Marriage of Zucker ( 2022 )

Filed 4/1/22 (unmodified opn. attached)
CERTIFIED FOR PARTIAL PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
In re the Marriage of B281051 (Cons. w B284981)
KIM and MARK S. ZUCKER.
(Los Angeles County
KIM ZUCKER, Super. Ct. No. BD
546573)
Appellant,
ORDER MODIFYING
v. OPINION (CHANGE IN
JUDGMENT)
MARK S. ZUCKER,
Respondent.
THE COURT:*
The opinion filed March 3, 2022, in the above-entitled matter is ordered
MODIFIED as follows:
On page 56, in the first full paragraph, the two references to “child
support” are changed to “spousal support.”
On page 61, delete the last three full paragraphs and replace them with
the following:
After entering a fee order on March 17, 2017, the court’s amended fee
order, dated May 10, 2017, superseded that order in certain respects and
found that “[u]sing $3,539,469 as the fees and expert costs incurred by
[Mark] and $3,706,672 as the fees and costs incurred by [Kim], plus $301,046
for court reporting and privately compensated reference judge fees produces
total charges incurred by both sides of $7,547,637. Using a 70% share of the
total fees to [Mark] as a starting point produces a fee and cost responsibility
of $5,283,346. Considering the payment of his own fees, his payments to
ARC, his payments to US Legal and the advance of $923,383 for fees and
costs to [Kim] means that [Mark] has already paid $4,764,258 of the total fees
and costs leaving a balance of $519,088 to reach the 70% amount. This would
be the starting point for further contribution of fees to [Kim].
“With a further payment of $1,200,000 [Mark’s] total payments would
constitute just under 80% of the total fees and costs leaving [Kim] with a
responsibility for slightly over 20%. . . . [¶] Based on all of the above the court
orders an additional contribution by [Mark] to [Kim’s] fees and costs in the
sum of $1,200,000, minus a $10,000 reduction representing [Mark’s] fees
incurred unreasonably as set forth above, estimated fees of [Kim] incurred on
the same issue and fees caused by unreasonable delay as set forth above. The
net sum is $1,990,000.” This latter figure, resulting from an error of
arithmetic, was later corrected on May 30, 2017 to $1,190,000.
On page 69, the paragraph under subheading 2 is deleted and replaced
with the following:
Relying on the March 17, 2017 fee order, Mark contends the trial
court’s arithmetic regarding the fee award was in error because the total
amount of $5,250,000 minus $4,820,000 is $430,000, not $480,000. Mark’s
argument is based upon a prior and superseded version of the fee order that
was later modified as set forth ante. We therefore reject his argument.
On page 72, the disposition is changed to remove the second full
sentence beginning with the words “The attorney fee award is corrected.”
These modifications change the judgment.
The petitions for rehearing are DENIED.
WILLHITE, Acting P.J. COLLINS, J. CURREY, J.
2
Filed 3/3/22 (unmodified opinion)
CERTIFIED FOR PARTIAL PUBLICATION**
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
In re the Marriage of B281051 (Cons. w B284981)
KIM and MARK S. ZUCKER.
(Los Angeles County
KIM ZUCKER, Super. Ct. No. BD 546573)
Appellant,
v.
MARK S. ZUCKER,
Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Robert Alan Schnider, Judge*. Reversed and remanded in part, affirmed in
part.
Law Offices of Robert M. Cohen, James L. Keane, Yvonne T. Simon and
Robert M. Cohen for Appellant.
Kibre & Horwitz , Joseph Kibre; Greines, Martin, Stein & Richland and
Marc J. Poster for Respondent.
**Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for
publication with the exception of parts PHASE I (VALIDITY OF THE PMA) page 3 through page 19,
and PHASE II SUPPORT ISSUES, page 37 through page 72.
*Retired Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article
VI, section 6 of the California Constitution.
In this contested marital dissolution proceeding, the trial court held a
bifurcated, two-phase trial which considered (1) the validity of Kim and Mark
Zucker’s 1994 premarital agreement (PMA) limiting community property
rights and spousal support (phase 1), and (2) determining the awards of child
support, spousal support, and attorney fees (phase 2). The case was
intensively litigated; the two phases of the trial consumed 57 days. Both
Mark and Kim appeal and cross-appeal.1 They raise a myriad of issues
challenging many aspects of the trial court’s rulings.
In Kim’s appeal, Kim challenges aspects of the trial court’s rulings
upholding the community property provisions of the PMA and the court’s
awards of spousal and child support. In Mark’s appeal, Mark challenges the
trial court’s finding that the provision in the PMA limiting spousal support
was unconscionable at the time of enforcement. In their respective cross-
appeals, Mark and Kim each challenge aspects of the trial court’s attorney fee
award.
We reject all challenges to the trial court’s rulings, except: (1) we
correct an arithmetical error in the trial court’s attorney fee award, and
modify the order to direct Mark to pay Kim $870,000; and, (2) vacate the trial
court’s ruling on Kim’s request for order of March 14, 2014 seeking to modify
the temporary spousal support order, and remand for the trial court to
determine the amount of pendente lite spousal support from the date of Kim’s
request. In all other respects, we affirm.
In the published portion of this opinion, we hold that in considering
whether a spousal support agreement executed between 1986 and 2002 is
enforceable, the court is not limited to a determination under Family Code
section 1615, subdivision (a)(2) whether the agreement was unconscionable
when executed. Rather, the court retains the power under Family Code
section 1612, subdivision (a)(7) to shape public policy regarding premarital
1 The two separate appeals (each with cross-appeals) were consolidated
March 16, 2018 under case No. B281051. We refer to Mark and Kim by first
names for ease of reference, and no disrespect is intended.
2
spousal support agreements to the extent not inconsistent with Legislative
declarations of such policy, and to declare that a premarital spousal support
agreement is unenforceable as against public policy solely because it is
unconscionable at the time of enforcement.
PHASE I (VALIDITY OF THE PMA)
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The parties met sometime in 1993, when Mark was 33 years old, and
Kim was 29. Kim became pregnant in June 1993 and at Mark’s request had
an abortion. After Kim became pregnant again in late 1993, Mark told her to
terminate the pregnancy, but she refused to do so. Thereafter, in early
January 1994, the parties discussed marriage.
Mark’s attorney prepared the PMA, and on January 28, 1994, the
parties signed it. Kim and Mark were married on February 6, 1994. During
their marriage, they had six children.2 They separated on February 21, 2011,
and Mark filed a petition for dissolution on June 17, 2011.
At trial, Kim contended that due to her emotional health issues she did
not voluntarily enter the PMA and that its spousal support provisions were
unconscionable. (Fam. Code, §§ 1612, 1615.)3
A. Parties’ Backgrounds
The parties had disparate economic backgrounds. Mark is the co-
founder and co-CEO of a hedge fund, Dorchester Capital Partners, and
founder and co-CEO of the Dorchester Capital Secondaries series of funds.
At the time he met Kim, Mark was a bond broker with Libra Investments.
Mark had a net worth of about $10 million and made about $2 million a year.
Kim had a history of psychological troubles. When she was 12, her
parents divorced. Kim developed an eating disorder (anorexia), for which she
was hospitalized. She attended and graduated from a public high school.
After attending UCSD for part of a year, she variously took classes at UCLA
2 Allyson (born 1994), Rachel (born 1996), Samantha (born 1997), Eliezer
(born 1998), Grace (born 2001), and Jonathan (born 2005).
3 All statutory references herein are to the Family Code.
3
Extension, Parsons School of Design in New York, and she also attended
cooking school, working as a nutritionist.
In 1988, after leaving UCSD, Kim admitted herself to the Westwood
Psychiatric Hospital for treatment of her eating disorder. After stealing a
prescription pad and obtaining medication with it, she was transferred to a
locked ward where she was raped at knifepoint.
In 1989, Kim married Ronaldo Rossi, whom she had met in a 12-step
program.4 Kim’s father arranged the couple’s PMA, which they executed the
day before their marriage. Kim claimed she did not fully understand the
effect of the PMA she had made with Rossi. The marriage was dissolved in
July 1992.
According to Mark, he was unaware of Kim’s past mental health
struggles. Kim did not tell Mark that when she was about 14 years old, she
was hospitalized for anorexia. Mark was not aware she had only attended
one year of college, or that she had been sexually assaulted while at the
psychiatric hospital in Westwood. Mark and Kim did not have any
discussions about how the rape affected her emotionally.
Mark knew that although Kim was working, she was being supported
by her mother. Mark did not know that she was receiving social security
benefits at the time of their PMA. He learned this fact after they were
married a year when they were preparing their taxes. He also found out
during their dissolution proceedings that Kim had a prenuptial agreement in
her previous marriage.
Mark observed that in contrast to her claimed issues, during the
marriage Kim kept her own bank accounts and did her own shopping.
Further, Kim helped supervise the 1995 remodel of the Malibu home Mark
purchased and Mark believed she capably performed this task. However,
Kim disputed Mark’s contention, noting that the construction project
manager observed that Mark solely made all decisions regarding the
construction.
4 Kim had an abortion, for medical reasons, during her marriage to
Rossi.
4
Kim was the beneficiary of a trust her father set up. Her mother was a
trustee and could release the funds to Kim if she wanted to, but she chose not
to do so because she believed Kim was incapable of handling the money.
B. Terms of the PMA
The PMA contained terms that were very unfavorable to Kim. Kim
waived her community property interest; would receive a one-time payment
of $10,000 upon moving out of the house; would receive limited spousal
support of $6,000 per month, with modest increases; and waived any
inheritance rights which would arise from Mark’s death during the marriage.
The PMA set forth Kim’s net worth as approximately $242,000 and Mark’s as
approximately $5.8 million.
The PMA contained a recital of facts, including that both Kim and
Mark had their own separate and independent counsel advising them of their
rights under the PMA. The PMA stated that the parties voluntarily and
expressly waived their rights to disclosure of assets, property, income, and
expenses. They “each acknowledge[d]” being advised of their rights by
counsel and adequately understanding such rights. The PMA declared:
“Both Kimberly and Mark have each given this Agreement a great deal of
thought and each of them acknowledges discussing all of his or her questions
with his or her counsel and receiving and understanding answers from his or
her counsel to all such questions.”
C. Kim’s Pregnancies, Discussions about the PMA, and Marriage
In June 1993, after Kim became pregnant the first time, she and Mark
spoke about getting married. Mark spoke to Kim about the “general outlines”
of the PMA in June “before she had her first abortion.” They had between
five and 10 conversations about Mark’s net worth. He told her he was worth
about $10 million to signal to her that he was worried about getting married
without a prenuptial agreement.
When Kim told Mark she was pregnant the second time, he told her to
have an abortion. They discussed alternatives to marriage, including that
Kim would have the baby and they would not get married, or that Kim would
have an abortion or put the baby up for adoption. Ultimately, Kim believed
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her options were to marry Mark with a PMA, to have an abortion, to have the
baby and put the child up for adoption, or to raise the child as a single
mother.
Kim scheduled an abortion for January 4, 1994, although she did not go
through with it. At the time, Kim’s doctor noted that she was “distraught.”
Kim’s mother also observed Kim was upset during the time before the
wedding and after she signed the PMA. After she did not have the abortion,
Kim’s family told her they would not help her financially with the baby.
Contrary to Kim’s mother’s observations, Mark’s rabbi and friends observed
that during the period before the PMA and during the parties’ marriage, Kim
seemed rational and was happy to be getting married.
About a week after Kim told Mark she did not go through with the
abortion, they began to discuss marriage. Mark told her that he would not
marry her without a PMA. Mark specified two options if she did not have an
abortion. Kim could sign the PMA and Mark would consider, but not commit
to, marriage, or Kim could have the baby on her own and Mark would
financially support the child
Kim and Mark obtained a marriage license on January 11, 1994. Kim
picked out a wedding dress, had fittings, and the parties bought a ring. They
met with Mark’s Rabbi and Mark’s mother. The wedding on February 6, 1994
was small (about 20 or 30 people) and held at Mark’s parents’ apartment.
D. The Drafting and Signing of the PMA, January 28, 1994
1. Drafting of the PMA
From late December 1993 to mid-January 1994, before they married,
the parties had specific discussions concerning the provisions in the PMA.
The PMA went through several drafts. According to Mark, a PMA was Kim’s
idea, and she asked for the “toughest prenup possible.”
Around this time, Mark earned about $25,000 per month. He made
about $400,000 in bonus at the time as well, bringing his income to about $2
million per year. They also discussed that Kim would get $10,000 “to move
out of the house.” Kim stated that if the marriage did not work out, Mark
would get the house. In spite of Mark’s recollections, Kim testified they had
no discussions concerning the terms of the PMA.
6
According to Mark, they discussed alternative terms to include in the
PMA. In particular, they discussed the support amount and decided on a
figure of $6,000. They also discussed how long the marriage must last before
support would be paid, and how long spousal support would be paid. They
made changes to the spousal support provisions after he discussed them with
Kim. Initially, Kim was not going to get spousal support. Although Kim had
asked him for the “toughest prenup possible,” Mark told her he wanted some
spousal support for her. They started with $6,000 per month and “work[ed]
our way backwards from there.” They had at least two discussions about
spousal support.
The PMA went through several drafts. The PMA was drafted by
Mark’s attorney Joseph Kibre (Kibre). Mark first received a draft in late
December 1993. Mark knew that Kim received a draft in mid-January 1994
because he gave her the draft. After Mark gave Kim the draft in mid-
January, they did not discuss the PMA any further. Mark claimed he would
not have gotten a marriage license until after the prenup was signed. Kim
claimed she saw the PMA for the first time the day she signed it. She did not
discuss it with her family. However, according to Mark, Kim generally
approved of the PMA but thought she should get her support payment sooner.
2. Signing of the PMA
On January 28, 1994, Kibre sent by messenger a letter to Kim’s
attorney Sorrell Trope at Trope and Trope advising that Kibre would be out
of town the following week, and therefore “Mark would very much like to
conclude signing the [PMA] today.” Thus, Kibre requested that the PMA be
signed by Kim and returned that day. As a result, the same day Kim met
with her attorney Donna Beck Weaver (Weaver), also of Trope and Trope, to
discuss the PMA, but neither Kim nor Weaver could recall specifics of the
actual signing of the PMA.
Weaver gave Kim a letter advising her of the ramifications of the PMA
and advising her not to sign it. She wrote: “The purpose of this letter is to
confirm the parameters of the advice which we have rendered to you
regarding the [PMA] which you intend to enter into with Mark S. Zucker.”
Specifically, the letter stated that “[w]e have thoroughly discussed with you
7
the operation of California community property law. . . . [¶] There can be no
doubt that by signing the proposed [PMA], you are giving up your right to
share in extremely substantial community property income from Mark’s
employment services during marriage.” In the PMA, Kim also waived her
Pereira and Van Camp rights.5 Weaver’s letter advised Kim that the
“proposed [PMA] substantially limits your ability to seek spousal support
from Mark . . . . You have stated that the foregoing is nevertheless
acceptable to you.” Given Mark’s income of $2 million a year, Weaver advised
that the amount and duration of support “is extremely low with respect to
support that would otherwise be ordered.”
Weaver further observed that “[a]nother troublesome aspect of the
proposed [PMA] is the provision calling for you to vacate [the] family home if
you are not the owner of the home upon a separation. [¶] We have expressed
to you our view that such a provision is contrary to California public policy in
that the court, absent this [PMA], could allow you to remain in such home at
least temporarily.” Instead, the PMA gave Mark the right to oust Kim from
the home on short notice. “During the course of negotiations, you have
repeatedly told me that if your relationship with Mark failed, you would not
want to remain in the then family residence. In response, I advised you that
although you may well feel that way in the present, there is no way you can
foresee how you will feel about the same issue in the future, when you may
have children, you may have been out of the work force for some time, and
you have a completely different world view and set of needs.”
5 Pereira v. Pereira (1909) 156 Cal. 1 (Pereira); Van Camp v. Van Camp
(1921) 53 Cal.App. 17 (Van Camp). California courts use two alternative
approaches to allocating business profits from a spouse’s separate business
developed from these cases. The Pereira approach allocates a fair return to
the separate property investment and allocates the balance of the increased
value to community property as arising from community efforts. The Van
Camp approach determines the reasonable value of the community’s services,
and allocates that amount to community property and the balance to
separate property. (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 852–
853.)
8
In conclusion, Weaver advised Kim not to sign the PMA. “We cannot
give you any advice about whether or not you should marry Mark. That is
clearly a personal choice for you alone to make.” Kim signed the letter,
acknowledging she had read it and that it was “Agreed, Acknowledged and
Understood.” Weaver billed a total of four hours for the signing process,
noting in her billing records: “Formulate letter to client re [PMA]; conference
with client re full explanation of [PMA]; complete property declaration;
revisions to [PMA].”
At trial, Weaver testified she did not have any recollection of the legal
work done for Kim, or the period January 25 through January 28, 1994. Due
to her lack of recollection, Weaver testified to her “custom and practice”
regarding the review and signing of a PMA. Her custom and practice was to
go through a PMA and ensure the client understood its terms. She would
ensure that the client understood what she was saying. At the time, Weaver
had done between five and 25 PMAs.
Weaver did not recall having a specific custom and practice whereby
when she represented the financially weaker spouse, she would ask whether
they had any mental problems. Although Weaver saw red flags in the PMA,
she did not recall asking Kim if she had any mental problems, and she did
not know that Kim was on social security disability. She had no independent
recollection whether Kim understood what Weaver was advising her about
the terms of the PMA on January 28.
Weaver believed the attorney certification was usually prepared by the
attorney who prepared the PMA. Weaver had no independent recollection of
whether Kim read every page of the PMA, but Kim initialed each page.
Kim did not remember the substance of her meeting with Weaver on
January 28, 1994 and did not recall for how long they met. Mark told her she
had to sign the PMA that day, and Kim repeated her conversation with
Weaver, telling Mark that her lawyer said it was not fair. Mark responded
that to the contrary, stating it “absolutely” was fair. Kim recalled that “I had
two choices, listen to the lawyers [that the PMA was unfair] and go have an
abortion, or listen to Mark and have a child that I didn’t want to abort.”
9
E. Trial on the Validity of the PMA
Trial on the first phase commenced in July 2013. Kim challenged the
PMA on the basis she did not enter it voluntarily because she lacked capacity
to appreciate its terms due to her lack of a college education, she was under
duress due to her pregnancy, and she lacked family support and financial
resources. Mark asserted that Kim had previously executed a premarital
agreement before her previous marriage and understood the effect of such an
agreement; she had adequate time to review the PMA, receiving a detailed
letter from her attorney; and Kim failed to specify how her “mental illness”
affected her ability to sign the PMA.
F. Statement of Decision
On April 21, 2014, the court issued its statement of decision. On the
issue of voluntariness, the court found Kim voluntarily executed the PMA.
Duress. The court found “no evidence whatsoever of duress.” The court
noted that “there are certain unique factors” applicable to PMAs in addition
to the general contract factors of pressure, threats, or mental coercion. These
factors consisted of proximity of signing to the wedding, surprise in
presentation of the agreement, absence of independent counsel, lack of full
disclosure, lack of understanding of the rights being waived, and inequality of
bargaining power.
The court found no surprise in presentation of the PMA to Kim because
she aware of the PMA before any guests were invited to the wedding or
wedding plans were finalized. Kim was represented by highly qualified
independent counsel, and she had full disclosure and knowledge of the rights
being waived. The proximity of signing to the wedding was not significant
because Kim had “clearly decided to not discuss the issue with any family
members, had gotten the advice from her counsel to not sign but told counsel
she intended to sign anyway, knew Mark’s position that she must sign or he
would not marry her and knew she did not wish to accept any other available
options. There is no further action she would have likely taken if there was
further delay and no reason to believe any delay would have changed her
decision.”
10
Undue Influence. After noting there was no confidential relationship
between parties entering into a PMA, 6 the court found no undue influence.
Under Bonds, supra, 24 Cal.4th at pages 27–30, the court must consider the
substantial weakness of the party influenced, the strength of the other party,
and pressures to quickly conclude the agreement. Here, the trial court
compared the case to In re Marriage of Dawley (1976) 17 Cal.3d 342 (Dawley),
a factually similar case where the court upheld a PMA even though the wife
was unwed and pregnant before the execution of the PMA, noting the wife,
like Kim, had her own counsel. (Id. at pp. 354–355.) Further, as in In re
Marriage of Burkle (2006) 139 Cal.App.4th 712, Kim had her own counsel
and was given a full explanation of the transaction and signed the
acknowledgment to the Weaver letter. (Id. at pp. 735–736.) Although she
claimed to have no choice, “[Kim] signed the [PMA] because she wanted to be
married to Mark and she knew clearly and for many months that that would
not happen without a PMA.”
Competence. The trial court found that “Kim’s contention that for most
of her life she has suffered from serious mental and emotional problems is
amply supported by the evidence,” but that such problems were not the
standard by which competence to contract was measured. Probate Code
sections 810-812 set forth a rebuttable presumption that persons are
competent to enter into agreements and set forth the factors for the court to
consider in evaluating whether the presumption has been rebutted. Applying
these factors, the trial court found Kim had not rebutted the presumption of
competence, highlighting the facts that Kim graduated high school, attended
some college, checked herself into the hospital twice (based on eating
disorders, rather than a break from reality), and attended classes at UCLA
6 Parties negotiating a premarital agreement are not presumed to be in a
confidential relationship that would give rise to the fiduciary duties owed
between spouses under section 721 or to the presumption of undue influence
when a transaction benefits one of the parties. (In re Marriage of Bonds
(2000) 24 Cal.4th 1, 29 (Bonds) [“it is evident that the Uniform [Premarital
Agreement] Act was intended to enhance the enforceability of premarital
agreements, a goal that would be undermined by presuming the existence of
a confidential or fiduciary relationship”].)
11
extension and Parsons School. Further, the parties’ rabbi, Rabbi May, found
Kim to be coherent, rational, never disoriented or depressed. Similarly,
Mark’s brother and friends found Kim to be coherent, rational, and happy.
Weaver (Kim’s counsel regarding the PMA) stated Kim understood the PMA.
Moreover, Kim’s call to Mark regarding the fairness of the PMA indicated her
understanding of it.
II. KIM’S APPEAL IN PHASE I
Kim contends that the trial court erred in finding that she entered the
PMA voluntarily, thus upholding the limitation on community property.
While generally accepting the trial court’s findings of fact regarding the
signing of the PMA, Kim asserts the trial court applied the wrong legal
standard and failed to apply relevant law to the facts. She also contends that
the trial court made evidentiary errors. We disagree with her contentions.
A. Standard of Review
In determining the voluntariness of a premarital agreement, the
reviewing court accepts such factual determinations of the trial court as are
supported by substantial evidence. (In re Marriage of Hill & Dittmer (2011)
202 Cal.App.4th 1046,1051–1052 (Dittmer); Dawley, supra, 17 Cal.3d at pp.
354–355; In re Marriage of Alexander (1989) 212 Cal.App.3d 677, 682
[determination as to extrinsic fraud in connection with a marital settlement
agreement is accepted on appeal if supported by substantial evidence]; “‘“In
reviewing the evidence on . . . appeal all conflicts must be resolved in favor of
the [prevailing party], and all legitimate and reasonable inferences indulged
in [order] to uphold the [finding] if possible.”’ [Citation.]” (Bonds, supra, 24
Cal.4th at p. 31.)
B. Legal Principles
Parties contemplating marriage may validly contract regarding their
property rights in the event of dissolution. Such a prenuptial agreement may
address both property owned at the time of marriage and property and
earnings that may be acquired during the marriage. (In re Marriage of Hill
& Dittmer, supra, 202 Cal.App.4th at p. 1052.) Pre-marital agreements and
12
marital settlement agreements are contracts and must comply with general
principles of contract law—there must be capacity to contract, valid consent,
a lawful object, and proper consideration. (Civ. Code, § 1550.)
The version of the Family Code applicable to the validity and
enforcement of premarital agreements turns on the date of execution. (In re
Marriage of Melissa (2012) 212 Cal.App.4th 598, 611 (Melissa).) The Uniform
Premarital Agreement Act (UPAA, § 1600 et seq.) controls the enforceability
of premarital agreements executed on or after January 1, 1986 (§ 1601).
Parts of the UPAA (§§ 1612 and 1615) were significantly amended effective
January 1, 2002, and case law has since clarified that sections 1612,
subdivision (c) and 1615, subdivision (c)(2) may not be retroactively applied to
premarital agreements executed between 1986 and 2002. (See Melissa,
supra, 212 Cal.App.4th at pp. 610–611.)
Here, we apply the version of section 1615 in effect at the time of
execution of the PMA in January 1994, which provided in relevant part that
“(a) A premarital agreement is not enforceable if the party against whom
enforcement is sought proves . . . . [¶] (1) That party did not execute the
agreement voluntarily.” (Former § 1615, subd. (a).)7
Generally, a party who has signed an agreement with the capacity of
reading and understanding its contents will be bound by its contents; he or
she effectively is estopped from claiming the provisions are contrary to his or
7 Former section 1615, subdivision (a) provided in full: “(a) A premarital
agreement is not enforceable if the party against whom enforcement is sought
proves either of the following: [¶] (1) That party did not execute the
agreement voluntarily. [¶] (2) The agreement was unconscionable when it
was executed and, before execution of the agreement, all of the following
applied to that party: [¶] (A) That party was not provided a fair and
reasonable disclosure of the property or financial obligations of the other
party. [¶] (B) That party did not voluntarily and expressly waive, in
writing, any right to disclosure of the property or financial obligations of the
other party beyond the disclosure provided. [¶] (C) That party did not have,
or reasonably could not have had, an adequate knowledge of the property or
financial obligations of the other party. [¶] (b) An issue of unconscionability
of a premarital agreement shall be decided by the court as a matter of law.”
(Stats. 1992, ch. 162, § 10.)
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her intentions or understanding. (Dittmer, supra, 202 Cal.App.4th at pp.
1054–1055 [wife who failed to take reasonable steps to familiarize herself
with premarital agreement’s final draft, especially considering her business
background, awareness of earlier drafts and access to counsel, was bound by
its content].) However, a party seeking to invalidate a PMA may prevail by
establishing the agreement was not entered into voluntarily. Lack of
capacity, duress, fraud, and undue influence “as demonstrated by a number
of factors uniquely probative of coercion in the premarital context, would be
relevant in establishing the involuntariness of the agreement.” (Bonds,
supra, 24 Cal.4th at p. 19.) These factors include: the coercion that may arise
from the proximity of execution of the agreement to the wedding, or from
surprise in the presentation of the agreement; the presence or absence of
independent counsel or of an opportunity to consult independent counsel;
inequality of bargaining power; whether there was full disclosure of assets;
and the parties’ understanding of the rights being waived under the
agreement or at least their awareness of the intent of the agreement. (Id. at
p. 18.) However, these factors are not isolated considerations, and the
presence or absence of a particular factor is not dispositive. (Id. at pp. 23, 37;
Dittmer, supra, 202 Cal.App.4th at pp. 1052–1053.)
C. Analysis
Substantial evidence supports the trial court’s finding Kim entered into
the PMA voluntarily under section 1615, subdivision (a). As the trial court
found, applying the factors set forth in Bonds, there was no coercion based on
the proximity of the execution of the PMA to the wedding, which occurred
more than a week later and was attended by only a small group in a private
residence. Kim was not presented with the PMA on the eve of marriage, and
the wedding preparations had been underway for enough time that she was
not surprised by PMA. Further, Kim was aware that Mark would not marry
her without one, and this requirement for marriage was discussed many
months before her second pregnancy. Indeed, Kim stated that she wanted a
very tough PMA to show how much she loved Mark.
Kim nonetheless highlights her options if she did not marry—becoming
a single mother, obtaining an abortion, and being cut off by her parents—as
14
providing sufficient compulsion for her to agree to a very one-sided PMA.
Kim argues that she was a distraught woman being left alone to deal with an
unexpected pregnancy and therefore could not have executed such an
extremely one-sided PMA as the result of her informed and voluntary choice.
Further, she argues her testimony that she was “emotionally very weak [and]
frail” and unable to decipher what was going on around her, plus the length
of the PMA (48 pages) and its complexity, creates severe doubt whether her
execution of the PMA constituted a knowing and informed choice.
While the trial court might have found these circumstances persuasive,
it did not, and substantial evidence supports that conclusion. The trial court
was entitled to conclude that despite the less than desirable options for Kim,
she nonetheless concluded willingly and voluntarily that marriage with a
PMA was a better option than no marriage. Any inequality in bargaining
power was offset by Mark’s promise to support the child if Kim elected to
keep the baby.
Further, Kim consulted with independent counsel, Weaver, who
provided her with a letter detailing her concerns about the PMA, advised
Kim not to sign it, and noted that Kim had decided to disregard the advice.
Moreover, the trial court was entitled to rely on Weaver’s testimony as to her
custom and practice in discussing such agreements with clients to conclude
that Weaver had followed such custom with Kim. Weaver explained the
import of the PMA, including the waiver of community property rights,
waiver of Pereira and Van Camp rights, and the limited spousal support
available. Kim signed the PMA to signify that she understood these terms.
In addition, Kim had previously entered into a PMA before her prior
marriage and was familiar with the concept and the intent of such
agreements, which was to have one party concede community property rights
under California law.
Finally, there was sufficient disclosure of assets for Kim to understand
that she was waiving substantial potential future community property
interests. In short, substantial evidence supports the trial court’s conclusion
that Kim entered the PMA voluntarily.
15
D. Kim’s Evidentiary Arguments
1. Exclusion of Rebuttal Testimony of Miriam Scharf
(a) Factual Background
Miriam Scharf, a psychotherapist, jointly counseled Kim and Mark
starting in late 1994 or early 1995. After initially counseling the couple, Ms.
Scharf continued to counsel them for four years “as needed.”
At trial, Ms. Scharf’s testimony was offered to rebut the testimony of
the project manager on the house remodel, Kelly John Nogy, that Kim
appeared competent. Kim did not designate Ms. Scharf as an expert.
Nonetheless, Scharf testified to Kim’s state of mind during the couple’s home
remodel from 1995 through 1997. Scharf testified that Kim suffered from
“dependent personality disorder,” a personality disorder which is
characterized by a fear of abandonment, inability to make decisions, and a
lack of judgment. Such a person defers to others to help them make
decisions.
Mark objected to the admission of this evidence. The court permitted
Scharf to testify subject to a motion to strike. After receiving the testimony,
the court granted Mark’s motion to strike, citing Kalaba v. Gray (2002) 95
Cal.App.4th 1416 (Kalaba). The court excluded Scharf’s testimony regarding
Kim’s alleged personality disorder but admitted Scharf’s testimony to the
extent it constituted percipient witness observations.
(b) Discussion
Kim argues the court erred in excluding Scharf’s testimony diagnosing
Kim as having dependent personality disorder, because Scharf was not
offering an opinion on ultimate fact issues, such as Kim’s capacity to contract,
but only testifying as to her observations regarding Kim’s state of mind.
Further, such evidence was offered only after “Mark opened the door” by
offering evidence that Kim competently oversaw the renovations of the
Malibu home during the period 1995 to 1997. Finally, she argues there was
16
no surprise to Mark because he could have deposed Scharf during a one-
month hiatus in trial dates.8 We find no abuse of discretion.
A party must disclose those treating physicians who will testify as an
expert. (Schreiber v. Estate of Kiser (1999) 22 Cal.4th 31, 35.) Kalaba
explained there are two types of physician experts, retained and nonretained.
Experts must be listed in an expert designation to be permitted to provide
expert opinion testimony at trial. In addition, should the physician testify,
an expert witness declaration is required. (Kalaba, supra, 95 Cal.App.4th at
p. 1422.) However, treating physicians are not “retained experts” within the
meaning of Code of Civil Procedure section 2034.210, subdivision (b), and no
expert declaration is required when a party intends to call a treating
physician for the purpose of eliciting expert testimony; it is sufficient if a
treating physician is identified by name and address in the proponent’s
designation of expert witnesses. (Id. at pp. 1422–1423.)
The purpose of the expert designation rule is “‘to give fair notice of
what an expert will say at trial’” and allows the parties to assess whether to
take the expert’s deposition, to fully explore the relevant subject area at any
such deposition, and to select an expert who can respond with a competing
opinion on that subject area. (Dozier v. Shapiro (2011) 199 Cal.App.4th 1509,
1522 (Dozier).) By requiring the parties to provide a summary of each
potential expert’s anticipated testimony, the expert witness designation
procedures provide the parties with the ability to intelligently determine
which of the opposing party’s potential expert-witness physicians need to be
deposed before trial.
In Kalaba, the plaintiff informed the court she intended to call three
treating physicians who had been identified in her deposition or answers to
interrogatories. The trial court granted defendant’s motion to exclude the
testimony of these three doctors. (Kalaba, supra, 95 Cal.App.4th at p. 1419.)
“[T]he trial court acts within its discretion when it excludes expert testimony
by the non-designated doctors.” (Id. at p. 1423.)
8 At trial, Kim offered to make Ms. Scharf available for deposition, and
the court ordered the parties to meet and confer on this issue. Mark did not
depose Ms. Scharf.
17
Here, the trial court did not abuse its discretion by limiting Ms.
Scharf’s testimony to percipient observations. Kim failed to designate Ms.
Scharf as an expert. (Kalaba, supra, 95 Cal.App.4th at p. 1423; Dozier,
supra, 199 Cal.4th at p. 1524.) Further, under Kalaba, the result remains
the same even though Kim offered Ms. Scharf as a rebuttal to Mark’s
testimony regarding the Malibu house remodel. Scharf was an undesignated
expert and as such the trial court properly excluded her expert diagnosis of
Kim’s personality disorder.
2. Evidence of Kim’s Attorney’s Custom and Practice
(a) Weaver’s Testimony
Kim called as a witness at trial her attorney Weaver, who represented
Kim in connection with the review and signing of the PMA. As previously
noted, Weaver did not have any recollection of the legal work done for Kim, or
the period January 25 through January 28, 1994. As a result, Weaver
testified to her “custom and practice” regarding the review and signing of a
PMA.
(b) Discussion
Kim argues that the court erred in admitting the “custom and practice”
testimony of Weaver. According to Kim, Weaver had not previously reviewed
a PMA with a client like Kim who was four months pregnant and who had
two previous abortions; and there was no evidence Weaver “had developed
the ability to discern whether her client actually understood the numerous
and complex legal principles which were supposedly being explained.”
Evidence Code section 1105 provides: “Any otherwise admissible
evidence of habit or custom is admissible to prove conduct on a specified
occasion in conformity with the habit or custom.” “[A] habit involves a
consistent, semiautomatic response to a repeated situation.” (Bowen v. Ryan
(2008) 163 Cal.App.4th 916, 926; Briley v. City of West Covina (2021) 66
Cal.App.5th 119, 138.) More specifically, “habit” constitutes a person’s
regular or consistent response to a repeated situation, while “custom” means
the routine practice or behavior on the part of a group or organization that is
18
equivalent to the habit of an individual. (People v. Johnson (2019) 8 Cal.5th
475, 518.)
We review the court’s evidentiary rulings for abuse of discretion.
(People v. Goldsmith (2014) 59 Cal.4th 258, 266.) “Specifically, we will not
disturb the trial court’s ruling ‘except on a showing the trial court exercised
its discretion in an arbitrary, capricious, or patently absurd manner that
resulted in a manifest miscarriage of justice.’” (Ibid.) A miscarriage of
justice results only if “it is reasonably probable that a result more favorable
to the appealing party would have been reached in the absence of the error.”
(People v. Watson (1956) 46 Cal.2d 818, 836.)
Kim asserts that there was no evidence Weaver had a “consistent,
semiautomatic response” to a repeated situation, namely, the execution of
PMAs. Kim’s argument is based upon the relatively few instances Weaver
had assisted a client with the signing of a PMA and her contention that there
was no evidence Weaver had previously counseled someone like Kim who was
pregnant and had psychological difficulties. We disagree.
Kim’s argument does not undermine the validity of the evidence to
support a finding that Weaver behaved in conformity with the law firm’s
custom in reviewing and signing PMAs on the day Kim signed the PMA. The
execution of PMAs, given their nature as an instrument waiving valuable
property rights, involves a ritualized signing and affirmation, both to every
page of the agreement, and to the contents of the agreement. Further,
Weaver’s testimony was corroborated by the detailed letter she gave to Kim
advising her not to sign the PMA. In short, the trial court did not abuse its
discretion in admitting evidence of Weaver’s habit and custom.
III. MARK’S APPEAL IN PHASE I
Mark contends that the trial court erred by invaliding the spousal
support provision of the PMA, which was entered in 1994, as unconscionable
based on circumstances existing at the time of enforcement. He raises an
issue on which California law is unsettled, an uncertainty created by the
timing and intent of an amendment to the Family Code effective 2002 (the
addition of subd. (c) to § 1612), and the decisions in In re Marriage of
Pendleton & Fireman (2000) 24 Cal.4th 39 (Pendleton), In re Marriage of
19
Howell (2011) 195 Cal.App.4th 1062 (Howell), and In re Marriage of Facter
(2013) 212 Cal.App.4th 967 (Facter). Indeed, as noted by a leading treatise,
the state of the law is “unclear if a trial court is required to consider whether
a spousal support limitation or waiver in a premarital agreement executed
between 1986 [the effective date of California’s adoption of the Uniform
Premarital Agreement Act (UPAA)] and 2002 is unconscionable at the time of
enforcement, the time of execution, or both.” (Hogoboom, et. al. Cal. Practice
Guide: Family Law (Rutter Group 2021), p. 9-78, § 9:177.4; see also In re
Marriage of Miotke (2019) 35 Cal.App.5th 849, 860–861 (Miotke) [noting
uncertainty in the law].)
Attempting to provide some clarity, we hold, for reasons explained
below, that in considering whether a spousal support agreement executed
between 1986 and 2002 is enforceable, the court is not limited to a
determination under section 1615, subdivision (a)(2) whether the agreement
was unconscionable when executed. Rather, the court retains the power
under section 1612, subdivision (a)(7) (identified in Pendleton, supra, 24
Cal.4th at pp. 48–49) to shape public policy regarding premarital spousal
support agreements to the extent not inconsistent with Legislative
declarations of such policy, and to declare (as suggested though left open in
Pendleton, id. at pp. 53–54) that a premarital spousal support agreement is
unenforceable as against public policy solely because it is unconscionable at
the time of enforcement.
A. Provisions of the PMA Relating to Spousal Support
Article 13 of the PMA governed spousal support. In Article 13, the
parties affirmed that their counsel believed contemporaneous and existing
California public policy did not permit premarital agreements limiting
spousal support. Nonetheless, “the parties intend and desire to have this
Agreement resolve their respective rights and obligations to the fullest extent
permissible regarding the support of [Kim] in the event the marriage of the
parties terminates by reason of a permanent separation, dissolution or
divorce.”
Further, the parties agreed that if California law did not recognize
limitations on spousal support, Article 13 would be of no force or effect.
20
However, “the parties further agree that if prenuptial agreements regarding
spousal support of the nature set forth herein become enforceable under
California law, either by reason of a statutory change or by reason of a
judicial determination, . . . then the provisions of this Article 13 shall fully
apply.”
With respect to spousal support, Kim and Mark mutually relinquished
“to the full extent permitted by law any and all right, entitlement or award of
spousal support.” The PMA set forth that Mark agreed to pay Kim
temporary and permanent spousal support according to a schedule, based on
the number of years of their marriage. If the marriage was less than two
years, Mark would pay no spousal support, but payments thereafter would
increase as the marriage lengthened, up to $6,000 a month after 11 years.
These payments would be adjusted to reflect changes in the CPI.
Finally, the parties agreed that “no court shall have or retain any
power or jurisdiction to extend, increase, decrease or otherwise modify the
payments of Spousal Support provided in this Article 13 or to require that
Mark pay any other amounts as Spousal Support or alimony, regardless of
changed circumstances or changes in the law existing at any time.” The
spousal support provisions were agreed to be severable from the rest of the
PMA.
At trial, Kim argued Mark’s spousal support obligation of $6,000 per
month with a one-time payout of $10,000 was unconscionable at the time of
enforcement and therefore unenforceable. Relying on Facter, supra, 212
Cal.App.4th 967, Kim’s brief highlighted the disparities in the parties’
income. Mark had a $32 million net worth, $4 to $5 million yearly income
(with a monthly net of between $376,000 to $682,453) while Kim had stayed
at home and raised the parties’ children during the marriage and had no
current employment.
21
B. Trial Court Ruling
On January 30, 2014, the court issued its statement of tentative
decision.9 The court recognized that section 1612, subdivision (c) regarding
spousal support provisions did not retroactively apply to the spousal support
provision of the PMA.10 However, relying on Pendleton, supra, 24 Cal.4th 39and Facter, supra, 212 Cal.App.4th 967, the court concluded that it had the
authority to determine whether the PMA was unconscionable at the time of
enforcement.
Examining the circumstances present in Facter (in which the Court of
Appeal found a premarital waiver of spousal support unconscionable at the
time of enforcement), the trial court concluded that “[t]he facts of this case
are . . . even more extreme for Kim.” In Facter, the wife had a high-school
education and was unemployed throughout the 16-year marriage, while the
husband had an annual income of $1 million and a net worth of $10 million.
Here, Kim’s forensic accountant had opined that Kim would need $86,000 per
month to meet the marital lifestyle based on an income-available approach,
while an expenditure approach would yield $37,000 per month. The trial
court adopted the expenditure approach because there was no community
property per the PMA. Kim, like the wife in Facter, was unemployed,
similarly educated, and spent the marriage raising the couple’s six children.
The trial court found the amount Kim would receive under the PMA—
9 The statement of decision was supplemented on March 11, 2014, and
April 21, 2014, to respond to the parties’ comments, but did not change the
court’s ruling on unconscionability.
10 That section provides: “(c) Any provision in a premarital agreement
regarding spousal support, including, but not limited to, a waiver of it, is not
enforceable if the party against whom enforcement of the spousal support
provision is sought was not represented by independent counsel at the time
the agreement containing the provision was signed, or if the provision
regarding spousal support is unconscionable at the time of enforcement. An
otherwise unenforceable provision in a premarital agreement regarding
spousal support may not become enforceable solely because the party against
whom enforcement is sought was represented by independent counsel.”
(§ 1612, subd. (c), italics added.)
22
“merely 10% of the probable order without the agreement”—was
unconscionable.
C. Discussion
Mark contends that the trial court did not have the authority to find
the spousal support provision of the PMA unenforceable as being
unconscionable at the time of enforcement. We disagree. Our explanation of
our decision requires an examination of the state of the law when the parties
entered the PMA and subsequent developments.
1. The Uniform Premarital Agreement Act
Effective 1986, the Legislature adopted the Uniform Premarital
Agreement Act (UPAA), now Family Code section 1600 et seq. 11 In 1994,
when the parties in the present case entered the PMA, section 1612,
subdivision (a) provided, as it does now, that “[p]arties to a premarital
agreement may contract with respect to all of the following.” (Stats. 1992, ch.
162, § 10.) It listed various specific topics and concluded with “(a)(7) Any
other matter, including their personal rights and obligations, not in violation
of public policy or a statute imposing a criminal penalty.” (Ibid., italics
added.)12
11 The UPAA was originally enacted as part of the Civil Code, but in 1994
was reenacted as part of the Family Code.
12 In its entirety section 1612 provided at the time of the PMA:
“(a) Parties to a premarital agreement may contract with respect to all of the
following: [¶] (1) The rights and obligations of each of the parties in any of
the property of either or both of them whenever and wherever acquired or
located. [¶] (2) The right to buy, sell, use, transfer, exchange, abandon,
lease, consume, expend, assign, create a security interest in, mortgage,
encumber, dispose of, or otherwise manage and control property. [¶] (3) The
disposition of property upon separation, marital dissolution, death, or the
occurrence or nonoccurrence of any other event. [¶] (4) The making of a will,
trust, or other arrangement to carry out the provisions of the agreement.
[¶] (5) The ownership rights in and disposition of the death benefit from a
life insurance policy. [¶] (6) The choice of law governing the construction of
the agreement. [¶] (7) Any other matter, including their personal rights and
23
With respect to the unenforceability of premarital agreements on the
ground of unconscionability, section1615, subdivision (a) provided in relevant
part that “[a] premarital agreement is not enforceable if the party against
whom enforcement is sought proves either of the following: [¶] . . .
[¶] (2) The agreement was unconscionable when it was executed and, before
execution of the agreement, all of [certain listed conditions] . . applied to
that party.” (Stats. 1992, ch. 162, § 10, italics added.)
2. Pendleton, supra, 24 Cal.4th 39When the UPAA was enacted, California common law disfavored
premarital agreements generally (including agreements waiving or limiting
spousal support) as being in violation of public policy, namely, as encouraging
divorce. (See Dawley, supra, 17 Cal.3d at p. 352 [“an antenuptial agreement
violates the state policy favoring marriage only insofar as its terms encourage
or promote dissolution”].) In 2000, in Pendleton, supra, 24 Cal.4th 39, the
California Supreme Court was “asked to decide whether a premarital
agreement in which the parties to be married waive the right to spousal
support in case of dissolution is enforceable.” (Id. at p. 41.) As noted, section
1612, subdivision (a)(7) then (as now) permitted parties to enter premarital
agreements limiting their marital rights if “not in violation of public policy.”
Observing that “[i]t is not necessary to decide in this case whether all such
agreements are enforceable regardless of the circumstances of the parties at
the time enforcement is sought,” the court “conclude[d] that no policy of this
state makes an agreement like that entered into by the parties to this action
per se unenforceable.” (Ibid.) The court’s holding rested on two primary lines
of analysis: (1) an examination of public policy as defined by the courts
regarding premarital spousal support waivers, and (2) whether the UPAA
deprived the court of the power to shape that policy after its enactment.
obligations, not in violation of public policy or a statute imposing a criminal
penalty. [¶] (b) The right of a child to support may not be adversely affected
by a premarital agreement.” (Stats. 1992, ch. 162, § 10, p. 464, operative Jan.
1, 1994.)
24
As to the first line of inquiry, the court charted the evolution of its prior
decisions regarding the unenforceability of premarital agreements and
concluded that when “the California version of the Uniform Act was adopted
[in 1985, effective 1986], this court had held that agreements waiving the
right to spousal support were unenforceable as being against public policy if
the waiver would promote or encourage dissolution.” (Pendleton, supra, 24
Cal.4th at p. 46.) Examining changes in “[b]oth public attitude and
contemporary official policy,” the court further concluded that “changes in the
law governing the spousal relation warrant[ed] reexamination of the
assumptions and policy underlying the refusal to enforce waivers of spousal
support.” (Id. at pp. 48, 52.)
However, before undertaking that reexamination, the court had to
consider whether the UPAA had deprived it of the power to reexamine that
policy. In adopting the Uniform Act, the Legislature deleted a Uniform
provision (subdivision (a)(4) of section 3) which would have expressly
permitted the parties to modify or eliminate spousal support, and the sparse
legislative history (two subcommittee reports) was ambiguous as to the
purpose of the omission. Further, one of the reports erroneously described
existing case law as prohibiting premarital waivers of spousal support, and
indicated that the omission of the Uniform provision in the enacted
legislation would keep that prohibition in place. (See Pendleton, supra, 24
Cal.4th at p. 44 [discussion of legislative history].) Thus, the court considered
two possibilities for the omission: “[t]he Legislature may have intended to
deny couples the right to enter into any premarital agreement regarding
spousal support by adopting what the committee report erroneously described
as the existing case law under which premarital waivers would be per se
unenforceable. Alternatively, the Legislature may have concluded that policy
governing spousal support agreements, having been established by the court
in the past, should continue to evolve in the court.” (Id. at p. 47.)
The court resolved this question by preserving the prerogative of the
courts to shape public policy regarding the enforceability of premarital
agreements on spousal support. The court reasoned: “The most reasonable
understanding of the Legislature’s purpose when it omitted subdivision (a)(4)
is that it was satisfied with the evolution of the common law governing
25
premarital waivers of spousal support and intended to permit that evolution
to continue. . . . . We agree with the Court of Appeal, therefore, that the court
is free to reexamine the assumptions that underlie the common law rule that
premarital spousal support waivers promote dissolution and for that reason
contravene public policy.” (Pendleton, supra, 24 Cal.4th at pp. 48–49.)
Having determined that the UPAA did not deprive it of the power to
shape public policy regarding premarital spousal support waivers, and
having concluded that reexamination of that policy was warranted, the court
reached its ultimate holding: “We agree with the Court of Appeal, therefore,
that, when entered into voluntarily by parties who are aware of the effect of
the agreement, a premarital waiver of spousal support does not offend
contemporary public policy. Such agreements are, therefore, permitted under
section 1612, subdivision (a)(7), which authorizes the parties to contract in a
premarital agreement regarding ‘[a]ny other matter, including their personal
rights and obligations, not in violation of public policy or a statute imposing a
criminal penalty.’ [¶] We need not decide here whether circumstances
existing at the time enforcement of a waiver of spousal support is sought
might make enforcement unjust. It is enough to conclude here that no public
policy is violated by permitting enforcement of a waiver of spousal support
executed by intelligent, well-educated persons, each of whom appears to be
self-sufficient in property and earning ability, and both of whom have the
advice of counsel regarding their rights and obligations as marital partners
at the time they execute the waiver. Such a waiver does not violate public
policy and is not per se unenforceable as the trial court believed.” (Pendleton,
supra, 24 Cal.4th at pp. 53–54, fn. omitted.)
In a footnote to its statement that it “need not decide whether
circumstances existing at the time enforcement of a waiver of spousal support
is sought might make enforcement unjust,” the court noted: “The Legislature
may, of course, limit the right to enter into premarital waivers of spousal
support and/or specify the circumstances in which enforcement should be
denied.” (Pendleton, supra, 24 Cal. 4th at p. 53.)
For our analysis here, three points of the court’s decision in Pendleton
stand out: (1) the preservation of the court’s authority under section 1612,
subdivision (a)(7) to determine the contours of public policy regarding the
26
enforceability of spousal support agreements; (2) the suggestion that changed
“circumstances existing at the time enforcement of a waiver of spousal
support is sought might make enforcement unjust”; and (3) the observation
that the Legislature could “specify the circumstances in which enforcement
should be denied.” (Pendleton, supra, 24 Cal.4th at p. 53, fn. 12.)
3. The Enactment of Senate Bill No. 78 (2001–2002 Reg. Sess.)
Effective 2002, in response to Pendleton, the Legislature (after
incorporating various amendments to the original bill) passed Senate Bill No.
78 (2001–2002 Reg. Sess.); “SB 78”), which amended section 1612, as well as
section 1615. As enacted, SB 78 created a new subdivision (c) of section 1612,
which remains the same today. It specifically applies to premarital spousal
support agreements, as follows: “(c) Any provision in a premarital agreement
regarding spousal support, including, but not limited to, a waiver of it, is not
enforceable if the party against whom enforcement of the spousal support
provision is sought was not represented by independent counsel at the time
the agreement containing the provision was signed, or if the provision
regarding spousal support is unconscionable at the time of enforcement. An
otherwise unenforceable provision in a premarital agreement regarding
spousal support may not become enforceable solely because the party against
whom enforcement is sought was represented by independent counsel.”
(Stats. 2001, ch. 286, § 1 (SB 78), italics added.)
SB 78 did not change section 1612, subdivision (a)(7), under which
premarital parties may contract with respect to “[a]ny other matter,
including their personal rights and obligations, not in violation of public
policy.” As noted, in Pendleton the Supreme Court had invoked this provision
in preserving the court’s authority to define public policy regarding
premarital spousal support agreements.
In tandem with adding subdivision (c) to section 1612, SB 78 also made
amendments to section 1615, the provision that governs the unenforceability
of premarital agreements generally. With respect to the unenforceability of a
premarital agreement under section 1615, subdivision (a)(2) because it was
27
“unconscionable when it was executed,” the amendment made only one
change not pertinent to our discussion.13 (Stats. 2001, ch. 286, § 2.)
4. Howell, supra, 195 Cal.App.4th 1062In Howell, supra, 195 Cal.App.4th 1062, the Court of Appeal considered
whether section 1612, subdivision (c) is retroactive. In Howell, the trial court
invalidated a 1999 premarital spousal support waiver by retroactively
applying the provision of subdivision (c) of section 1612 making such an
agreement unenforceable “if the party against whom enforcement of the
spousal support provision is sought was not represented by independent
counsel at the time the agreement containing the provision was signed.” On
appeal, the court held that the trial court had erred in retroactively applying
section 1612, subdivision (c).
The court concluded that SB 78 changed existing law in response to
Pendleton by “limit[ing] the right of parties to enter into premarital waivers
(e.g., the independent counsel requirement) and specif[ying] the
circumstances in which enforcement could be denied (e.g., the spousal
support waiver is unconscionable at the time of enforcement).” (Howell,
supra, 195 Cal.App.4th at p. 1072.) Noting that the legislation contained no
express retroactivity provision, the court referred to the rule that “‘in the
absence of an express retroactivity provision, a statute will not be applied
retroactively unless it is very clear from extrinsic sources that the
Legislature . . . must have intended a retroactive application.’ [Citations.]”
(Id. at p. 1074.)
Examining the legislative history, the court determined that the
Legislature did not intend the 2002 amendment to apply retroactively. After
charting the proposed amendments to SB 78 made in May 2001 (adding to
proposed section 1612, subdivision (c) an independent counsel requirement)
and June 2001 (adding unconscionability at the time of enforcement as a
13 The Legislature added that the party against whom enforcement was
sought must have been provided a “fair, reasonable, and full disclosure” of
the other party’s property or financial duties, whereas the prior version
simply required a “fair disclosure.” (Stats. 2001, ch. 286, § 2, italics added.)
28
ground for nonenforcement), the court looked to a Senate Judiciary
Committee analysis of the original version of the bill (prior to the May and
June 2001 amendments) to discern the Legislature’s intent in passing the
final bill. (Howell, supra, 195 Cal.App.4th at pp. 1074–1076.) The Senate
Judiciary report “noted that those opposed to the bill were concerned ‘over
the possible retroactivity of a prohibition on spousal support waivers . . . .’
(Sen. Com. on Judiciary, Analysis of Sen. Bill No. 78 (2001–2002 Reg. Sess.)
as introduced Jan. 11, 2001, p. 10.) The Senate Judiciary Committee report
went on to note that Senate Bill No. 78 ‘contains no provision for retroactive
application,’ and cited the general rule that ‘laws operate prospectively unless
retroactive application is provided for specifically, or unless the new
legislation clarifies existing law.’ (Id. at p. 11.)” (Id. at p. 1075.) Based on
this comment, and in the absence of any provision for retroactive application,
the court concluded that “the legislative history of Senate Bill No. 78
supports the conclusion that the Legislature did not intend subdivision (c) of
section 1612 to apply retroactively.” (Howell, supra, 195 Cal.App.4th at p.
1075.)
Because section 1612, subdivision (c) did not apply retroactively, the
court set aside the trial court’s invalidation of the spousal support agreement
based on the absence of independent counsel. The court then analyzed the
remainder of the trial court’s decision and concluded substantial evidence
supported the trial court’s findings that the agreement was nether
involuntarily entered nor unconscionable when executed. (Howell, supra, 195
Cal.App.4th at pp. 1078–1080.) In a footnote, the court noted: “After the
2002 amendment to section 1612, a spousal support provision in a premarital
agreement—including the waiver of such support—is deemed unenforceable
if the provision ‘is unconscionable at the time of enforcement.’ (§ 1612, subd.
(c), italics added.) However, under former section 1615, subdivision (a)(2),
which we apply here, unconscionability is determined at the time the
premarital agreement ‘was executed.’” (Id. at p. 1080, fn. 12, italics added.)
5. Facter, supra, 212 Cal.App.4th 967In Facter, supra, 212 Cal.App.4th 967, the court agreed with Howell
that section 1612, subdivision (c) is not retroactive. But it appeared to
29
disagree (on grounds not entirely clear) with Howell’s assertion (195
Cal.App.4th at p. 1081, fn. 12) that when examining a pre-2002 premarital
spousal support agreement for unconscionability, a court is limited to an
examination under section 1615, subdivision (a)(2) of the circumstances
existing when the agreement was executed.
In Facter, the trial court applied section 1612, subdivision (c)
retroactively to invalidate a 1994 spousal support waiver as being
unconscionable at the time of enforcement. (Facter, supra, 212 Cal.App.4th
at p. 981, and fn. 19.) On appeal, relying on Howell, the court held that the
trial court erred in applying section 1612, subdivision (c) retroactively. The
court observed, however, that “the Supreme Court in Pendleton did not set a
precise standard for when a spousal waiver is deemed unconscionable.”
(Facter, supra, 212 Cal.App.4th at p. 982.) In an accompanying footnote, the
court noted that “[f]ormer section 1615 (pertaining to unenforceable
premarital agreements) applies to premarital agreements as a whole and
does not specifically reference spousal support waivers. Accordingly, we rely
primarily on case law in evaluating whether the waiver in the Agreement is
unconscionable. (See Pendleton, supra, 24 Cal.4th 39, 48–49 [‘The most
reasonable understanding of the Legislature’s purpose when it omitted [the
UPAA’s spousal support language from section 1612’s list of permissible
objects of a premarital agreement] is that it was satisfied with the evolution
of the common law governing premarital waivers of spousal support and
intended to permit that evolution to continue.’].)” (Facter, supra, 212
Cal.App.4th at p. 982, fn. 21.)
Distinguishing the circumstances at the time of execution of the
agreement in the case before it with those in Pendleton and Howell, the court
appeared to hold (without expressly so stating) that the agreement was
unconscionable at the time it was executed. (Ibid.) But the court went
further: “The Supreme Court in Pendleton also suggested that circumstances
existing at the time of the enforcement of a spousal support waiver ‘might
make enforcement unjust.’ [Citation.]” (Facter, supra, 212 Cal.App.4th at p.
983.) The court then analyzed the circumstances of the parties at the time of
enforcement and concluded: “Given that Jeffrey’s [husband’s] self-reported
separate property is now in excess of $10 million and his earnings $1 million
30
per year, whereas Nancy [wife] amassed no separate property during the
marriage and has no income at all, we have little difficulty in concluding that
the Agreement’s spousal support waiver is presently unconscionable.”
(Facter, supra, 212 Cal.App.4th at p. 984.)
6. Unconscionability at the Time of Enforcement
Like Facter, we agree with Howell to the extent it held that section
1612, subdivision (c), in and of itself, is not retroactive. But we do not agree
with the implicit conclusion of Howell that the non-retroactivity of section
1612, subdivision (c) means that, under section 1612, subdivision (a)(2), a
court considering the unconscionability of premarital spousal support
agreements entered between 1986 and 2002 is limited solely to the
circumstances existing at the time of execution. To the contrary, as
apparently recognized in Facter (though the details are not fleshed out) we
conclude that the Legislature did not intend to eradicate the authority of the
court, recognized in Pendleton, to shape public policy regarding spousal
support agreements for the protection of the parties. Thus, we hold that in
considering whether a premarital spousal support agreement entered
between 1986 and 2002 is enforceable, the court is not limited to the section
1615, subdivision (a)(2) determination whether the agreement was
unconscionable when executed. Rather, the court retains the power under
section 1612, subdivision (a)(7) (identified in Pendleton, supra, 24 Cal.4th at
pp. 48–49) to shape public policy regarding premarital spousal support
agreements to the extent not inconsistent with Legislative declarations of
such policy, and to declare (as suggested in Pendleton, id. at pp. 53–54) that a
premarital spousal support agreement is unenforceable as against public
policy solely because it is unconscionable at the time of enforcement. We
reach this conclusion for three reasons.
First, as we have noted, in Pendleton, the California Supreme Court
held that the adoption of the UPAA did not deprive the court of the power to
shape the extent to which a premarital spousal support waiver may be
unenforceable as against public policy under section 1612, subdivision (a)(7).
The court also left open the possibility that such agreements are
unenforceable based on circumstances existing at the time of enforcement.
31
And it did so even though section 1615, subdivision (a)(2) expressly provided
that premarital agreements were unenforceable if unconscionable at the time
of execution, not the time of enforcement. Thus, if the reference to
unenforceability at the time of execution in section 1615, subdivision (a)
controlled, there would have been no need for the Pendleton court to mention
the possibility that a court might find a premarital spousal support
agreement unenforceable as unjust at the time of enforcement.
Second, Howell’s determination of non-retroactivity relied in large part
on its interpretation of a comment in a report of the Senate Judiciary
Committee describing SB 78 as introduced. Omitted in the court’s summary
of the comment is language important for the issue that faces us here:
whether, by not making SB 78 retroactive, the Legislature intended to vitiate
the court’s power, to the extent not inconsistent with Legislative declarations,
to shape public policy regarding the enforceability of premarital spousal
support agreements.
The entire comment referred to in Howell states, with the language
omitted by Howell in italics: “Opponents of the bill further express concern
over the possible retroactivity of a prohibition on spousal support waivers,
particularly as some premarital agreements waiving spousal support may
have been executed in reliance on the original Pendleton decision by the Court
of Appeal in 1998 (upheld by the Supreme Court in 2000). [¶] This bill
contains no provision for retroactive application. As a general rule, laws
operate prospectively unless retroactive application is provided for
specifically, or unless the new legislation clarifies existing law.” (Sen. Bill
Analysis, SB 78 (2001-2002 Reg. Sess.) pp. 10–11, italics added.)
Thus, the specific concern of the opponents of the bill was the possible
retroactivity of “a prohibition on spousal support waivers,” particularly as to
the expectations of parties who entered premarital agreements waiving
spousal support in reliance on the original Court of Appeal decision in
Pendleton (for ease of reference, Pendleton 1). Of course, as adopted, section
1612, subdivision (c) did not contain the per se prohibition. More
importantly, the opinion in Pendleton 1 endorsed the power of the court to
declare premarital spousal support agreements unconscionable at the time of
enforcement.
32
In Pendleton 1, the Court of Appeal noted that under section 1615, a
premarital agreement was unenforceable if it “was unconscionable when
executed” and the trial court made the findings listed in that section. (See
former 62 Cal.App.4th 751, 759, fn. 9, depublished by grant of review.) The
opinion suggested a need for changes in the conditions of enforcement under
section 1615, and further stated that until then “the courts will have to
decide enforcement issues in conformance with the rules that are expressed
in Family Code section 1615 and the policies underlying both the Uniform
Act and the California Act.” (See former 62 Cal.App.4th at p. 759, fn. 9.)
Amplifying on the role of the courts, the opinion referred to a then-
current version of a secondary treatise which “not[ed] the absence of any
reported California case involving an unconscionability claim vis-à-vis a
premarital agreement and quoting the standard under the Uniform Act, to
the effect that, ‘in determining whether a premarital agreement is
unconscionable, courts “may look to the economic circumstances of the parties
resulting from the agreement, and any other relevant evidence.”’” (Former 62
Cal.App.4th at p. 759, fn. 9.)
On the same point the opinion also cited Lewis v. Lewis (1988) 69 Haw.
497. In that case, the Hawaii Supreme Court held that a premarital spousal
support agreement must be evaluated for unconscionability not only at the
time of execution, but also, as a matter of public policy, at the time of
enforcement. (See former 62 Cal.App.4th at p. 759, fn. 9; see also Lewis v.
Lewis (1992) 69 Haw. 497, 503 [“To enforce a spousal support provision of a
premarital agreement because it was reasonable at the time of execution of
the agreement can result in unforeseen economic hardship to a spouse that
may shock the conscience of the court due to relevant changes in the
circumstances of the marriage by the time of divorce. Public policy mandates
against the enforcement of unconscionable support payments”].) Although
the holding of Lewis is not specifically mentioned in Pendleton 1, the import
of the citation to Lewis is clear.
In short, Pendleton 1 contemplated courts evaluating unconscionability
as a matter of public policy at the time of enforcement. Agreements entered
by parties in reliance on Pendleton 1 would have taken that fact into account.
Therefore, to the extent the opponents to SB 78 expressed concern regarding
33
invalidation of premarital spousal support agreements entered into by
parties who relied on Pendleton 1, and to the extent the Legislature
responded to that concern by not making section 1612, subdivision (c)
retroactive, the Legislature certainly did not intend to preclude a court from
declaring, as a matter of public policy under section 1612, subdivision (a)(7),
that a premarital spousal support agreement was unenforceable as being
unconscionable at the time of enforcement.
Indeed, the Legislature added section 1612, subdivision (c) in response
to Pendleton to provide greater legislative protections to parties against
whom a premarital spousal support agreement is sought to be enforced.
Nothing in the statute or Legislative history suggests that the Legislature
meant to eradicate the court’s independent power, recognized in Pendleton, to
define public policy, especially as it might relate to invalidation of a
premarital spousal support agreement based on circumstances existing at the
time of enforcement.
Finally, it is true that, as a general matter, courts examine the
unconscionability of contracts as of the time of execution. (See Civ. Code,
§ 1670.5, subd. (a).)14 But as illustrated by case law evaluating the
substantive unconscionability of arbitration agreements in cases brought
under FEHA (the California Fair Employment and Housing Act; Gov. Code,
§ 12900 et seq.), in some circumstances it is appropriate to examine the
unconscionability of contract provisions as of the time of enforcement.
Although the parties to an employment arbitration agreement may agree to
something less than the full panoply of discovery available in California’s
discovery statutes (Armendariz v. Foundation Health Psychcare Services, Inc.
(2000) 24 Cal.4th 83, 105–106), courts have recognized that such agreements
must “‘ensure minimum standards of fairness’ so employees can vindicate
14 Section 1670.5, subdivision (a) provides that: “If the court as a matter
of law finds the contract or any clause of the contract to have been
unconscionable at the time it was made the court may refuse to enforce the
contract, or it may enforce the remainder of the contract without the
unconscionable clause, or it may so limit the application of any
unconscionable clause as to avoid any unconscionable result.”
34
their public rights. [Citation.]” (Fitz v. NCR Corp. (2004) 118 Cal.App.4th
702, 716.) Whether such minimum standards of fairness exist is examined at
the time of enforcement of the agreement, not execution of the agreement,
and is analyzed based on the specific discovery needs of the plaintiff’s case.
“In striking the appropriate balance between the desired simplicity of limited
discovery and an employee’s statutory rights, courts assess the amount of
default discovery permitted under the arbitration agreement, the standard
for obtaining additional discovery, and whether the plaintiffs have
demonstrated that the discovery limitations will prevent them from adequately
arbitrating their statutory claims. [Citation.]” (Davis v. Kozak (2020) 53
Cal.App.5th 897, 910–911, italics added.)
As illustrated by the cases involving employment arbitration
agreements, when important statutory rights are at stake, courts are not
always constrained to examine unconscionability at the time of execution of
an agreement. We acknowledge that the analogy to premarital spousal
support agreements is not perfect. But California recognizes the centrality in
dissolution proceedings of the trial court’s broad statutory discretion to
fashion an appropriate award of spousal support (or no award at all) based on
the parties’ present abilities to provide for their own needs and the standard
of living established during the marriage. (§§ 4320, 4330, subd. (a); see
Pendleton, supra, 24 Cal.4th at p. 52.) In light of the importance of the right
to spousal support in appropriate cases, we see no reason why, as a matter of
public policy, a premarital agreement entered between 1986 and 2002
waiving or limiting the right to spousal support ought not be examined by a
court for unconscionability at the time of enforcement. (See Melissa, supra,
212 Cal.App.4th at pp. 610–611 [“The rules and underlying public policy
regarding support waivers has swung like a pendulum from the one extreme
of complete prohibition, to the other extreme of being condoned but highly
regulated with technical requirements and safeguards. While we no longer
believe prenuptial agreements containing spousal support waivers encourage
dissolution or will harm society, we are also well aware of the need for
safeguards to ensure fairness and voluntariness”]).
Thus, despite the non-retroactivity of section 1612, subdivision (c), we
hold that the court retains the power under section 1612, subdivision (a)(7)
35
(identified in Pendleton) to shape public policy regarding premarital spousal
support agreements to the extent not inconsistent with Legislative
declarations of such policy, and to declare (as suggested in Pendleton) that a
premarital spousal support agreement is unenforceable as against public
policy solely because it is unconscionable at the time of enforcement. In the
instant case, therefore, the trial court did not err in considering whether the
spousal support provision of the PMA was unconscionable at the time of
enforcement.
We further conclude that the trial court properly found the spousal
support provision in the PMA unconscionable at the time of enforcement.
In Facter, in concluding that the spousal support provision was
unconscionable at the time of enforcement, the court observed that the wife
had a high-school education and was unemployed throughout the 16-year
marriage, while the husband had an annual income of $1 million and a net
worth of $10 million. Here, Kim’s forensic accountant had opined that Kim
would need $86,000 per month to meet the marital lifestyle based on an
income-available approach, while an expenditure approach would yield
$37,000 per month. Kim, like the wife in Facter, was unemployed, similarly
educated, and spent the marriage raising the couple’s six children. The trial
court found the amount Kim would receive under the PMA—“merely 10% of
the probable order without the agreement”—was unconscionable.
We find no flaw in the trial court’s reasoning. Many years had elapsed
since the time of execution, and Kim had foregone employment outside of the
home, while at the same time Mark continued to amass a large separate
property fortune from his business. As a result, $6,000 a month in spousal
support under the agreement compared to Mark’s monthly earnings of
upwards of approximately $250,000 was oppressive. Further, we note as well
that Kim had already waived any community property interest in Mark’s
income.15 We therefore affirm the trial court’s invalidation of the spousal
support provision of the PMA.
15 Mark filed a letter brief citing the recently decided case of Miotke,
supra, 35 Cal.App.5th 849 on the issue of the time of evaluation of
unconscionability. He does nothing other than draw this court’s attention to
36
PHASE II: SUPPORT ISSUES
I. THRESHOLD ISSUE: DATING OF MARK’S INCOME
As a threshold issue regarding phase II, Kim contends the trial court
erred because it used Mark’s income from the period 2011-2013 to calculate
his cash flow in mid-2016 to determine funds available for child and spousal
support. Mark counters that the trial court did not abuse its discretion in
using a time period that it found more reliably predicted Mark’s future
income. We agree with Mark.
A. Factual Background and Procedural Summary
1. Testimony and Other Evidence Regarding Mark’s Income
Discovery cutoff was in August 2014. (See Code Civ. Proc., § 2024.020,
subd. (a).) As a result, the most recent information available when trial
commenced in September 2014 was Mark’s Income and Expense Declaration
dated August 27, 2014, containing income information through March 31,
2014. During trial, Kim sought additional financial information.16
Trial was continued to May 2016. Kim persisted in her attempts to get
updated financial information. From the bench in February 2016, the court
stated that “I’m not going to give any further discovery. Whatever [Kim’s
forensic accountant] Mr. Zuckerman has, let him deal with it. No new
documents . . . unless [Mark] seeks to present evidence of income different
than what he’s presented so far, I’m not going to have any new documents.”
the case. For good reason—Miotke concluded the issue had been waived by
the wife’s failure to raise it in the trial court. (Id. at p. 861.)
16 According to Kim, during trial in December 2014, she issued trial
subpoenas duces tecum seeking additional documents. After Mark objected
and Kim sought to compel production, the trial court granted partial
production. In October 2015, during a telephonic conference, Kim sought
additional financial information, but the trial court issued a written order
stating that the parties could not seek documents via trial subpoenas unless
they were based on new issues. None of these materials are part of the
record.
37
At trial, the court heard expert testimony on Mark’s income for the
period 2011 to 2013. During this time, Mark managed hedge funds and
purchased speculative partnership interests with deep discount values. His
investment business was changing, and he had gone from $1.5 billion in
assets under management in 2008 to $273 million at the time of trial;
investors had demanded their money back. The funds producing income in
2014 were almost entirely based upon a return of capital (“harvesting”) and
thus were unique, and as a result, his income in 2014 was 18 times the
income in 2011 and 2012. Dorchester was having trouble raising capital and
many employees had left; in 2014 investors lost one-third of their
investments, and it took several years for the firm to recover.
Kim’s forensic accountant determined Mark’s income for 2014 to be
$8.7 million, or approximately $700,000 per month.
2. Court’s Findings
(a) Sufficiency of 2011-2013 Income Figures
The court found that “Mark’s income is not consistent from year to year
and the parties disagreed as to what time period the court should use to
compile a representative prediction of future income. Mark suggested several
alternative periods but also offered testimony that the nature of his business
has changed, likely reducing his future income. He pointed to exhibit 1030
which showed a substantial decline in assets under management [at]
Dorchester . . . in 2014,” and that a “certain class of investments that were
generated by the financial disruptions around 2008 [were] no longer
available.”
The court noted that Mark was not ordered to provide full financial
information for 2015 and 2016. “For a variety of reasons, the trial of the
reserved issues in this case took an extended period of time commencing in
December 2014 and not concluding until mid-2016. Mark argued and the
court concluded that it would be disruptive and ultimately not beneficial to
have a constantly moving target for income calculation and document
production. The court will use the years 2011-2013 as a representative
period to judge Mark’s income.” The court declined to use 2014 income
figures because that year appeared to be an “outlier.”
38
Using the income of Dorchester and Reflection for this period, the court
found Mark’s average monthly income to be $259,432.
B. Discussion
Kim asserts that she was prejudiced by the trial court’s failure to
permit her to obtain current financial information from Mark, and that
“harvesting” was not a one-off occasion but occurred on a regular basis. Thus,
a multi-year sampling of income cannot be properly “representative” if the
highest income year is eliminated. As such, the court erred in concluding
there was no prejudice because there would have been no difference in its
ruling even if the 2014 income had been considered. She contends the court
essentially gave Mark credit for the possibility of reduced income, rather than
waiting for reduced income to occur. We find the trial court did not abuse its
discretion in selecting the years 2011-2013, and excluding 2014, to calculate
Mark’s income.
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, taking into consideration the
circumstances set forth in section 4320.’” (In re Marriage of Blazer (2009) 176
Cal.App.4th 1438, 1442 (Blazer).) There is no statute defining income for the
purpose of determining spousal support, and this determination is left to the
trial court’s discretion. (Id. at p. 1445.) However, in evaluating support, the
trial court cannot engage in speculation, and an order for spousal support
must be based on the facts and circumstances existing at the time of the
order. (In re Marriage of Tydlaska (2003) 114 Cal.App.4th 572, 575 [request
for modification of child and spousal support denied where income and
expense declaration not current].)
In In re Marriage of Riddle (2005) 125 Cal.App.4th 1075 (Riddle), upon
which Kim relies, the court held that the trial court abused its discretion by
calculating income for child and spousal support orders based on the
husband’s latest two months of earnings as a commissioned financial advisor
at an investment firm. (Riddle, supra, 125 Cal.App.4th at p. 1077.) The
39
court in Riddle concluded the trial court should have used a properly
representative sample, which presumptively would have been the previous 12
months. (Ibid.)
Because the husband’s monthly income fluctuated, Riddle relied on
sections 406017 and 4064,18 “the two statutes which deal with the problem of
calculating fluctuating income for support orders.” (Riddle, supra, at p.
1081.) Riddle explained that “[t]he aim of section 4060 is to give a trial court
discretion to adjust the annual net adjustable income required for a support
order when dividing net disposable income by 12 ‘does not accurately reflect
the actual or prospective earnings of the parties.’ Section 4064 gives a trial
court the authority to adjust a child support order ‘as appropriate to
accommodate seasonal or fluctuating income of either parent.’ While both
statutes are framed in discretionary terms, it is also well established that the
discretion must be a reasonable one, “‘exercised along legal lines, taking into
consideration the circumstances of the parties, their necessities and the
financial ability of the [supporting spouse].”’” (Riddle, supra, 125
Cal.App.4th at p. 1081.)
As noted in Riddle, the purpose of using this method of calculating
child support, when income fluctuates, is to provide a reasonable predictor of
what each parent will earn in the immediate future. (Riddle, supra, 125
Cal.App.4th at p. 1081; see County of Placer v. Andrade (1997) 55
Cal.App.4th 1393, 1396 [“The assumption underlying these calculations is
that past income is a good measure of the future income from which the
parent must pay support”].) “The theory is that the court is trying to predict
17 Section 4060 provides: “The monthly net disposable income shall be
computed by dividing the annual net disposable income by 12. If the monthly
net disposable income figure does not accurately reflect the actual or
prospective earnings of the parties at the time the determination of support is
made, the court may adjust the amount appropriately.”
18 Section 4064 provides: “The court may adjust the child support order
as appropriate to accommodate seasonal or fluctuating income of either
parent.”
40
likely income for the immediate future, as distinct from extraordinarily high
or low income in the past.” (Riddle, supra, at p. 1082.)
In re Marriage of Rosen (2002) 105 Cal.App.4th 808, likewise involved
an order of pendente lite spousal support from a husband whose income
fluctuated due to monthly sales commissions. (Riddle, supra, 125
Cal.Appp.4th at pp. 1077–1078.) The trial court utilized a sample size of just
two months in calculating support payments. (Id. at p. 1078.) Rosen held
this was error, reasoning that “the time period on which income is calculated
must be long enough to be representative, as distinct from extraordinary.”
(Id. at p. 1082.) Riddle held that a 12-month period is “an appropriate period
in most cases,” but acknowledged that a longer period could be conceivably
used “if it were more representative of a party’s income.” (Id. at pp. 1083–
1084.)
We review spousal support orders under the deferential abuse of
discretion standard and examine the challenged order for legal and factual
support. “‘As long as the court exercised its discretion along legal lines, its
decision will be affirmed on appeal if there is substantial evidence to support
it.’” (Blazer, supra, 176 Cal.App.4th at p. 1443.)
Here, due to the fluctuation in Mark’s income from year to year, we
encounter a situation requiring a longer time period to generate a
representative sample. Hence, the trial court’s reliance on a period spanning
more than one year was appropriate. Further, Rosen and Riddle support the
trial court’s actions: Mark’s evidence established that his income fluctuated
from year to year. As the purpose of income calculation in such case is to
select the time period that most accurately reflects the spouse’s income, the
court here could have reasonably concluded, by crediting Mark’s evidence,
that 2014 was indeed an “outlier” year and thus should not be used to
calculate his income. As observed in Riddle, the court is trying to predict
likely income for the immediate future, as distinct from extraordinarily high
or low income in the past. (Riddle, supra, 125 Cal.App.4th at p. 1082.) Thus,
Kim’s focus on the trial court’s refusal to use “up to date” income figures
reflecting Mark’s income at the time of trial in 2016 does not translate into
an abuse of discretion. As we find no error, we need not address Kim’s claims
of prejudice.
41
II. SUPPORT ISSUES
Kim contends the below-guideline child support order is riddled with
errors, as illustrated by a comparison of the pendente lite order with the final
order; the trial court’s failure to make specific findings under section 4056; its
reliance on an unpublished opinion to adopt the “odious comparison”
standard; and its failure to apply proper standards in considering Kim’s
housing expenses.
Kim also seeks to modify the spousal support order based upon
invalidation of the PMA, arguing the court failed to retroactively modify the
temporary support order.19 She also argues there is no way to determine
whether, or how, the trial court adjusted spousal support in light of its
potential tax impact.
A. Factual Background
1. Pendente Lite Order
On February 28, 2012, the trial court (by a different judge than the
trial judge) entered a pendente lite support order. This order awarded Kim
$25,558 per month child support but did not include a housing component
because Kim remained in the home. At Mark’s request, the court deviated
from the guideline amount based upon its finding that a higher award, even
given Mark’s monthly income of $213,668, was not warranted because it
would be more than the children’s reasonable needs. The award was
retroactive to July 1, 2011. The court also awarded temporary spousal
support of $6,983, retroactive to October 1, 2012.
In calculating the support amount, the court awarded a savings
component of $7,500, finding “[i]t is in the children’s best interest to have a
savings component of a child support award to cover irregular and difficult to
predict contingencies. [¶] Ordinary prudence dictates this result. . . . The
19 Kim also apparently disputes the amount of the award itself, but does
not develop any argument why the figure itself is in error.
42
court determined the amount based on the number of children, the apparent
lack of a current reserve under [Kim’s] control, and [Mark’s] station in life.”
In addition, as discussed more fully infra, the court limited the amount
of support to $6,983 based upon the terms of the PMA.
2. Kim’s Request for Order (RFO) re Modification
After invalidation of the spousal support provision of the PMA, in
March 2014, Kim filed an RFO seeking to modify the temporary support
order. The trial court found that Kim’s arguments, based solely on this fact,
ignored the prior judge’s findings that the use of the residence, with no
Watts20 payment, met Kim’s reasonable needs at the standard of living of the
marriage. Further, Mark had expended additional sums in payment of the
minor and adult children’s expenses and had not demanded vacation of the
residence. “A retroactive modification would not adequately consider these
actions taken . . . . The court finds that there has been no substantial change
in circumstances and denies modification of the temporary order.”
3. Trial Court Ruling
(a) General Findings Regarding the Parties’ Income
Kim. The court adopted its findings regarding Kim’s income from
Phase I, observing that beyond high school, Kim had no degrees, job
certifications, or job training; she never maintained a job for more than a
short period of time; and her finances were supervised by her mother until
she married. Since the parties’ marriage in February 1994, Kim had not
been employed outside the home, instead devoting her efforts to raising the
couple’s six children; she continued to care for the three remaining minor
children. Kim had no job skills or job history, had a history of medical and
psychological issues, and was entering her mid-50s. Further, Kim received
assistance from her mother, which was sometimes characterized by the
parties as loans or gifts, but the court did not find they were income. Based
20 A Watts credit is a “reimbursement to the community for the exclusive
use of a community property asset by one spouse.” (In re Marriage of Watts
(1985) 171 Cal.App.3d 366, 373.)
43
on the foregoing, the court declined to impute any income to Kim, and found
her income to be zero.
Mark. Mark was a manager of investment entities, receiving a variety
of forms of compensation from business entities operating under the
Dorchester name. Mark had a separate investment vehicle known as
Reflection Partners (Reflection), of which he owned 81 percent and the
children held 19 percent. Reflection received income from capital gains (and
losses), interest, and other business activities. The court adopted Mark’s
assertion that there had been no distribution to him from Reflection and
Reflection’s income was reinvested and was not used for family expenses
during the marriage. The court nevertheless included the income of
Reflection as cash available to Mark for support payments. These figures
were set forth on Exhibit 1156 (not part of the record), and Kim did not
dispute those amounts.
(b) Child Support
The court applied section 4055’s complex formula21 to calculate child
support, and stated that pursuant to section 4057, subdivision (a) the
calculated sum was the presumptively correct sum for child support. The
court concluded Mark’s income was higher than had been determined in the
temporary order, and his income was higher than the income qualifying as an
exceptionally high earner in several reported cases. Thus, the high earner
exception of section 4057, subdivision (b)(3) applied and the “deviation from
guideline child support will be in the best interest of the children as their
needs will be met without overly indulging them.”
The court calculated guideline child support based on Mark’s monthly
income of $113,727 in wages and $145,705 of other taxable income, less
21 Section 4055 provides a uniform guideline formula where CS = K[HN -
(H%)(TN)]. As more fully defined in the statute, CS is child support, K is the
amount of both parents’ income to be allocated for child support, HN is a high
earner’s net monthly disposable income, H is the approximate percentage of
time that the high earner has or will have primary physical responsibility for
the children compared to the other parent, and TN is the total net monthly
disposable income of both parties.
44
expenses and deductions. Total guideline child support for the three
remaining minor children was $26,374, but the court deviated from the
guidelines based upon what it determined were the reasonable expenses of
the children. The court observed that “[c]hild support is not limited by
historical spending averages but should meet the standard of living of the
higher income parent,” citing In re Marriage of Chandler (1997) 60
Cal.App.4th 124. Further, “the court’s goal is to provide funds sufficient that
the children will not draw odious comparisons between the two households.
The children need only share the lifestyle of the wealthy parent ‘to some
degree,’” citing In re Marriage of Hubner (1988) 205 Cal.App.3d 660 (Hubner).
The court found the three minor children’s reasonable monthly expenses to be
$16,000 per month, with $4,000 of that sum attributable to housing, plus
private school tuition, temple memberships, summer camps, and tutors.
However, the court did not award a savings component, stating, “Mark has
made those provisions through [one of his companies, Reflection Partners].”
(c) Spousal Support
As part of its unconscionability finding, the trial court found that Kim’s
marital standard of living (MSOL) was a net figure of $37,000 monthly, or a
pretax figure of between $55,000 to $60,000 monthly. The court also found
Mark’s income to be $4 million annually and set his net worth at $19 million.
On March 24, 2014, Kim sought an increased and retroactive spousal support
award based upon these findings. The trial on this issue became part of the
Phase II support proceedings.22
Mark argued that although the trial court invalidated the spousal
support provisions of the PMA, the trial court should not approach the issue
as a “clean slate” but instead consider the parties’ PMA and adjust the
agreement until it is no longer unconscionable. The court declined to do so,
stating “While the court does have the power to vacate portions of contracts
between parties, it cannot rewrite the terms of a contract.” As a result, the
22 These proceedings consumed 40 sessions occurring between September
2014 and May 2016.
45
trial court made the spousal support order that would be applicable in the
absence of the PMA.
The court observed it would consider the factors of In re Marriage of
Smith (1990) 225 Cal.App.3d 469 to determine the marital standard of living,
and that consideration of those categories yielded a standard that “was in the
lower end of upper income.” Kim had sought a lump sum payment to cover
first and last months’ rent ($100,000 to $150,000), moving costs ($26,000) and
furniture replacement ($815,000). The court found the estimates not
credible, and that no authority has been cited for lump sum payments of this
sort. Instead, the court decided to build reasonable expenses for these items
into the support award. The court concluded Kim’s needs and the needs of
the three remaining minor children could be met by a rental in the range of
$15,000 per month, and assigned $4,000 of that sum to child support, leaving
$11,000 for Kim’s spousal support. Kim’s other needs totaled $15,000 for a
total of $26,000 per month.
The court awarded $40,000 per month spousal support, with $15,000 of
that coming off the top if Kim remained in the Malibu marital residence.
Weighing the 4320 factors,23 the court found under subdivision (e) that
Mark had substantial assets in the range of $20 million, while Kim’s assets
23 Section 4320 requires the court to consider numerous circumstances,
including those relevant here: “(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
46
were in the thousands of dollars. Regarding factor (f), “this is a lengthy
marriage which deepens Mark’s obligations to Kim in light of an extended
period at a high standard of living.”24 Further, the court “has taken into
account the tax consequences of spousal support.”
B. Discussion
1. Child Support
California has a strong public policy in favor of adequate child support,
expressed in statutes embodying the statewide uniform child support
guideline. (§§ 4050–4076; In re Marriage of Cryer (2011) 198 Cal.App.4th
1039, 1048 (Cryer).) 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).) “Children should
share in the standard of living of both parents. Child support may therefore
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. [¶] . . . [¶] (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. [¶] . . . [¶] (n) Any other factors the court
determines are just and equitable.”
24 The court stated that the 4320, subdivision (a)(2), (b), (i) [domestic
abuse], (l) and (m) [criminal background] did not apply and that its analysis
of subdivisions (a)(1), (c) and (d) were “set forth above.”
47
appropriately improve the standard of living of the custodial household to
improve the lives of the children.” (§ 4053, subd. (f).)
The statewide uniform guideline under section 4055 determines child
support according to a complex formula based on each parent’s income and
custodial time with the child. (In re Marriage of McHugh (2014) 231
Cal.App.4th 1238, 1245.) The term “guideline” is a misnomer because the
amount generated by the guideline formula is presumptively correct. (In re
Marriage of Hubner (2001) 94 Cal.App.4th 175, 183; §§ 4053, subd. (k), 4057,
subd. (a).) Under section 4057, the guideline figure “is a rebuttable
presumption affecting the burden of proof and may be rebutted by admissible
evidence showing that application of the formula would be unjust or
inappropriate in the particular case, consistent with the [policy] principles set
forth in Section 4053.” (§ 4057, subd. (b).)
The amount of child support may vary from the guideline when the
parent paying the support “has an extraordinarily high income and the
amount determined under the formula would exceed the needs of the
children.” (§ 4057, subd. (b)(3).) What constitutes reasonable needs for a
child varies with the circumstances of the parties. (In re Marriage of
Chandler, supra, 60 Cal.App.4th at p. 129.) “[I]n the case of wealthy
parents . . . the well-established principle [is] that the ‘child’s need is
measured by the parents’ current station in life.’ [Citations.]” (In re
Marriage of Cheriton (2001) 92 Cal.App.4th 269, 293 (Cheriton).)
Thus, a child’s need is for more than “bare necessities” and varies with
the parents’ situation. “‘Accordingly, where the supporting parent enjoys a
lifestyle that far exceeds that of the custodial parent, child support must to
some degree reflect the more opulent lifestyle even though this may, as a
practical matter, produce a benefit for the custodial parent.’” (Johnson v.
Superior Court (1998) 66 Cal.App.4th 68, 71.) In S.P. v. F.G. (2016) 4
Cal.App.5th 921, 924–925, the court found no error in deviating downward
from guideline formula where the support order reflected the child’s best
interest and provided standard of living commensurate with a “financially
privileged child.”
Where the trial court departs from the guideline amount, it is required
to state for the record its reasons and why the support ordered is in the
48
child’s best interests. (§ 4056, subds. (a)(2), (3).) However, the requisite
findings can be implied from the record where they are not explicitly stated.
(S.P. v. F.G., supra, 4 Cal.App.5th at p. 935.)
We will not overturn a child support award absent a showing of a clear
abuse of discretion resulting in prejudicial error. (S.P. v. F.G., supra, 4
Cal.App.5th at p. 935.) “[W]e do not substitute our judgment for that of the
trial court, and we will disturb the trial court’s decision only if no judge could
have reasonably made the challenged decision.” (Cryer, supra, 198
Cal.App.4th at pp. 1046–1047.) In reviewing a child support order, however,
“‘we are mindful 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.” [Citation.]’ [Citation.]” (In re
Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1312.)
(a) Below Guideline Order
Kim argues the trial court erred in awarding support of $16,000, which
was below the guideline $26,374 amount. She argues that the pendente lite
order was based upon $213,668 per month of net income and awarded Kim
$25,558 per month, while the trial court here awarded support based on a
total of $259,432 per month, yet the monthly support order was less.
Further, the pendente lite order included a savings component, while the
trial court’s order did not. As a result, she contends she could be placed
under the fiscal control of Mark.
Other than pointing to the differences in the two awards, 25 and
engaging in speculative argument, Kim presented no evidence the children’s
needs would not be met by the trial court’s permanent support award. In the
case of a high-earner spouse, the court may depart from the guidelines if the
award meets the needs of the children. Here, there is no evidence their needs
would suffer on a lesser award, particularly since Mark was obligated to
25 Pendente lite awards of child support differ from permanent awards in
that the court on a permanent award is required to make findings. (In re
Marriage of Czapar (1991) 232 Cal.App.3d 1308, 1316.)
49
separately pay for private school tuition, temple memberships, summer
camps, and tutors.
(b) Sufficiency of Court’s Section 4320 Findings
Kim next argues that the trial court failed to make the required section
4320 findings under section 4056, and instead made conclusory statements
that the award met the children’s best needs. She complains that there is a
complete failure to explain how the below guideline order even approaches
the amount necessary for the children to share in Mark’s station in life. Kim,
however, does not specify the “amount necessary,” does not state how this
failure translates into prejudice to the children’s needs, and does not
demonstrate why the necessary findings cannot be implied from the record.
We therefore consider Kim’s argument forfeited. Appellate briefs must
provide argument and legal authority for the positions taken. We are not
required to develop appellants’ argument for them. The absence of clear legal
argument or citation to authority allows this court to treat the contention as
forfeited. (Orange County Water Dist. v. Sabic Innovative Plastics US, LLC
(2017) 14 Cal.App.5th 343, 383.)
(c) Improper “Odious Comparison” Standard
Kim argues the trial court’s use of the “odious comparison” standard is
based upon an unpublished decision and therefore its child support order
departs from established standards for such awards.26 The fact the trial
court borrowed terminology from an unpublished case does not render its
ruling unsound. The point of prohibiting comparison between households is
26 In re Marriage of Worthington (2006) 2006 WL 1530609, an
unpublished case, used this term to warn about the hazards of inadequate
child support. (Id. at pp. 5–7.) Pursuant to California Rules of Court, rule
8.1115(a), an unpublished appellate court or superior court appellate
department opinions must not be cited or relied on by a court or a party in
any other action. (See Aixtron, Inc. v. Veeco Instruments Inc. (2020) 52
Cal.App.5th 360, 399 [refusing to consider unpublished, tentative decision
from the superior court in Los Angeles County in an unrelated case].)
Nonetheless, despite this rule, Kim discusses the case in her brief.
50
to ensure some form of parity with the wealthier parents’ standard of living
so that the children do not experience a lower standard because of the
parents’ dissolution. “‘[W]here the supporting parent enjoys a lifestyle that
far exceeds that of the custodial parent, child support must to some degree
reflect the more opulent lifestyle even though this may, as a practical matter,
produce a benefit for the custodial parent.’” (Johnson v. Superior Court,
supra, 66 Cal.App.4th at p. 71.)
(d) Housing Expenses
Kim contends the trial court failed to apply the appropriate standards
to determine the proper housing costs for purposes of child support.
(i) Factual Background
The parties lived during their marriage in a large house in Malibu.
The parties stipulated the house had a fair market value of approximately
$16 million. Mark’s appraiser gave the property a fair rental value (year-
round) per month of $25,500 (unfurnished) to $30,500 (furnished). Kim’s
expert agreed to a fair rental value of $25,000 per month, but believed if the
house were cleaned and repaired, it would rent for $30,000 to $35,000 per
month.
With respect to replacement housing, Mark’s expert apparently limited
his search to homes less than half the size of the marital home and did not
consider proximity to the children’s schools. After being replaced mid-trial,
Mark’s new experts opined that Kim could find replacement housing for
$9,500 to $14,000.
The trial court concluded that “Kim has expressed a wish to remain in
the Malibu area citing a variety of reasons including her own health issues.
Where she chooses to live will be her choice but the court has focused its
review on those options presented in Malibu. The listings offered into
evidence were received not as locations for Kim to actually rent but as an
example of what would likely be available in the future market. [¶] The
court believes the reasonable needs for Kim and the remaining 3 minor
children . . . can be met for a rental in the range of $15,000.00 per month.
The court has assigned $4,000.00 of that sum to child support leaving costs of
$11,000.00 for Kim’s spousal support need at this time.”
51
(ii) Discussion
Kim contends the trial court erred in arriving at this figure because it
did not permit Kim and the remaining minor children to live in any residence
even closely comparable to the Malibu residence, or Mark’s new $6.5 million
Beverly Hills residence. (See, e.g., In re Marriage of Hubner, supra, 205
Cal.App.3d at pp. 667–669.)
In Hubner, the trial court awarded below guideline child support. The
parents had widely disparate income levels, with the mother unemployed and
the father earning more than $40,000 a month. The court stated its order
was based upon the needs of the child but awarded the mother only half of
what the father agreed he could pay. (Hubner, supra, 205 Cal.App.3d at p.
667.) Hubner concluded that the “core of this dispute is whether the trial
court, in setting child support, should focus on the noncustodial parent’s
wealth or the custodial parent’s poverty. We conclude that the primary focus
must be on the parent’s wealth, and that the trial court must frame its orders
to assure, as best the court can, that the wealth flows to the child, and not to
the custodial parent.” (Id. at p. 667.)
As a result, Hubner reversed, observing that in crafting support, the
Legislature referred, both to the “parent’s circumstances” (§ 4720, subd. (e))
and to the “parents’ standard of living” (§ 4724, subd. (a)). “We agree with
the trial court that some consideration should be given to the poorer parent’s
circumstances or standard of living. However, at least where the ability of
the noncustodial parent to pay a high level of child support is undisputed,
and that level is also consistent with the guidelines, the inability of the
custodial parent to make a meaningful financial contribution should not
significantly affect the level of support ordered. To emphasize the
contributive abilities of both parents unrealistically deprives the child of a
standard of living easily available to that child, but for consideration of the
poorer parent’s inability to contribute. A child living with both parents, one
of whom is a homemaker with no cash income, depends solely on the cash
income of the earning parent.” (Hubner, supra, 205 Cal.App.3d at p. 668.)
Here, Kim assumes she is entitled to absolute housing equivalency with
Mark. Rather, the children are entitled to share in Mark’s wealth to the
52
extent that their housing would reflect what Mark could afford. On that
basis, Kim cannot show that $15,000 per month ($4,000 a month, plus
$11,000 of the spousal support order), is insufficient to ensure that the
children maintain their father’s lifestyle as far as possible.
2. Spousal Support
There are two distinct types of spousal support under California law,
based on the timing and the purpose of the award. (In re Marriage of
Mendoza & Cuellar (2017) 14 Cal.App.5th 939, 942.) Temporary spousal
support, awarded under section 3600, is intended to maintain the living
conditions and standards of the parties as closely as possible to the status
quo, pending trial and the division of the assets and obligations of the parties.
(In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1328.) In contrast,
permanent spousal support is intended to provide financial assistance as
determined by the financial circumstances of the parties after their
dissolution and the division of their community property. (In re Marriage of
Winter (1992) 7 Cal.App.4th 1926, 1932.)
Permanent spousal support is governed by the statutory scheme set
forth in sections 4300 through 4360. In particular, 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, taking into consideration
the circumstances set forth in section 4320. (In re Marriage of Ciprari (2019)
32 Cal.App.5th 83, 108 (Ciprari).) These statutory factors include the
supporting spouse’s ability to pay, the needs of each spouse based on the
marital standard of living, the obligations and assets of each spouse,
including separate property, and any other factors pertaining to a just and
equitable award. (Ibid.)
In making a spousal support order, a trial court has broad discretion to
fairly exercise the balancing process of section 4320, with the goal of
accomplishing substantial justice for the parties in the case before it.
(Ciprari, supra, 32 Cal.App.5th at p. 108.) In balancing the statutory factors,
the trial court has discretion to determine the appropriate weight to accord to
each. But the court must exercise its discretion within legal principles,
53
taking into consideration the applicable circumstances of the parties as set
forth in section 4320, especially their reasonable needs and their financial
abilities. (Ibid.; In re Marriage of McLain (2017) 7 Cal.App.5th 262, 269
(McLain) [in awarding spousal support, the court must consider the
mandatory guidelines of § 4320].) The court does not have discretion to
ignore any relevant circumstance enumerated in the statute. The court must
recognize and apply each applicable statutory factor in setting spousal
support. (Ciprari, supra, 32 Cal.App.5th t p. 108.)
(a) Modification Based on Retroactive Application of the
Unconscionability Finding
Kim seeks modification based upon invalidation of the PMA. She
argues the trial court erred in refusing to apply the spousal support award
retroactively after it invalidated the PMA upon which the temporary award
was based. The trial court refused to do so based upon its conclusion that the
temporary award was based upon more than the PMA, namely, the use of the
residence with no Watts payment. However, she asserts the trial court was
incorrect because the temporary award referred to child support, not spousal
support. Therefore, she contends, the PMA is the sole basis upon which the
pendente lite spousal support award was made, and the invalidation of the
PMA justifies revisiting pendente lite support.
(i) Factual Background
The trial court stated it departed from the guideline amount because
“1) The guideline would result in an order exceeding the marital standard of
living and 2) The parties signed a premarital agreement limiting support.”
The court interpreted the PMA to adjust the baseline award of $6,000 per
month upward after the 11th year of marriage, and awarded $6,983 per
month retroactive to October 1, 2012.
(ii) Discussion
Generally, courts will not modify child or spousal support unless there
has been a material change of circumstances following the previous
determination. (Cryer, supra, 198 Cal.App.4th at p. 1048.) “‘[T]he reason for
54
the change of circumstances rule is to preclude relitigation of the same facts’
and to bring finality to determinations concerning financial support.” (In re
Marriage of Rosenfeld & Gross (2014) 225 Cal.App.4th 478, 490 (Rosenfeld &
Gross).) “‘Without a changed circumstances rule, “‘dissolution cases would
have no finality and unhappy former spouses could bring repeated actions for
modification with no burden of showing a justification to change the order.
Litigants “‘are entitled to attempt, with some degree of certainty, to reorder
their finances and life style [sic] in reliance upon the finality of the decree.’”
[Citation.] Absent a change of circumstances, a motion for modification is
nothing more than an impermissible collateral attack on a prior final
order.’”’” (Rosenfeld & Gross, supra, at p. 490.)
The burden of proof to establish changed circumstances sufficiently
material to support an adjustment in support rests with the party seeking
modification. (Cryer, supra, 198 Cal.App.4th at p. 1054.) “The ultimate
determination of whether the individual facts of the case warrant
modification of support is within the discretion of the trial court. [Citation.]”
(In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556.) “[A]n abuse [of
discretion] occurs when a court modifies a support order without substantial
evidence of a material change of circumstances.” (In re Marriage of McCann
(1996) 41 Cal.App.4th 978, 983 (McCann).)
There are no rigid guidelines for evaluating whether circumstances
have sufficiently changed to warrant a support modification. However, in
evaluating a request for modification of an existing support order, the focus is
generally on whether there has been “a reduction or increase in the
supporting spouse’s ability to pay and/or an increase or decrease in the
supported [party’s] needs.” (McCann, supra, 41 Cal.App.4th at p. 982.)
“Each case stands or falls on its own facts, but the overriding issue is whether
a change has affected either party’s financial status.” (In re Marriage of
Laudeman (2001) 92 Cal.App.4th 1009, 1015.)
An order modifying or terminating spousal support generally may be
made retroactive only to the date of filing the OSC or notice of motion to
modify or terminate. (§ 3653, subd. (a); In re Marriage of Gruen (2011) 191
Cal.App.4th 627, 638.) The question of retroactivity lies within the trial
court’s sound discretion, exercised generally regarding the supported party’s
55
need and the supporting party's ability to pay during the period for which a
retroactive modification is sought. (Cheriton, supra, 92 Cal.App.4th at pp.
312–313.)
Here, the trial court’s conclusion that the temporary support order was
not entirely based upon the PMA does not withstand scrutiny. The pendente
lite order explicitly discusses how the limits of the PMA required it to adopt
the PMA’s figures as de facto child support. Even assuming the trial court
was correct that other factors were at play in the fashioning of the pendente
lite order, we cannot discern the extent to which they dictated the pendente
lite award, and the matter must be remanded for a determination of
pendente lite child support from the date of Kim’s OSC.
(b) Tax Ramifications
Section 4320, subdivision (j) requires the trial court, in awarding
support, to consider the tax consequences of its award. Here, other than
claiming the trial court failed to specify the manner in which it considered
the issue, Kim does not argue how such omission prejudiced her. She does
not point to any evidence that the tax consequences of the court’s spousal
support award negatively affected her.
FEE CROSS-APPEALS
Both Kim and Mark cross-appeal from the trial court’s fee awards.
Mark contends the court erred in (1) determining he was not the prevailing
party and (2) apportioning 80 percent of Kim’s fees to him. Kim contends
that the trial court (1) failed to make the required finding under section 2030,
subdivision (a)(2) whether Mark was able to pay the fees for both parties, and
(2) mistakenly relied on Alan S. and the outdated versions of the applicable
statutes upon which it was based.
I. FACTUAL BACKGROUND
A. Trial Proceedings Re Fees
1. Fee Clause in PMA
The PMA provided “the prevailing party, whether at trial or on appeal,
shall be entitled, . . . to be reimbursed by the non-prevailing party for all
56
costs and expenses incurred thereby, including but not limited to reasonable
attorneys’ fees and costs for services rendered to the prevailing party.”
2. Hearing re Fees
Mark and Kim both argued that they were the prevailing party under
the PMA having obtained greater relief in the litigation, and both also sought
fees as sanctions under section 271.
Kim sought total fees of $2,783,427.04, consisting of funds borrowed
from her mother and stepfather, funds owed to her attorneys and
accountants, and costs. Kim sought 100 percent of her fees and costs based
on her need and Mark’s ability to pay. She asserted Mark earned in excess of
$10 million in 2014, had assets of $24 million and the Malibu residence was
worth in excess of $15 million. Kim, on the other hand, asserted she only
received $6,983 per month in spousal support.
In addition, Kim claimed she should be deemed the prevailing party (or
alternatively, there was no prevailing party) based on her successful
challenge to the spousal support clause of the PMA, and she sought section
271 sanctions based upon Mark’s unreasonable custodial demands.
Mark pointed to Kim’s conduct in, among other things, litigating the
PMA (while deciding for months whether she would contest it), seeking
excessive amounts for monthly rent (up to $50,000 per month to rent a home
similar to the Malibu residence), and seeking $70,000 in spousal support, and
$25,000 per month in child support.
B. Trial Court Ruling
The trial court issued a statement of intended decision on March 17,
2017.27
1. Prevailing Party
Relying on De La Cuesta v. Benham (2011) 193 Cal.App.4th 1287, the
court found there was no prevailing party, concluding Mark prevailed on the
overall validity of the PMA, while Kim succeeded in invalidating the spousal
27 As amended and corrected May 10, 2017, May 30, 2017, and August 8,
2017.
57
support limitation. The court noted that the PMA had two principal effects:
it eliminated community property, and severely limited Mark’s spousal
support obligation in amount and duration. The court found “clear wins” for
each party on the two issues litigated (overall validity and spousal support)
but rejected each parties’ contention that their “win” had a substantially
greater economic impact. “[A] final determination of the true value of either
side’s victory is not possible on the evidence received by the court.”
First, the court could not determine, due to the vacillating nature of the
evidence of Mark’s assets, how much property he had at the start of the
marriage. Mark came into the marriage with substantial separate property
assets, leaving the question of what portion of his net worth would have been
separate even without the PMA. “No evidence received by the court allows
such a calculation.” “Thus, the value of [Mark’s] successful defense of the
PMA cannot be credited with any specific dollar sum.” On the other hand,
Kim claimed her spousal support order could be valued at $15 million, but
given future contingencies (modification, termination due to remarriage) and
Kim’s failure to consider taxation, “no specific dollar sum can be assigned to
this win.”
2. Section 271 Fees
Noting that “sanctions are reserved for reprehensible conduct,” the
court found neither party was entitled to fees under section 271.
Kim’s request for section 271 fees had been primarily based on custody
issues and focused on Mark’s unsuccessful requests regarding physical and
legal custody. The trial court found the “fact [Mark’s] request was not
granted is no basis for sanctions. [Mark] clearly and honestly believed that
granting him such authority was in the best interest of the children and there
was substantial evidence that could support that opinion.”
Mark’s request for section 271 sanctions was based on a longer list of
complaints: Mark objected to the contrasting settlement proposals of each
side, namely Kim’s request for a lump sum payment that was infeasible after
the PMA was upheld, but the trial court found “there is nothing
inappropriate about seeking a goal the court cannot reach by making
compromises in areas where one’s trial case is stronger.” Kim’s failure to
58
agree to a “nesting” timeshare and her OSCs and RFOs were “simply
reflections of a different but reasonable point of view.” Kim’s delay in
deciding whether to challenge the PMA similarly could not support sanctions.
“[Mark] offers no evidence that these litigation decisions were made for the
purpose of delay or any reason other than counsel’s careful weighing of the
pluses and minuses of the decision for his client.” With respect to disputes
over Kim’s purchase of household objects and the time it took to litigate a
suitable replacement rental for Kim, they were likewise not a basis for
sanctions as “[e]ach party had a different but reasonable plausible contention
on [the issues].”
In sum, the trial court observed that “[t]his case was intensively and
exhaustively litigated by each side. No witness examination, nor especially
any cross examination, was pro forma. It cannot be said that at trial [Kim]
consumed substantially more time than [Mark]. While the court did not keep
track of the times used by either party for examination or argument during
trial, it seemed that the time each used was either equal or was slightly
higher for [Mark]. This case could have been tried more quickly, more issues
could have been settled but if parties choose to have full out litigation with
detailed examination of witnesses that serve a point rather than just
spending time, that right should not be taken away from them by a draconian
fee order. Zeal and vigor in the representation of clients are commendable.
Marriage of Davenport (2011) 194 Cal.App.4th 1507[.] Davenport condemned
‘attack dog’ ‘scorched earth’ litigation but that was not the case here. If only
[Kim] had been litigating in this full on, intensive fashion the court might be
more inclined to question the basis of this style but both parties were similar
in their litigation approach.”
3. Fees Under Section 2030
The court considered the factors required by section 2030.
(a) Ability to Pay. The court found Kim had a need for assistance
with her attorney fees but she also had some ability to pay them herself.
After considering income from employment after receiving child and spousal
support, the court calculated she would have yearly net spendable income
(after tax payments) in the low $40,000 range.
59
Although the court recognized that In re Marriage of Hatch (1985) 169
Cal.App.3d 1213 (Hatch), suggested that support awards should generally not
be considered in determining ability to pay, the court concluded Hatch dealt
with orders made at the pendente lite stage of the case and focused on fees
needed to maintain the litigation. In contrast, Alan S. v. Superior Court
(2009) 172 Cal.App.4th 238 (Alan S.), held that the purpose of section 2030 is
“not to redistribute wealth from the greater income party to the lesser but
rather to equitably apportion the burden of litigation between the parties.
The court must make a nuanced consideration of the needs of each party
including expenses which perforce requires recognition of the equalizing
effect of the payment of support by one party and the receipt of that support
by the other. [¶] The court finds the Alan S. approach more persuasive.
Each party is paying their expenses from the same pot of money, the gross
income of [Mark].” Further, the court observed that “While it is true as
stated in Hatch that the payee is using the support paid to meet living
expenses, it is no less true that the payor is using what is left over to meet
similar living expenses. This is particularly true where, as here, the parties
have equal time share with the children.”
Relying on Alan S., the court used the income findings made in the
judgment and also considered direct support payments to find Mark would
have approximately 70 percent of net spendable income, while Kim would
have 30 percent. Although Kim requested that the court rely on Mark’s 2014
and 2015 income tax returns, the court instead found Mark’s income and
expense declaration from the period ending September 2016 “suggest[ed] a
dramatic future reduction in income, a current higher monthly gross income
than was found by the court but a net spendable lower than that of [Kim]
after considering all expenses.” The court also considered future reduction in
Mark’s income, payments to the minor children, and expenses for the adult
children.
The court found a 70/30 division of net spendable income to be a
starting point for consideration of allotment of attorney fees. Adjustments
would be made based on the assets available to each party, access to funds,
reasonable expenses and the reasonableness of the fees incurred.
60
(b) Access to Funds for Fees. Kim’s fees had been paid in part with
loans from her mother and stepfather; such loans totaled $458,024. Under In
re Marriage of Smith (2015) 242 Cal.App.4th 529, such loans were to be
treated as gifts, and the court considered them funds accessible to Kim.
(c) Reasonableness of Fees. The court observed that the case was an
exceptionally long trial of 57 days that was “intensively and exhaustively
litigated by each side.” Fees on both sides were approximately equal. The
court noted that during trial, Kim’s counsel was often late and extended
recesses beyond the time allotted. Mark asserted $30,000 in fees were
occasioned by these delays, and the court stated it would adjust the fees
accordingly.
To date, Mark had advanced $778,383 on account of Kim’s fees and
$145,000 for accounting services. Mark also advanced the sum of $194,545
for the privately compensated judge and $106,861 for court reporters. The
court declined to reallocate the judge and court reporter fees, but stated it
would take them into account.
The court found $3.6 million per side in fees, with $300,000 for court
fees, totaling $7.5 million. Initially, a 70/30 assessment (later revised to
80/20) would assign to Mark $5.25 million, less $4.82 million for fees
advanced to date to Kim and judge and court reporter costs, leaving a balance
of $480,000; such balance would “be the starting point for a further
contribution of fees to [Kim].”
The court found the “starting point” “must be adjusted taking into
account the vastly greater value of assets owned by [Mark]. Whether the
court uses the highly questionable claim or $11.5 million dollars of net worth,
[Kim’s] speculation of $40 million dollars or the court’s somewhat tentative
finding of the range of $20 million dollars, [Mark’s] net worth dwarfs [Kim’s]
which is in the range of $0.00 dollars. This requires a substantial upward
adjustment of the fee order.”
The court ordered an additional contribution from Mark towards Kim’s
fees and costs of $920,000.
61
II. DISCUSSION
A. Prevailing Party
Mark argues he prevailed because overwhelming evidence rebutted
Kim’s claim of incompetence, ignorance and duress. Further, Kim’s request
for additional spousal support under revised section 1612 cannot be balanced
against Mark’s victory on the overall validity of the PMA because this was
the only contract issue presented. Finally, he asserts that in the context of a
PMA, the “prevailing party” question is not just about money; here, the
parties would not have married without a PMA and lived pursuant to the
PMA’s terms during their marriage. Kim does not dispute the trial court’s
finding that there was no prevailing party for purposes of attorney fees.
Under Civil Code section 1717, parties to a contract may provide that
the prevailing party is entitled to attorney fees. (Civ. Code, § 1717;
DisputeSuite.com LLC v. Scoreinc.com (2017) 2 Cal.5th 968, 973.) The
“prevailing” party is the party who recovered greater relief in the action on
the contract. (Civ. Code, §1717, subd. (b)(1).) A trial court determines the
prevailing party upon final resolution of the contract claims and by making a
comparison of the extent to which each party has succeeded or failed in its
contentions. (Hsu v. Abbara (1995) 9 Cal.4th 863, 876 (Hsu).)
“If neither party achieves a complete victory on all the contract claims,
it is within the discretion of the trial court to determine which party
prevailed on the contract or whether, on balance, neither party prevailed
sufficiently to justify an award of attorney fees.” (Scott Co. v. Blount, Inc.
(1999) 20 Cal.4th 1103, 1109 (Scott Co.) [trial court did not abuse its
discretion in determining plaintiff was the prevailing party even though it
received less than 25 percent of the damages it sought].) In exercising that
discretion, our high court has counseled, “the trial court is to compare the
relief awarded on the contract claim or claims with the parties’ demands on
those same claims and their litigation objectives as disclosed by the
pleadings, trial briefs, opening statements, and similar sources.” (Hsu,
supra, 9 Cal.4th at p. 876.) If neither party achieves a complete victory on
the contract claims, the trial court has discretion to determine the prevailing
party. (Scott Co., supra, 20 Cal.4th at p. 1109; De La Cuesta v. Benham,
supra, 193 Cal.App.4th at p. 1294.) In deciding this question, the court
62
compares the relief awarded on the contract claim or claims with the parties’
demands on those same claims and their litigation objectives as disclosed by
the pleadings, trial briefs, opening statements, and other sources. (Hsu,
supra, 9 Cal.4th at p. 876; Marina Pacifica Homeowners Assn. v. Southern
California Financial Corp. (2018) 20 Cal.App.5th 191, 204.)
We find no abuse of discretion in the trial court’s evaluation of the
parties’ relative success in the proceedings. Although Mark was successful in
preserving the PMA’s elimination of any community property, the fluctuating
evidence of his net worth (from which a potential community property
interest could be derived) left the trial court without the tools to calculate the
monetary value of this success. On the other hand, Kim’s success in voiding
the support provisions was far easier to value. Although the trial court
rejected Kim’s estimate of this value due to contingencies that had not yet
occurred (and might never occur), it concluded that her victory had sufficient
value to offset Mark’s victory.
In addition, we reject Mark’s contention that because the parties “lived
under” the PMA’s terms during their marriage and he spent his separate
property on Kim, this non-monetary aspect of the parties’ conduct under the
contract should accord him prevailing party status. The PMA operated like a
will and did not become operative until the parties’ dissolution proceedings
commenced and Kim challenged its validity. Given that both parties
partially prevailed on their assertions, the trial court acted within its powers
in concluding even a variance in the monetary value did not justify awarding
one party or the other prevailing status.
B. Section 27128
Mark argues that Kim’s “gonzo” approach to the litigation justified an
award of fees to him because otherwise, this “litigation run amok” “will never
end” until Kim is no longer subsidized by Mark. He points to her conduct in
28 As Kim points out, Mark’s brief is not entirely clear whether he is
arguing the court erred in failing to apply section 271, or whether he
contends it merely abused its discretion in allocating 80 percent of the fees to
him. In any event, we evaluate the trial court’s section 271 ruling.
63
making unreasonable demands for primary custody, challenging the PMA
with a weak argument, seeking an unreasonable amount for a replacement
residence, challenging the support provision and seeking excessive spousal
support.
Pursuant to section 271, a trial court may base an attorney fees and
costs award “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.” (§ 271; Parker v. Harbert
(2012) 212 Cal.App.4th 1172, 1177; In re Marriage of Greenberg (2011) 194
Cal.App.4th 1095, 1100.) Section 271 imposes a minimum level of
professionalism and cooperation to effect the policy goal favoring settlement
of family law litigation and a reduction of the attendant costs. (In re
Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1537.)
Section 271 is not tied to need, but is a penalty for bad conduct. With
section 271, a lesser showing of culpable conduct is needed than under other
sanctions statutes. (Burkle v. Burkle (2006) 144 Cal.App.4th 387, 399; In re
Marriage of Tharp (2010) 188 Cal.App.4th 1295, 1318 [section 271 “does not
require that the sanctioned conduct be frivolous or taken solely for the
purpose of delay”].) The purpose behind section 271 is to promote settlement
and encourage litigant cooperation; therefore, no showing of separate injury
is required. (Id. at p. 1317.)
Although there need not be a direct correlation between section 271
sanctions and expenses incurred due to the sanctionable conduct, such
sanctions must be “tethered to attorney fees and costs.” In other words,
“‘sanctions available under the statute are limited to “attorney fees and
costs,”’” and do not, for example, include travel expenses necessarily incurred
to attend court hearings or vacation time used for relief from work
obligations. (See Menezes v. McDaniel (2019) 44 Cal.App.5th 340, 350–351.)
While “need” is irrelevant, the court must take into consideration “all
evidence concerning the parties’ incomes, assets, and liabilities.” And in no
event may the amount of the sanction impose “an unreasonable financial
burden” against the sanctioned party. (§ 271, subd. (a); In re Marriage of
Fong (2011) 193 Cal.App.4th 278, 291; In re Marriage of Pearson (2018) 21
64
Cal.App.5th 218, 234.) Unless sanctions are scaled, they might discourage
the economically weaker party from pursuing actions. (In re Marriage of
Norton (1988) 206 Cal.App.3d 53, 60.)
The award of section 271 sanctions is committed to the trial court’s
broad discretion. An “unreasonable financial burden” cap is the only limit on
this discretion. The trial court’s ruling can be set aside “only if, considering
all of the evidence viewed most favorably in its support and indulging all
reasonable inferences in its favor, no judge could reasonably [have made] the
order.” (In re Marriage of Corona (2009) 172 Cal.App.4th 1205, 1225–1226;
Menezes v. McDaniel, supra, 44 Cal.App.5th at p. 347.) Trial courts have no
discretion, however, to assess section 271 sanctions without evidence of the
statutory factual predicate, namely conduct that frustrated the promotion of
settlement and the reduction of litigation costs. (In re Marriage of Lucio
(2008) 161 Cal.App.4th 1068, 1083.)
Applying these standards here, the trial court concluded that the
parties’ conduct was based upon rational motivations. The court found
Mark’s custody requests were based on what Mark “clearly and honestly”
believed was in the best interests of the children, while Mark offered no
evidence Kim’s litigation decisions were made for the purpose of delay or any
reason other than counsel’s careful weighing of options for Kim. We cannot
say these conclusions are unreasonable, and there was no error in denying
section 271 sanctions.
C. Section 2030 Fee Calculation
Mark asserts that the trial court’s math is “incomprehensible” and it
abused its discretion in appropriating 80 percent of Kim’s fees to him. In
response, Kim asserts that Mark has not shown the trial court’s findings are
not supported by substantial evidence, and in her cross-appeal asserts the
trial court erred in failing to make the required finding under section 2030,
subdivision (a)(2) that Mark had the ability to pay the fees of both parties,
and in improperly relying on Alan S. to “nuance down” Mark’s obligations.
65
1. Sections 2030 and 2032
Under sections 2030 and 2032, the trial court may make a need-based
award of attorney fees and costs where the making of the award and its
amount are just and reasonable given the relative circumstances of the
parties. (§§ 2030, 2032, subd. (a).)29 The court’s decision on a request for
section 2030 fees must be based upon (1) an assessment of the parties’
respective income and needs, (2) whether there is a disparity in their
respective access to funds to retain legal counsel, and (3) whether one party is
able to pay for legal representation of both parties. (§ 2030, subds. (a)(1), (2);
In re Marriage of Sorge (2012) 202 Cal.App.4th 626, 662 (Sorge) [statutory
29 Section 2030, subdivision (a) provides in relevant part that “[i]n a
proceeding for dissolution of marriage, . . . the court shall ensure that each
party has access to legal representation, including access early in the
proceedings, to preserve each party’s rights by ordering, if necessary based on
the income and needs assessments, one party, . . . to pay to the other party, or
to the other party’s attorney, whatever amount is reasonably necessary for
attorney’s fees and for the cost of maintaining or defending the proceeding
during the pendency of the proceeding. [¶] (2) Whether one party shall be
ordered to pay attorney’s fees and costs for another party, and what amount
shall be paid, shall be determined based upon, (A) the respective incomes and
needs of the parties, and (B) any factors affecting the parties’ respective
abilities to pay.”
Section 2032 provides: “(a) The court may make an award of attorney’s
fees and costs under Section 2030 or 2031 where the making of the award,
and the amount of the award, are just and reasonable under the relative
circumstances of the respective parties. [¶] (b) 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. The fact
that the party requesting an award of attorney’s fees and costs has resources
from which the party could pay the party’s own attorney’s fees and costs is
not itself a bar to an order that the other party pay part or all of the fees and
costs requested. Financial resources are only one factor for the court to
consider in determining how to apportion the overall cost of the litigation
equitably between the parties under their relative circumstances.”
66
framework provides court with discretion in fashioning attorney fee awards].)
“‘An award of spousal support is a determination to be made by the trial court
in each case before it, based upon the facts and equities of that case, after
weighing each of the circumstances and applicable statutory guidelines.
[Citation.]’” (McLain, supra, 7 Cal.App.5th at p. 269.)
Section 2032 requires the court to consider the factors set forth in
section 4320, which include (1) “[t]he extent to which the earning capacity of
each party is sufficient to maintain the standard of living established during
the marriage” and (2) “[t]he needs of each party based on the standard of
living established during the marriage” (§ 4320, subds. (a) and (d)). The
marital standard of living is “a general description of the station in life the
parties had achieved by the date of separation,” rather than a “mathematical
standard.” (In re Marriage of Smith, supra, 225 Cal.App.3d at p. 491.) The
trial court possesses broad discretion to fairly exercise the weighing process
of section 4320, with the goal of achieving substantial justice for the parties.
(McLain, supra, 7 Cal.App.5th at p. 269.)
As explained in In re Marriage of Morton (2018) 27 Cal.App.5th 1025,
the 2004 amendments to section 2030 compel the court to order fees, and the
2010 amendments made section 4320 findings mandatory. 30 (Id. at pp. 1049–
1051.) “The textual changes made by the 2004 and 2010 legislation
demonstrate that the discretionary authority granted to trial courts is not as
broad as it once was and, currently, trial courts must comply with certain
30 The version of section 2030 enacted in 1993 stated the trial court “may
. . . order” attorney fees in certain circumstances. (Stats. 1993, ch. 219,
§ 106.1, pp. 1607–1608.) The 2004 amendment deleted the word “may” and
inserted text that used the word “shall” four times. (Stats. 2004, ch. 472, § 1,
p. 3057.) The 2010 amendment modified section 2030 to include text stating
“the court shall make findings” and stating “the court shall make an order
awarding attorney’s fees and costs” if the findings demonstrated certain
conditions. (Stats. 2010, ch. 352, § 4, p. 1819.) (Morton, supra, 27
Cal.App.5th at p. 1049.)
67
mandatory provisions.” (Id. at p. 1049.) A showing of prejudicial error
flowing from the failure to make findings is required. (Id. at p. 1051.)31
In Alan S., supra, 172 Cal.App.4th 238, decided before the 2010
amendments, the court observed that “[r]eading section 2032 together with
section 4320, one cannot escape the idea that a . . . fee award should be the
product of a nuanced process in which the trial court should try to get the ‘big
picture’ of the case, i.e., ‘the relative circumstances of the respective parties’
as the statute puts it. (§ 2032, subd. (a).) Conversely, determination of [an]
attorney fee order is definitely not a truncated process where the trial court
simply (a) ascertains which party has the higher nominal income relative to
the other, and then (b) massages the fee request of the lesser-income party
into some manageable amount that feels like it will pass an abuse of
discretion test.” (Id. at p. 254.) Alan S. concluded “the purpose of section
2030 is not the redistribution of money from the greater income party to the
lesser income party. Its purpose is parity: a fair hearing with two sides
equally represented. The idea is that both sides should have the opportunity
to retain counsel, not just (as is usually the case) only the party with greater
financial strength.” (Id. at p. 251.)
Section 2032 makes clear that “[t]he fact that the party requesting an
award of attorney’s fees and costs has resources from which the party could
pay the party’s own attorney’s fees and costs is not itself a bar to an order
that the other party pay part or all of the fees and costs requested. Financial
resources are only one factor for the court to consider in determining how to
apportion the overall cost of the litigation equitably between the parties
under their relative circumstances.” (§ 2032, subd. (b).) Notwithstanding the
parties’ relative economic circumstances, an award under section 2030 et seq.
is properly denied if a case has been overlitigated or if the fees otherwise
were not “reasonably necessary.” (§ 2030, subd. (a)(1); In re Marriage of
31 In In Marriage of Morton, supra, 27 Cal.App.5th 1025, the court
observed that the 2010 amendments to section 2030 had placed limitations on
trial court discretion with regard to fees, and it is no longer accurate to refer
to a trial court’s “broad discretion” when describing a trial court’s
responsibilities under section 2030 as currently in effect. (Id. at pp. 1048–
1049.)
68
Keech (1999) 75 Cal.App.4th 860, 870–871.) Indeed, it is an abuse of
discretion to award fees “without making any inquiry into the reasonableness
of those fees.” (Id. at p. 870; Ciprari, supra, 32 Cal.App.5th at pp. 111–112.)
We review a trial court’s award of attorney fees (§§ 2030, 2032) and
sanctions (§ 271) for abuse of discretion. (In re Marriage of Schleich (2017) 8
Cal.App.5th 267, 276.) “In exercising its discretion the trial court must follow
established legal principles and base its findings on substantial evidence.”
(In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47.) “‘To the extent
that a 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.”’” (In re Marriage of Blazer, supra, 176 Cal.App.4th at p.
1443.)
2. Mark’s Contentions: Wrong Numbers
Mark contends the trial court’s arithmetic was in error because
$5,250,000 minus $4,820,000 is $430,000, not $480,000. Mark is correct. The
fee award is corrected to subtract $50,000 from $920,000 for a balance due of
$870,000. (Nunn v. JPMorgan Chase Bank, N.A. (2021) 64 Cal.App.5th 346,
361 [courts have inherent power to correct clerical errors].)
3. Mark’s Contentions: Error in Awarding Kim 80 Percent of Her
Fees
To the extent Mark argues that the trial court erred in awarding Kim
80 percent of her fees, we find no error. Mark asserts that “leveling the
playing field” should not translate into a “dollar-for-dollar disgorgement of
separate property funds from the ‘in’ spouse to the ‘out’ spouse,” and the trial
court erred in treating the case like ordinary civil litigation.
However, the court is permitted to consider the parties’ relative
circumstances in fashioning a fee award. Section 2032 authorizes a need-
based fee award even though the applicant spouse might be able to pay his or
her attorney without financial assistance because the court must consider the
parties’ relative circumstances. (§ 2032, subd. (b).) Indeed, the other party’s
superior ability to pay may itself make a fees and costs award “just and
reasonable.” (Sorge, supra, 202 Cal.App.4th 660–661.) In Sorge, although
69
the wife had abundant financial assets of her own, the court found no abuse
of discretion in awarding her $260,000 in total fees given the “huge disparity”
in parties’ respective assets. In In re Marriage of O’Connor (1997) 59
Cal.App.4th 877, 884, there was no abuse of discretion in awarding husband
a total of $700,000 fees even where husband had $2 million in assets and wife
had $40 million in assets.
Here, Mark erroneously equates the court’s ability to consider the
parties’ relative incomes pursuant to section 2032 with a prohibited transfer
of wealth in the guise of attorney fees under Alan S. Mark succeeded in
eliminating Kim’s community property interest entirely, leaving Mark with
all the funds he had accumulated during marriage intact. As a result, his net
worth dwarfed Kim’s net worth—Kim left the marriage with essentially no
assets. On this basis, the trial court did not abuse its discretion in awarding
Kim 80 percent of her fees.
4. Kim’s Contentions: Mark Could Pay 100 Percent and the Trial
Court Erred in Failing to Make Section 2030 Findings in This
Regard
Kim argues that the trial failed to find whether Mark was able to pay
the fees of both parties pursuant to section 2030, subdivision (a)(2), and such
failure was prejudicial because Mark was able to pay such fees. Instead, she
contends the trial court erroneously relied on her net spendable income after
taxes, although Kim has a negative net worth. Mark counters that Morton
did not overrule Alan S., and the trial court properly relied on it in setting
fees.
Here, the court did not expressly find that Mark had the ability to pay
both parties’ fees. However, such a finding can be implied from the court’s
statements regarding Mark’s net worth, Kim’s lack of assets, her other
sources of funds to pay fees, and the parties’ net relative share of Mark’s
income. (In re Marriage of Schleich, supra, 8 Cal.App.5th at pp. 292–294
[ability to pay finding implied from trial court’s ruling].)
In any event, there is no prejudice to Kim from the lack of an express
finding. Given that the record discloses that Mark had the ability to pay both
parties’ fees, the court’s departure from a 100 percent cost award
70
demonstrates that the result in this case would not have been different had
the court made an express finding.
5. Kim’s Contention: Erroneous Reliance on Alan S.
Further, Kim argues the trial court’s reliance on Alan S., and the
outdated statutes on which it relies, was error. She asserts that Morton
recognized previously discretionary duties were now mandatory, and “[b]y
using the principles of Alan S. to provide ‘nuance’ to its mandated
consideration of the parties’ respective needs and ability to pay, the trial
court gave Mark an undeserved break” and did so by concluding Kim could
divert some of her support money to pay unreimbursed fees.
As explained in In re Marriage of Morton, supra, 27 Cal.App.5th 1025,
the 2004 amendments to section 2030 to require the court to order fees, and
the 2010 amendments required the court to make findings. (Id. at pp. 1049–
1051.) “The textual changes made by the 2004 and 2010 legislation
demonstrate that the discretionary authority granted to trial courts is not as
broad as it once was and, currently, trial courts must comply with certain
mandatory provisions.” (Id. at p. 1049.) A showing of prejudicial error
flowing from the failure to make findings is required. (Id. at p. 1051.)
However, nothing in the revisions to section 2030 affected the trial
court’s ability to evaluate the parties’ respective needs when awarding fees,
nor did Morton overrule Alan S. Rather, the amendments limited the
discretion to be applied regarding whether the parties’ needs could be
evaluated to determine fees. On the other hand, Alan S. prohibits a mere
wealth transfer between the wealthier spouse in the guise of a fee award and
requires the court to adopt a balanced approached to its analysis—which the
court did here. Kim therefore misreads the trial court’s reliance on Alan S.
Finally, as we have discussed above, the trial court’s fee division of 80
percent to 20 percent was within its discretion and does not represent
unlawful “nuance.” Kim had some assets with which to pay fees, and given
the extent of the litigation, the court ascribed 20 percent of her fees to her.
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DISPOSITION
The judgment of the superior court is reversed with respect to the
spousal support award, and remanded for a determination of pendente lite
spousal support from the date of Kim’s OSC. The attorney fee award is
corrected to reflect that Mark must pay Kim $870,000. In all other respects,
the judgment is affirmed. The parties are to bear their own costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION
WILLHITE, Acting P. J.
We concur:
COLLINS, J. CURREY, J.
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