IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT Butte
March 22, 2011
IN RE THE MARRIAGE OF SUSAN HOFFNER AND WILLIAM H. BABER III. SUSAN HOFFNER BABER, RESPONDENT,
WILLIAM H. BABER III, APPELLANT.
Super. Ct. No. FL023569
The opinion of the court was delivered by: Mauro , J.
Marriage of Hoffner and Baber CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
The trial court issued a post-dissolution order reducing the amount of spousal support that William Baber must pay to Susan Hoffner Baber. But the trial court stayed the reduction until the Dow Jones Industrial Average reaches 12,500. William appeals, arguing that (1) the trial court did not have authority to stay a legitimate reduction in spousal support and abused its discretion in issuing the stay, and (2) the trial court erred in refusing to terminate or further reduce spousal support.
We conclude the trial court had authority to craft an appropriate order based on the particular circumstances in this case, and that it did not err or abuse its discretion on this record. We will affirm the order.
Some of the factual discussion is derived from our opinion in case No. C048541, of which we take judicial notice. (In re Marriage of Baber (October 26, 2005, C048541) [nonpub. opn.]; Evid. Code, § 451, subd. (a).)
William and Susan were married in July 1974. In October 1999, Susan filed a petition for dissolution of marriage in the Sacramento County Superior Court. (In re Marriage of Baber, supra, C048541.)
On May 22, 2001, the parties stipulated that William would pay Susan $7,300 a month in spousal support, subject to further court order, written agreement of the parties, death of either party, or Susan's remarriage. The stipulation was adopted as a court order on November 27, 2001. The court also granted William's request to change venue from Sacramento County to Butte County. (In re Marriage of Baber, supra, C048541.)
In February 2004, William filed a motion in the Butte County Superior Court seeking to modify the prior spousal support order. The trial court denied his motion and we affirmed in October 2005. (In re Marriage of Baber, supra, C048541.)
Five years later, in February 2009, William filed a motion to terminate spousal support. William stated that the $400,000 in IRA monies Susan received in the marital settlement agreement had increased in value and Susan was now old enough to withdraw money from the account without penalty. William also stated that, subsequent to the spousal support order, Susan had inherited $700,000 from her parents, which she could use to support herself.
Susan opposed the motion on the ground that William failed to establish a material change of circumstances needed to modify the spousal support order. Susan acknowledged the inheritance from her parents and the overall growth in her investment accounts, but she also noted that in the prior 18 months her investments had decreased in value. Susan claimed that unless she was given the opportunity to "grow" her investments, she would not be able to support herself through retirement. Moreover, Susan argued that William continued to live at the marital standard while she did not, and he still had the ability to pay the spousal support ordered.
The issue went to trial over two days in June 2009. At trial, William conceded he had the ability to pay spousal support of $7,300 per month, but argued Susan should nevertheless be required to withdraw money from her retirement accounts or at least stop contributing to them.
To support her contention that she needed to grow her retirement accounts rather than raid them, Susan presented the expert testimony of Harold Littlejohn, a certified public accountant. Littlejohn testified that the cumulative annual income generated by Susan's four Merrill Lynch accounts was $33,956. Susan paid $10,000 annually to have those accounts professionally managed.
Littlejohn further testified that in order for Susan to retire at age 65 and maintain her current standard of living, she needed to have money in her investment accounts totaling approximately $2 million. Littlejohn also noted that, although Susan was a member of the State Teachers Retirement System (STRS), her retirement benefits would be approximately $300 each month if she retired at age 65. Thus, according to Littlejohn, if Susan were ordered to make withdrawals from her investments now she would only have approximately $1.25 million in her accounts by age 65. In his opinion, that was insufficient to support Susan through her retirement, particularly given that both of Susan's parents lived into their 90s. William offered no contrary expert testimony.
Susan testified that after the dissolution she started working for the Butte County Unified School District as an intervention specialist. She explained that her job was grant-funded and not a tenured position. As a consequence, she often did not know from one school year to the next whether she would have a job. Susan also described some real estate investments she made. She described how the properties she purchased had decreased in value, and were now costing her money rather than generating income. Susan acknowledged that William was not responsible for offsetting those losses with spousal support.
On June 23, 2009, the court filed a statement of intended decision ordering a reduction of $2,500 a month in spousal support. The court further ordered that the reduction be stayed "pending a chance for [Susan] to rebuild her depleted accounts. The stay will not be conditioned on her actual success in this regard, but her opportunity to do so. The stay will remain in effect until the [Dow Jones Industrial Average] reaches 12,500, or up 50% from today's levels after a 50% plunge starting in October, 2007." This became the court's final decision on June 23, 2009.
The court's ruling was memorialized in the findings and order after hearing filed on July 8, 2009: "1. Spousal support payable by Respondent, William H. Baber, III, to Petitioner, Susan Hoffner Baber, shall be reduced from its present level of $7,300.00 per month to $4,800.00 per month effective the following date: [¶] a. The date on which the Dow Jones Industrial Average (DJIA) reaches 12,500[.] Until the DJIA reaches 12,500, spousal support shall remain at $7,300.00 per month."
William appeals from this order.
The trial court's decision referenced In re Marriage of Schmir (2005) 134 Cal.App.4th 43. William contends the Schmir case did not give the trial court authority to stay a legitimate reduction in spousal support, and that the trial court abused its discretion in issuing the stay. We conclude the trial court had authority to craft an appropriate order based on the particular circumstances of the parties, and that it did not abuse its discretion on this record.
In ordering spousal support, "the trial court possesses broad discretion so as to fairly exercise the weighing process contemplated by [Family Code] section 4320, with the goal of accomplishing substantial justice for the parties in the case before it." (In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 93 (Kerr).) Among other things, the trial court must consider the earning capacity of each party, the marketable skills of the supported party, the contributions by the supported party to the career of the supporting party, the ability of the supporting party to pay spousal support, the needs of each party based on the marital standard of living, the obligations and assets of each party, the ability of the supported party to engage in gainful employment, the age and health of the parties, the goal of self-sufficiency, and any other factor the court determines is just and equitable. (Fam. Code, § 4320.)*fn1
"'Because trial courts have such broad discretion, appellate courts must act with cautious judicial restraint in reviewing these orders [for support].'" (Kerr, supra, 77 Cal.App.4th at p. 93.)
In the case In re Marriage of Schmir, supra, 134 Cal.App.4th 43, a judgment of dissolution required husband to pay spousal support to wife in the amount of "$5,800 per month until the death of either party, [wife's] remarriage, or further order of the court." (Id. at p. 46.) Wife was never warned that she needed to become self-sufficient.*fn2 (Ibid.) Fourteen years later, husband sought an order modifying or terminating spousal support. (Schmir, at p. 46.) Among other things, the trial court determined that wife was now capable of earning $2,500 per month and that she could withdraw money from her IRA. (Id. at p. 47.) Based on those changed circumstances, the trial court terminated spousal support. (Ibid.) The Court of Appeal reversed in part, concluding that although there was substantial evidence to support the termination of spousal support, the trial court abused its discretion in doing it so abruptly, i.e., without sufficient notice to wife and without giving wife a reasonable opportunity to find employment. (Schmir, at pp. 58-59.) The Court of Appeal modified the trial court's order to provide that support would continue at $5,800 per month until wife obtained employment with a particular income, or ceased good-faith efforts to obtain employment, or turned age 65. (Ibid.)
In the instant case, the parties and the trial court previously determined that $7,300 per month was the appropriate level of support necessary for Susan to maintain the marital standard of living. (In re Marriage of Baber, supra, C048541.) In considering William's motion to terminate support, the court considered this in conjunction with the section 4320 factors. In doing so, the court determined that Susan continued to earn income "commensurate with her skills," and her estate had grown since the spousal support order issued in May 2001.
Nonetheless, the uncontroverted evidence also established that Susan needed approximately $2 million in her retirement accounts to support herself through retirement at the marital standard of living. To reach that goal, the trial court determined that Susan needed the opportunity to allow her investments to increase in value. Meanwhile, William conceded he had the ability to continue paying $7,300 a month for spousal support.
The court noted that William favored a short-term reduction in spousal support even if the payment would need to increase after Susan's retirement. But the court also noted that William did not have, and could not obtain, insurance to cover the spousal support payments if he were to die before Susan.
On balance, the trial court concluded Susan's spousal support should be reduced, but not until she had the opportunity to increase the value of her investment accounts. This is similar to the situation in In re Marriage of Schmir, supra, 134 Cal.App.4th 43, and it is also similar to a step-down order, where support is reduced incrementally based on future events. "[A] step-down order is proper if, at the time of making the order, the court had discretion to decrease support to the ultimate step-down level . . . and the court states that it is implementing the step-down to ease the impact of the decrease on the supported spouse." (In re Marriage of Rising (1999) 76 Cal.App.4th 472, 478, italics omitted.) Those were the circumstances in the instant case, and the trial court did not abuse its discretion.
William also argues on appeal that the stay "is not founded on a firm foundation." He asks, "What happens if the DJIA never reaches 12,500?" The trial court answered William's question, noting that the parties could make further motions as appropriate, and stating that "[i]f the Dow Jones [I]industrial [A]verage doesn't go up to 12,500 for a long time, I could see the parties wishing to file a motion that [the] stay be lifted." In any event, William's contention on appeal is forfeited, because he failed to provide legal argument or citations in support of his claim. (County of Solano v. Vallejo Redevelopment Agency (1999) 75 Cal.App.4th 1262, 1274; Duarte v. Chino Community Hospital (1999) 72 Cal.App.4th 849, 856.)
Although William's appellate briefs are not entirely clear, it appears he also contends that the trial court erred in refusing to terminate or further reduce spousal support. We disagree.
In addition to the section 4320 factors, "section 4322 provides that in original or modification proceedings, 'where there are no children, and a party has or acquires a separate estate, including income from employment, sufficient for the party's proper support, no support shall be ordered or continued against the other party.' . . . Denial of continued support is thus mandatory if the sufficiency threshold is met, irrespective of circumstances the court would otherwise consider under section 4320." (In re Marriage of Terry (2000) 80 Cal.App.4th 921, 928.)
"[T]he ultimate section 4322 determination is whether a particular estate is, or is not, reasonably capable of providing for a spouse's proper support. That determination will vary with the nature of the particular estate. Where . . . the supporting spouse challenges the reasonableness of the supported spouse's investment strategy, the court should look to the estate as a whole, including the actual and reasonable income potential from investment assets, as well as their total value, in resolving the issue of the estate's sufficiency for proper support." (In re Marriage of Terry, supra, 80 Cal.App.4th at p. 930.)
William did not challenge Susan's investment strategy at trial. On appeal, he argues the trial court should have terminated Susan's spousal support because her net worth is sufficient to support her. The trial court correctly looked to the income generated by Susan's estate to make this determination. The court found that without further investment, the income from Susan's estate would not be sufficient to adequately support her through retirement.
William now provides his own detailed analysis of Susan's investment accounts, investment strategies, and monthly expenses to prove Susan's estate and income are sufficient to support her through retirement. But his analysis was not presented to the trial court, and thus it is not properly before us on appeal. (Damiani v. Albert (1957) 48 Cal.2d 15, 18 [points not raised in the trial court may not be raised for the first time on appeal].)
Moreover, to the extent William contends there was insufficient evidence to support the trial court's decision, his claim fails. Littlejohn's uncontroverted testimony at trial was that Susan needed to increase the value of her retirement accounts to $2 million in order to properly support herself through retirement. Such evidence supports the trial court's ruling.
William argues that Susan's accounts were not depleted because her records show that her net property increased over the last five years. Littlejohn testified, however, that Susan's accounts "suffered significant losses" in the 18 months prior to trial. William offered no evidence to the contrary. The court's finding is supported by substantial evidence.
William also contends that Susan's real estate losses are not a "spousal support expense." But the trial court made no such finding. Spousal support was ordered in 2001, before Susan's real estate investments failed, and there is no evidence in the record to indicate Susan asked for an increase in spousal support when that happened. (In re Marriage of Baber, supra, C048541.) At trial, Susan conceded the losses were not William's burden to bear.
William fails to show an erroneous ruling by the trial court.
The trial court order is affirmed. William shall reimburse Susan for her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: RAYE , P. J. BLEASE , J.