns did not reflect her earned income. He stated that he had learned she had recently quit working at the grocery store. Ernesto declared further that Edna owned her home in Clovis, and she had been able to afford trips to Europe. Upon their divorce, Edna had received one-half of Ernesto's CalPERS retirement funds. Ernesto declared further that over the years since their divorce, Edna had made no effort to become self-supporting, aside from her working for unreported income.
2. Edna's Opposition
Edna, a self-represented litigant, filed a responsive declaration opposing Ernesto's motion to modify spousal support. Edna stated she (1) had been married to Ernesto for 21 years, (2) was 59 years old, and (3) had multiple health problems, including hypertension, blurry vision, and problems with her knee and foot, that prevented her from working. Edna declared that the $750 monthly support she received from Ernesto helped her with her expenses.
Edna submitted an I&E declaration dated August 16, 2016, reflecting that she received $953 in pension/retirement, $584 in disability, and $750 in spousal support for a total monthly income of $2,287. She declared she had $1,000 in cash, checking accounts, savings or other accounts. Edna declared that her total monthly expenses were $2,323, which included a mortgage payment of $903 and property taxes of $200.
3. Ernesto's Reply
Ernesto submitted a reply memorandum and a supplemental declaration. Ernesto provided further background concerning his Motion to reduce support. He stated that he had previously worked as a corrections officer in the state prison system but had been injured on the job. He had retired because of disability, but continued employment thereafter as a USPS mail carrier, which required him to drive a commercial vehicle. In mid-2016, he became blind in one eye and could no longer drive a commercial vehicle, which prevented him from continuing to work as a mail carrier. Ernesto stated he was "looking for work but because of his vision, it [was] now difficult for him to read." Ernesto declared that he was 59 years old, and that his only work experience had been as a correctional officer and a mail carrier. He stated that although he did not know what work he could perform, he intended to enroll in community college if he could obtain technology to assist with his studies.
Ernesto stressed that his only source of income was his CalPERS retirement benefits. His wife worked part-time at the post office; there were no full-time jobs available. Ernesto had no stocks or income from stocks. His application for social security disability benefits had been rejected, but he had sought reconsideration of that decision. He declared that if Edna were to prevail in opposing the Motion, he and his family would be destitute because they could not live on $973 per month.
Ernesto stated in his I&E Declaration filed August 4, 2016, that his wife's gross monthly income was between $800 and $1,200 per month. The court, of course, may not consider that income in determining or modifying spousal support. (Fam. Code, § 4323, subd. (b); see In re Marriage of Lynn (2002) 101 Cal.App.4th 120, 133.)
It is uncertain how Ernesto arrived at this figure. Subtracting $750 spousal support and $168 child support from monthly income of $1,845 would equal $927.
Ernesto included in his reply a request for judicial notice of a series of attached I&E declarations submitted over the years by the parties (discussed below). Summarizing the parties' respective I&E declarations:
The court below did not specifically rule on Ernesto's request for judicial notice. Since the record is otherwise silent, we presume that the trial court "considered all the pertinent matters presented to it" in ruling on the modification request. (Lydig Construction, Inc. v. Martinez Steel Corp. (2015) 234 Cal.App.4th 937, 945; see also GGIS Ins. Services, Inc. v. Superior Court (2008) 168 Cal.App.4th 1493, 1504.) Because the documents attached to Ernesto's reply are proper matters of which judicial notice may be taken (see Evid. Code, § 452, subd. (d)), we will take judicial notice of them in this appeal. (Evid. Code, § 459, subd. (a).)
Ernesto I&E Declarations
| Date Filed | Total Income | Total Expenses | Housing Expense |
| 10/09/01 | $3,898 | $1,880 | [not listed] |
| 02/06/04 | $1,847 | $4,749 | $1,175 |
| 11/02/04 | $5,118 | $4,435 | $1,175 |
| 08/08/07 | $4,754 | $8,029 | $3,469 |
| 09/25/07 | $4,435 | $7,334 | $3,469 |
| 10/29/09 | $5,464 | $6,730 | $1,665 |
| 08/04/16 | $1,845 | $4,052 | $1,400 |
Edna I&E Declarations
| Date Filed | Total Income | Total Expenses | Housing Expense |
| 10/15/04 | $500 | $2,258 | $853 |
| 05/04/07 | $1,295 | $2,076 | $653 |
| 10/15/07 | $1,425 | $653 | |
| 03/13/09 | $1,564 | $1,706 | $650 |
| 04/17/09 | $1,564 | $1,706 | $653 |
| 08/16/16 (dated) | $2,287 | $2,323 | $903 |
Edna's I&E declaration listed a total expenses figure of $1,497. It appears that this figure is in error, since the individual expenses listed by Edna total $2,150.
4. Hearing and Order
A contested hearing on the Motion was held on September 29, 2016. Ernesto represented to the court that he had reached agreement with his second wife to reduce his child support obligation to $0, with him continuing to have custody of his child for 50 percent of the time. He confirmed that his monthly income was $1,845. Ernesto stated that he had applied to the USPS for a reasonable accommodation, but his application had been denied because there was no position available for him given his physical limitations. He had also applied for Social Security benefits; his application was denied and he was appealing that decision.
The court received the information from the parties as discussed in this section. But they were not sworn as witnesses at the hearing.
Edna, questioned by the court, confirmed that her monthly income consisted of $750 in spousal support, $953 in pension, and $584 as Supplemental Security Income benefits. She stated that she received no other income and denied that she received income from part-time jobs.
The court announced its decision from the bench. It ordered that spousal support be reduced to $500 per month commencing December 2016. Ernesto was ordered to pay any arrearages promptly and to continue to pay support of $750 per month through November 2016. The court ordered further that the parties exchange tax returns in June 2017 and in the month of June for each year thereafter. The court filed its formal Order on October 18, 2016.
In the Order, the court made certain findings of fact and conclusions of law. It found that Ernesto had become blind in one eye and was no longer able to drive a commercial vehicle. He was unable to continue his position as a mail carrier and he was denied a reasonable accommodation because the USPS had no work available for him. He was also denied federal disability. His monthly rent was $1,200. After deduction of his $750 spousal support payments, his monthly income was $1,095. The court noted that there had been no evidence presented concerning Ernesto's potential earning capacity. The court found further that Edna owned a four-bedroom house in Clovis with a monthly mortgage of $900, she was not employed, had no savings, and there was no evidence of her potential earning capacity. Edna's monthly income, including $750 support, was $2,287.
This is an evident error made by the trial court. The record shows as an undisputed matter that Ernesto's monthly rent when the Motion was filed and heard was $1,400. He stated this rent amount in his 2016 I&E declaration, and in his accompanying separate declaration. The record also reflects that Ernesto stated under penalty of perjury in a separate request for order that is not part of the appeal in case No. H044217 that the monthly rent to house his family, as of November 3, 2016, was $1,400. This apparent error may be potentially explained by the fact that Ernesto filed an I&E declaration August 1, 2016 (dated July 31, 2016), in which he stated that his monthly rent was $1,200. He filed an amended I&E declaration on August 4, 2016 (dated August 3, 2016)—along with his separate declaration filed the same day—stating that his rent was $1,400. We conclude there is no substantial evidence to support the court's finding that Ernesto's monthly rent at the time of the hearing was $1,200.
The court concluded in the Order that Ernesto's involuntary retirement from the USPS resulted in a reduction in his monthly income to $1,845, which constituted a material change in circumstances. It found that "[e]qualization of disposable income" would result if Ernesto's support payment to Edna were reduced to $500 per month.
C. Motion to Reconsider Spousal Support Order
Ernesto filed a motion to reconsider the Order modifying spousal support. The motion was based upon the fact that Edna had testified at the hearing on the Motion that her monthly mortgage payment was $900, when in fact it was $653. Ernesto did not learn of this fact until he received Edna's credit report after the prior hearing.
Edna opposed the reconsideration motion. She stated that she made monthly payments on two loans against her property that totaled $931.15: a first mortgage of $653.37 to Chase Mortgage and a home equity line of credit to Chase Mortgage of $277.78.
The court heard the motion on December 1, 2016. After argument, the court denied Ernesto's motion for reconsideration.
Ernesto filed a timely notice of appeal.
D. Motion to Quash (H044783)
On March 6, 2017, Ernesto filed a motion to quash an earnings assignment order served on CalPERS. Ernesto averred that on March 1, 2017, Edna filed a wage attachment order upon CalPERS seeking $750 per month from Ernesto's monthly retirement benefits to satisfy spousal support obligations. He argued that such retirement benefits were exempt from attachment under the Code of Civil Procedure, subject to a motion by the judgment creditor. Edna filed a response opposing Ernesto's motion to quash.
After a hearing on Ernesto's motion to quash on April 20, 2017, the court denied the motion. A formal order was filed on May 12, 2017. Significantly, although referred to in Ernesto's motion and in the court's order, the wage assignment order itself is not part of the appellate record. But we believe that the wage assignment order was issued after the court's Support Modification Order, since Edna requested that such order issue in her opposition to Ernesto's motion for reconsideration, which request was not acted upon when the court denied Ernesto's reconsideration motion. Ernesto filed a timely notice of appeal of the May 12, 2017 order.
On March 6, 2017, Ernesto also filed a request for order requiring that Edna sign forms allowing him access to her tax returns and social security information. The request for order was heard in conjunction with Ernesto's motion to quash, and the court denied without prejudice the request for order requiring Edna to sign forms. Ernesto does not challenge that portion of the order in this appeal (case No. H044783).
II. DISCUSSION
A. Motions to Modify Orders for Spousal Support
A spousal support order, with certain exceptions not relevant here, may be modified or terminated at any time by the court. (Fam. Code, § 3651, subd. (a).) Spousal support may only be modified "upon a material change of circumstances since the last order. 'Change of circumstances' means a reduction or increase in the supporting spouse's ability to pay and/or an increase or decrease in the supported spouse's needs. It includes all factors affecting need and the ability to pay." (In re Marriage of West (2007) 152 Cal.App.4th 240, 246.) The requirement that there be a showing of a material change of circumstances is "to prevent parties from relitigating issues that the court has previously addressed." (In re Marriage of Freitas (2012) 209 Cal.App.4th 1059, 1071-1072.) "Whether a modification of a spousal support order is warranted depends upon the facts and circumstances of each case." (In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 357.)
All further unspecified statutory references are to the Family Code.
This standard for modifying an order of support "means a change in the circumstances of the respective parties, i.e., a reduction or increase in the [supporting spouse's] ability to pay and/or an increase or decrease of the [supported spouse's] needs." (In re Marriage of Cobb (1977) 68 Cal.App.3d 855, 860-861.) Thus, " '[i]n general a change of circumstances may be anything that affects the financial status of either party.' [Citation.]" (In re Marriage of Hoffmeister (1984) 161 Cal.App.3d 1163, 1173, original italics.)
In deciding a motion to modify a spousal support order, the court is required to address the same factors it must consider under section 4320 in making an initial spousal support order. (In re Marriage of Shaughnessy (2006) 139 Cal.App.4th 1225, 1235.) Those statutory factors include (1) "[t]he extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage" (§ 4320, subd. (a)); (2) the supporting party's ability to pay support, based upon his or her "earning capacity, earned and unearned income, assets, and standard of living" (id., subd. (c)); (3) the parties' respective needs, "based on the standard of living established during the marriage" (id., subd. (d)); (4) the parties' respective assets and liabilities, including separate property (id., subd. (e)); and (5) "[t]he balance of the hardships to each party" (id., subd. (k)). The court must also consider "[a]ny other factors the court determines are just and equitable." (Id., subd. (n).) The trial court is required to "recognize and apply each applicable statutory factor in setting spousal support. [Citations.]" (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 304, original italics.) The moving party bears the burden of demonstrating that "the economic situation of the parties has changed, since it is the economic relation which is to be affected by the proposed modification. [Citations.]" (In re Marriage of Clements (1982) 134 Cal.App.3d 737, 745-746.)
One circumstance that may constitute a material change in circumstances, upon consideration of the entire case and application of the section 4320 factors, is the reduction of the supporting spouse's income due to loss of job, disability, or retirement. (See Hogoboom & King, Cal. Practice Guide: Family Law (the Rutter Group 2017) ¶ 17:211, p. 17-84 ["supporting party's retirement or other cessation of gainful employment may be a sufficient changed circumstance to warrant a decrease in or termination of the support obligation . . . [after] consideration and weighing of all of the statutory spousal support factors"].) Courts have held in numerous instances that the supporting spouse's reduction in earned income was a matter that, after consideration of all relevant factors, may serve as a material change of circumstances justifying a downward modification of spousal support. (See, e.g., In re Marriage of Mosley (2008) 165 Cal.App.4th 1375, 1383-1385 [trial court should have modified support, based on supporting spouse's loss of lucrative law firm partner job, where his new job had significantly lower base salary plus an uncertain discretionary bonus]; In re Marriage of Richmond (1980) 105 Cal.App.3d 352, 355, 357 [monthly support modified from $542 to $200 where supporting spouse's became unemployed for two months after having a job paying $2,297 gross per month]; In re Marriage of Norton (1976) 71 Cal.App.3d 537, 541 [support reduction where supporting spouse had substantial reduction in earnings and had been hospitalized with serious illness]; Peirce v. Peirce (1966) 243 Cal.App.2d 330, 338-340 [50 percent reduction where supporting party was nearing retirement age, had made nine years of support payments, and had monthly income reduced from $2,083 to $1,700]; Moore v. Moore (1955) 133 Cal.App.2d 56, 59 [support reduction where supporting party, a cook, showed aggravation of preexisting medical ailments prevented full-time work]; Anderson v. Anderson (1954) 129 Cal.App.2d 403, 411 [support reduction where supporting party, a dentist, due to declining health, was no longer able to work a full day].)
Thus, in Philbin v. Philbin (1971) 19 Cal.App.3d 115 (Philbin), the supporting spouse, an actor, sought an order modifying child and spousal support that had been set in the interlocutory and final judgments in the aggregate amount of $1,300. (Id. at pp. 120- 121.) He based his request on the fact that his income had fluctuated from $55,000 in 1968 (when the parties' property settlement agreement was signed) to $95,000 in 1969 (when the interlocutory and final judgments were entered) to $27,000 in 1970 (when the modification request was made). (Id. at pp. 118-119.) The trial court ordered the reduction of monthly child and spousal support for a period of six months to $550. (Id. at p. 117.) The appellate court, finding the supporting spouse had shown a material change of circumstances, and determining that he had shown that he was not at fault for his reduction in income and that the industry in which he was employed was depressed, held that the trial court had not abused its discretion in reducing the support obligation. (Id. at pp. 119-121.) But the appellate court concluded that the portion of the order calling for an automatic reversion of support to its original level after six months was unsupportable because there was no evidence that the supporting spouse's income would be restored to its former higher level at that time. (Id. at pp. 121-123.)
Philbin, supra, 19 Cal.App.3d 115 was superseded by statute on another ground. (See In re Marriage of Destein (2001) 91 Cal.App.4th 1385, 1392.)
B. Standard of Review
We review an order granting or denying a motion to modify a spousal support order for abuse of discretion. (In re Marriage of Olson (1993) 14 Cal.App.4th 1, 7.) We bear in mind our Supreme Court's admonition concerning this review standard that it "is not a unified [one]; the deference it calls for varies according to the aspect of a trial court's ruling under review. The trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)
"In exercising its discretion the trial court must follow established legal principles and base its findings on substantial evidence. If the trial court conforms to these requirements its order will be upheld whether or not the appellate court agrees with it or would make the same order if it were a trial court." (In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47, fn. omitted.) If a finding of a material change of circumstances is unsupported by substantial evidence, "an order modifying a support order will be overturned for abuse of discretion. [Citation.]" (In re Marriage of West, supra, 152 Cal.App.4th at p. 246.)
The trial court abuses its discretion when, after considering all of the circumstances, its decision " 'has "exceeded the bounds of reason" or it can "fairly be said" that no judge would reasonably make the same order under the same circumstances. [Citations.]' " (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 480; see also In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373, 1377 [discretion abused " 'when, after calm and careful reflection upon the entire matter, it can fairly be said that no judge would reasonably make the same order under the same circumstances' "].)
The trial court's discretion to act, however, "is not an uncontrolled power. A proper exercise of judicial discretion requires the exercise of discriminating judgment within the bounds of reason, and an absence of arbitrary determination, capricious disposition, or whimsical thinking. A court must know and consider all the material facts and legal principles essential to an informed, intelligent, and just decision in the particular case before it. [Citations.]" (In re Marriage of Rosevear (1998) 65 Cal.App.4th 673, 682-683.) Stated otherwise, "[d]iscretion is abused in the legal sense 'whenever it may be fairly said that in its exercise the court in a given case exceeded the bounds of reason or contravened the uncontradicted evidence.' [Citations.]" (Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 527.)
Although our review is one that is deferential, in that the trial court is accorded the discretion to assign the appropriate weight to the statutory factors relevant to spousal support, the trial " 'court may not be arbitrary; it must exercise its discretion along legal lines, taking into consideration the applicable circumstances of the parties set forth in [the statute], especially reasonable needs and their financial abilities.' [Citation.] Furthermore, the court does not have discretion to ignore any relevant circumstance enumerated in the statute. To the contrary, the trial judge must both recognize and apply each applicable statutory factor in setting spousal support. [Citations.] Failure to do so is reversible error. [Citations.]" (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 304, original italics; see also In re Marriage of Shimkus (2016) 244 Cal.App.4th 1262, 1273 [failure to consider and weigh all statutory factors in deciding request to modify spousal support constitutes abuse of discretion].)
C. Appeal: Support Modification Order (H044217)
We address four aspects of the trial court's Support Modification Order of October 18, 2016. First we consider whether the trial court properly found a material change of circumstances warranting a modification of support. Second, we review whether the court abused its discretion in finding, based upon a material change of circumstances, that a reduction of monthly spousal support from $750 to $500 was proper. Third, we address whether the court erred in failing to make its order retroactive to the later of the service of the Motion or the date of Ernesto's unemployment. Lastly, we review whether the court erred in denying Ernesto's request for termination of spousal support.
Because we conclude the court abused its discretion by reducing monthly support from $750 to $500 and by failing to make any reduction in support retroactive, we will reverse the Order.
1. Material Change of Circumstances
The court's finding of a material change of circumstances here was proper. Indeed, a contrary finding would have constituted a clear abuse of discretion. In mid-2016, Ernesto—at 59 years old, who had a long-term employment history as a state correctional officer and then as a USPS mail carrier—found himself suddenly without sight in one eye, unable to perform his mail carrier duties, and without a job at the USPS. His monthly income had reduced dramatically from at least $5,464—the last reported figure in October 2009—to $1,845. And the record showed that he had no immediate employment prospects or a reasonable expectation that he would soon find work. From this record, a material change of circumstances was manifest.
Although the record does not show Ernesto's monthly income immediately before he lost his USPS job in 2016, it appears that his monthly income immediately prior to his involuntary retirement was conservatively $5,464, based upon the assumption that his gross monthly salary with the USPS in 2016 was not less than it was in 2009 ($3,816). (We note that the record shows that between September 2007 and October 2009, Ernesto's gross monthly salary for a 40-hour work week with the USPS increased from $2,976 to $3,816.)
2. Order Reducing Monthly Support From $750 to $500
We next examine whether the trial court properly exercised its discretion by ordering that Ernesto's monthly spousal support obligation be reduced from $750 to $500, effective December 2016.
The trial court recited, based upon a record that was uncontradicted, that Ernesto at age 59, had "bec[o]me blind in one eye and unable to drive a commercial vehicle." He found it difficult to read as a result of his having lost sight in one eye. He had sought unsuccessfully a reasonable accommodation from his employer, the USPS. The court found "no evidence of his potential earning capacity." As a result of his "involuntary retirement from the USPS," his monthly income had been reduced to $1,845, its sole source being his CalPERS retirement payment. The trial court found further, based upon uncontroverted evidence, that Ernesto "ha[d] no savings account or investments," and no investment income. He had applied for federal disability, but his application had been denied.
It was undisputed that Ernesto's monthly rent obligation to house himself, his wife, and (for 50 percent of the time) his son—in what Ernesto described as a "tiny in-law unit"—was $1,400. Thus, his net income, after deduction of rent, was $445. And although not expressly mentioned by the court in the Support Modification Order, Ernesto's declared monthly living expenses (aside from rent)—there having been no evidence contradicting his declared expenses—totaled $2,652. After deduction of rent and other expenses, therefore, Ernesto's net monthly loss (including payment of $750 spousal support) was $2,957.
See footnote 11, ante.
The evidence further showed, and the trial court found, that Edna—who was also 59 years old—was not employed and had monthly income totaling $2,287, consisting of $953 (her stipulated interest in Ernesto's CalPERS retirement), $584 (disability), and $750 (spousal support). The court found "no evidence of her potential earning capacity," and Edna had no savings. Edna lived alone and owned a four-bedroom house in Clovis for which her monthly mortgage obligation was $900. There was no evidence presented as to the value the home or the equity that Edna held in it. Thus, her net income, after deduction of mortgage, was $1387. And although not expressly mentioned by the court in the Support Modification Order, Edna's additional declared monthly living expenses (aside from mortgage and home equity payments)—there having been no evidence contradicting her declared expenses—totaled $1,420. After deduction of mortgage and other expenses, therefore, Edna had a net monthly loss of $33.
Ernesto challenged the declared amount of Edna's monthly income, contending that she earned money " 'under the table' " and had roommates in her home who presumably paid rent. The court made no finding as to whether Edna's declared income was understated. Therefore, the court's implied finding accepted the amount of Edna's declared income as being true, and there is substantial evidence to support this implied finding.
As was clarified in Ernesto's reconsideration motion and Edna's opposition thereto, although Edna listed on her 2016 I&E declaration that her monthly mortgage was $903, the situation was somewhat more nuanced. Her monthly obligations consisted of a $653 mortgage payment and a $277 home equity line of credit payment, for a total monthly housing obligation of $930.
It is obvious that, at the time of the hearing on the Motion, the economic circumstances of both parties were dire. Neither party was employed, and the record did not show, based upon their work history, that either could readily find employment (assuming they were physically able to perform it). Both parties had physical limitations that limited or prevented the type of work they could perform. Ernesto had been told by his physician that he "[could not] and should not work anymore." Further, accepting the accuracy of their respective declared assets, liabilities, and monthly income and expenses—as the trial court apparently did—neither Ernesto nor Edna had a positive monthly cash flow. But, obviously, Ernesto's negative cash flow (-$2,957) was significantly greater than Edna's (-$33). And Ernesto was a renter supporting himself, his wife, and his son (for one-half of the time), while Edna owned her home (presumably having some equity in it), and supported only herself. These facts underscore that Ernesto was significantly more financially disadvantaged than was Edna.
Based upon documents included in Edna's opposition to Ernesto's motion to reconsider, it appears that as of the hearing on the Motion, the principal balances of her mortgage and home equity loans against her Clovis property totaled $94,277. The only evidence presented as to the value of the Clovis property (to which Edna did not object) was Ernesto's declaration that he had performed an Internet search and determined that houses in Clovis had a range in value from $230,000 to $500,000.
Ernesto's disability, loss of employment, and large reduction of monthly income constituted a material change of circumstances justifying the reevaluation of the prior support order and the reduction of his support obligations to Edna. Our review of the record reveals, however, that the trial court, in conducting this reevaluation of the prior support order, did not properly exercise its discretion by "both recogniz[ing] and apply[ing] each applicable statutory factor in setting spousal support. [Citations.]" (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 304, italics omitted.) Instead, the court—as noted in the Order—focused upon the "[e]qualization of disposable income" of the parties in fashioning its order reducing monthly spousal support from $750 to $500, effective December 1, 2016. And at the hearing on the Motion, in a discussion with Edna, the court stated: "Ms. Buera, your income is so different. [Ernesto's] is so much lower than yours. There has to be some equalization down here to make things fair."
This effort to equalize the parties' respective income did not justify the court's modification of support from $750 to $500 for two reasons. First, section 4320, which presents a nonexclusive list of 13 factors—together with a catchall "[a]ny other factors" category (§ 4320, subd. (n))—does not preclude a court from considering, among other factors, the "[e]qualization of disposable income" of the parties. But this factor may not be used to the exclusion of other considerations, such as the supporting spouse's ability to pay, in fashioning a support modification order. (See In re Marriage of Shimkus, supra, 244 Cal.App.4th at p. 1273 [failure to consider and weigh all statutory factors in deciding request to modify spousal support constitutes abuse of discretion].) Second, the court's conclusion that an order reducing Ernesto's support obligation by $250 would promote the "[e]qualization of disposable income" is not supported by the record. Ernesto's monthly income was $1,845, while Edna's was $2,287. While a reduction of Edna's monthly income by modifying the spousal support amount from $750 to $500 brought Edna's monthly income closer to Ernesto's ($2,037 vs. $1,845, respectively), this $192 difference—representing more than 10 percent of his income—is not insignificant, given Ernesto's modest monthly income. In any event, considering, as the only factor, a reduction of spousal support to accomplish approximate parity between the income levels of the parties, without consideration of all factors identified in section 4320, including the magnitude of the changed circumstances or the supporting spouse's living expenses relative to his income, was not reasonable under the circumstances. (See In re Marriage of Reynolds, supra, 63 Cal.App.4th at p. 1377; In re Marriage of Smith, supra, 225 Cal.App.3d at p. 480.)
Three cases in which the trial court was found to have abused its discretion concerning a support modification request are illustrative. In In re Marriage of Reynolds, supra, 63 Cal.App.4th 1373, the trial court modified a prior spousal support order by reducing monthly support from $5,500 to $3,500 after the supporting party [Husband] retired at age 66. (Id. at pp. 1375-1376.) The support amount, as modified, "exceeded Husband's net income from any source." (Id. at p. 1380.) The appellate court reversed, holding that the order was "not base[d] . . . on an examination of the material change in circumstances caused by Husband's timely retirement . . . [and] incorrectly applied a 'capacity to earn' standard" (id. at pp. 1379), where there was "no evidence that Husband had any actual ability to work or that he refused any real jobs" (id. at p. 1378). Here, while the trial court correctly found a material change of circumstances, it failed to properly weigh and consider all relevant factors—including Ernesto's current income and living expenses as they related to his ability to pay support—to fashion a modification order that was reasonable. Instead, the court implicitly determined that Ernesto could afford to pay Edna monthly support of $500—paralleling the unfounded application upon Husband by the trial court in In re Marriage of Reynolds of a " 'capacity to earn' standard" (id. at p. 1379)—notwithstanding uncontroverted evidence that he could not.
In Philbin, supra, 19 Cal.App.3d 115, although the appellate court agreed that the supporting's spouse's substantial reduction in wages justified a downward modification of his support obligation, it found the court abused its discretion by ordering that, after six months, the reduction would automatically terminate and support would revert to its original level. The court in Philbin held that, where there was no evidence the supporting spouse's income would return to its original levels within six months, the trial court's order was "predicated on the grossest kind of speculation" that the supporting party's income would revert to its original, significantly higher levels. (Id. at p. 122.) Similarly, here, imposing a reduced support obligation of $500 upon Ernesto after finding a material change of circumstances was implicitly "predicated on the grossest kind of speculation" (ibid.) that he had the ability to pay monthly support of $500. With his monthly income drastically reduced to $1,845 as of the time of the hearing, Ernesto was operating at a monthly deficit of $2,207. It was thus "speculation" that he could access $500 to pay Edna as monthly support under these circumstances.
Lastly, in In re Marriage of Mosley, supra, 165 Cal.App.4th 1375, the trial court denied the supporting spouse's [Husband's] request to modify child and spousal support totaling $10,910, where he had lost his lucrative job as a law firm partner ($447,150) and had obtained work as in-house counsel for a construction firm at a salary of $205,000, with the possibility of a bonus during a period in which there was a depressed real estate market. (Id. at pp. 1380-1381.) The appellate court concluded it was error "to require [Husband] to pay nearly 100 percent of his take-home pay in support payments, on the assumption, based on only a one-year history with the homebuilder, that he would continue to receive a six-figure bonus each subsequent year. It placed him in a position of having to borrow for his living expenses, and thus resulted in a miscarriage of justice." (Id. at pp. 1386-1387.) Similarly, here, the requirement that Ernesto pay $500 in support when his living expenses greatly exceeded his monthly income—and where there was no evidence that (1) his claimed living expenses were inflated or otherwise improper, or (2) there was a likelihood that his income would imminently and significantly increase—resulted in a miscarriage of justice. It would require him to choose between housing and feeding himself and his family and paying support to Edna, from whom he had been divorced for 14 years.
From our careful review of the record, it does not appear that the trial court, in fashioning its Order reducing monthly spousal support from $750 to $500, properly exercised its discretion by "both recogniz[ing] and apply[ing] each applicable statutory factor in setting spousal support. [Citations.]" (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 304, italics omitted; see also In re Marriage of Shimkus, supra, 244 Cal.App.4th at p. 1273.) Because " 'after calm and careful reflection upon the entire matter, it can fairly be said that no judge would reasonably make the same order under the same circumstances' " (In re Marriage of Reynolds, supra, 63 Cal.App.4th at p. 1377), we find that the court abused its discretion by reducing spousal support from $750 to $500 per month.
3. Nonretroactivity of Support Modification Order
The trial court ordered the reduction of spousal support from $750 to $500 to be effective December 1, 2016, three months after the hearing date. It made no findings concerning its reasons for not choosing an earlier effective date for the reduction order.
The court initially announced that spousal support would be reduced effective November 2016. Shortly afterward in the hearing it changed the effective date to December 2016.
Under section 3653, subdivision (a), the court has the discretion to make an order modifying or terminating a support order retroactive to the date of filing of the motion or order to show cause. (See In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 300 [court exercises its discretion in deciding whether to make modification of child support order retroactive based upon "children's then current needs, as measured by the parents' ability to provide support"].) But when the "order modifying or terminating a support order is entered due to the unemployment of . . . the support obligor . . . , the order shall be made retroactive to the later of the date of the service on the opposing party of the notice of motion or order to show cause to modify or terminate or the date of unemployment, . . . unless the court finds good cause not to make the order retroactive and states its reasons on the record." (§ 3653, subd. (b), italics added.) Thus, "[t]he language of the statute thus requires the court to make retroactive the order modifying or terminating support due to the parent's unemployment, unless it makes a specific finding of good cause and specifies on the record its reasons for denying retroactivity." (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 557, original italics.)
The trial court did not state its reasons on the record for making the reduction in spousal support nonretroactive. Indeed, it did not specify any reasons for failing to make the Order effective until three months after the hearing date. And the Order contains no reasons for making the support reduction nonretroactive. The court therefore abused its discretion under section 3653, subdivision (b). The Order should have made any support reduction retroactive to the later of Ernesto's date of retirement from the USPS or the date of service of his motion. Since neither date appears in the record before us, the court below on remand is directed, unless it makes a specific good-cause finding under section 3653, subdivision (b), to determine the proper date of retroactivity of any new order modifying support.
4. Denial of Request for Termination of Support
As a final matter, we determine whether the court abused its discretion by failing to terminate spousal support altogether.
As we have discussed, ante, the trial court abused its discretion by reducing the spousal support amount from $750 to $500. Ernesto presents a strong case for termination of support, based upon, among other factors, his (1) age (59 at the time of the Motion); (2) medical condition; (3) involuntary retirement from the USPS; (4) lack of job history outside of being a mail carrier (which occupation he could no longer perform due to his partial blindness) and being a correctional officer (from which job he previously retired due to disability); (5) monthly income having been reduced by a factor of two-thirds; (6) lack of investment income or other financial resources; and (7) level of living expenses being greatly in excess of his monthly income.
There was some evidence in the record, however, that Ernesto's financial circumstances might be in flux, given, for example, that an appeal of the denial of his application for federal disability benefits was pending. While, under the circumstances, it would not have been an abuse of discretion to terminate support, we cannot say that, particularly in light of Edna's poor financial condition, the denial of a request for termination of support constituted an abuse of discretion.
D. Denial of Motion to Quash Earnings Assignment Order (H044783)
We have concluded that the Support Modification Order challenged in case No. H044217 must be reversed and the case must be remanded for reconsideration of the Motion. The related appeal in case No. H044783 involves a challenge to the order of May 12, 2017, denying Ernesto's motion to quash the earnings assignment order issued and served upon CalPERS. While we do not have the subject earnings assignment order before us—issued after entry of the Support Modification Order—it authorized an attachment of Ernesto's CalPERS monthly retirement benefits to satisfy spousal support obligations to Edna. Since the nature and extent of Ernesto's spousal support obligations are as yet undetermined and must be established upon remand of the case, we reverse the order denying the motion to quash in case No. H044783 for its reconsideration by the trial court in conjunction with its reconsideration of the Motion.
III. DISPOSITION
The October 18, 2016 order modifying spousal support at issue in appeal No. H044217, is reversed and the trial court is directed to vacate said order. The May 12, 2017 order denying motion to quash earnings assignment order at issue in case No. H044783, is reversed and the trial court is directed to vacate said order.
Upon remand, in connection with Ernesto's August 1, 2016 request for order modifying spousal support, the trial court is directed (1) to confirm its finding of the existence of a material change of circumstances, (2) to reconsider Ernesto's request for order modifying spousal support by considering and weighing all relevant factors under Family Code section 4320, and (3) to determine (unless it makes a good-cause finding under Family Code section 3653, subdivision (b)) the proper date of retroactivity of any new order modifying spousal support. The trial court, after addressing and deciding Ernesto's request for order modifying spousal support, shall then reconsider Ernesto's motion to quash earnings assignment order.
/s/_________
BAMATTRE-MANOUKIAN, J. WE CONCUR: /s/_________
ELIA, ACTING P.J. /s/_________
MIHARA, J.