Opinion
G044066
12-29-2011
In re Marriage of TRICIA K. and JAMES E. LOCKINGTON TRICIA K. LOCKINGTON, Respondent, v. JAMES E. LOCKINGTON, Appellant.
James E. Lockington, in pro. per., for Appellant. No appearance for Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 04D004637)
OPINION
Appeal from an order of the Superior Court of Orange County, Ronald P. Kreber, Judge. Reversed and remanded.
James E. Lockington, in pro. per., for Appellant.
No appearance for Respondent.
Appellant James E. Lockington appeals from an order denying his request to modify the amount he pays in child support to respondent Tricia K. Lockington. James sought to reduce his child support payments when he lost his income, short sold his home to prevent a foreclosure, and moved in with his sister to avoid becoming homeless. The trial court denied James's request because it concluded the children had a right to maintain the lifestyle they enjoyed during James and Tricia's marriage despite any financial hardships James encountered after the marriage. The court also denied James's request because it found a substantial decrease in James's income did not alter the amount needed to properly care for the children.
For clarity, "we refer to the parties by their first names, as a convenience to the reader. We do not intend this informality to reflect a lack of respect. [Citation.]" (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1513, fn. 2.)
We reverse and remand the matter for further proceedings because the trial court abused its discretion by relying on erroneous legal standards to deny James's modification request. Specifically, a request to modify child support must be evaluated on current circumstances, not the circumstances that existed during the marriage. Moreover, child support must be based on the parents' actual incomes and ability to pay, not a nonspecific amount the court believes is necessary to properly care for the children.
I
FACTS AND PROCEDURAL HISTORY
James and Tricia married in 1991. They have two daughters, one born in 1998 and the other in 2000. Tricia filed for divorce in May 2004 and the trial court entered a stipulated judgment dissolving the marriage in December 2006. The judgment awarded Tricia primary physical custody and ordered James to pay $2,074 per month in child support based on his $13,476 gross monthly income, Tricia's $11,473 gross monthly income, and a 70/30 percent timesharing arrangement for physical custody. The judgment also ordered James and Tricia to share equally in the children's healthcare, education, and daycare expenses. In May 2009, James and Tricia stipulated to temporarily limit James to eight hours of supervised visitation every other weekend while he sought treatment for a pornography addiction.
The clerk's transcript James designated did not include either Tricia's petition for dissolution of the marriage or the judgment to which James and Tricia stipulated. We obtained copies of the petition and judgment from the trial court and, on our own motion, judicially notice both documents. (Evid. Code, §§ 452, subd. (d), 459, subd. (a); Martin v. Inland Empire Utilities Agency (2011) 198 Cal.App.4th 611, 621, fn. 5.)
In April 2010, James filed an order to show cause asking the trial court to reduce his monthly child support payments because his income had significantly decreased and he had no other assets he could use to continue paying support at the same level. Before the hearing on his request, James filed several supplemental declarations further describing his increasingly dire financial situation.
These declarations explained that when James and Tricia stipulated to the child support payments in December 2006, James worked for a home building company in an executive management position. In April 2007, however, the company terminated James because of the housing market decline and he began working as a self-employed real estate development and construction management consultant. In that capacity, James continued to earn a good income and timely paid all child support and other payments the judgment required. James earned an average of approximately $14,500 per month for 2009.
During 2009 and 2010, however, James spent over $100,000 in attorney fees and treatment expenses to address his pornography addiction and the custody dispute that addiction spurred. Moreover, in December 2009, James's primary client sold the project on which James worked and informed him it would no longer need his services after he helped transition to the new owner. At the same time, James's work with his other clients also began to dry up. James billed his clients just $3,075 in January 2010 and $4,750 in February 2010. By June 2010, James's monthly income plummeted to $300. In July 2010, the trial court ordered James to pay Tricia $50,000 for the attorney fees she incurred regarding the custody dispute.
The expenses relating to James's treatment and custody dispute combined with the precipitous drop in his income exhausted all of James's financial resources. He began using credit cards and borrowing money from family members to pay his child support and living expenses. By June 2010, James had run up substantial credit card debt, short sold his home to prevent a foreclosure, and moved in with his sister to avoid becoming homeless. James's sister, an attorney who assumed his representation on a pro bono basis, filed a declaration confirming that James moved in with her in June 2010 and that she was paying his living expenses. James's declarations also explained not only his efforts to finding new consulting clients, but also a salaried position in his field and even temporary office work with staffing agencies.
Tricia opposed James's request to reduce his child support obligations, arguing the children's expenses remained the same and she should not have to find a second job to cover James's share of the children's expenses merely because he lost his job. She argued James should get a job at Starbucks or Target to pay his child support obligations. Tricia also questioned whether James truly lost all of his income, but she failed to provide any evidence to support her contention James might be hiding money. Finally, Tricia pointed out that earlier in the proceedings a different judge found that James lacked credibility when it came to financial matters.
In early August 2010, the trial court conducted a hearing on James's request to reduce his child support payments. Although the court accepted James's testimony regarding his dire financial circumstances, it nonetheless denied his request and ordered James to continue paying child support and expenses as ordered by the December 2006 judgment: "So the court is going to deny your request for modification. . . . [T]he court feels that the priority has to be with the children. [¶] I know you're living with your sister and I know you sold items. . . . But the care of the children is paramount, and it must be addressed and taken care of. Because they have expenses. [¶] So I would not grant your request, and all prior orders remain in effect."
The court further stated the children had a right to maintain the marital standard of living regardless of any financial difficulties James faced: "Well, the court looks at the lifestyle of the family and the children. And that's before this separation . . . . The children, I think, are entitled to the same lifestyle that they had before. And that's really what the court is relying on. I think the children have a right to have that same lifestyle. [¶] And I don't know who is to blame here, but both of you spent a ton of money on this case, and now we have no money for the children. So for me to say you don't have to pay because you're out of work, I'm just enabling you, and I don't think that's right. I think you have to be forced to look at the responsibilities you have." (Italics added.) James timely appealed the trial court's ruling.
II
DISCUSSION
A. Standard of Review
"The standard of review for an order modifying a child support order is well established. '[A] determination regarding a request for modification of a child support order will be affirmed unless the trial court abused its discretion, and it will be reversed only if prejudicial error is found from examining the record below.' [Citations.] Thus, '[t]he ultimate determination of whether the individual facts of the case warrant modification of support is within the discretion of the trial court. [Citation.] The reviewing court will resolve any conflicts in the evidence in favor of the trial court's determination. [Citation.]' [Citation.]" (In re Marriage of Williams (2007) 150 Cal.App.4th 1221, 1233-1234.)
But "'the trial court has "a duty to exercise an informed and considered discretion with respect to the [parent's child] support obligation . . . ." [Citation.] Furthermore, "in reviewing child support orders we must also recognize that determination of a child support obligation is a highly regulated area of the law, and the only discretion a trial court possesses is the discretion provided by statute or rule. [Citations.]" [Citation.] In short, the trial court's discretion is not so broad that it "may ignore or contravene the purposes of the law regarding . . . child support. [Citations.]" [Citation.]' [Citation.]" (In re Marriage of Williams, supra, 150 Cal.App.4th at p. 1234.)
"In conducting our review for an abuse of discretion, we determine 'whether the court's factual determinations are supported by substantial evidence and whether the court acted reasonably in exercising its discretion.' [Citation.] We do not substitute our own judgment for that of the trial court, but determine only if any judge reasonably could have made such an order. [Citation.]" (In re Marriage of Bodo (2011) 198 Cal.App.4th 373, 384.)
"'The scope of discretion always resides in the particular law being applied, i.e., in the "legal principles governing the subject of [the] action . . . ." Action that transgresses the confines of the applicable principles of law is outside the scope of discretion and we call such action an "abuse" of discretion.' [Citation.]" (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393 (Horsford).) B. Legal Principles Governing Child Support Orders and Their Modification
"California has implemented a 'statewide uniform guideline' for determining child support according to a complex algebraic formula based on the parents' incomes and custodial time with the child." (In re Marriage of Smith (2001) 90 Cal.App.4th 74, 80.) The formula applies not only to an initial order fixing child support but also an order modifying child support. (See Fam. Code, § 4052, all statutory references are to the Family Code unless otherwise noted; In re Marriage of Hall (2000) 81 Cal.App.4th 313, 316-318 [reversing order modifying child support order because trial court failed to apply formula]; Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2011) 117:15 p. 17-8 (rev. # 1, 2009).)
Although the formula is referred to as a "guideline," that "label is seriously misleading." (In re Marriage of Laudeman (2001) 92 Cal.App.4th 1009, 1013, fn. 2.) The guideline imposes mandatory requirements to which the courts must adhere (ibid.; § 4052); they "may depart from the guideline only in special circumstances set forth in [the Family Code]" (§ 4052).
The amount of child support determined by the formula is rebuttably presumed to be correct. (§ 4057, subd. (a).) The court may deviate from that amount only on a "showing that application of the formula would be unjust or inappropriate in the particular case . . . ." (§ 4057, subd. (b).) In addition to the formula, the Family Code also establishes several general principles to which the courts must "adhere" when "implementing" the statutory formula. (§ 4053.) In general, these principles provide that a parent's foremost obligation is to support his or her minor children according to the parent's actual income and ability to pay and the children should share in both parents' standard of living. (§ 4053, subds. (a), (c), (d), (f).)
Whenever a child support award differs from the guideline amount, the trial court has a sua sponte obligation to state the reasons why it deviated from the amount required under the formula. (§ 4056, subd. (a); In re Marriage of Hall, supra, 81 Cal.App.4th at p. 316.) Because the trial court must either award the amount dictated by the formula or explain why it awarded a different amount, "no trial judge making a child support order can escape making a formula calculation . . . ." (In re Marriage of Hall, at pp. 316-317.)
Specifically, section 4056, subdivision (a), requires the trial court to state each of the following, "in writing or on the record," whenever the trial court's child support order differs from the amount required under the formula: "(1) The amount of support that would have been ordered under the guideline formula. [¶] (2) The reasons the amount of support ordered differs from the guideline formula amount. [¶] (3) The reasons the amount of support ordered is consistent with the best interests of the children."
"An order of child support 'may be modified or terminated at any time as the court determines to be necessary.' [Citation.] Statutory procedures for modification of child support 'require a party to introduce admissible evidence of changed circumstances as a necessary predicate for modification.' [Citations.] The burden of proof to establish that changed circumstances warrant a downward adjustment in child support rests with the supporting spouse. [Citation.]" (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556.)
"'Ordinarily, a factual change of circumstances is required [for an order modifying support] (e.g., increase or decrease in either party's income available to pay child support).' [Citation.] 'There are no rigid guidelines for judging whether circumstances have sufficiently changed to warrant a child support modification. So long as the statewide statutory formula support requirements are met [citation], the determination is made on a case-by-case basis and may properly rest on fluctuations in need or ability to pay.' [Citations.]" (In re Marriage of Leonard, supra, 119 Cal.App.4th at p. 556, original italics.) C. The Trial Court Relied on Erroneous Legal Standards to Deny James's Modification Request
The trial court offered two justifications for its ruling denying James's request to modify his child support obligations. First, the court found the children had a right to maintain the lifestyle they enjoyed during James and Tricia's marriage regardless of any financial difficulties James faced after the marriage. Second, the court explained James's financial difficulties did not justify a reduction in child support because those difficulties did not alter the amount needed to properly care for the children. Both of these justifications, however, show the trial court abused its discretion because it relied on erroneous legal standards to deny James's request. (See Horsford, supra, 132 Cal.App.4th at p. 393 [applying erroneous legal standard constitutes an abuse of discretion].)
1. Current Circumstances Govern a Request to Modify Child Support
A trial court must evaluate a request to modify child support based on the parents' current financial circumstances, not the financial circumstances that existed during the marriage. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 298 ["The statutes also contemplate that the trial court will modify child support orders based on the parties' then current circumstances"]; see also In re Marriage of Mosley (2008) 165 Cal.App.4th 1375, 1379-1380, 1386-1387 [trial court must decide modification request based on current income, not income at time of separation].) "Unlike spousal support awards requiring consideration of the parties' standard of living during marriage, child support awards must reflect a minor child's right to be maintained in a lifestyle and condition consonant with his or her parents' position in society after dissolution of the marriage. [Citations.] A child's need is measured by the parents' current station in life." (In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 95-96.)
The Family Code and the case law applying it authorize a trial court to modify a child support order based on a material change in circumstances occurring after the court entered the original support order. (§ 3651, subd. (a); In re Marriage of Cryer (2011) 198 Cal.App.4th 1039, 1048.) Indeed, California case law is replete with cases modifying child support based on changes in the parents' financial circumstances that occur after the marriage. (See, e.g., In re Marriage of Mosley, supra, 165 Cal.App.4th at pp. 1379-1380, 1384, 1386-1387; In re Marriage of Eggers (2005) 131 Cal.App.4th 695, 699-701.)
In In re Marriage of Mosley, we reversed a trial court ruling denying a father's request to modify child support in the face of undisputed evidence showing an economic downturn forced the father to take a new job that paid substantially less than the job he held during the marriage. (In re Marriage of Mosley, supra, 165 Cal.App.4th at pp. 1379-1380.) We concluded the trial court abused its discretion because the more than 50 percent reduction in base salary the father experienced constituted a material change in circumstances that required the trial court to modify the father's child support obligations. (Id. at pp. 1386-1387.) Similarly, in In re Marriage of Eggers, we concluded the trial court abused its discretion in denying a father's request to modify child support because the father's involuntary job loss constituted a material change in circumstances that required a modification of the father's child support obligations. (In re Marriage of Eggers, supra, 131 Cal.App.4th at pp. 700-701.)
Here, undisputed evidence showed James suffered a material change in circumstances that required the trial court to modify his child support obligations. When James and Tricia stipulated to the child support payments in December 2006 James earned approximately $13,500 per month. When the trial court heard James's request to modify child support nearly four years later, James had lost his job, short sold his home, and moved in with his sister to avoid becoming homeless. The month before the hearing, James earned just $300. Moreover, although not argued by the parties, Tricia also had suffered a significant decrease in her income — from approximately $11,500 to $7,500 — and she had physical responsibility for the children approximately 97 percent of the time instead of the 70 percent on which the original judgment based the child support amount.
Although the trial court acknowledged these undisputed changes in circumstances, it refused to consider them in ruling on James's request to modify child support because they did not impact the lifestyle the children enjoyed during the marriage. Under the trial court's reasoning, however, a parent could never modify his or her child support obligations because changes in circumstances occurring after the marriage could never affect the lifestyle the children enjoyed during the marriage. The trial court therefore abused its discretion in denying James's request based on the lifestyle the children enjoyed during the marriage.
2. Child Support Must Be Based On the Parents' Incomes
The parents' incomes dictate the amount of child support, not the cost of caring for the children. Indeed, the statutory formula calculates child support payments based on the parents' incomes and the time each parent has primary physical responsibility for the children; the cost of caring for the children is not a variable included in the statutory formula. (§ 4055, subds. (a) & (b).) Similarly, the principles to which the trial court must adhere in implementing the statutory formula focus on the parents' income and ability to pay: (1) "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"; (2) "[t]he guideline takes into account each parent's actual income and level of responsibility for the children"; (3) "[e]ach parent should pay for the support of the children according to his or her ability"; and (4) "[c]hildren should share in the standard of living of both parents." (§ 4053, subds. (a), (c), (d), (f), italics added.) As with the statutory formula, none of the statutory principles refer to the cost of caring for the children.
Section 4055 establishes the formula as follows: "(a) The statewide uniform guideline for determining child support orders is as follows: CS = K [HN -(H%) (TN)]. [¶] (b) (1) The components of the formula are as follows: [¶] (A) CS = child support amount. [¶] (B) K = amount of both parents' income to be allocated for child support as set forth in paragraph (3). [¶] (C) HN = high earner's net monthly disposable income. [¶] (D) H% = approximate percentage of time that the high earner has or will have primary physical responsibility for the children compared to the other parent. In cases in which parents have different time-sharing arrangements for different children, H% equals the average of the approximate percentages of time the high earner parent spends with each child. [¶] (E) TN = total net monthly disposable income of both parties."
The trial court, however, based its decision to deny James's modification request on the cost of caring for the children rather than on James's actual income and his present ability to pay child support. Indeed, the trial court acknowledged James was out of work, had no income, and had no present ability to pay support in the amount ordered by the December 2006 judgment. Nonetheless, the court denied James's modification request because if found the children still had expenses that required payment. The trial court therefore abused its discretion by ignoring the undisputed evidence regarding James's current income and inability to pay child support in the amount ordered.
We sympathize with Tricia's plight in seeking to properly care for her children after James fell behind on his child support obligations. The statutory formula and principles for its implementation, however, required the trial court to base its child support order on James's actual income and his present ability to pay child support. The court cannot require James to pay an amount in child support he clearly has no ability to pay. (See In re Marriage of Smith, supra, 90 Cal.App.4th at pp. 82-83, 85 [incarcerated parent with no opportunity to earn an income and no assets cannot be ordered to pay child support].)
This does not mean the trial court must blindly set or modify the amount of child support based on the parents' actual income. Section 4058, subdivision (b), grants the court discretion to "consider the earning capacity of a parent in lieu of the parent's income, consistent with the best interests of the children."
"'Earning capacity is composed of (1) the ability to work, including such factors as age, occupation, skills, education, health, background, work experience and qualifications; (2) the willingness to work exemplified through good faith efforts, due diligence and meaningful attempts to secure employment; and (3) an opportunity to work which means an employer who is willing to hire. [Citations.] [¶] . . . When the ability to work or the opportunity to work is lacking, earning capacity is absent and application of the standard is inappropriate. When the payor is unwilling to pay and the other two factors are present, the court may apply the earnings capacity standard to deter the shirking of one's family obligations.' [Citation.]" (In re Marriage of Smith, supra, 90 Cal.App.4th at p. 82, italics omitted.) But a finding the parent acted in bad faith to deliberately avoid child support obligations is not required for a trial court to use earning capacity in lieu of actual income. (Brothers v. Kern (2007) 154 Cal.App.4th 126, 135.)
"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.] 'Figures for earning capacity cannot be drawn from thin air; they must have some tangible evidentiary foundation.' [Citation.] 'To calculate support based on the hypothetical procurement of a job which the evidence showed was not available to [the parent] would effectively write the "opportunity" element of earning capacity out of existence.' [Citation.]" (In re Marriage of Smith, supra, 90 Cal.App.4th at p. 82.)
Here, although the trial court did not expressly state it was doing so, its ruling effectively relied on James's earning capacity and determined that capacity remained the same as it was when James and Tricia stipulated to the child support amount in December 2006. There is no evidence, however, to support that determination. To the contrary, James met his burden to show he had no opportunity to work at or even near the income level he enjoyed in December 2006. (In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1304 ["in the very ordinary situation where the payor parent loses his or her job and seeks a reduction in court-ordered support based on the changed circumstances of lack of income, it will be the payor parent, as moving party, who bears the burden of showing a lack of ability and opportunity to earn income" (original italics)].) James presented evidence identifying specific efforts he made to obtain work in his field and to obtain lower paying work with temporary staffing agencies.
During the hearing, the trial court commented, "I have looked at those efforts [to find work]. And I see a lot of similar efforts by other people, but I can't take that into consideration. I don't think generating a lot of resumes on the internet - I haven't seen that to [sic] work." The evidence James presented, however, showed specific efforts well beyond generating resumes on the internet. James's declarations explained that he continued seeking consulting clients by regularly networking with over 100 individuals and firms with whom he previously worked. He also provided a list of (1) 19 development and construction industry recruiters he worked with to find a job in California and other countries; (2) 19 specific development and construction industry jobs for which he applied; and (3) seven temporary staffing agencies through which he sought work. There is no substantial evidence to support a finding James had the opportunity to work.
In stating its ruling, the trial court also agreed with Tricia's contention that James could get a job at Starbucks or Target to meet his child support obligations even if he could not get a job in his professional field. Tricia, however, failed to present evidence identifying an available job at Starbucks, Target, or any other business that James failed to seek. More importantly, assuming James could get a job at Starbucks or Target, there is no evidence the income he would earn is comparable to the income he earned when he and Tricia stipulated to the child support amount. Consequently, the possibility of getting a job at Starbucks or Target does not provide a basis for denying James's modification request in its entirety. The drastic difference between the $13,500 monthly income James earned in December 2006 and the monthly income he could earn in an entry-level position at Starbucks or Target would constitute a material change in circumstances warranting a modification in child support.
On remand, the trial court must conduct a new hearing to consider evidence of both James's and Tricia's current incomes and the current timesharing arrangement regarding physical responsibility for the children. If James remains unemployed or underemployed, he may present evidence regarding both his ability and opportunity to earn income. Tricia, of course, also may present evidence regarding James's ability and opportunity to earn income. Finally, if the evidence supports an order modifying James's child support obligations under the proper standards, the trial court should also determine whether that order will apply retroactively. (§ 3653.)
III
DISPOSITION
The order denying James's request to modify child support is reversed and the matter remanded to the superior court for further proceedings consistent with this opinion. In the interest of justice, the parties shall bear their own costs on appeal.
ARONSON, J. WE CONCUR: BEDSWORTH, ACTING P. J. O'LEARY, J.