From Casetext: Smarter Legal Research

Phillips v. Phillips (In re Marriage of Phillips)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
Nov 17, 2017
No. D070470 (Cal. Ct. App. Nov. 17, 2017)

Opinion

D070470

11-17-2017

In re the Marriage of RICHARD and JENNIFER PHILLIPS. RICHARD PHILLIPS, Appellant, v. JENNIFER PHILLIPS, Respondent.

Hargreaves & Taylor and Elizabeth A. Kreitzer for Appellant. Stephen Temko for Respondent.


NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. DN178387) APPEAL from an order of the Superior Court of San Diego County, Christine Goldsmith, Judge, retired. Affirmed. Hargreaves & Taylor and Elizabeth A. Kreitzer for Appellant. Stephen Temko for Respondent.

Richard Phillips (Father) petitioned for $12,000 in monthly child support from his former wife, Jennifer Phillips (Mother). After an evidentiary hearing, the court ordered Mother to pay $416 in monthly child support.

On appeal, Father challenges the support amount. Father contends the court erred by: (1) failing to calculate Mother's income based on the entire monthly cash amount she receives from her parents (Maternal Grandparents), rather than only a portion of that amount; and (2) declining to find special circumstances supported an upward deviation from the statutory guidelines. We reject these contentions and affirm.

FACTUAL AND PROCEDURAL SUMMARY

Background

Mother and Father married in 2006, and their three children were born during the next three years. They separated in April 2014. Their May 2015 dissolution judgment incorporated a marital settlement agreement providing for equal child custody but leaving open the child support issue.

Less than two weeks later, Father petitioned for "at least $12,000" in monthly child support. Father argued that although Mother earns minimal income, she lives in a $4.5 million Rancho Santa Fe home on 2.3 acres (where the parties lived before separation); she receives substantial cash payments from her parents and their companies; and she spends about $331,309 on annual living expenses. Father argued the court should impute $170,000 in annual income to Mother based primarily on the Maternal Grandparents' cash gifts, and/or use its discretionary authority to deviate from the statutory guidelines because Mother has substantial separate property assets and the parties have unequal housing expenses and living situations.

Mother opposed the petition, arguing the Maternal Grandparents' cash gifts reflected a loan and thus should not be counted for purposes of her income; she does not own the Rancho Santa Fe home and instead it is owned by a trust from which she receives no income; Father has been intentionally suppressing his earnings and available assets; Father has been receiving monetary assistance from his mother; and there are no justifiable grounds for departing from the statutory guidelines.

Evidentiary Hearing

A hearing was held in January 2016. Both parties testified at the hearing, and both submitted their own declarations (which they stipulated could be considered by the court) and extensive documentary evidence. Viewed in the light most favorable to the court's factual conclusions, the evidence established the following.

The hearing was held before retired Superior Court Judge Christine Goldsmith, who had been retained as a privately compensated temporary judge and served in the status of a judicial officer. (See Cal. Const., art. 6, § 21; Cal. Rules of Court, rules 2.830-2.834; Kajima Engineering and Construction, Inc. v. Pacific Bell (2002) 103 Cal.App.4th 1397, 1401.) For simplicity we refer to Judge Goldsmith as the court.

The couple met in about 2004 or 2005 when they were working for a mortgage broker. Father was a successful broker who made $517,000 in 2004; $726,173 in 2005; and $405,019 in 2006. Mother was a mortgage loan processor/officer who made about $80,000. After they married in 2006, Mother became a full-time homemaker and the primary caregiver for their young children.

The Maternal Grandparents, who own a highly successful business and a real estate entity, provided substantial financial assistance to Mother and Father during their marriage. The Maternal Grandparents are first-generation immigrants who built the business from the ground up and live a modest lifestyle despite their earned wealth. Mother testified her parents are financially generous, but expect their three children (Mother and her two adult siblings) to work and be financially independent.

After their marriage, Mother and Father bought a home in Rancho Santa Fe (referred to as the Mayor home). In 2009, in the midst of the recession, Father lost his job and the couple soon spent all of their savings. When they tried to sell the Mayor home, they were unable to do so and could not refinance because of falling housing prices.

At about the same time, the Maternal Grandparents purchased an 8,200 square foot Rancho Santa Fe home (referred to as the Via Canada home) on about two acres. The purchase price was about $3.8 million. The Maternal Grandparents acquired the home so that Mother and her family would have a place to live "forever." Soon after, Mother, Father and the children moved into the Via Canada home. Mother's relatives purchased the Mayor home and gave the rental earnings to Mother and Father in return for their services in managing the property.

Two years later, in 2011, while Mother and Father were still living together in the Via Canada home, the Maternal Grandparents deeded this property to an irrevocable trust (Trust) they had created several years earlier for the benefit of Mother and her three children. Mother has no control over the Trust, which was created for estate planning purposes. The trustees of the Trust paid a majority of the expenses for the Via Canada home, including utilities, homeowners association fees, insurance, gardening services, and property taxes.

During the next four years, Maternal Grandparents gave many cash gifts to Mother and her family. Although the evidence was disputed on the precise amount and nature of those gifts, it appears the gifts were mainly in response to Mother's requests for assistance, including for the children's preschool tuition, automobile purchases, and remodeling expenses (about $160,000 to $180,000) for the Via Canada property.

In about April 2013, Maternal Grandfather (through his real estate business) hired Father as a property manager/developer and paid him $10,000 per month. Although the Maternal Grandparents had initially believed Mother and Father would perform these duties together, Father handled the duties and Mother never worked for the business.

When the parties separated in April 2014, Father's position with the Maternal Grandparents' company was terminated. Mother stayed in the Via Canada home, and Father rented a home in the nearby Carmel Valley community. The children lived equal time with each parent. The Trust continues to own the Via Canada home.

As part of the divorce settlement, Mother's family sold the Mayor home, and Father received the net sale proceeds ($278,000) as a "gift" from the Maternal Grandparents. Within one week, Father invested $290,000 into a "spec home" in Utah, that has not yet been built. In his testimony, Father agreed he made a "conscious" decision to put the funds into an "illiquid investment vehicle," rather than having the money available for "living expenses."

At the time of the hearing, the evidence showed that since the separation, Mother has received regular monthly cash sums from Maternal Grandparents in the average amount of $27,724. Mother testified these funds are a loan to assist her and her children while she transitions back to work. Mother produced a note reflecting this loan. Mother testified she "absolutely" intends to repay the money or deduct the borrowed funds against her inheritance. She said her parents do not intend to continue supporting her.

Mother's vocational evaluation showed there is no impediment to her returning to full-time work; her annual earning ability ranged from $22,868 (as a cook) to $59,436 (as a property manager) with opportunity for growth. She said she is making efforts to reenter the work force, including to reobtain her real estate license and possibly to start a catering or granola-supply business.

The evidence showed the Via Canada home is currently valued between $3 million and $6 million, and the Trust assets continue to be the source for the major expenses related to the property. Mother pays for minor repairs and general maintenance. Under a newly-created lease, Mother is obligated to pay approximately $2,000 rent, which she says she pays in the form of property management services for the home. Mother testified her monthly expenses are approximately $6,800 per month. She spends the additional amounts received from her parents on the children's clothing and extracurricular activities; furniture and other household items; and attorney fees. She testified that although her monthly expenses from the separation date are close to $30,000, she needs no more than about $6,000 or $7,000 per month to "live very comfortably."

In addition to her own testimony and declarations, Mother submitted two other declarations: one from the Maternal Grandparents' estate planning attorney and one from the Maternal Grandparents. The estate planning attorney explained the Trust is an estate planning device, and although the trustees have discretion to distribute funds to Mother, the trustees have never done so. The attorney also said the trustees are paying the Via Canada property expenses for the welfare and benefit of the three grandchildren. In their joint declaration, the Maternal Grandparents said they expect Mother to repay the monthly sums she is now receiving (with interest) once she becomes "self-supporting."

The court ruled these declarations were admissible, but it would "consider what weight to award said declarations in light of [Father's counsel's] inability to cross-examine [the declarants]." Father does not challenge this ruling on appeal.

At the time of the evidentiary hearing, Father (who has substantial experience in the real estate field) was working as a wholesale mortgage account executive, earning about $3,000 per month. Father's yearly job earnings in 2015 were $17,154. A vocational examiner opined that Father could currently earn $100,000 as a mortgage account executive, with substantial potential for income growth in the next several years. Father was living in a 1,500 square foot, multi-level townhome in Carmel Valley. The monthly rent is about $2,700. The development has a community pool and a weight room. Father is active, and spends substantial time surfing, running, and skateboarding. Until shortly before the hearing, Father's mother (the Paternal Grandmother) had been paying his rent and attorney fees. Father testified that a home equivalent to Mother's Via Canada home would rent for about $20,000 to $25,000, and he could possibly rent a smaller home in Mother's neighborhood for about $7,500 per month.

In addition to his testimony and declaration, Father called one witness, a former colleague who acknowledged it was possible for Father in his current job position to make $100,000 next year and $200,000 a few years later, but said it was not realistic that Father would make an annual salary of $500,000.

Each parent took several vacation trips after they separated, both with and without the children.

Court's Ruling

After the hearing, the court issued a written statement of decision. Of relevance here, the court: (1) imputed annual income of $45,432 to Mother and $100,000 to Father; (2) found Father has "received ongoing and regular [monthly] gifts of $2,700/month from [Paternal Grandmother]," which the court included as part of Father's income; (3) found that after the separation Mother received "regular and continual" monthly cash amounts of $27,724 from Maternal Grandparents, but the court allocated as income only one-quarter (or $6,931) of this amount to Mother, and found the remaining amount was intended to be a monthly gift to the three grandchildren; and (4) stated that it "does not find any special circumstances . . . which would justify [departing from the statutory guidelines and awarding] a higher amount." Based on its income findings (including gift income and imputed income), the court ordered Mother to pay Father $416 in monthly child support obligations (calculated based on the statutory formula).

In explaining these findings, the court stated in part:

"Both parties are very underemployed. Neither party has properly focused upon his/her obligation to support the children without assistance from others. [¶] . . . [¶] The Court finds that it is in the
best interest of the children that both Mother and Father work full-time. All children are apparently healthy and normal and in school. The parents enjoy an equal timeshare. Both have access to appropriate childcare and reliable transportation. It is now two years following separation. Both parents are physically and intellectually able to work.

While the parties enjoyed a very upper class standard of living during much of the marriage, that is not the case today. Although [Mother] continues to reside in the [Via Canada] home, she does not own it. She lists $215,000 in cash and assets on her Income and Expense Declaration . . . . [Father] lists $320,000 in cash and assets on his Income and Expense Declaration . . . .

It cannot be stated that the [Maternal Grandparents'] 'note,' which really appears to be more of a 'gift,' is intended only for [Mother's] benefit, as opposed to also for the three grandchildren. Since this money is available on a regular and continual basis, the Court has determined that it is appropriate to consider a portion of those monies as income available for support [citing In re Marriage of Alter (2009) 171 Cal.App.4th 718 (Alter)]. A close reading of the [Maternal Grandparents'] emails . . . show that [Maternal Grandfather] was interested in 2012 and 2013 in planning for the 'next phase' of his life, which would include partial or complete retirement and time with his grandchildren, born and unborn. Currently, and for the last 18 months . . . , [the Maternal Grandparents] have provided to [Mother's] household $27,724 per month . . . . The Court finds that 1/4 of that sum ($6,931) is a gift to [Mother], and available for support, with the other 3/4 being a gift to the three grandchildren."
Neither party filed objections to the statement of decision.

DISCUSSION

Father does not challenge that the court correctly applied the statutory formula based on its imputed income and gift findings. But he argues: (1) the court's income findings were erroneous because there was no factual basis for the court to allocate three-quarters of the $27,724 monthly cash amounts from the Maternal Grandparents to the grandchildren instead of attributing all of this gift income to Mother; and (2) the court erred in declining to find special circumstances warranted an upward deviation from the statutory guidelines. For the reasons explained below, we find Father has not met his burden to show reversible error on either of these points.

I. Challenged Income Allocation Between Mother and Children

A. Review Standards

Statutory guidelines govern child support determinations in California. (See Fam. Code, §§ 4050-4203.) "The guideline amount of child support, which is calculated by applying a mathematical formula to the relative incomes of the parents, is presumptively correct. (See §§ 4055, 4057, subd. (a); In re Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1359 . . . .) 'The court may depart from the guideline only in "special circumstances" set forth in the child support statutes. (§ 4052).' " (In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 753, fn. omitted (Schlafly).)

All further unspecified statutory references are to the Family Code.

Child support awards are reviewed for abuse of discretion. (In re Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1312 (Williamson).) "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; accord Williamson, at p. 1312.) A party challenging the court's discretionary rulings has the "burden of convincing this court that the trial judge exercised his discretion in an arbitrary, capricious or patently absurd manner." (Culbertson v. R. D. Werner Co., Inc. (1987) 190 Cal.App.3d 704, 710; accord, In re Marriage of Boswell (2014) 225 Cal.App.4th 1172, 1176 (Boswell); see In re Marriage of Lim & Carrasco (2013) 214 Cal.App.4th 768, 778.)

B. Analysis

The mandatory guideline formula is based on each parent's actual or imputed income. (§ 4055, 4058, subds. (a), (b); see In re Marriage of Sorge (2012) 202 Cal.App.4th 626, 642-643.) A parent's actual income is derived from the parent's "annual gross income," defined generally to mean "income from whatever source derived." (§ 4058, subd. (a).) The statutes include a nonexclusive list of "income" sources (e.g. wages, salaries, dividends, interest, workers' compensation benefits). (§ 4058, subd. (a)(1).) Although gifts are not included on this list, the Courts of Appeal have held a family court has the discretion to treat monetary gifts as income if the gift resembles earned income in the sense that it is a recurring and regular amount received by the parent. (Alter, supra, 171 Cal.App.4th at pp. 735-736; accord Anna M. v. Jeffrey E. (2017) 7 Cal.App.5th 439, 445-446 (Anna M.); see also Williamson, supra, 226 Cal.App.4th at pp. 1314-1315.)

But the courts have emphasized the broad discretionary nature of this gift-income characterization, and have held the receipt of ongoing cash amounts does not necessarily mean the court is required to treat the funds as income. (Alter, supra, 171 Cal.App.4th at p. 737; see Anna M., supra, 7 Cal.App.5th at p. 450.) "[W]hile regular gifts of cash may fairly represent income, that might not always be so. Therefore, the question of whether gifts should be considered income for purposes of the child support calculation is one that must be left to the discretion of the trial court." (Alter, at p. 737; see Anna M., at p. 450 ["the Alter court did not hold gifts to a parent must always be considered income"].) Unlike monetary gifts, noncash benefits are generally not considered income for purposes of the statutory child-support formula. (See In re Marriage of Loh (2001) 93 Cal.App.4th 325, 334-336; see also Anna M., supra, 7 Cal.App.5th at p. 453; Williamson, supra, 226 Cal.App.4th at p. 1315.)

The court found the monthly $27,724 amounts received by Mother were not loans, and instead were regular, recurrent gifts that would likely continue, and thus should be considered income. But the court found that only one-quarter of this amount was a gift to Mother and the remaining was a direct gift to the grandchildren. Father does not challenge that gifts to the grandchildren are not considered in the child support income calculation. But he argues there was insufficient evidence to show that any portion of the monthly $27,724 amount was intended for the grandchildren. He contends there was no evidence that the money was intended to be allocated between Mother and her children, particularly because the entire sum was available to Mother each month when she deposited all of the funds in a single bank account.

When a party challenges a trial court's factual determination, " 'we resolve all conflicts in favor of the prevailing party, and we indulge in all legitimate and reasonable inferences to uphold the finding if possible.' " (Garcia v. Seacon Logix, Inc. (2015) 238 Cal.App.4th 1476, 1483.) We consider only " 'whether there is any substantial evidence, contradicted or uncontradicted, that will support the finding. When two or more inferences can be reasonably deduced from the facts, we cannot substitute our own deductions for those of the trial court.' " (Ibid.) Substantial evidence consists of evidence that is " 'reasonable, credible, and of solid value,' " which would allow a reasonable factfinder to reach the particular factual conclusion. (In re Christina A. (1989) 213 Cal.App.3d 1073, 1080.) "The ultimate test is whether it is reasonable for a trier of fact to make the ruling in question in light of the whole record." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 652.)

Under these standards, there is sufficient evidence to uphold the trial court's allocation ruling. Although the Maternal Grandparents never expressed this intent in specific words, their actions and communications support the court's finding that a portion of their monthly cash amount was intended to be a gift directly to their grandchildren, rather than to Mother. In his emails to Mother, the Maternal Grandfather refers to his concern for his grandchildren and indicates his desire to spend more time with the children and to benefit the next generation of his family. Although Maternal Grandfather primarily discusses business issues in the emails, these discussions did not preclude the court from finding that the emails also reflected Maternal Grandfather's intent to provide for the grandchildren. Second, the Trust states that the Trust assets are for the benefit of Mother and her children, and that the Maternal Grandparents intended "that the trust funds assist [our] descendants to live a productive and happy life." Third, Father's testimony was consistent with a finding that a portion of the cash gifts was directed to the grandchildren, when he acknowledged the Maternal Grandparents purchased the Via Canada home as a "place [for] our kids [to] live forever." Fourth, Mother's Income and Expense Declaration showing her monthly expenses to be about $6,800 closely approximated the amount of income that the court found to be the Maternal Grandparents' recurring gift to Mother. Although there was evidence Mother spent more than this amount, the court could have reasonably concluded the additional amounts were specifically intended by the Maternal Grandparents to go directly to the grandchildren.

This evidence justified a finding that the Maternal Grandparents were focused on financially helping their grandchildren, and that a portion of the monthly cash gift was intended to directly benefit the grandchildren and to be provided to them. A contrary factual conclusion would have been appropriate, but it is for the family court, and not this court, to draw inferences from the evidence and reach logical factual conclusions based on those inferences. The court had broad discretion to decide the appropriate treatment of the monetary cash amounts (see Alter, supra, 171 Cal.App.4th at pp. 733-737), and did not act in an arbitrary or capricious manner in concluding that only a portion of the Maternal Grandparents' gift was "income" for purposes of applying the statutory formula (see Boswell, supra, 225 Cal.App.4th at p. 1176 ["appellate court may not substitute its discretion for that of the trial court unless the appellant can demonstrate, as a matter of law, that the trial court's judgment is arbitrary, capricious, whimsical, or exceeds the bounds of reason"]). Based on the totality of the circumstances, the court reached a reasonable conclusion.

In his appellate brief, Father argues that Mother spent the funds received from her parents solely on herself for "personal entertainment, traveling and shopping," and therefore the court erred in concluding the money was not Mother's "income" for purposes of the child support analysis. However, in characterizing a gift, the court must consider the intent of the giver, not solely the recipient's actions. Equally important, when viewing the evidence in the light most favorable to the court's ruling (as we must), the record does not support Father's factual assertions. The evidence was not clear as to precisely how Mother spent her funds received from her parents, and it appeared Mother spent about $2,000 (over and above the $6,800 monthly expenses) on the children. Although the trial court could have inferred from this lack of clarity that Mother spent most of the money on herself, it was not required to do so. The testimony of both Father and Mother made clear that both parents were focused on their children's welfare as their paramount concern, and the record did not necessarily show that Mother used the funds received from the Maternal Grandparents intended for the grandchildren for her own personal needs. Additionally, the fact that Mother never created a separate bank account for the children, and instead placed all of the funds in her own account, goes to the weight of the evidence and does not preclude the court's factual finding.

Additionally, to the extent Father argues the court's allocation ruling was based only on the contents of Maternal Grandfather's emails, we reject this argument. Although the court referred to Maternal Grandfather's emails in explaining its decision, the court did not suggest its conclusion was based only on this evidence. Appellate review for sufficiency of the evidence is not limited to facts mentioned in the trial court's statement of decision unless the court states its conclusions are based only on these particular facts. (See Schmir, supra, 134 Cal.App.4th at pp. 49-50.) Father also forfeited this claim by failing to raise it below. (See In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1138; In re Marriage of Whealon (1997) 53 Cal.App.4th 132, 144.) If Father had raised the issue, the court could have explained in more detail the factual basis for its allocation decision.

The court did not err in concluding that only a portion of the Paternal Grandparents' monthly cash amounts should be considered gift income to Mother, and thus only this portion could be used in the child-support guidelines calculation.

II. Requested Deviation From Statutory Guidelines

A. Legal Principles

The child support amount generated by the guideline formula is presumptively correct. (§§ 4053, subd. (k), 4057, subd. (a).) A parent requesting the court to deviate from this amount has the burden to establish by a preponderance of the evidence "that application of the formula would be unjust or inappropriate in the particular case, consistent with the policy principles set forth in section 4053." (§ 4057, subd. (b).) The section 4053 policy principles include: "(1) the interests of the child are the state's top priority, (2) a parent's principal obligation is to support his or her children 'according to the parent's circumstances and station in life,' (3) '[b]oth parents are mutually responsible for the support of their children,' (4) '[e]ach parent should pay for the support of the children according to his or her ability,' (5) children should share in both parents' standard of living [and therefore child support may appropriately improve the living standard of the custodial household], and (6) in cases 'in which both parents have high levels of responsibility for the children,' child support orders 'should reflect the increased costs of raising the children in two homes and should minimize significant disparities in the children's living standards in the two homes.' (§ 4053, subds. (a), (b), (d)-(g).)" (Schlafly, supra, 149 Cal.App.4th at p. 753.)

Section 4057, subdivision (b)(5) states: " '[S]pecial circumstances' " showing the formula would be "unjust or inappropriate . . . include, but are not limited to, . . . [¶] . . . [c]ases in which both parents have substantially equal time-sharing of the children and one parent has a much lower or higher percentage of income used for housing than the other parent." This code section "vests trial courts with considerable discretion to approach unique cases on an ad hoc basis." (County of Lake v. Antoni (1993) 18 Cal.App.4th 1102, 1106; accord In re Marriage of Cryer (2011) 198 Cal.App.4th 1039, 1049; In re Marriage of de Guigne, supra, 97 Cal.App.4th at p. 1361.)

B. Contentions

Father urged the court to deviate from the guidelines and increase the child support payment based chiefly on the difference in the parents' housing expenses and living situations. He argued the two homes are "drastically different" and that while they are living with Father, the children "should be able to enjoy some semblance of the station in life they enjoy while living at [Mother's] house." He asserted that "my current level of income will not allow me to provide for our Children in the same manner they enjoy at [Mother's] house and likely never will given the opulence with which [Mother] lives." He claimed the statutory formula resulted in an unjust child support amount because Mother "is afforded an exceptionally comfortable, even lavish, lifestyle financed by inheritance and gifts while [he] has no such inheritance and would be forced to maintain a substantially inferior household for the children."

In support, Father emphasized various features of Mother's residence, including the size of the house (8,200 square feet), the number of bathrooms (eight) and bedrooms (seven); the gourmet kitchen; the high ceilings; the pool with hot tub, waterfalls, and slide; the three-hole putting green; and outdoor living area. He argued that his current income is $3,000 in mortgage sales and he expects that it will take "years" for his income to increase. Father said he was asking the court to "bridge the gap between . . . the disparity between how my kids live with me and her . . . . It's obnoxious. My apartment, literally, would fit in her master bedroom."

In response, Mother asserted that Father was overstating her lifestyle and understating his own. She said she remained in the home where the couple lived when they separated, and that "[t]he children are comfortable there and it has allowed them to remain at their same school." She said she does her own cooking, cleaning, and laundry. She said that although her residence is "a nice big home" with a pool and putting greens, she does not have a full-time staff and her housekeeper cleans only about once every two or three weeks. The parents share the same babysitter, who is with the children after school in both households.

Based on her personal observations, Mother described Father's residence as a "very nice" home. She said the home is "a spacious and comfortable condo, with a two-car garage, in Carmel Valley[,] which is one of the most prestigious areas in San Diego and is about 10 miles from my house. [Father] lives in a complex that has many other families with children and community amenities such as a swimming pool. The children are happy and comfortable there. I don't believe the children feel like they are leading different lifestyles in our respective homes. On the contrary, they are happy and healthy children who feel loved, cared for and safe in both of our homes. They have made no such comments to me about living disparate lives in our homes. In the event that they have made any comments to [Father], it would be because [Father] said something to them about it."

Mother also argued that Father's request for additional child support payments was "a back door request for spousal support [for Father] who got comfortable during our marriage and does not wish to pursue gainful employment despite his extensive experience in the real estate field and very successful earnings history." Mother asserted that "[i]f [Father] is not happy with his current lifestyle, then he has the ability to change that. He has the experience and the ability to earn a significant income that would be more than sufficient to support our children during his custodial times." Mother emphasized Father's receipt of the $278,000 as a "gift" from Maternal Grandparents upon separation, and the fact that Father used those funds on an illiquid asset instead of spending the funds on a bigger residence. Mother also asserted she does not personally have extensive property holdings, securities, or trust income; she has a limited ability to increase her income; Father's mother pays for his monthly rent; and Father made financial choices to "deprive" the children of a bigger home.

C. Analysis

On the factual record before it, the court could have accepted Father's arguments and increased child support, but it was not legally mandated to do so. First, the court reached a reasonable conclusion that Father was suppressing his income and that he made the intentional choice to live in a smaller home, rather than apply his real estate expertise to earn more salary and/or to use the $278,000 in funds received as part of the marital settlement to provide better housing for his children. The court's statement of decision encompassed its factual conclusion that Father could earn substantially more income and that he had not invested the settlement funds in good faith and instead placed the funds out of reach to increase the likelihood that the court would award him additional support from his former in-laws. Additionally, the court made a factual finding that Father's mother paid for his rent since the separation, and that these gifts would continue in the future. Father has not challenged these findings on appeal.

Second, although there was substantial disparity in the size and nature of the parents' homes, the court had a reasonable basis to credit the evidence showing the children did not live an opulent lifestyle in Mother's home and their standard of living did not materially differ between the homes. The homes are only about five to ten miles apart; the children attend a school relatively close to both homes; they participate in the same extracurricular activities; and have the same daily babysitter. Without more, the facts that Mother's home had additional (and likely bigger) bedrooms/bathrooms and the children could play and swim in a pool in a private backyard, as opposed to playing and swimming in a pool with other children, does not in and of itself establish these young children had a materially "higher" living standard. Both parents took the young children on vacations since the separation, and there was no evidence the type or quality of the vacations materially differed.

Father's reliance on section 4057, subdivision (b)(5)(B) is misplaced. That code section provides a parent may rebut the guideline-calculation presumption in "[c]ases in which both parents have substantially equal time-sharing of the children and one parent has a much lower or higher percentage of income used for housing than the other parent." (§ 4057, subd. (b)(5)(B).) The court made a factual finding that Father had not been paying any portion of his income for housing because he was receiving the rental payments from his mother. Thus, this statutory exception was inapplicable because the court found the parents' percentage of their income used for housing was essentially equal. Further, the court imputed substantially more income than the $3,000 per month that Father claimed to be making, and Father does not challenge this finding on appeal. Thus, the court could reasonably find Father's percentage of income used for housing was much lower than he claimed. On this record, the court did not abuse its discretion in concluding that the section 4057, subdivision (b)(5) circumstance did not support a deviation from the statutory guidelines.

We reject Father's additional suggestion that the court failed to consider that Mother did not pay rent (or paid a minimal amount of rent). Absent affirmative evidence to the contrary, we are required to presume the court complied with its statutory duties and considered all relevant evidence, which included the evidence that Mother's housing costs were minimal (if at all) and substantially below market. (See Evid. Code, § 664; In re Julian R. (2009) 47 Cal.4th 487, 499; Gorman v. Tassajara Development Corp. (2009) 178 Cal.App.4th 44, 67.) There is nothing in the record showing the court misunderstood or ignored the evidence of Mother's housing benefit—which was a centerpiece of Father's case. The record affirmatively supports that the court considered the fact that Mother paid little or nothing to live in the Via Canada home and properly applied this factor in reaching its conclusions.

DISPOSITION

Order affirmed. Appellant to bear respondent's costs on appeal.

HALLER, J. WE CONCUR: NARES, Acting P. J. DATO, J.


Summaries of

Phillips v. Phillips (In re Marriage of Phillips)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA
Nov 17, 2017
No. D070470 (Cal. Ct. App. Nov. 17, 2017)
Case details for

Phillips v. Phillips (In re Marriage of Phillips)

Case Details

Full title:In re the Marriage of RICHARD and JENNIFER PHILLIPS. RICHARD PHILLIPS…

Court:COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

Date published: Nov 17, 2017

Citations

No. D070470 (Cal. Ct. App. Nov. 17, 2017)