Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No. DN114552, Eugenia Eyherabide, Judge.
O'ROURKE, J.
William Wright appeals from a postjudgment order modifying the spousal support awarded to his former wife, Donna Wright, from $1,705 to $1,500 per month. He contends the family court erred in determining his spousal support obligation when it declined to consider all of his former wife's income — including retirement income — and her lack of effort to obtain employment in view of a prior warning that she must make efforts to do so. We reverse the order and remand with directions that the court redetermine William's modification motion taking into consideration the changed circumstances of Donna's actual receipt of retirement income, as well as William's expectation that Donna will take reasonable steps to become self-supporting, and her efforts and ability to do so.
FACTUAL AND PROCEDURAL BACKGROUND
As is conventional in family law matters and not out of disrespect, we refer to the parties by their first names. Donna has not filed a brief in this appeal. We may nevertheless decide the case based on William's opening brief and the record, which we elect to independently examine. (Cal. Rules of Court, rule 8.220(a)(2); see In re Bryce C. (1995) 12 Cal.4th 226, 232-233 [decided under former rules of court]; In re Conservatorship of Pamela J. (2005) 133 Cal.App.4th 807, 816.) Because William has not requested oral argument, "we examine the record as augmented on the basis of [his] opening brief and ' "reverse only if prejudicial error is found." ' " (Pamela J., at p. 816.)
William and Donna married in September 1989 and separated in March 2000, at which time divorce proceedings commenced. Based on the parties' stipulation, in February 2001 the family court ordered William to pay Donna $2,900 per month in spousal support.
Following a short cause trial, the parties in June 2003 entered into a marital settlement agreement incorporated into a judgment in which William was ordered, inter alia, to pay Donna $2,500 per month in spousal support. The court ordered that William's various retirement accounts and defined benefits from his employers, BAE and General Dynamics/Hughes/Raytheon, be divided between the parties under specified formulas.
In early 2006, William filed an order to show cause to modify the spousal support order. After a contested hearing, the family court issued a statement of decision finding there had been a change in circumstances by virtue of William's increased income since entry of the June 2003 judgment, Donna's eligibility for Social Security, and Donna's ability to make withdrawals from certain retirement accounts. The court then considered factors under Family Code section 4320, including the parties' respective standards of living and the availability of amounts invested in retirement accounts. However, the court declined to consider Social Security funds available to Donna in its calculation because they would be subject to a 20 percent penalty if withdrawn. Nor did it consider Donna's employment income because William had not requested a vocational evaluation or asked the court to impute income to Donna. On these findings, the court modified Donna's spousal support to $1705 per month. Further, finding Donna had not been sufficiently warned about her obligation to contribute to her own support by seeking and obtaining employment (In re Marriage of Gavron (1988) 203 Cal.App.3d 705 (Gavron)), the court issued such a warning, stating that Donna "is capable of a degree of self support [and]... she should make reasonable efforts to assist in providing for her own need for support, and to do so within the one year. The failure to do so may serve as cause to modify or terminate spousal support."
Statutory references are to the Family Code unless otherwise indicated.
In December 2007, William again petitioned for modification of the June 2003 spousal support order, specifically asking the court to terminate his support obligation. In an accompanying declaration, he asserted he had retired since the last hearing; that his income had decreased and Donna's had increased because she was entitled to receive monthly payments from BAE and Raytheon for her interest in his defined benefits plans. He asserted that Donna had $224,000 in liquid assets. Williams further asserted that "on information and belief, [Donna] continues to refuse to take employment." He asked the court to impute a minimum wage income to Donna and to consider her increased income and his decreased income, her ability to take Social Security, as well as her "refusal" to assist in her own support, and argued all of these circumstances justified termination of spousal support.
Donna filed her response on the day before the hearing, stating she had been diagnosed with fibromyalgia and could not work, and was being treated for depression, arthritis, and degenerative neck disease. She stated she would be getting $67.18 a month from Raytheon and was awaiting benefits from other companies with the amounts unknown. She asserted William had inherited a substantial sum of money from both of his aunts and had taken an early retirement at age 55, and asked the court to compel William to work until age 65. In her income and expense declaration, Donna reported she was receiving $745 each month for "[p]ension/retirement fund payments" and $693 in Social Security retirement payments.
William objected to the family court's consideration of Donna's late filed papers. When the court declined to strike them, he elected to proceed rather than accept the court's invitation to seek a continuance and received the court's permission for "liberality" in response. Following arguments on the matter, the family court recited the procedural history, noted Donna had been given the prior Gavron warning and the fact there was no evidence that she had made any attempt to support herself, and summarized Donna's diagnoses as reflected in her medical records. The court stated it had factored her health into its decision. It declined to consider William's retirement status, observing the record contained no indication why he had retired at age 57. As for the parties' receipt of retirement benefits, the court observed during arguments that "[e]verybody knew [Donna] would be getting the BAE retirement" and stated, "[B]ased on the evidence, there has been no significant change presented in terms of the parties' prior accounts, in terms of each of them receiving whatever retirement funds they were to receive. That's not a significant change in circumstances, that at some time they would be receiving those various retirement accounts." The court found that the only significant change was Donna's receipt of an additional $693 in Social Security. It concluded: "On the one hand, the Court is hesitant to modify based on that, because I presume that Ms. Wright — when Mr. Wright comes and starts receiving Social Security, that would entitle her to a modification. But it is a significant change that was not considered by the previous court. [¶] So in light of the fact that the Court did admonish Ms. Wright that she would be subject to modification, it only seems appropriate that the Court do so. [¶] Therefore, considering all the evidence presented in this case – the parties' ages, parties' ability to work, the fact that Ms. Wright does have some form of chronic pain, the Court will reduce spousal support to the amount of $1,500 a month. Each party will be responsible for their own attorney's fees."
The family court's ensuing minute order states: "Petitioner's Request for a Statement of Decision is denied. Based on the evidence presented there is no significant change of circumstances in Petitioner's income. Petitioner's income as previously imputed is used at this time. [¶] The Respondent is receiving additional income of $696.00 per month from Social Security. The Court has considered all [Family Code section] 4320 factors. Spousal support is reduced to $1500.00 per month paid by Petitioner to Respondent."
DISCUSSION
I. Standard of Review/Applicable Legal Principles
A trial court's order modifying a spousal support award is reviewed for abuse of discretion. (In re Marriage of Shaughnessy (2006) 139 Cal.App.4th 1225, 1235 (Shaughnessy).) "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." (Marriage of Schmir (2005) 134 Cal.App.4th 43, 47, fn. omitted.) Under the abuse of discretion standard, we do not disturb the trial court's ruling unless, "considering all the relevant circumstances, the court has 'exceeded the bounds of reason' or it can 'fairly be said' that no judge would reasonably make the same order under the circumstances." (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 480.)
" 'In exercising discretion whether to modify a spousal support order, "the court considers the same criteria set forth in section 4320 as it considered when making the initial order.... " ' " (Shaughnessy, supra, 139 Cal.App.4th at p. 1235, quotingIn re Marriage of Bower (2002) 96 Cal.App.4th 893, 899; In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 77-78.) The section 4320 criteria include the extent to which each party's earning capacity is sufficient to maintain the standard of living established during the marriage taking into account the supported party's marketable skills and periods of unemployment; the supporting party's ability to pay spousal support; the parties' respective needs based on the marital standard of living, obligations and assets including their separate property; their ages and health; the duration of the marriage; and the supported spouse's ability to engage in gainful employment. (§ 4320, subds. (a)-(h); In re Marriage of Stephenson, at p. 78; In re Marriage of Baker (1992) 3 Cal.App.4th 491, 496.) The court must also consider the "balance of the hardships" to the parties and "[a]ny other factors [it] determines are just and equitable." (§ 4320, subds. (k), (n).)
In full, section 4320 states: "In ordering spousal support under this part, the court shall consider all of the following circumstances: [¶] (a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following: [¶] (1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment. [¶] (2) The extent to which the supported party's present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties. [¶] (b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party. [¶] (c) The ability of the supporting party to pay spousal support, taking into account the supporting party's earning capacity, earned and unearned income, assets, and standard of living. [¶] (d) The needs of each party based on the standard of living established during the marriage. [¶] (e) The obligations and assets, including the separate property, of each party. [¶] (f) The duration of the marriage. [¶] (g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party. [¶] (h) The age and health of the parties. [¶] (i) Documented evidence of any history of domestic violence, as defined in Section 6211, between the parties, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party, and consideration of any history of violence against the supporting party by the supported party. [¶] (j) The immediate and specific tax consequences to each party. [¶] (k) The balance of the hardships to each party. [¶] (l) The goal that the supported party shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336, a 'reasonable period of time' for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court's discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties. [¶] (m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4325. [¶] (n) Any other factors the court determines are just and equitable."
II. Donna's Retirement Income
William challenges the family court's finding that Donna's receipt of retirement income was not a changed circumstance; he contends the court's reasoning — that the "fact" of her receipt of such income was known at the time of the judgment — is flawed under Marriage of Schmir, supra, 134 Cal.App.4th 43. He concedes the family court possesses broad discretion on the issue of spousal support, but points out an abuse of discretion occurs when the court fails to consider and apply the statutory factors in setting spousal support. He asks us to remand the matter to require the family court to consider the availability and amount of Donna's retirement income as a mandatory factor under section 4320. William's argument has merit.
In Marriage of Schmir, the family court ruled that a former wife's ability to draw from an individual retirement account (IRA) was one of three separate changes in circumstances for purposes of the former husband's petition to terminate spousal support. (In re Marriage of Schmir, supra, 134 Cal.App.4th at pp. 46, 50-51.) The wife challenged that finding on appeal, contending that her ability to make such penalty free withdrawals was not a change in circumstances "because the parties must have contemplated when they entered into their support agreement in 1989 [she] would reach the age when she could begin making withdrawals from the account without penalty" and "[t]herefore her reaching the requisite age is not a change in circumstance but merely an aspect of the same circumstance existing at the time of the original support order in 1989." (Id. at p. 51.)
The Court of Appeal rejected that argument and held the family court's conclusion was supported by substantial evidence, reasoning that the wife's theory "would mean that as a matter of law the supporting spouse's attainment of retirement age could never constitute a change of circumstance for purposes of a motion to modify a support order." (In re Marriage of Schmir, supra, 134 Cal.App.4th at p. 51.) The appellate court found the fact the account had grown to more than double its original size since the parties' property settlement was also a change in circumstance. (Ibid.) It noted wife's ability to withdraw such funds constituted a change in circumstances when the circumstance being considered was the assets available to her to provide for her own support; whether she could be required to draw on her retirement fund in lieu of spousal support was a separate question. (Id. at p. 51 & fn. 15.) Ultimately, the Court of Appeal held the family court did not abuse its discretion in terminating spousal support, imputing certain income to wife, and requiring her to withdraw any shortfall from her IRA because the withdrawals were penalty free and she would not have to significantly draw from the principal to compensate her for the lost support income. (Id. at pp. 51-53.)
Here, the trial court employed the same flawed reasoning that the court rejected in In re Marriage of Schmir when it declined to consider Donna's actual receipt of BAE or any other retirement income as a material change in circumstance. "A supported spouse's need is an essential element in determining entitlement to support independent of the other spouse's ability to pay." (In re Marriage of Beust (1994) 23 Cal.App.4th 24, 30, citing In re Marriage of Hoffmeister (1984) 161 Cal.App.3d 1163, 1175; see also In re Marriage of Bower, supra, 96 Cal.App.4th at p. 899 [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]; In re Marriage of Terry (2000) 80 Cal.App.4th 921, 936-937.) Donna did not dispute that she was then receiving monthly payments of $745 in retirement income, and she did not challenge William's counsel's assertions at oral argument that that sum was from BAE alone. Having granted leniency to William's counsel in responding to Donna's late-filed papers, the family court was entitled to credit his statements. Donna's actual receipt of such income, as in Schmir, should have been considered in the assessment of Donna's needs and her respective ability to meet her needs (In re Marriage of Stephenson, supra, 39 Cal.App.4th at p. 76)as income available to provide for her own support. The family court's finding that it was not a material change in circumstance is simply not supported by the evidence.
In reaching this conclusion, we are cognizant that the family court nevertheless found a material change of circumstances by reason of Donna's receipt of Social Security income and reduced William's monthly spousal support payment to $1500. " ' "In balancing the applicable statutory factors [under section 4320], the trial court has discretion to determine the appropriate weight to accord to each. [Citation.] But the '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." ' " (In re Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1297.) Here, "the record provides inadequate grounds to accord the usual deference to the court's exercise of discretion in making the award of spousal support" primarily because the court did not base its findings on substantial evidence. (Geraci, at p. 1299 & fn. 34; Shaughnessy, supra, 139 Cal.App.4th at p. 1235 [in exercising its discretion whether or not to modify spousal support, trial court must base its findings on substantial evidence]; see also In re Marriage of Beust, supra, 23 Cal.App.4th at p. 31.) Because the court did not consider additional changed circumstances relating to Donna's needs consisting of her undisputed receipt of retirement or defined benefit income from BAE and Raytheon, on remand it must reconsider the matter in light of those circumstances.
III. Donna's Employment Efforts
Pointing out that in December 2006, the family court had warned Donna to make efforts to become self supporting under Gavron, supra, 203 Cal.App.3d 705, William contends the family court did not give adequate weight to Donna's failure to seek or obtain work as a basis to modify support; he argues the failure to become self-supporting is a distinct ground to modify spousal support. William states if Donna's ability to earn were limited to the minimum wage of $1,370 per month, her monthly income — including her Social Security income and retirement income of $745 from BAE and $67 from Raytheon — would more than meet her monthly need of $2,940.
As stated, section 4320 requires the court to consider "[t]he goal that the supported party shall be self-supporting within a reasonable period of time." (§ 4320, subd. (l).) "As recognized by our Supreme Court the public policy of this state has progressed from one which 'entitled some women to lifelong alimony as a condition of the marital contract of support to one that entitles either spouse to postdissolution support for only so long as is necessary to become self-supporting.' " (In re Marriage of Schmir, supra,134 Cal.App.4th at p. 54, citing In re Marriage of Pendleton & Fireman (2000) 24 Cal.4th 39, 53, fn. omitted.) In keeping with these principles, "[a] trial court acts within its discretion in denying spousal support where the supported spouse has failed to diligently seek employment sufficient to become self-supporting.... There is no requirement that the failure to exercise diligence in seeking gainful employment has been in bad faith." (Shaughnessy, supra, 139 Cal.App.4th at p. 1238.) "Further, a material change of circumstances warranting a modification of spousal support may stem from unrealized expectations embodied in the previous order. [Citation.] Specifically, changed expectations pertaining to the ability of a supported spouse to become self-supporting may constitute a change of circumstances warranting a modification of spousal support. [Citation.] Thus, if a court's initial spousal support award contemplates that a supported spouse will take some action to decrease the need for spousal support following the issuance of the order and the supported spouse fails to take that action, the court may modify the award on the ground of changed circumstances." (Ibid.)
While the family court expressly took Donna's medical records and health issues into account, it gave little to no weight to the "goal that [Donna] become self-supporting within a reasonable period of time." The court made no inquiry into Donna's efforts to become self-supporting, though it was undisputed she had been clearly admonished to do so a year earlier. The purpose of the Gavron warning was to give Donna notice that she should make good faith efforts to become self-supporting, and to prevent unfair surprise from a later ruling reducing or terminating support. (In re Marriage of Gavron, supra, 203 Cal.App.3d at p. 712.) Apparently placing the burden of proof on William, the court found an asserted lack of evidence; it stated therewas "no evidence whatsoever presented as to whether there was any attempt made or any efforts to support herself." In providing its reasoning, the court pointed out Donna's medical records did not "specifically say whether [her conditions] would deter her from working a small job, a home job," though it stated it "factored all that in its decision.... Again, there wasn't any evidence to specify what that means in reference to this court order in terms of failure to do so that would serve as cause to modify."
After Gavron was decided, the Legislature enacted section 4330, subdivision (b), which gives the court discretion to advise the supported spouse "that he or she should make reasonable efforts to assist in providing for his or her support needs," unless "in the case of a marriage of long duration... the court decides this warning is inadvisable." Plainly, in December 2006, the family court had already determined that the Gavron warning was appropriate notwithstanding the fact William and Donna's 10-year, six-month marriage was of long duration.
However, William was entitled to an expectation, in view of the December 2006 Gavron admonition acknowledging Donna was "capable of a degree of self-support," that Donna would take reasonable steps to become self-supporting. (See Shaughnessy, supra, 139 Cal.App.4th at p. 1240.) " '[T]he question of reasonable expectations is material and a failure to realize them may constitute a change of circumstances justifying modification of the order.' " (In re Marriage of Beust, supra, 23 Cal.App.4th at p. 29.) The family court did not credit William's reasonable expectation, and it made no factual or legal findings as to Donna's efforts or ability to earn a wage. We are unable to imply findings necessary to support the family court's order (such as a finding that Donna was not at fault for failing to take such steps because her health renders her unable to work), because as we explain more fully below, the court did not meet its obligation to provide a statement of decision despite William's timely request. (§ 3654; In re Marriage of Sabine M. and Toshio M. (2007) 153 Cal.App.4th 1203, 1219 [court will imply findings if parties waive statement of decision]; In re Marriage of Sellers (2003) 110 Cal.App.4th 1007, 1010 ["A statement of decision is as much, or more, for the benefit of the Court of Appeal as for the parties. It 'is a touchstone to determine whether or not the trial court decision is supported by the facts and the law' "]; see Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2008) ¶ 15:101, p. 15-21.) Because we cannot conclude the family court considered William's expectation that Donna would take reasonable steps to obtain gainful employment, remand on that issue is necessary as well. On remand, the family court is directed to consider whether that fact constitutes an additional material change of circumstances.
IV. Statement of Decision
In the conclusion section of his brief, William argues he had a right to a finding on Donna's refusal to seek employment, and that the family court's refusal to give a statement of decision on his modification motion was an abuse of discretion. He provides no legal argument or authorities on the point, and on that ground we would normally deem the argument abandoned. (In re Marriage of Mosley (2008) 165 Cal.App.4th 1375, 1392-1393.) However, as we have stated, the absence of a statement of decision impacts our ability to imply findings and assess the family court's ruling for factual and legal support. In any event, because we are remanding the matter for reconsideration of William's motion in light of the additional changed circumstances and mandatory factors identified above, we more fully address the point for the family court's guidance on remand in the event either party timely requests a statement of decision.
During the course of the hearing on William's modification motion and prior to the family court's ruling, William's counsel requested a statement of decision. Pointing out the matter was on a "20-minute calendar," the court denied William's request for a statement of decision on grounds it was "not appropriate and not made pursuant to Code of Civil Procedure section 632."
Code of Civil Procedure section 632 provides in part: "The court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial. The request must be made within 10 days after the court announces a tentative decision unless the trial is concluded within one calendar day or in less than eight hours over more than one day in which event the request must be made prior to the submission of the matter for decision. The request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision.... [¶] The statement of decision shall be in writing, unless the parties appearing at trial agree otherwise; however, when the trial is concluded within one calendar day or in less than 8 hours over more than one day, the statement of decision may be made orally on the record in the presence of the parties."
The ruling was incorrect. Section 3654 provides: "At the request of either party, an order modifying, terminating, or setting aside a support order shall include a statement of decision." Though the statute does not specify when such a request must be made, a request under this provision has been held timely when, as was the case here, it is made before the trial court renders its decision. (In re Marriage of Sellers, supra, 110 Cal.App.4th at pp. 1010-1011.) Sellers held that on timely request, the family court is obligated to prepare a statement of decision (or designate either party to prepare it) regardless of Code of Civil Procedure section 632 and California Rules of Court that preclude statements of decision for trials completed within one day. (Sellers, supra, 110 Cal.App.4th at p. 1010 [section 3654 reflects Legislature's acknowledgment of the benefit of a statement of decision in connection with modification orders]; seeCal. Rules of Court, rule 3.1590.) Under this provision, when the trial court fails to render a statement of decision, it is reversible error. (In re Marriage of Cauley (2006) 138 Cal.App.4th 1100, 1109; Sellers, supra, 110 Cal.App.4th at p. 1010.)
DISPOSITION
The order is reversed and the matter remanded for redetermination of William's motion for modification of spousal support. The family court is directed to consider the changed circumstances of Donna's actual receipt of retirement income, as well as Williams' expectation that Donna will take reasonable steps to become self-supporting, and her efforts to do so. William shall recover his costs on appeal.
WE CONCUR: BENKE, Acting P. J., HUFFMAN, J.