Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Santa Clara County Super. Ct. No. FL099693.
BAMATTRE-MANOUKIAN, J.
INTRODUCTION
This is third appeal arising from the dissolution action of appellant Gregory M. Galloway and respondent Suzanne P. Galloway. In the first appeal we determined that the order awarding continuing temporary spousal support of $3,145 per month was based on the erroneous calculation that Gregory’s monthly bank deposits averaged $10,000 from September 2001 through March 2002. We reversed the order and remanded the matter for a recalculation of continuing temporary spousal support. (In re Marriage of Galloway (Oct. 20, 2003, H024940) [nonpub. opn.] (Galloway I).)
Hereafter, we will refer to the parties by their first names for purposes of clarity and not out of disrespect. (See Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.)
In the second appeal we concluded that Gregory had failed to preserve any of the issues he raised concerning the order awarding joint legal custody of the parties’ two children, and therefore we affirmed the order. (In re Marriage of Galloway (July 11, 2006, H028384) [nonpub. opn.] (Galloway II).)
On remand, a trial was held and the trial court subsequently issued a judgment that included a recalculated award of retroactive temporary spousal support, as well as an award of permanent spousal support and an award of child support. The trial court also ruled, among other things, that the funds in the Marclyn Designs, Inc. checking account and a San Mateo Federal Credit Union checking account were Suzanne’s separate property; Gregory owed Suzanne $70,523 for the fair rental value of the family residence postseparation; Gregory was not entitled to reimbursement for postseparation payments to Suzanne’s in-home care provider; and Gregory breached his fiduciary duty by taking an item of community property, a tax refund check, without notice. Additionally, the trial court awarded Suzanne $60,000 in attorney fees and costs. Gregory challenges all of these rulings in the present appeal. For reasons that we will explain, we will affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
Gregory and Suzanne were married on June 25, 1989. They have two children, Marc, age 17 and Cheryl, age 15. In 1994, Suzanne was diagnosed with multiple sclerosis. The Social Security Administration designated Suzanne as totally disabled in 1998. Since January 2000 Suzanne has lived with her mother, Bette Perroton, except for a brief period in June 2000 when she returned to the family home.
We take judicial notice of this court’s prior opinions, Galloway I, supra, H024940 and Galloway II, supra, H028384. Some background facts have been taken from our previous opinions.
On December 5, 2000, the Santa Clara County Superior Court appointed Suzanne’s mother and her sister, Ann Hayes, to be her temporary conservators. The conservators retained an attorney who filed the instant dissolution action on Suzanne’s behalf on May 10, 2001. The conservatorship was made permanent on September 7, 2001. Bette Perroton was subsequently replaced as a conservator by Suzanne’s other sister, Nancy Ellickson.
After Suzanne began living with her mother, Gregory received and deposited 11 Social Security checks that were made payable to Suzanne during the period of January 2000 to January 2001. A hearing was held on May 16 and 24, 2002, regarding the Social Security checks, among other issues. On June 23, 2002, the court made the following findings: “The Court does not find [Gregory] credible. The Court finds [Gregory] has a present ability to be employed and that with reasonable efforts, employment at the level attributed in the dissomasters could be available now with [a] modicum of effort earlier by [Gregory]. The Court finds that [Gregory] has not made reasonable efforts to become employed or satisf[y] the Court’s earlier employment efforts order. His only efforts are to attend one seminar at a luxury resort in Arizona and once a month meetings of the Churchill Club. Furthermore, based upon the expenses [Gregory] is manag[ing] to pay without incurring debt, based on the deposits in 2002 averaging $11,443.00 a month, and based on the deposits in early 2002 averaging almost $10,000.00 a month, the Court believes [Gregory] is currently earning that amount as his gross income.”
In its order of June 23, 2002, the trial court also found that Gregory had converted Social Security checks totaling $12,588. Gregory appealed, but we did not reach the issue in our first opinion in this matter (Galloway I, supra, H024940) because we determined that Gregory had agreed to “drop his appeal of that issue” during an October 2, 2002, hearing in Suzanne’s conservatorship case. However, we also determined in Galloway I that Gregory’s appeal of the order awarding continuing temporary spousal support of $3,145 per month was meritorious, because the order was based on the erroneous calculation that Gregory’s monthly bank deposits averaged $10,000 from September 2001 through March 2002. We reversed the order and remanded the matter for a recalculation of continuing temporary spousal support.
After remand, a trial was held on May 19, 2005 and July 15, 2005. The issues to be tried included the recalculation of temporary spousal support retroactive to May 10, 2001, permanent spousal support, child support, characterization of the family residence, reimbursement for Gregory’s postseparation use of the family residence, reimbursement of cashed Social Security checks, life insurance, Epstein credit, and attorney fees and costs. The trial court issued a 45-page statement of decision on October 12, 2005. No party filed an objection to the statement of decision and judgment was entered on April 5, 2006.
An Epstein credit is a credit for separate property spent postseparation on a community obligation, pursuant to In re Marriage of Epstein (1979) 24 Cal.3d 76, 84-85 (Epstein).
Thereafter, Gregory filed a motion for reconsideration and new trial on April 21, 2006. The motion was denied on July 14, 2006. Gregory filed a notice of appeal and an opening brief that raises eight issues. We will discuss each issue in turn, including a summary of the evidence presented at trial and the trial court’s rulings that are pertinent to each issue.
DISCUSSION
I. Spousal Support
Gregory asserted in his trial brief that he has overpaid spousal support since May 2002 and he is entitled to spousal support of $414 per month from Suzanne. Suzanne stated in her trial brief that the issue turned on a determination of Gregory’s earnings, and requested an award of permanent spousal support and temporary spousal support retroactive to May 10, 2001, with an Epstein credit to Gregory for his separate property mortgage payments made on the family residence from January 2000 to May 9, 2001.
A. Trial Evidence Pertaining to Spousal Support
Charles Helfrick, an accounting expert retained by Suzanne, testified regarding his review of bank deposits in various bank accounts for the years 2000, 2001, 2002, 2003, and part of September 2004. His review included examination of bank statements, copies of deposit slips, and the underlying checks making up the deposits. He was not able to distinguish whether the source of the deposits was loans or earned income. Helfrick’s reports of July 29, 2004 and September 4, 2004, were admitted into evidence.
Gregory testified regarding his income and expenses. Additionally, his federal income tax returns for 2000, 2001, 2002 and 2003 were admitted into evidence, as were his income and expense declarations for 2001, 2002, 2003, 2004, and 2005. Gregory also prepared exhibits showing his bank account deposits, including deposits of loans, for 2002, 2003, 2004, and 2005. According to Gregory, his average monthly income for the 12 months preceding the May 19, 2005 trial date was $1,800. His 2004 federal income tax return indicated that his income for 2004 was approximately $21,000. To earn income in 2004, Gregory did consulting work in real estate comparative market studies and worked for friends doing drywall, painting and trash hauling.
Gregory’s educational background includes graduation from high school in 1976. He is currently taking real estate courses at local community colleges and has passed the test required to obtain a real estate license. During the last two years, Gregory worked for Barry Swenson Builders and earned $12,000. He also earned $7,000 working for Vance Brown Builders.
Gregory estimated that his monthly expenses during the year preceding the trial were approximately $5,100, including the children’s expenses. The trial court inquired as to how Gregory paid monthly expenses of $5,100 on a monthly income of $1,800. Gregory explained that he borrowed money from friends, family, and his girlfriend. He acknowledged that he did not have a promissory note for any of the loans from his family and friends, except for his loan from his girlfriend, Cynthia Nelson, who is currently paying his attorney’s fees.
Gregory further testified that during the first five months of 2005 he earned $7,000 and borrowed $8,000, for a total income of $15,000. The trial court then inquired as to what accounted for the difference between the expenses of $25,000 for the first five months of the year and the available income of $15,000 during the same period. Gregory reviewed his records and determined that his actual expenses for the first five months of 2005 were $12,102, not $25,000. The discrepancy on his income and expenses declaration was due to Gregory’s estimation of future expenses.
On the second day of trial, July 14, 2005, Gregory filed an income and expense declaration regarding the preceding 12 months. His average monthly income was $1,858 and his average monthly expenses were $4,124. He borrowed approximately $2,000 per month to make up the difference between his income and expenses. The list of loans provided by Gregory indicated that he had borrowed $22,500 from his brother, Rick Galloway, to pay for living expenses. The other loans listed were primarily used to pay attorney fees of $187,500. At the time of trial, his total attorney fees in this case were approximately $246,000.
Gregory’s personal loans from friends and family total approximately $200,000, including a loan of $112,000 from his girlfriend. While there is a promissory note for that loan, she has allowed him to stop making monthly payments on the loan for a year while he tries to straighten out his financial affairs. His total cash assets at the time of trial were $3.19.
Timothy Harper, a vocational expert retained by Gregory, testified regarding his vocational assessment. Harper described Gregory as attempting to reinvent himself after his previous success in a floppy disk drive business that later became bankrupt. Although Gregory had become a consultant, his income was not consistent. Gregory had some barriers to employment, including the economic downturn in Silicon Valley, his lack of a college degree, the bankruptcy of his business, his past 10 years of work as an independent consultant rather than as a company employee, and the emotional impact of Suzanne’s illness. Additionally, Harper viewed Gregory as having the characteristics of an entrepreneur rather than an employee.
Despite Gregory’s lengthy period without steady employment, Harper found that Gregory had made more than reasonable efforts to find work and to make money as a consultant. He also believed that seeking a real estate career was a prudent course for Gregory to follow, based on his brief employment with Barry Swenson, a well-known real estate developer. However, Harper acknowledged that it was “quite extraordinary” that Gregory had been out of work for so long. During the past five years of performing between 400 and 500 vocational assessments per year, he had only seen three or four other people who had been unemployed for the same amount of time as Gregory, four and one-half years. Harper also agreed that it was “odd” that Gregory had not received a single written reply to a company job application for two or three years.
Regarding earning capacity, Harper concluded that Gregory reasonably could earn an annual income of $35,000 to $50,000 after six months of maximum good faith efforts to find a job. The high end of his earning capacity would be $80,000 per year.
Cheryl Foden, a vocational expert retained by Suzanne, testified regarding her vocational evaluation of Gregory, including her report dated December 31, 2001. Foden also reviewed Timothy Harper’s deposition testimony and noted that she had several points of agreement with him. Both vocational experts determined that Gregory was “basically a salesperson”; he could obtain a job within 90 to 120 days; the low end of his earning capacity was $35,000 to $50,000 per year; and the high end of his earning capacity was $60,000 to $80,000 per year. Foden believed that positions in both salary ranges were available in the period of 2000 through 2004, based on her labor market job research.
Foden did not agree with Harper that Gregory had substantial barriers to employment. She noted that other job seekers were able to search for jobs during divorce litigation and while caring for children. Foden also pointed out that Gregory’s children were teenagers and that Suzanne was not living with him. Furthermore, Foden had not seen anyone in her caseload who, like Gregory, had not gotten a job in five and one-half years. She believed that Gregory would have obtained a job in the $60,000 to $80,000 salary range if he had focused on getting employment in September 2001.
When informed that Gregory had earned less than $35,000 to $50,000 per year in the past three or four years, Foden responded that she would not view Gregory’s job search as diligent. She stated, “That was the very minimum amount that . . . Tim Harper and I both felt, he could earn in relatively short order. Both experts thought that. Now we’re looking five and a half years later; four and a half years later since I saw him. If he’s still not earning that then I just don’t believe that the efforts have been made.”
Although Foden had not interviewed Gregory since September 28, 2001, she had reviewed his subsequent job search emails for 2001 through part of 2004. She acknowledged that the quality of the emails was excellent and indicated some effort on Gregory’s part. However, she did not have sufficient information to give a “formed and full opinion” as to what his job search efforts had been after September 28, 2001. Also, she admitted that Gregory was not qualified for all of the jobs listed in her report as available.
B. Judgment and Statement of Decision
The trial court issued a statement of decision on October 12, 2005, that contained rulings on a number of issues, as summarized below.
Temporary Spousal Support.
With respect to temporary spousal support, the court exercised its discretion to order temporary spousal support retroactively to May 10, 2001, based on the evidence of each party’s annual income and expenses. The court found that for all relevant periods, Suzanne was disabled and unable to work (pursuant to the parties’ stipulation), while Gregory was the primary custodial parent of the parties’ two children.
Suzanne’s income and expense declarations indicated that in 2001 she received monthly Social Security benefits of $1,083 and monthly income from a mini-storage property of $4,613, with medical expenses of $2,552 per month and health insurance costs of $155 per month. In 2002, she received Social Security benefits of $1,207 per month and income from the mini-storage property of $6,715 per month, with medical expenses of $4,898 per month and health insurance costs of $182 per month. In 2003, Suzanne received monthly Social Security benefits of $1,220 and income from the mini-storage property of $4,067 per month, with monthly medical expenses of $4,931 and health insurance costs of $182 per month. Suzanne’s mini-storage income ceased in September 2003 when her principal was “cashed out.”
In 2004, Suzanne received monthly Social Security benefits of $1,239 per month and other income of $30 per month, and had monthly medical expenses of $5,462. In 2005, up to the trial date of May 19, 2005, Suzanne received monthly Social Security benefits of $1,262 per month plus three $170 payments of spousal support, with health insurance costs of $289 per month.
As to Gregory, the trial court found that his 2001 income available for support was $5,318 per month, based on the opinion of the accounting expert, William Helfrick, although Gregory’s income and expense declaration for 2001 stated that his income for that year was $700. The court noted that Gregory had health insurance costs of $470 per month in 2001.
For 2002, the trial court determined that earning capacity of $5,000 per month should be imputed to Gregory. This ruling was based upon the court’s finding that Gregory had failed to make reasonable efforts to become employed, despite September 2001 and November 2001 orders to make reasonable efforts to find employment. The court examined Gregory’s evidence of his job search and found that he had made only one application for employment in 2001 and in 2002.
The trial court further stated, “Even if [Gregory] had submitted the number of applications that he apparently provided to Mr. Harper, it is incredibly unusual and not credible that not even a single interview would have resulted and that there were no substantive responses. Applying for work by sending letters or emails to prospective employers cannot simply be measured by the volume of the applications. It is very easy to send blanket emails or letters to employers. This is not an adequate measure of the sincerity and thoroughness of the effort to obtain employment. This Court believes that [Gregory], with a thorough and careful effort, could have obtained employment by the year 2002 and there were jobs available for him based upon his skills. [Gregory] has, however, not really demonstrated a willingness to be employed or self employed in a gainful manner . . . .” The trial court also found that Gregory “is often not a credible witness.”
The trial court additionally determined that it would not be appropriate to accept the opinion of the accounting expert that in 2002 Gregory had income available for support of $2,364 per month, based on Gregory’s financial records. The court stated, “[Gregory’s] explanation for the amounts moving in and out of his accounts was simply not credible. However, the Court does not feel it appropriate to simply utilize the figure found by the accountant, in view of the ability to earn of [Gregory] and his lack of compliance with the efforts to seek employment ordered by the Court.”
For 2003, the trial court again determined that earning capacity of $5,000 per month should be imputed to Gregory in addition to the $1,227 in taxable income shown on his amended tax return. The court found that there was no credible evidence that Gregory actively sought employment in 2003, observing that he had only “provided evidence of two job inquiries for the entire year.”
For 2004, the trial court determined that Gregory had an earning capacity of at least $5,883 per month, “which is in the mid-range of the amounts that both vocational evaluators found that [Gregory] was able to earn, based upon his skills and the jobs available.” The court found that Gregory had not made a diligent job search effort in 2004, noting that his job search emails “do not demonstrate a reasonable and consistent search for employment or self employment.” Further, the court found that “[b]ased on the evidence submitted, there were jobs available to [Gregory] had he diligently pursued them. Had he obtained one within a reasonable time after his alleged loss of employment, he could, by 2004, be either employed or self employed and earning approximately $70,000 per year, which is $5833 per month.” The court additionally found that taking eight real estate classes in 2003 or 2004 “does not represent a serious effort to retrain for a new career. It is a start at best if, in fact, it has happened.”
The trial court did not rely upon the accounting expert’s report that Gregory had income of $2,998 per month in 2004 that was available for support, determining that Gregory’s statement of assets and debts, his tax returns, and his loan documentation were inconsistent. The court found that “the amounts listed on the tax returns did not all go through [Gregory’s] bank accounts, at least the ones disclosed to the accountant expert. [Gregory’s] explanations and the evidence he submitted seriously strain credibility. The best that can be said is that things just do not add up.”
For 2005, the trial court determined that Gregory had an earning capacity of $6,667 per month, based on the opinions of the vocational experts that Gregory had the ability to earn approximately $80,000 per year. The court rejected Gregory’s assertion that he had earned only $1,800 per month in 2005, noting that he listed monthly expenses of $5,100 on his April 29, 2005, income and expense declaration and monthly expenses of $4,124 on his July 14, 2005, income and expense declaration. Gregory also stated on his July 14, 2005, income and expense declaration that he had received loans totaling $211,500, which the trial court determined approximately equaled the amount of legal expenses that Gregory had not directly paid and thus those funds were not loans for living expenses. Further, the trial court found that Gregory had not listed any assets from which he could withdraw funds for living expenses. The court accordingly found that “[a]t a minimum, therefore, it can be inferred and found that [Gregory] has available sufficient after tax dollars to pay at least $4,511 per month in actual expenses.”
Based on the trial court’s findings regarding the parties’ income and expenses, Gregory was ordered to pay Suzanne temporary spousal support of $444 per month commencing May 10, 2001. The court rejected the contention that Gregory’s temporary spousal support obligation should be offset by the children’s Social Security benefits. Gregory was also ordered to pay temporary spousal support of $767 per month commencing January 1, 2002. For 2003, Gregory was ordered to pay temporary spousal support of $1,834 per month, commencing January 1, 2003. For 2004, Gregory was ordered to pay temporary spousal support of $1,160 per month, commencing January 1, 2004. Beginning January 1, 2005 to May 19, 2005, Gregory was ordered to pay temporary spousal support of $1,300 per month. The trial court further ordered that Gregory was entitled to a credit for any spousal support previously paid.
Permanent Spousal Support
Before making an award of permanent spousal support, the trial court made the following factual findings. The parties had a long marriage of over 10 years and have two teenage children. Suzanne, age 46, is totally disabled and unable to work due to a progressive form of multiple sclerosis and requires substantial assistance in her daily life. Her sisters are her conservators. In 2001, she incurred unreimbursed monthly health care expenses of approximately $2,552. In 2005, her monthly health care expenses had reached $6,952 per month. Suzanne has exhausted all of her assets and will not be able to work in the future, as stated in the credible testimony of Suzanne’s sister, Nancy Ellickson.
The trial court further found on the basis of Nancy Ellickson’s testimony that the proceeds from the sale of the family residence in Sunnyvale will be exhausted to pay Suzanne’s obligations, including loan payments, property taxes, legal fees and loans from Suzanne’s mother for Suzanne’s care. Suzanne currently receives monthly Social Security benefits of $1,239. Based on the testimony of Robert La Porte, an employee of the Social Security Administration, the trial court determined that Suzanne’s Social Security benefits would be unaffected by an award of spousal support.
Additionally, the trial court found that the parties had a middle-class lifestyle during their marriage. Regarding Gregory, the trial court found that he was 49 years old and began working at the age of 18. His employment history includes work as the manager of the software library at Atari from 1981 to 1984 and in engineering and marketing at Xidex/Dysan from 1984 to 1987. In 1987, Gregory founded Tronix Peripherals, a company that manufactured disk drives and subsequently failed in 1993. In 1994, Gregory began working as a consultant through two companies, Marclyn Designs, Inc. and Chermark, Inc.
The court’s findings regarding Gregory’s income in 2000 through the first part of 2005, as stated with respect to temporary spousal support, were incorporated in the findings regarding permanent spousal support, including the finding that Gregory had an earning capacity of $80,000 per year at the time of trial. The trial court further found that “[Gregory] is a bright and apparently talented individual. Even without the benefit of a college degree, he has been able to earn over $100,000 a year in the past. It is apparent that not all of [his] funds go or have gone through the bank accounts disclosed in this matter to the accountant.”
The trial court also found that Suzanne accurately stated on her April 29, 2005 income and expense declaration that she has monthly expenses of $9,900, which include unreimbursed health care costs of $6,952. Suzanne lives with her mother, her only income is Social Security benefits, and she does not pay rent. Her assets have been exhausted. Gregory’s July 14, 2005 income and expense declaration indicated monthly expenses of $4,511 for himself and the parties’ two children. Gregory is the primary custodial parent and the children are with Suzanne 20 percent of the time. There were no child care costs and child care did not impact Gregory’s ability to work. In 2005, Gregory received Social Security benefits for the children of $330 per month for each child due to Suzanne’s disability. While Gregory represented that he had no substantial assets, the court found that he lacked credibility.
Based on these findings, the trial court determined that Gregory had the ability to pay Suzanne permanent spousal support of $1,600 per month, commencing May 19, 2005. The court also terminated its jurisdiction over the issue of spousal support for Gregory because he was able to support himself.
In so ruling, the trial court rejected Gregory’s contention that his spousal support obligation should be offset by the support that Suzanne’s mother, Bette Perroton, provides to Suzanne. The court found that her mother’s support did not constitute income to Suzanne. Also, the court was not persuaded that Family Code section 3910, which provides that a parent has an obligation to support his or her adult child who is incapacitated and unable to earn a living, provided any basis for a reduction in Gregory’s support obligation as the spouse of Suzanne.
All further statutory references are to the Family Code unless otherwise indicated.
Arrearages
The trial court recognized that its orders would create arrearages for both temporary and permanent spousal support, and ruled that the arrearages would accrue interest at the rate of 10 percent. Gregory was ordered to pay at least $200 per month towards the arrearages.
Judgment
Neither party filed objections to the statement of decision. Judgment was entered on April 5, 2006. The judgment orders Gregory to pay temporary spousal support and permanent spousal support as set forth in the statement of decision. Additionally, the judgment states that the total amount of temporary spousal support due is $54,574, less credit for spousal support previously paid during the relevant time period.
C. Analysis
Gregory’s Contentions
On appeal, Gregory contends that the trial court erred in awarding temporary and permanent spousal support to Suzanne on the basis of imputed income, rather than his actual income, for two reasons. First, Gregory argues that his due process right was violated because he was not given notice that the trial court could impute income in accordance with a vocational expert’s opinion of his earnings capacity. Second, Gregory argues that the trial court’s findings regarding his earning capacity are not supported by substantial evidence. Gregory also asserts that he is entitled to a set off for the value of room, board and care provided to Suzanne by her mother, Bette Perroton. We will begin our evaluation of Gregory’s claims with a discussion of the applicable standard of review.
Standard of Review
Both temporary and permanent spousal support orders are reviewed under the abuse of discretion standard. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 302 -304 (Cheriton); In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327.) However, an award of temporary spousal support is governed by different rules than an award of permanent spousal support.
“Generally, temporary spousal support may be ordered in ‘any amount’ based on the party’s need and the other party's ability to pay. [Citations.] ‘Whereas permanent spousal support “provide[s] financial assistance, if appropriate, as determined by the financial circumstances of the parties after their dissolution and the division of their community property,” temporary spousal support “is utilized to maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations.” [Citations.]’ [Citations.] The court is not restricted by any set of statutory guidelines in fixing a temporary spousal support amount. [Citation.]” (In re Marriage of Wittgrove, supra, 120 Cal.App.4th at p. 1327.)
In contrast, permanent spousal support is governed by the statutory scheme set forth in sections 4300 through 4360. Section 4330 authorizes the trial court to order a party to pay spousal support in an amount, and for a period of time, that the court determines is just and reasonable, based on the standard of living established during the marriage and taking into consideration the circumstances set forth in section 4320. (Cheriton, supra, 92 Cal.App.4th at pp. 302-303; § 4330, subd. (a).) As this court stated in Cheriton, “ ‘In making its spousal support order, the trial court possesses broad discretion so as to fairly exercise the weighing process contemplated by section 4320, with the goal of accomplishing substantial justice for the parties in the case before it.’ [Citation.]” (Cheriton, supra, 92 Cal.App.4th at p. 304.)
Section 4320 provides, “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.”
Section 4330, subdivision (a), provides, “In a judgment of dissolution of marriage or legal separation of the parties, the court may order a party to pay for the support of the other party an amount, for a period of time, that the court determines is just and reasonable, based on the standard of living established during the marriage, taking into consideration the circumstances as provided in Chapter 2 (commencing with Section 4320.”
It is well established that the trial court may consider a spouse’s earning capacity in determining spousal support. (Cheriton, supra, 92 Cal.App.4th at p. 301; In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 211.) To calculate earning capacity, the court must determine “the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history, and the availability of employment opportunities.” (In re Marriage of Simpson (1992) 4 Cal.4th 225, 234; § 4058, subd. (b).) However, there is no earning capacity where “the ability to work or the opportunity to work is lacking . . . .” (In re Marriage of Regnery (1989) 214 Cal.App.3d 1367, 1373.)
The trial court’s decision to impute earnings to an unemployed or underemployed spouse is reviewed for abuse of discretion. (In re Marriage of Simpson, supra, 4 Cal.4th at p. 234.) However, the standard of review for the calculation of earning capacity is substantial evidence. (In re Marriage of Cohn (1998) 65 Cal.App.4th 923, 931.) “Under that standard, we must consider all of the evidence in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference, and resolving conflicts in support of the judgment. [Citations.]” (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630.) “It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted or uncontradicted, in support of the judgment.” (Id. at pp. 630-631.) “ ‘Substantial evidence means such evidence as a reasonable fact trier might accept as adequate to support a conclusion; evidence which has ponderable legal significance, which is reasonable in nature, credible and of solid value.’ ” (In re Marriage of Paboojian (1987) 189 Cal.App.3d 1434, 1438.) Accordingly, “figures for earning capacity cannot be drawn from thin air; they must have some tangible evidentiary foundation.” (In re Marriage of Cohn, supra, 65 Cal.App.4th at p. 931.)
Due Process Violation
Having determined the appropriate standards of review, we turn to Gregory’s contention that his due process right was violated because he was not given notice that the trial court could impute income in accordance with a vocational expert’s opinion of the adequacy of his job search efforts. According to Gregory, the only notice he received was an employment efforts order that provided, “The job seeker shall apply for not less than five jobs every two weeks . . . Failure to do so may result in imputation of income and/or criminal sanctions.” Gregory therefore argues that “the [employment efforts order] notifies the job seeker that the criterion for whether the court will impute income to him is simply the number of job applications he submits. (Underscore in original.) It does not give him fair notice that the adequacy of his job-search efforts will be later determined by the inference of an expert based on his annual earnings.” For that reason, Gregory contends that the trial court improperly relied on the opinion of Cheryl Foden, Suzanne’s vocational expert, that his job search was not diligent and disregarded the number of job applications that he had submitted.
Suzanne points out that Gregory raises his claim of a due process violation for the first time on appeal, an observation that Gregory does not dispute. However, he asserts that an issue involving a due process violation is especially appropriate for review for the first time on appeal, citing Bonner v. City of Santa Ana (1996) 45 Cal.App.4th 1465, 1477, disapproved on other grounds in Katzberg v. City of Santa Ana (1996) 29 Cal.4th 300, 320. We need not determine whether Gregory failed to raise his due process claim in the proceedings below. Assuming that Gregory properly preserved his claim, we find no violation of due process.
The California Supreme Court has established that a litigant is entitled to due process in support proceedings, because “[i]t is a fundamental concept of due process that a judgment against a defendant cannot be entered unless he was given proper notice and an opportunity to defend. [Citations.]” (In re Marriage of Lippel (1990) 51 Cal.3d 1160, 1166.) In the present case, the record reflects that Gregory had pretrial notice that Suzanne sought the imputation of income and that expert opinion regarding the adequacy of his job search efforts would be presented at trial. Gregory stated in his trial brief that “[Suzanne] seeks to have income imputed to [Gregory]. [¶] . . . [¶] [Gregory] intends to call Timothy Harper, a vocational expert, to testify regarding Gregory’s earning capacity and the availability of work for [Gregory]. [Gregory] will present evidence of his efforts to find employment, [that] he was employed and that he paid spouse support to the best of his ability.”
The record also reflects that Gregory had ample opportunity to defend. As he anticipated in his trial brief, Gregory called his own vocational expert, Timothy Harper, who gave his opinion regarding the adequacy of Gregory’s job search efforts. Moreover, Gregory’s attorney had the opportunity to cross-examine Suzanne‘s vocational expert, Cheryl Foden, regarding her opinion that Gregory’s job search efforts were not adequate. Therefore, because Gregory had both notice and an opportunity to defend against the imputation of income based on the inadequacy of his job search efforts, we determine that his due process claim lacks merit.
Imputation of Income
We next consider Gregory’s contention that the trial court erred in determining that income should be imputed to him as an unemployed or underemployed supporting spouse. As Suzanne correctly asserts, the trial court imputed income based on the testimony of the parties’ vocational experts, who agreed that Gregory could obtain a job in 90 to 120 days and that it was highly unusual for a person not to receive a reply to any job application or to be unable to obtain a job after more than four years. Cheryl Foden also testified that because Gregory should be able to obtain a job paying an annual salary of $35,000 to $50,000 in “short order,” his failure to obtain such employment in the four and one-half years preceding the 2005 trial indicated inadequate job search efforts. Accordingly, the trial court did not abuse its discretion in implicitly finding that Gregory was underemployed and ruling that income should be imputed to him on the basis of his earning capacity as determined by the parties’ experts.
We are also not convinced by Gregory’s alternate contention. He argues that, in the absence of evidence that he had the opportunity to work, consisting of a specific job opportunity at which he could earn the income imputed by the court, the trial court was required to calculate spousal support on the basis of his actual income. According to Gregory, Cheryl Foden’s failure to identify any such specific job opportunity means there was insufficient evidence to support the trial court’s calculation of temporary and permanent spousal support on the basis of his earning capacity.
In so arguing, Gregory has overlooked the burden of proof with respect to opportunity to work. “The ‘opportunity to work’ exists when there is substantial evidence of a reasonable ‘likelihood that a party could, with reasonable effort, apply his or her education, skills and training to produce income.’ [Citation.]” (In re Marriage of Smith (2001) 90 Cal.App.4th 74, 82.) The burden is on the supporting spouse to establish that “no one was willing to hire him or her despite reasonable efforts to find work.” (In re Marriage of Cohn, supra, 65 Cal.App.4th at p. 929; In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1339.)
Thus, the burden was on Gregory to show that he did not have the opportunity to work because, despite his reasonable efforts, no employer was willing to hire him. Gregory did not meet this burden because he presented no evidence of employers who were unwilling to hire him. Moreover, his own vocational expert, Timothy Harper, stated that Gregory reasonably could earn an annual income of $35,000 to $50,000 after six months of maximum good faith effort to find a job, and that the high end of his earning capacity was $80,000. Additionally, Suzanne’s expert, Cheryl Foden, stated that positions in the both salary ranges were available in the period of 2000 through 2004, based on her labor market job research. Because both parties’ vocational experts agreed that Gregory could find a job paying $35,000 to $50,000, with a high end of $80,000, substantial evidence supports the trial court’s calculation of spousal support on the basis of Gregory’s earning capacity.
Furthermore, we find no merit in Gregory’s contention that the trial court was required to calculate spousal support on the basis of his actual income as shown on his federal income tax returns. The general rule is that income shown on recent income tax returns is presumptively correct. (In re Marriage of Loh (2001) 93 Cal.App.4th 325, 332.) However, the presumption may be rebutted. (In re Marriage of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 34.) Thus, where there was a “huge discrepancy” between the income stated by a father on his tax returns, his loan applications, his income and expense declarations, and in his testimony, the appellate court determined that the trial court was not required to accept the statement of income on his tax returns. (Id. at p. 35.)
The present case is similar. Gregory does not dispute the trial court’s finding that there was a discrepancy between the income stated on his tax returns, his income and expense declarations, and his stated income, expenses, and loans. As the trial court noted, “The best that can be said is that things just do not add up.” Accordingly, the presumption that Gregory’s income tax returns correctly indicated his income was rebutted and the trial court was not required to base its spousal support calculation on Gregory’s income as stated in his federal income tax returns.
For these reasons, the trial court did not abuse its discretion in imputing income to Gregory and substantial evidence supports the court’s calculation of his earning capacity. (In re Marriage of Simpson, supra, 4 Cal.4th at p. 234; In re Marriage of Cohn, supra, 65 Cal.App.4th at p. 931.)
Offset for Support Provided by Suzanne’s Mother
Finally, we agree with the trial court that Gregory was not entitled to a set off for the value of the support provided to Suzanne by her mother, Bette Perroton, because such support does not constitute income for purposes of calculating spousal support. Gregory argues that since Suzanne’s mother is providing room, board and care pursuant to section 3910, subdivisions (a) and (b), because Suzanne is her incapacitated adult child, his spousal support obligation should be reduced. He relies on the decisions in Stewart v. Gomez (1996) 47 Cal.App.4th 1748 and County of Kern v. Castle (1999) 75 Cal.App.4th 1442 for the proposition that a parent’s income for purposes of child support includes the value of free housing, and maintains that the same rule should apply to spousal support.
Section 3910 provides, with respect to child support, “(a) The father and mother have an equal responsibility to maintain, to the extent of their ability, a child of whatever age who is incapacitated from earning a living and without sufficient means. [¶] (b) Nothing in this section limits the duty of support under Sections 3900 and 3901.”
Suzanne responds that the decisions in Stewart v. Gomez, supra, 47 Cal.App.4th 1748 and County of Kern v. Castle, supra, 75 Cal.App.4th 1442 make clear that the court has the discretion to consider free housing in calculating support, but is not required to do so. In Stewart v. Gomez, supra, 47 Cal.App.4th at page 1755, the appellate court ruled that if a father “received free housing as a part of his employment, the trial court could, in its discretion, include the reasonable value of such housing as income under section 4058, subdivision (a)(3).” In County of Kern v. Castle, supra, 75 Cal.App.4th at page 1451, the appellate court determined that the trial court “could have discretionarily considered as income the mortgage-free housing [the father] was living in because he paid the mortgage off with part of the proceeds from his inheritance. This constituted a reduction in living expenses like that in the Stewart [v. Gomez, supra, 47 Cal.App.4th 1748] case.”
Section 4058, subdivision (a)(3) provides, “The annual gross income of each parent means income from whatever source derived, except as specified in subdivision (c) and includes, but is not limited to, the following: [¶] . . . [¶] . . . In the discretion of the court, employee benefits or self-employment benefits, taking into consideration the benefit to the employee, any corresponding reduction in living expenses, and other relevant facts.”
As Suzanne correctly points out, this court has determined that with respect to child support, “[u]nder the plain language of section 4058, the court’s ability to consider house benefits as income is limited to cases involving employment-related housing benefits.” (In re Marriage of Schlafly (2007) 149 Cal.App.4th 747, 758 (Schlafly.) Suzanne’s free housing is obviously not employment-related. However, the issue of whether a supported spouse’s housing benefits could be considered as income was not addressed in Schlafly, Stewart, or Gomez, which only concerned child support. Moreover, section 4320, which specifies the circumstances that the court may consider in ordering permanent spousal support, does not expressly provide that the court has the discretion to consider a spouse’s housing benefit.
Even assuming that the trial court has the discretion to consider the supported spouse’s free housing under section 4320, because subdivision (e) provides that the trial court may consider “[t]he obligations and assets, including the separate property, of each party,” while subdivision (n) provides that the court may also consider “[a]ny other factors the court determines are just and equitable,” we believe that consideration of the support provided by Suzanne’s mother is unwarranted under the circumstances of this case.
The support provided by a parent to an incapacitated adult child pursuant to section 3910 is not intended to reduce a supporting spouse’s obligation to an incapacitated supported spouse. It is well established that section 3910 was enacted to reduce the financial burden on the public: “The statute has its roots in Elizabethan poor law from almost 400 years ago and has been a part of California law since the Civil Code was adopted in 1872. [Citation.] Its imposition upon parents of a duty to support their child continues even after the child reaches the age of majority, on the rationale of protecting the public from the financial burden of supporting an individual whose parents are able to provide the requisite support. [Citation.]” (Jones v. Jones (1986) 179 Cal.App.3d 1011, 1014.)
Thus, in In re Marriage of Drake (1997) 53 Cal.App.4th 1139, 1154, the court rejected a father’s contention that his obligation to support his disabled adult son under section 3910 was discharged because the mother had set up a trust for their son’s support. Similarly, in Chun v. Chun (1987) 190 Cal.App.3d 589, 596 a father could not avoid his support obligation under Civil Code section 206 (the predecessor statute to section 3910) because his disabled daughter was fully supported by her mother. From these decisions, we infer that a parent’s support of an incapacitated adult child pursuant to 3910 does not necessarily reduce the obligation of the adult child’s spouse to pay spousal support, because the intent of section 3910 is to protect the public from the financial burden of supporting the incapacitated person.
We therefore determine that the trial court did not err in declining to consider the support provided by Suzanne’s mother as income in determining Gregory’s spousal support obligation. However, we emphasize that our ruling is limited to the facts of this case, and we do not establish a general rule that the court may never consider the parental support provided to a party under section 3910 in determining the other party’s spousal support obligation.
For these reasons, we conclude that the trial court did not abuse its discretion in making its awards of temporary and permanent spousal support to Suzanne.
II. Child Support
In his trial brief, Gregory requested an award of child support from the date of separation in light of Suzanne’s income from Social Security, rental of the family residence, her interest in a mini-storage unit, and her mother’s support. Suzanne, in her trial brief, requested an award of child support retroactive to May 10, 2001.
A. Trial Evidence Pertaining to Child Support
The trial evidence relevant to the trial court’s ruling on child support included the evidence set forth above with respect to spousal support.
B. Statement of Decision and Judgment
In its statement of decision, the trial court found that there were two minor children and that they spend approximately 20 percent of their time with their mother, Suzanne, while Gregory is the primary custodial parent. For purposes of calculating child support, the court determined that Gregory’s actual net income was $4,511 per month, rather than imputing income of $6,667 per month. The trial court accordingly calculated that under the guidelines, Gregory should pay Suzanne guideline child support of $544 per month.
Courts are required to calculate child support under the statutory guidelines set forth in the Family Code. (See §§ 4052-4055.) “[A]dherence to the guidelines is mandatory, and the trial court may not depart from them except in the special circumstances enumerated in the statutes. (§§ 4052; 4053, subd. (k); [citation].)” (Cheriton, supra, 92 Cal.App.4th at p. 284.)
However, the court determined that a deviation from the guideline was appropriate due to the unusual aspects of the case, including the children’s monthly Social Security payment of $660 per month that Gregory receives. The trial court awarded Suzanne child support of $300 per month, which includes $100 per month for the oldest child and $200 per month for the youngest child. The trial court rejected Gregory’s contention that it was not in the best interests of the child to require the custodial parent to pay child support to the parent with the lesser amount of time share.
No party filed an objection to the statement of decision. The judgment entered April 5, 2006, includes the award of child support as set forth in the statement of decision.
C. Analysis
Gregory’s Contentions
On appeal, Gregory contends that the trial court erred in calculating child support on the basis that he had a net income of $4,511 per month, rather than his actual income of $1,858 per month. Gregory also asserts that he is entitled to an offset for the value of room, board and care provided to Suzanne by her mother.
Standard of Review
We review an award of child support under the abuse of discretion standard. (Cheriton, supra, 92 Cal.App.4th at p. 282.) However, we review the trial court’s findings with respect to a parent’s actual income to determine if the findings are supported by substantial evidence. (In re Marriage of Schulze (1997) 60 Cal.App.4th 519, 529.)
Statutes and Public Policy Governing Child Support
The statutes and public policy governing the calculation of child support awards and the related determination of parental income were outlined by this court in Cheriton, supra, 92 Cal.App.4th at pages 283-284. “California has a strong public policy in favor of adequate child support. [Citations.] That policy is expressed in statutes embodying the statewide uniform child support guideline. (See [§§] 4050-4076.) ‘The guideline seeks to place the interests of children as the state’s top priority.’ (§ 4053, subd. (e).) In setting guideline support, the courts are required to adhere to certain principles, including these: ‘A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.’ (§ 4053, subd. (a).) ‘Each parent should pay for the support of the children according to his or her ability.’ (§ 4053, subd. (d).)” (Ibid., fn. omitted.) Parental income is “broadly defined” for the purpose of calculating child support under the statutory guidelines. (Cheriton, supra, 92 Cal.App.4th at p. 285.)
Actual Income
Gregory contends that there was not substantial evidence to show that his monthly income in 2005 was greater than $1,858, as stated in his July 14, 2004, income and expense declaration. We disagree.
The trial court determined that Gregory’s actual income was $4,511 per month, stating, “In addition to finding that [Gregory] has the ability to earn at least the sum of $6,667 per month . . . the Court finds, based upon the evidence, that [Gregory] actually does have funds available for support of at least $4,511 per month net.” The evidence the court relied upon was described as follows in the statement of decision:
“On the later Income and Expense Declaration, filed on July 14, 2005, [Gregory] lists expenses of $4,124 for the last 12 months and states that his rent has increased to $1750 from $1,363, which would bring the total expenses to $4,511 per month. [Gregory] has stated under oath that he is working 30 to 50 hours per week and asserts that he is earning only $1,858 per month as a consultant. In addition, on this form, he lists a number of alleged loans, but does not state the purpose of these loans. The loans total $211,500. . . . [I]f one examines the amounts paid in legal expenses listed by [Gregory], it equals $246,229, of which he asserts that he paid directly the sum of $35,169. The difference equals approximately $211,060, which is remarkably close to the amount of the loans asserted. Thus, the ‘loans’ were not apparently for living expenses. At a minimum, therefore, it can be inferred and found that [Gregory] has available sufficient after tax dollars to pay at least $4,511 per month in actual expenses. There are no assets shown on the form from which [Gregory] states he is able to withdraw funds for living expenses. The tax returns submitted by [Gregory] are inconsistent with his own sworn declarations. Based upon all of the evidence and findings, the Court finds that [Gregory] has the sum of at least $4,511 per month net or nontaxable income available for support in 2005.”
We reiterate that when the findings of the court are challenged for sufficiency of the evidence, “ ‘our power begins and ends with a determination as to whether there is any substantial evidence to support them; that we have no power to judge . . . the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom.’ ” (In re Marriage of Martin (1991) 229 Cal.App.3d 1196, 1200.)
Applying this standard, we determine that the trial court could reasonably infer from the evidence that Gregory had a source of actual income in 2005, in addition to his stated monthly income of $1,858, from which he was paying a large portion of his monthly expenses of $4,511. While Gregory asserted that he paid the expenses in excess of his actual monthly income of $1,858 by obtaining loans from family and friends, the trial court calculated that the amount of the loans Gregory had received approximately equaled his attorney fees, less amounts that he had paid from his own funds. Therefore, the loans listed by Gregory were insufficient to cover his monthly expenses in addition to his attorney fees and it may be reasonably inferred that he had another source of income from which the majority of his monthly expenses were paid.
Offset for Support Provided by Suzanne’s Mother
Gregory also argues that the support provided to Suzanne by her mother pursuant to section 3910 must be considered Suzanne’s income for the purpose of calculating child support. For several reasons, we are not convinced by his argument.
First, with regard to child support, subdivision (b) of section 3910 expressly provides that “Nothing in this section limits the duty of support under Sections 3900 and 3901.” Thus, we do not read section 3910 to authorize reduction of a parent’s child support obligation because the other parent is an incapacitated adult child who is receiving support from his or her parent pursuant to section 3910.
Section 3900 provides, “Subject to this division, the father and mother of a minor child have an equal responsibility to support their child in the manner suitable to the child’s circumstances.”
Section 3901 provides, “(a) The duty of support imposed by Section 3900 continues as to an unmarried child who has attained the age of 18 years, is a full-time high school student, and who is not self-supporting, until the time the child completes the 12th grade or attains the age of 19 years, whichever occurs first. [¶] (b) Nothing in this section limits a parent’s ability to agree to provide additional support or the court’s power to inquire whether an agreement to provide additional support has been made.”
Second, as we have discussed in connection with the issue of spousal support, section 4058 does not authorize consideration of a parent’s non-employment related free housing as income for purposes of child support. Section 4058, subdivision (a)(3), provides that in the court’s discretion a parent’s gross income for purposes of child support may include “employee benefits or self-employment benefits, taking into consideration the benefit to the employee, any corresponding reduction in living expenses, and other relevant facts.” We reiterate this court’s ruling in Schlafly, supra, 149 Cal.App.4th at page 758, that “[u]nder the plain language of section 4058, the court’s ability to consider house benefits as income is limited to cases involving employment-related housing benefits.” It cannot be disputed the support provided to Suzanne by her mother pursuant to section 3910 is not employment-related. Thus, Gregory misplaces his reliance on the decisions in Stewart v. Gomez, supra, 47 Cal.App.4th 1748 and County of Kern v. Castle, supra, 75 Cal.App.4th 1442 for his contention that the value of the support provided by Suzanne’s mother should reduce his child support obligation.
For these reasons, we determine that the trial court did not abuse its discretion awarding child support of $300 per month to Suzanne. (Cheriton, supra, 92 Cal.App.4th at p. 282.)
III. Characterization of Family Residence
Suzanne asserted in her trial brief that she was entitled to reimbursement under In re Marriage of Watts (1985) 171 Cal.App.3d 366 (Watts) for Gregory’s exclusive use of the family residence, which was her separate property, from January 2000 to November 2004. In his trial brief, Gregory contended that parties each had a 50 percent separate property interest in the family residence, in accordance with the 1991 postmarital agreement, and therefore reimbursement was not required. Alternatively, Gregory requested a credit for his payment of house-related expenses, pursuant to Epstein, supra, 24 Cal.3d 76.
A. Trial Evidence
Suzanne and Gregory entered into a postmarital agreement on November 22, 1991. The agreement provided that each of them had a 50 percent separate property interest in the family residence in Sunnyvale. On June 28, 1993, Gregory executed an interspousal transfer grant deed conveying his interest in the Sunnyvale residence to Suzanne as her sole and separate property. According to Gregory, the purpose of the transfer was to obtain a loan. Subsequently, the parties stipulated to a partial judgment, filed on March 21, 2005, which states, “The real property at 1617 Canary Drive, Sunnyvale, California 94087 is found to be the separate property of [Suzanne] with no reimbursement claims to [Gregory] at any time.”
At the time of trial, the parties agreed that they separated in January 2000. Gregory testified that they continued to live together through July 2000. The parties also stipulated that the reasonable rental value of the family residence in Sunnyvale was $2,800 per month from August 3, 2000 through August 15, 2004.
B. Statement of Decision and Judgment
In its statement of decision, the trial court ruled that the postmarital agreement “is a valid agreement between the parties and they are bound by the terms of the agreement.” The trial court also ruled that the Sunnyvale residence was the separate property of Suzanne, based on the March 21, 2005 partial judgment. The court determined that “This Court is bound by the Judgment in this case. The parties agreed that the residence was the separate property of [Suzanne]. They did not say that it was the separate property as of a particular point in time. They simply agreed that it was her separate property and that there were to be no reimbursement claims by [Gregory]. The Court interprets this to mean that the property was the separate property of [Suzanne].”
The court also made the following findings regarding the rental value of the Sunnyvale residence: [T]he calculation for the rental value would be $2,800 times the number of months involved, which the Court will find to be 48, from August, 2000 to August, 2004. That sum equals $134,400. If the property were community property, this sum would be divided by two. Since it is the separate property of [Suzanne], it is not divided.”
As to the parties’ Watts and Epstein claims, the trial court ruled as follows: “Regarding the claims of [Gregory] of amounts paid towards the house, it appears undisputed that he paid . . . $57,293 plus $6,584, for a total of $63,877. [¶] This leaves a net amount of $70,523 which is due from [Gregory] to [Suzanne].”
The trial court’s rulings as indicated in the statement of decision were included in the judgment entered April 5, 2006.
C. Analysis
The Parties’ Contentions
Gregory argues on appeal that the trial court erroneously interpreted the partial judgment of March 21, 2005, to provide that the Sunnyvale residence was Suzanne’s separate property. He contends that the reporter’s transcript of the trial court proceedings of September 23, 2004, which contains an oral recitation of the parties’ stipulation to the partial judgment, shows that the parties intended that the Sunnyvale residence become Suzanne’s separate property as of the date of the judgment, March 21, 2005. He also contends that the trial court’s ruling is inconsistent with its ruling that the postmarital agreement is valid and binding, since the postmarital agreement confirms the parties’ separate property interests in the Sunnyvale residence. In Gregory’s view, the trial court’s ruling effects a retroactive transmutation of his separate property interest, thereby violating his constitutional right to due process.
This court granted Gregory’s request to augment the record on appeal with the reporter’s transcript of the trial court proceedings of September 23, 2004.
Suzanne disagrees, for several reasons. First, she points out that Gregory failed to present to the trial court the reporter’s transcript of the trial court proceedings of September 23, 2004, which reflect the parties’ stipulation to the March 21, 2005 partial judgment. Suzanne therefore contends that Gregory’s argument regarding the extrinsic evidence that supports his interpretation of the March 21, 2005, judgment must be disregarded because it is being presented for the first time on appeal. Alternatively, Suzanne argues that the reporter’s transcript of September 23, 2004, does not support Gregory’s contention that the parties agreed that the Sunnyvale residence became Suzanne’s separate property as of the date of the partial judgment.
Scope of Appellate Review
We observe that, as a general rule, documents that were not before the trial court are disregarded as beyond the scope of appellate review. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1.) For that reason, the parties are precluded from making arguments in their briefs that rely on facts that are either outside the record or improperly included in the record, and such arguments are usually disregarded by the appellate court. (Kendall v. Allied Investigations, Inc. (1988) 197 Cal.ApP.3d 619, 625.) Therefore, in the present case we will disregard Gregory’s arguments regarding the proper interpretation of the partial judgment of March 21, 2005, since those arguments are based on the September 23, 2004, reporter’s transcript that was not before the trial court.
Standard of Review
We will apply the applicable standard of review for the interpretation of a writing, which this court has previously described: “When a trial court's construction of a written agreement is challenged on appeal, the scope and standard of review depend on whether the trial judge admitted conflicting extrinsic evidence to resolve any ambiguity or uncertainty in the contract. If extrinsic evidence was admitted, and if that evidence was in conflict, then we apply the substantial evidence rule to the factual findings made by the trial court. But if no extrinsic evidence was admitted, or . . . the evidence was not in conflict, we independently construe the writing. [Citations.]” (De Anza Enterprises v. Johnson (2002) 104 Cal.App.4th 1307, 1315.) The general rules applicable to the interpretation of a writing also apply to the interpretation of a judgment. (Estate of Careaga (1964) 61 Cal.2d 471, 475; In re Marriage of Richardson (2002) 102 Cal.App.4th 941, 949.)
The March 21, 2005 Judgment
In the present case, the trial court determined that the March 21, 2005 judgment unambiguously provided that the Sunnyvale residence was Suzanne’s separate property, and did not consider any extrinsic evidence. As we have noted, the reporter’s transcript of September 23, 2004, on which Gregory bases his argument on appeal, was not presented to the trial court. Having reviewed the March 21, 2005, judgment, we agree with the trial court that the judgment clearly provides that the Sunnyvale residence is Suzanne’s separate property. The judgment states, “The real property at 1617 Canary Drive, Sunnyvale, California 94087 is found to be the separate property of [Suzanne] with no reimbursement claims to [Gregory] at any time.” No dates or other limitations on Suzanne’s separate property interest, or mention of Gregory’s separate property interest, were included in the judgment.
Due Process Claim
Finally, we also determine that Gregory forfeited his claim that the trial court’s ruling violated his due process rights by effecting a retroactive transmutation of his separate property interest because he failed to raise that claim below. The general rule is that a party may forfeit a constitutional right, in either a criminal case or a civil case, by failing to assert the right below. (People v. Simon (2001) 25 Cal.4th 1082, 1103.) We decline to excuse Gregory’s failure to assert his due process right in light of his opportunity to address the issue during trial court proceedings.
For these reasons, we conclude that the trial court did not err in characterizing the Sunnyvale residence as Suzanne’s separate property pursuant to the partial judgment of March 21, 2005, and in making its rulings on the parties’ Watts and Epstein claims on that basis.
IV. San Mateo Federal Credit Union Checking Account
A. Trial Evidence
During the trial, the parties submitted supplemental briefs in which a bank account identified by the parties as “San Mateo Federal Credit Union 80 checking account” was listed as one of the items disputed. Suzanne claimed that the San Mateo Federal Credit Union 80 checking account was her separate property, with a value of $18,625 on the date of separation, January 3, 2000. Gregory asserted in his supplemental brief that the account had a value of $3,695 on the date of separation, which he stated was January 1, 2000, and reasserted the value of $3,695 during his trial testimony. Prior to trial, Suzanne submitted a trial brief in which she also stated that the date of separation was January 3, 2000.
B. Statement of Decision and Judgment
The trial court ruled in its statement of decision as follows: “Pursuant to Exhibit 22, this account had a balance of $3,695.95 as of January 1, 2000. Date of separation was January 8, 2000. Thus, the deposit of January 6, 2000, of $4,796.00 must be added to the original balance and the checks and withdrawals which accrued to date of separation must also be deducted . . . leaving a net balance of $7,833.20.” The trial court also determined that the balance on the date of separation was offset by the checks that Gregory had written for Suzanne’s benefit, leaving “a balance of $5,292.34 to be credited as [Suzanne’s] separate property in the overall accounting of the division of property and the accounting of separate property.” The judgment entered April 5, 2006, states that the $5,592.34 net value of the account is Suzanne’s separate property.
C. Analysis
The Parties’ Contentions
On appeal, Gregory contends that the trial court erred in determining that the date of separation was January 8, 2000, rather than January 3, 2000. He also asserts that Suzanne is estopped from asserting January 8, 2000 as the date of separation because she stated in her trial briefs that January 3, 2000 was the date of separation. Suzanne responds that Gregory is barred from asserting an error in the date of separation on appeal because he failed to bring the matter to the trial court’s attention during the proceedings below. We agree.
Date of Separation
It is well established that “a reviewing court ordinarily will not consider a challenge to a ruling if an objection could have been but was not made in the trial court. [Citation.]” (In re S.B. (2004) 32 Cal.4th 1287, 1293.) “The purpose of this rule is to encourage parties to bring errors to the attention of the trial court, so that they may be corrected. [Citation.]” (Ibid.) Here, the record reflects that Gregory had the opportunity to object to the trial court’s determination that January 8, 2000 was the date of separation but failed to do so, as indicated in the following colloquy during the first day of trial, May 19, 2005:
“THE COURT: Do we have a stipulation on what the date of separation was?
“[SUZANNE’S ATTORNEY]: We filed our petition --it’s January 8, I believe, 2000.
“THE COURT: Is that stipulated?
“[GREGORY’S ATTORNEY]: The response as I recall it did not dispute that date. So I think we’re—whatever the facts on the ground that’s the
“THE COURT: All right.
“[GREGORY’S ATTORNEY]: --probably the date of separation.
“THE COURT: Thank you.
“[SUZANNE’S ATTORNEY]: I’ll give you the exact date. It’s January something.
“[GREGORY’S ATTORNEY]: I don’t think it matters terribly the exact date in January.”
Thereafter, Gregory did not object to the finding in the statement of decision that the date of separation was January 8, 2000. He also brought a motion for reconsideration and new trial on April 21, 2006, in which he again failed to object to the trial court’s finding that January 8, 2000, was the date of separation. We acknowledge that the record reflects three different dates of separation, including January 1, 2000, January 3, 2000, and January 8, 2000. We determine, however, that Gregory has forfeited his claim on appeal that January 3, 2000, is the correct date of separation because an objection could have been but was not made in the trial court proceedings below. (In re S.B., supra, 32 Cal.4th at p. 1293.)
V. The Marclyn Designs, Inc. Checking Account
The parties’ supplemental trial briefs indicated that another checking account in dispute was the Marclyn Designs, Inc. (Marclyn) checking account at Bank of America.
A. Trial Evidence
At trial, Gregory testified that “the stock of [Marclyn] is fully owned and the separate property of Suzanne.” He further explained, “[I] was joint on the account and [Marclyn] was a shell corporation that I performed work and did my billing [through] and that’s how I obtained my earnings.” Gregory deposited checks that represented his earnings into the Marclyn account and he also loaned some of his separate property earnings to Marclyn. A copy of the Marclyn checking account bank statement of January 31, 2000, was introduced into evidence, which indicated that the balance on that date was $46,026.
Gregory also entered into evidence a detailed accounting of the Marclyn account’s checks and deposits between February 27, 1999 and December 8, 1999. The accounting was accompanied by Gregory’s declaration, in which he stated that he had loaned Marclyn “the sums of $36,000 on March 30, 1999 and $4,952 on April 1, 1999, from his personal account.” Gregory further stated in his declaration that Marclyn did not repay his loans, which totaled $40,952, and therefore the balance in the Marclyn account is his separate property.
B. Statement of Decision and Judgment
In its statement of decision, the trial court found that the parties’ postmarital agreement provided that Marclyn was Suzanne’s separate property. Additionally, the postmarital agreement provided that the “efforts, skills and labor of a party in contributing to an asset, while they might otherwise create a community property interest in the account, would not do so following the execution of the Post Marital Agreement.” The trial court also found that the balance of the Marclyn checking account on the date of separation, January 8, 2000, was $47,485, based on the deposits shown on the January 31, 2000, bank statement, and that the account was Suzanne’s separate property.
The trial court rejected Gregory’s claim that the funds in the account on the date of separation were traceable to his separate property and were subsequently exhausted solely for the benefit of Suzanne. The court determined that Gregory’s “tracing and allocation between the parties is not sufficient to demonstrate that the funds in the account at the point of separation were solely from his earnings.”
The judgment of April 5, 2006, states, “the court finds the Marclyn Designs account to be the separate property of [Suzanne]. [Gregory] had control of this account and took $47,485.70 from it. He is to return those sums immediately.”
C. Analysis
The Parties’ Contentions
Gregory contends that the trial court erred because he is entitled to reimbursement of his traceable separate property deposits to the Marclyn account, pursuant to section 2640, subdivision (c), which provides in pertinent part, “A party shall be reimbursed for the party’s separate property contributions to the acquisition of property of the other spouse's separate property estate during the marriage, unless there has been a transmutation in writing pursuant to Chapter 5 (commencing with Section 850) of Part 2 of Division 4, or a written waiver of the right to reimbursement.”
Gregory further argues that he proved his claim that he loaned money to Marclyn by submitting to the trial court a detailed accounting of the Marclyn account’s checks and deposits between February 27, 1999 and December 8, 1999. He also emphasizes that he proved his tracing claim by submitting bank records establishing the deposit of the $36,000 check and the $4,952 check, both drawn on his separate property account, into the Marclyn account.
Alternatively, Gregory argues that if this court agrees with the trial court’s ruling that he did not prove his tracing claim, the amount confirmed as Suzanne’s separate property should nevertheless be reduced to $23,218 because that was the balance on the correct date of separation, January 3, 2000.
Suzanne counters that section 2640, subdivision (c) is not applicable because subdivision (c) was enacted in 2004 and may not be applied retroactively to defeat her separate property interest in the Marclyn account. Alternatively, Suzanne argues that the trial court correctly determined that Gregory had failed to meet his burden to produce satisfactory proof of his separate property tracing claim, and that the correct date of separation is January 8, 2000.
Standard of Review
The general rule is that “a trial court's finding that a particular item is separate or community property is limited to a determination of whether any substantial evidence supports the finding.” (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 849 .) Consistent with that rule, “[w]hether the spouse claiming a separate property interest has adequately traced an asset to a separate property source is a question of fact for the trial court, and its finding must be upheld if supported by substantial evidence.” (In re Marriage of Braud (1996) 45 Cal.App.4th 797, 823.)
Characterization of the Marclyn Account
We agree with the trial court that Gregory failed to show that the funds in the Marclyn checking account as of the date of separation, January 8, 2000, were his separate property. Gregory’s evidence consists of copies of two checks that were deposited into the Marclyn account in 1999, including one check dated March 30, 1999 in the amount of $36,000 and a second check dated April 1, 1999, in the amount of $4,952. Both checks are imprinted with the name “Greg Galloway” and the address of the Sunnyvale residence, and were apparently drawn on the same Bank of America account. In his declaration, Gregory states that the checks were drawn on his “personal account” and constituted his “separate property loan.” He provides no other information about the source of these funds, which totaled $40,952. Gregory therefore failed to adequately trace his $40,952 in deposits to the Marclyn account by showing that the funds derived from a separate property source.
Accordingly, we need not determine whether subdivision (c) of section 2640 may be applied retroactively. Even assuming that Gregory is entitled to reimbursement of his separate property deposits in the Marclyn account in accordance with subdivision (c) of section 2640, Gregory did not establish that he made separate property deposits into the Marclyn account and therefore he is not entitled to reimbursement.
For these reasons, we determine that substantial evidence supports the trial court’s determination that the Marclyn account’s $47,485 balance on the date of separation was Suzanne’s separate property. Additionally, for the reasons previously stated, we further find that substantial evidence supports the trial court’s finding that the date of separation was January 8, 2000.
VI. Payments to Loraine Downie
As discussed above, the trial court ruled that Suzanne’s separate property included the net value of the San Mateo Federal Credit Union 80 account on the date of separation, which was $5,292.34. An issue arose as to whether Gregory was entitled to an offset for the checks that he had written to Loraine Downie, which would reduce the net value of the San Mateo Federal Credit Union 80 account.
A. Trial Evidence
At trial, Gregory testified that he had employed Loraine Downie to assist with the “physical care” of Suzanne and that she was a full time caretaker. When asked whether Downie was a nanny, Gregory replied, “After—let’s see July—whenever it is after the conservatorship was filed then we kept her on and I had her doing child care and Suzanne stopped being delivered to the house.” Gregory also submitted a spreadsheet that he asserts shows that he wrote 13 checks to Downie on the San Mateo Federal Credit Union 80 account from January 20, 2000 to September 18, 2000.
B. Statement of Decision and Judgment
In its statement of decision, the trial court declined to allocate “the checks to Loraine Downie as expenses for [Suzanne] which should be offset against the balance of the account on the date of separation. After examination of the evidence presented, including specifically, but not limited to, Exhibit O, it appears that checks were written to Ms. Downie for items labeled by [Gregory] as painting (see check 2419) and [19]99 tax due (see check 2523). Interestingly enough, on [Gregory’s] own accounting, Exhibit Q, he labels these as medical expenses for [Suzanne], yet the checks in his handwriting and admitted as part of Exhibit O, show the expenses for painting and taxes. [Gregory] has not shown these expenses to Ms. Downie to be legitimate expenses on behalf of [Suzanne]. The Court, based upon the evidence before it, finds that the expenses for Ms. Downie should not be allowed as offsets against the account balance of this separate property account.” The trial court’s finding was included in the judgment entered on April 5, 2006.
C. Analysis
The Parties’ Contentions
On appeal, Gregory argues that the trial court erred in failing to allow as an offset “the 11 perfectly-legitimate payments made to Loraine Downie for Suzanne’s benefit.” He contends that the trial court should be ordered to offset $27,610 against the total sum of his obligations to Suzanne. Suzanne responds that the trial court acted with appropriate discretion in making its finding.
Standard of Review
As Suzanne correctly indicates, we review an order regarding a reimbursement claim for abuse of discretion. (See, e .g., In re Marriage of Reilley (1987) 196 Cal.App.3d 1119, 1124.) Where the trial court's exercise of discretion is based on the facts of the case, it will be upheld “as long as its determination is within the range of the evidence presented. [Citation.]” (In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 670.)
Denial of Reimbursement Claim
Applying this deferential standard of review, we determine that the trial court did not abuse its discretion. The evidence presented showed that Gregory had listed on his spreadsheet for the San Mateo Federal Credit Union 80 account two checks made payable to Loraine Downie for “medical expenses,” although those checks contained the handwritten notations “painting” and “99 tax due.” In fact, Gregory listed all payments to Downie as “medical expenses” on his spreadsheet. Downie did not testify and Gregory presented no specific evidence to support his claim that he paid Downie for providing postseparation caretaker services for Suzanne. Further, the trial court had made prior findings that Gregory’s testimony lacked credibility. On this evidence, we believe that trial court could properly exercise its discretion to deny Gregory’s reimbursement claim because he failed to establish that his postseparation payments to Downie from January 20, 2000 to September 18, 2000 were for Suzanne’s benefit.
We received exhibit O from the trial court and reviewed the seven checks made payable to Loraine Downie that were included in the exhibit.
VII. Tax Refund Check
A. Trial Evidence
At trial, Gregory testified that in January 2001 he received a State of California tax refund check for the 1992 tax year in the amount of $1,116. He deposited the check and did not give any part of the proceeds to Suzanne.
B. Statement of Decision and Judgment
In its statement of decision, the trial court ruled that the tax refund check should be divided equally between the parties because it was presumptively community property. The court also awarded Suzanne interest on her portion of the tax refund, as well as the additional sum of $250. The additional sum was imposed on Gregory because the trial court found that he had breached his fiduciary duty to Suzanne by failing to disclose the tax refund check to her conservators. The trial court based its ruling on the court’s review of the accounting in Suzanne’s probate case, which did not indicate that the tax refund check was included in the probate accountings. The judgment of April 5, 2006 incorporates these rulings.
C. Analysis
Gregory’s Contentions
On appeal, Gregory argues that for several reasons the trial court erred in determining that he breached his fiduciary duty by failing to disclose to Suzanne’s conservators that he had received a community property tax refund check and awarding Suzanne an additional sum of $250.
First, Gregory contends that the trial court lacked jurisdiction because he had “exclusive power” to dispose of the community property tax refund check pursuant to sections 1103, subdivision (a) and Probate Code section 3051, subdivision (b)(1). We need not reach this issue because Gregory raises it for the first time on appeal. The California Supreme Court has instructed that “ ‘[a]n appellate court will ordinarily not consider procedural defects or erroneous rulings, in connection with relief sought or defenses asserted, where an objection could have been but was not presented to the lower court by some appropriate method . . . .’ ” (Doers v. Golden Gate Bridge etc. Dist., supra, 23 Cal.3d at p. 184, fn. 1; see also In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 1002.)
Section 1103, subdivision (a) provides, “Where one or both of the spouses either has a conservator of the estate or lacks legal capacity to manage and control community property, the procedure for management and control (which includes disposition) of the community property is that prescribed in Part 6 (commencing with Section 3000) of Division 4 of the Probate Code.”
Probate Code section 3051, subdivision (b)(1) provides, “Except as provided in subdivision (c), if one spouse has legal capacity and the other has a conservator: [¶ (1) The spouse who has legal capacity has the exclusive management and control of the community property including, subject to Section 3071, the exclusive power to dispose of the community property.”
Next, Gregory also contends that there is no evidence to show that he failed to disclose the tax refund check in the probate case accountings. He also claims that the trial court abused its discretion in failing to consider the negative effect of a finding of breach of fiduciary duty on his ability to obtain a “securities license,” which will impair his ability to provide for the children.
Standard of Review
We review the trial court’s ruling that a spouse breached his or her fiduciary duty under the substantial evidence standard of review. (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1430.)
Breach of Fiduciary Duty
The duty to disclose the existence of community assets is set forth in section 1100, subdivision (e), which provides in pertinent part, “Each spouse shall act with respect to the other spouse in the management and control of the community assets and liabilities in accordance with the general rules governing fiduciary relationships which control the actions of persons having relationships of personal confidence as specified in Section 721, until such time as the assets and liabilities have been divided by the parties or by a court. This duty includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest . . . .”
Here, Gregory admitted during his trial testimony that he received the community property tax refund check in January 2001, that he deposited the check in his personal Bank of America account, and that he did not give any part of the proceeds to Suzanne. Moreover, Gregory does not dispute the trial court’s finding that the tax refund check was not disclosed in an accounting in the probate case by pointing to any actual disclosure. Accordingly, there is substantial evidence that Gregory breached his fiduciary duty under section 1100, subdivision (e) by failing to disclose the existence of the tax refund check to Suzanne or her conservators.
Award of $250
Finally, Gregory argues that the trial court lacked jurisdiction to award an additional sum of $250, because section 1101 does not authorize an award in a discretionary amount. Suzanne disagrees, asserting that section 1101, subdivisions (g) and (h) do not limit the remedies available for a breach of fiduciary duty.
Subdivision (g) of section 1101 provides in pertinent part, “Remedies for breach of the fiduciary duty by one spouse, including those set out in Sections 721 and 1100, shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.” Subdivision (h) of section 1101 provides, “Remedies for the breach of the fiduciary duty by one spouse, as set forth in Sections 721 and 1100, when the breach falls within the ambit of Section 3294 of the Civil Code shall include, but not be limited to, an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty.”
Because subdivision (g) of section 1101 expressly provides that the remedies for breach of fiduciary duty are not limited to an award of 50 percent of the undisclosed asset, we construe the plain language of that section to provide that the minimum remedy for a spouse’s breach of fiduciary duty is to award the aggrieved spouse no less than 50 percent of the undisclosed asset, plus attorney fees and costs. Therefore, we believe that the trial court was authorized to award Suzanne the additional sum of $250.
For these reasons, we conclude that substantial evidence supports the trial court’s finding that Gregory breached his fiduciary duty and the court was authorized to award Suzanne $250 in addition to one-half of the tax refund check, pursuant to section 1101, subdivision (g).
VIII. Attorney Fees
After the first day of trial, the court asked the parties to brief the issue of attorney fees and costs. Suzanne asserted that she was entitled to attorney fees and costs of $140,000 under section 2030 because she had no ability to pay her own attorney fees; under section 3557 because enforcement of support orders was required; and under section 271 because Gregory’s misconduct had increased the costs of litigation. Suzanne submitted the declaration of her attorney, who stated that Suzanne’s attorney fees and costs through May 31, 2005, totaled $161,862, and that he had been required to appear in court at least 25 times during the litigation.
Gregory argued that he had no ability to pay attorney fees; that Suzanne had already been awarded attorney fees of $35,000 in the marital dissolution action and $40,000 in the probate proceeding; and claimed that attorney fees could only be awarded by the probate court.
A. Statement of Decision and Judgment
The trial court’s statement of decision included the following ruling on attorney fees and costs: “[P]ursuant to [sections] 2030, 271, and 2107, the Court orders that [Gregory] pay to [Suzanne] . . . the sum of $60,000. Said sum shall be payable at the rate of $500 per month or more, commenced November 1, 2005, and continuing on the first of each month thereafter until paid in full. This is without prejudice to other collection remedies which may be available to [Suzanne]. The outstanding balance shall bear interest at the legal rate, which is currently 10%. The Court finds that [Gregory] has the ability to pay the fees as ordered and that it will not cause an undue financial hardship on him. The Court finds that [Suzanne] is in need of payment of a portion of her fees and costs.” The order awarding Suzanne attorney fees and costs of $60,000, payable at the rate of $500 per month, was included in the judgment of April 5, 2006.
The statement of decision also included a number of factual findings. The trial court found that the case “ha[d] become very complex”; Gregory had incurred attorney fees and costs of $246,229 as of July 14, 2005, which were over $100,000 more than Suzanne had incurred; the attorney fees incurred by Suzanne were reasonable under the circumstances of this case; Suzanne’s estate had been exhausted; there was a substantial disparity in the parties’ income; and Suzanne was in need of payment of a portion of her attorney fees and costs.
The trial court also made a number of findings specific to Gregory, including the following: “[Gregory] has been found to lack credibility in a number of key areas. He clearly has income and resources that do not go through the accounts he has disclosed. While he has deducted his attorney’s fees and costs under the category of fees for the preservation of income, it is not clear exactly what income he is allegedly preserving. . . . [¶] . . . [Gregory] has the ability to pay fees and costs. This is not based on his apparent ability to borrow whatever it takes to litigate this matter indefinitely. Rather, it is based upon the findings of income and all of the findings set forth above.”
Additionally, the trial court found that the case had been over litigated, which required Suzanne to incur substantial attorney fees. Specifically, the court found that Gregory had “failed to follow the orders that he seek employment. He has failed to file his Declaration of Disclosure. He raised issues literally in the middle of trial and provided records that he had not previously disclosed in discovery. Given the issues of credibility, counsel for [Suzanne] was required to conduct more formal discovery than he otherwise should have been required to do.”
B. Analysis
The Parties’ Contentions
Gregory’s primary argument on appeal is that the trial court’s award of attorney fees and costs is not supported by substantial evidence. He asserts there is no substantial evidence to show that he has the ability to pay, as required by section 2032, subdivision (a) and section 270. According to Gregory, he is currently burdened with attorney fees awards totaling $112,060 through December 27, 2006 and he has no assets from which attorney fees could be paid. Further, Gregory asserts that his actual net income of $4,511 per month, as determined by the trial court, leaves him with only $161 per month after payment of court-ordered obligations. Gregory also maintains there is no substantial evidence to support an award of attorney fees and costs under section 271 because it was Suzanne’s attorney and conservators who are responsible for “meritless over litigation.”
Suzanne contends that the trial court’s factual findings show that the court did not abuse its discretion in making the award of attorney fees and costs, noting that the trial court may rely on its own experience and knowledge in determining the value of an attorney’s services.
Standard of Review
We review the trial court’s award of attorney fees and costs under the abuse of discretion standard. “A motion for attorney fees in a marital dissolution action is left to the sound discretion of the trial court and will not be overturned absent an abuse of that discretion. [Citations.] ‘ “[T]he trial court’s order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made. [Citations.]” ’ [Citations.]” (In re Marriage of Huntington (1992) 10 Cal.App.4th 1513, 1523.)
The Pertinent Attorney Fee Statutes
The trial court based its attorney fees award on the provisions of sections 2030, 271, and 2107, as discussed below.
Section 2030Under section 2030, the trial court is authorized to order any party to pay “ ‘the amount reasonably necessary for attorney’s fees and for the cost of maintaining or defending the proceeding.’ ” (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 629.) “The purpose of such an award is to provide one of the parties, if necessary, with an amount adequate to properly litigate the controversy.” (Ibid.) “The trial court may award attorney fees under section 2030 ‘where the making of the award, and the amount of the award, are just and reasonable under relative circumstances of the respective parties.’ ([§] 2032, subd. (a).)” (In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.)
“ ‘In determining what is just and reasonable under the relative circumstances, the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately, taking into consideration, to the extent relevant, the circumstances of the respective parties described in [section] 4320.’ ([§] 2032, subd. (b).) The parties’ circumstances described in [section] 4320 ‘ “include assets, debts and earning ability of both parties, ability to pay, duration of the marriage, and the age and health of the parties.” ’ [Citation.] In assessing one party’s need and the other’s ability to pay, the court may consider evidence of the parties’ current incomes, assets, and earning abilities. [Citation.]” (In re Marriage of Rosen, supra, 105 Cal.App.4th at p. 829.)
Section 2107“Section 2107, subdivision (c) requires the trial court to impose monetary sanctions and award reasonable attorney fees if a party fails to comply with any portion of the chapter of the Family Code that deals with spouse's fiduciary duty of disclosure during dissolution proceedings, i.e., sections 2100 to 2113. The statute provides, ‘If a party fails to comply with any provision of this chapter, the court shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party. Sanctions shall be in an amount sufficient to deter repetition of the conduct or comparable conduct, and shall include reasonable attorney’s fees, costs incurred, or both, unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the imposition of the sanction unjust.’ (§ 2107, subd. (c).)” (In re Marriage of Feldman (2007) 153 Cal.App.4th 1470, 1477.)
Section 271Section 271 advances the policy of the law “ ‘to promote settlement and to encourage cooperation which will reduce the cost of litigation.’ ” (In re Marriage of Petropoulos (2001) 91 Cal.App.4th 161, 177. Thus, “[f]amily law litigants who flout that policy by engaging in conduct that increases litigation costs are subject to the imposition of attorneys’ fees and costs as a sanction. [Citations.]” (Ibid.)
“Specifically the statute provides: ‘Notwithstanding any other provision of this code, the court may base an award of attorney's fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorney’s fees and costs pursuant to this section is in the nature of a sanction. In making an award pursuant to this section, the court shall take into consideration all evidence concerning the parties’ incomes, assets, and liabilities. The court shall not impose a sanction pursuant to this section that imposes an unreasonable financial burden on the party against whom the sanction is imposed. In order to obtain an award under this section, the party requesting an award of attorney’s fees and costs is not required to demonstrate any financial need for the award.’ (§ 271, subd. (a).)” (In re Marriage of Feldman, supra, 153 Cal.App.4th at p. 1477.)
The Trial Court Did Not Abuse its Discretion
Having reviewed the extensive record of the litigation in this matter, we determine that the trial court did not abuse its discretion in awarding Suzanne attorney fees and costs of $60,000. The court awarded Suzanne less than one-half of the $140,000 in attorney fees and costs that she had requested, after finding that under section 2030, Suzanne was in need of partial payment of her attorney fees and costs; that Gregory had failed to comply with his duty of disclosure under section 2107; and Gregory had also increased the cost of litigation, which justified an award of sanctions under section 271.
We are not convinced by Gregory’s argument that the trial court abused its discretion because he has no ability to pay the $60,000 award of attorney fees and costs. He does not address the trial court’s finding that he has actual income that has not been disclosed or the court’s previous finding that he had failed to account for his payment of living expenses in excess of his actual income and the loans from his family and friends. Gregory also does not address the trial court’s finding that he has been inconsistent in stating his income on the documents he has filed in this action and on his income tax returns. Moreover, the trial court has made a finding of credibility with respect to his claims about his income that is adverse to Gregory and which we may not review. (In re Marriage of Martin, supra, 229 Cal.App.3d at p. 1200.)
The record also reflects that Gregory has engaged in conduct that increased the cost of litigation in this matter. As the trial court found, Gregory failed to comply with the employment efforts order, failed to timely file disclosures of his income, and damaged his credibility, such that the policy of cooperation was frustrated and the cost of litigation was increased.
The trial court was also entitled to take into account its experience and knowledge regarding the handling of this case in comparison to other similarly complex dissolution actions. “ ‘When the trial court is informed of the extent and nature of the services rendered, it may rely on its own experience and knowledge in determining their reasonable value.’ [Citations.] ‘The exercise of sound discretion by the trial court in the matter of attorney’s fees includes also judicial evaluation of whether counsel’s skill and effort were wisely devoted to the expeditious disposition of the case.’ [Citation.]” (In re Marriage of Huntington, supra, 10 Cal.App.4th at p. 1524.) Here, the trial court could reasonably conclude that expeditious disposition of this case has been made impossible by Gregory’s litigation tactics.
For these reasons, we conclude that the trial court did not abuse its discretion in awarding Suzanne $60,000 in attorney fees and costs. (In re Marriage of Huntington, supra, 10 Cal.App.4th at p. 1523.)
DISPOSITION
The judgment is affirmed. Respondent Suzanne Galloway is awarded her costs on appeal.
WE CONCUR: RUSHING, P.J., DUFFY, J.