Opinion
NOT TO BE PUBLISHED
Appeal from a postjudgment order of the Superior Court of Orange County, No. 04D010972 Thomas R. Murphy, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed.
Law Offices of William J. Kopeny and William J. Kopeny for Appellant.
Law Offices of Marjorie G. Fuller, Marjorie G. Fuller, J.E.T. Rutter, Lisa R. Wiley; Ferruzzo & Ferruzzo and Wayne L. Jones for Respondent.
OPINION
RYLAARSDAM, ACTING P. J.
This appeal is related to In re Marriage of Pilz (Oct. 15, 2010, G040955, [nonpub. opn.]). That case involves an appeal by Bradford J. Pilz (husband) from the judgment dissolving his marriage to Colleen P. Pilz (wife) and challenges the trial court’s characterization and division of certain assets. In this appeal, wife challenges a postjudgment order reducing the amount of child and spousal support. Since husband’s motion to modify support was not supported by a showing of a change of circumstances, we reverse the postjudgment order.
FACTS AND PROCEDURAL BACKGROUND
In January 2005, after the filing of the underlying action, the trial court entered an order directing husband to pay temporary child support of $7,056 each month for the couple’s two minor children, plus monthly spousal support of $14,018.
Trial of the issues raised in the underlying action was bifurcated and a hearing on certain issues began in late January 2007. After five days, the matter was continued to mid-April. At that time, the court held two more days of hearings. During this time, the parties submitted a written stipulation providing wife’s monthly earning capacity “for purposes of calculating support” was $2,750.
At the mid-April portion of the bifurcated hearing, husband testified 70 percent of the revenues earned by his business Promark Advertising, Inc. (Promark) came from a company named Honeywell and the company had informed him that, except for a six-event program, it would terminate the contract with Promark at the end of 2006. Husband said he was attempting “to replace the Honeywell account, ” but had not yet been successful in doing so.
On June 22, the court issued its initial statement of decision on the bifurcated issues. It “adopt[ed] the analysis of [husband’s forensic accountant]... that [his] cash flow... available for support amounts to $48,460 [per month].” The court also agreed to implement the parties’ “de facto [child custody] arrangement” giving wife primary custody of the children.
Over the next several months, the court issued at least three additional statements of decision clarifying its original findings and responding to additional issues presented by the parties. In an August 2007 response to wife’s inquiry concerning the court’s valuation of Promark, the court stated it accepted husband’s “March 31, 2005” valuation, “plus additional information re the loss of the Honeywell account.” Thereafter, the court directed the parties to submit written closing arguments on the remaining issues in the case.
In January 2008, husband filed two pleadings. One was a motion to reopen the evidentiary hearing on his “current income and cash flow... for support... and... the income of [wife] in light of the court[’]s tentative decision as to characterization and potential allocation of income producing assets.” (Capitalization omitted.) The second sought to reduce the 2005 temporary child and spousal support orders. Husband’s supporting declaration stated, “Since learning [about the loss of the Honeywell account], I have made every effort to seek replacement business and revenues, without substantial success, ” and “[i]t was not until November 2007 that negotiations for new or greater business... had clearly failed.” Wife opposed both requests.
The court conducted a hearing on these matters on April 2 and denied husband’s motion to reopen. With the parties’ agreement, it reserved jurisdiction to modify the temporary support orders retroactive to January 2008. The trial judge further noted “‘it was anticipated that [husband] would be filing a [m]otion re [m]odification of the [p]ermanent [c]hild and [s]pousal [s]upport [a]ward... after receipt of said award’” and that the court “‘would make [its] determination re the anticipated motion to modify... de novo....’”
The court issued a statement of decision on the remaining issues and, on June 30, entered final judgment. Citing the parties’ stipulation concerning wife’s earning capacity and the court’s prior finding husband’s monthly cash flow is $48,460, the judgment ordered husband to pay wife $7,078 per month for permanent child support and $10,000 per month for permanent spousal support commencing May 1, 2008.
Husband timely appealed from the judgment. But, as noted, he limited it to issues concerning the trial court’s characterization and division of certain assets.
In July, husband filed an order to show cause to modify the permanent support orders. The court conducted an evidentiary hearing on this request October 1 and 2. It directed the parties file written arguments.
On December 14, the court issued a statement of decision. The court summarized its prior rulings, acknowledging that “[i]n retrospect, the determination of [husband’s] [c]urrent [c]ash [f]low [a]vailable for [s]upport should have been deferred to a time closer to when support was determined, ” but “[c]onsidering [its] prior comments” plus the parties’ stipulation, the court “concluded that the issues of child and spousal support... should be considered de novo....”
The court then reduced husband’s monthly child support obligation to $2,733 effective as of February 1, 2008. It also reduced husband’s spousal support obligation to $1,500 per month as of the same date. Wife filed a request for a further statement of decision on 12 issues. After issuing a second statement of decision on certain issues, the court entered its formal order on April 10, 2009.
DISCUSSION
1. Standard of Review
“A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness. [Citations.]” (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) In an appeal from an order modifying a child or spousal support award, “[w]e begin with the proposition that a support order is reviewed for an abuse of discretion. [Citation.] Thus, we consider only ‘whether the court’s factual determinations are supported by substantial evidence and whether the court acted reasonably in exercising its discretion.’ [Citation.]” (In re Marriage of Berger (2009) 170 Cal.App.4th 1070, 1079.)
2. Material Change of Circumstances Supporting Modification of the Support Awards
Wife claims the support modification orders are invalid because the trial court could not modify the previous orders “absent a change of circumstances, which the moving party bears the burden of proving.” Husband disputes this argument citing “the unique procedural problems in this case, ” and arguing that “there was an actual change in circumstances, the reduction of [his] income....”
Contrary to husband’s claim, the unique procedural posture of this case did not constitute a basis for avoiding the requirement that a change of circumstances be established to permit modification of either the spousal or child support orders. (In re Marriage of Dietz (2009) 176 Cal.App.4th 387, 396; In re Marriage of Williams (2007) 150 Cal.App.4th 1221, 1234.) “A motion for modification of... support may only be granted if there has been a material change of circumstances since the last order. [Citation.] Otherwise, dissolution cases would have no finality and unhappy former spouses could bring repeated actions for modification with no burden of showing a justification to change the order. Litigants ‘“are entitled to attempt, with some degree of certainty, to reorder their finances and life style [sic] in reliance upon the finality of the decree.”’ [Citations.] Absent a change of circumstances, a motion for modification is nothing more than an impermissible collateral attack on a prior final order. [Citation.]” (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 480.)
Husband argues “there was plainly a change in [his] circumstances from the [July 2007] date specified in the judgment as the one on which the support order was based... to the [October 2008] date of the modified order....” First, this argument is contrary to the trial court’s rulings. It ruled “the issues of child and spousal support... should be considered de novo....” Second, the date when the court initially made its findings on husband’s monthly income and the date of the postjudgment order is not the relevant time period. “Modification of a spousal support order may be made only on a showing of a material change in circumstances after the last order. [Citations.]” (In re Marriage of Tydlaska (2003) 114 Cal.App.4th 572, 575.) The same is true for child support. (In re Marriage of Catalano (1988) 204 Cal.App.3d 543, 548-549.)
Husband could have challenged the trial court’s original support orders in his appeal from the judgment. “Trial courts have broad discretion in deciding whether to reopen the evidence. [Citation.]” (Horning v. Shilberg (2005) 130 Cal.App.4th 197, 208.) But “[a] motion to reopen a case for further evidence can be granted only on a showing of good cause. [Citation.]” (Ensher, Alexander & Barsoom, Inc. v. Ensher (1964) 225 Cal.App.2d 318, 326.)
In this case, husband timely moved to reopen the trial to allow the presentation of new evidence concerning his “current income and cash flow... for support....” (Capitalization omitted.) In addition, the necessary showing of good cause was satisfied. Trial of this matter covered more than a year. Husband testified as early as April 2007 that Promark, his primary business, might be suffering a significant reduction in income due the loss of its major client. In support of his January 2008 motion, husband submitted a declaration reporting his efforts to find new customers had not succeeded. The court did not even rule on this request for another three months.
In Foster v. Keating (1953) 120 Cal.App.2d 435, when trial began the court directed the parties to focus on the nature of their business relationship and ruled it would only conduct an accounting of the financial aspects of their relationship if it was ultimately required. As a result, the defendant refrained from presenting much of his evidence related to the parties’ financial transactions. At the end of trial, the court found the defendant had breached a duty of trust to the plaintiff and proceeded to award both compensatory and punitive damages without performing an accounting.
The appellate court reversed, finding the trial court abused its discretion by denying the defendant’s motion to reopen the evidence. “‘A party is entitled to have received in evidence and considered by the court, before findings of fact are made, all competent, material, and relevant evidence which tends to prove or disprove any material issue raised by the pleadings. [Citations.]’ [Citation.] It is within the sound discretion of the trial court to define the issues and direct the order of proof but that may not be so done as to preclude a party from adducing competent, material, and relevant evidence which tends to prove or disprove any material issue. [Citations.]” (Foster v. Keating, supra, 120 Cal.App.2d at pp. 451-452; Estate of Horman (1968) 265 Cal.App.2d 796, 808-809.)
In this case, the 2005 temporary support order was based on a finding husband had a monthly income of $55,000. The permanent award contained in the judgment was based on a finding his monthly cash flow exceeded $48,000. At the hearing on his order to show cause, the evidence reflected the negative impact from Promark’s loss of the Honeywell account reduced husband’s monthly income to less than $19,000. Husband did appeal from the judgment, but he did not challenge the trial court’s findings on the award of child and spousal support. Given the delays in this case and his changing financial circumstances, had husband raised this claim in his appeal, we would have likely found the court erred in denying him the opportunity to reopen the case as it related to his ability to pay support. But, having failed to do so, husband waived that claim.
Under these circumstances, we conclude the trial court abused its discretion by modifying the child and spousal support orders without finding a material change in circumstances since entry of the judgment.
DISPOSITION
The postjudgment order is reversed. Appellant shall recover her costs on appeal.
WE CONCUR: BEDSWORTH, J., O’LEARY, J.