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Y.R. v. A.F.

California Court of Appeals, Second District, Fourth Division

February 24, 2017

Y.R., Plaintiff and Appellant,
A.F., Defendant and Respondent.

          Order Filed 3/15/17

         APPEAL from an order of the Superior Court of Los Angeles County, Nos. BF051758 B. Scott Silverman, Judge. Reversed and remanded with directions.

          Walzer Melcher, Christopher C. Melcher and Steven K. Yoda for Plaintiff and Appellant.

          Cuneo & Hoover, J. Nicholas Cuneo and Janina A. Verano for Defendant and Respondent.

          MANELLA, J.

         Appellant Y.R., mother of Z., appeals the trial court's order awarding child support from respondent A.F., father of Z., in an amount that deviated downward from the statewide uniform guideline by a substantial amount. Appellant contends the court failed to state its reasons for awarding less than the guideline or for concluding the amount awarded was in Z.'s best interests, as required by Family Code section 4056, subdivision (a).[1] She further contends the court erroneously based the award on appellant's and Z.'s historical expenses rather than the disposable income and lifestyle of respondent -- an extraordinarily high income earner -- and placed on appellant the burden of proving the guideline amount reasonable, rather than requiring respondent to prove the guideline amount unjust or inappropriate. Finally, appellant contends respondent presented insufficient evidence to support a deviation from the guideline.

         We conclude that the trial court's failure to comply with the requirements of section 4056, subdivision (a) mandates reversal, despite the existence of evidence sufficient to warrant a deviation from the guideline. We further conclude that the court's reliance on appellant's and Z's expenses and lifestyle, rather than on those of respondent and his children, precludes us from implying findings adequate to support the deviation ordered by the court. Accordingly, we reverse and remand for reconsideration of child support under the correct criteria.


         A. Appellant's Petition and Respondent's Opposition

         Appellant and respondent had a brief affair resulting in the birth of their daughter, Z., in July 2006. Appellant is a hair stylist. Respondent is a successful director and producer. He is married and lives with his wife and three children, one of whom is an adult. Appellant, who has had sole custody of Z. since her birth, did not immediately seek a formal order of support. Instead, respondent paid certain of appellant's and Z.'s expenses and provided additional funds, totaling approximately $5, 000 per month. In October 2014, when Z. was eight, appellant filed a petition to establish parentage and for guideline child support. Her petition also requested that respondent pay Z.'s health insurance, a portion of Z.'s uninsured health care costs, and half the cost of Z.'s extracurricular activities.[2]

         After filing the petition, appellant submitted requests for production to respondent, asking for tax returns and other documents pertinent to his income and expenses. Appellant also submitted interrogatories seeking detailed information about respondent's lifestyle, including a description of the home he and his family shared, the restaurants they frequented, the vacations they took, and the cost of his other children's tuition, extracurricular activities, and medical insurance. Respondent objected to answering the interrogatories, on the ground that he acknowledged that he was an “extraordinarily high income earner” within the meaning of section 4057, subdivision (b)(3), and had the ability to pay child support in “any amount commensurate with the reasonable needs of the minor child.”[3] He raised the same objection to the document requests. He provided a declaration stating his salary was $2, 282, 512 per year (approximately $190, 000 per month). Appellant disputed that respondent was an extraordinarily high income earner under the statute, but did not seek an order compelling further responses.[4]

         Prior to the hearing, appellant presented evidence that she and Z. lived in a three-bedroom, two-bath apartment in Santa Monica with her other two children, Z.'s older half-brother and half-sister. Z. shared a bedroom with her half-sister. Appellant described the apartment as “cramped, ” and stated that the rent for a four-bedroom condo in the same area would be, at a minimum, $6, 000 per month, while renting a four-bedroom home in the area would cost between $10, 000 and $15, 000 monthly. Appellant further stated that one of respondent's sons attended a private school at a cost of $34, 000 per year ($2, 833 per month).[5] Appellant described a number of activities she wished to provide Z., including tutoring at a cost of $480 per month, a nanny at a cost of $1, 800 per month, and theater camp at a cost of $2, 100 per year. She also stated she was unable to afford vacations, visits to out-of-state relatives, art classes, piano lessons, and better quality clothing and restaurants for Z. Appellant's income and expense declaration indicated she worked part-time as a hair stylist, grossing $1, 833 per month. Rent on her existing apartment was $2, 840 per month. Other expenses, including groceries, utilities, clothing and insurance, totaled approximately $6, 000 per month.[6]

         Respondent provided an income and expense declaration stating that his annual salary was $2, 097, 000, based on 2014 earnings for himself and his company, Cartel.[7] Respondent acknowledged, however, that a percentage of the expenses claimed by Cartel should be included in his income, as they represented perquisites for him.[8] His income and expense declaration indicated his rent was $20, 900 per month and that he spent more than $3, 000 per month in each of the following categories: “[g]roceries and household supplies, ” “[e]ating out, ” “[c]lothes, ” education for the two minor children who lived with him, and “[e]ntertainment, gifts, and vacation.” He also indicated “[o]ther” expenditures of over $31, 000 per month, including legal fees unrelated to the underlying proceeding, fitness, non-tuition expenses for the children, “[m]iscellaneous [c]ash [e]xpenses” of $7, 167, and $7, 500 per month he had recently begun paying appellant. He stated that he paid $13, 457 ($10, 000 plus various expenses) per month for child support for another child born out of wedlock.[9] His attorneys prepared a DissoMaster report indicating that based on disposable income of approximately $190, 000 per month, guideline child support was $11, 840 per month.[10]

         Respondent's opposition focused on appellant's and Z.'s current expenses. Respondent argued that based on appellant's income and expense declaration, $11, 840 in support represented “$4, 660 more per month than [appellant] needs to pay the monthly expenses for [herself], [Z.] and [her] two other children from prior relationships, ” and that appellant needed support from respondent of only $7, 180 per month “to pay her monthly expenses.” Respondent's opposition contained no discussion of his or his other children's lifestyles, and made no attempt to calculate a reasonable amount of child support based on the evidence of his monthly income and expenses.

         In her reply, appellant contended that respondent's income was much higher than $190, 000 per month, observing that his company's income had been higher in 2013 and that he had already been paid $610, 000 for the first two months of 2015.[11] Appellant's accounting expert, David Blumenthal, calculated an average monthly salary for respondent by adding the data for 2013, a year in which respondent and his company had much higher income, to the data for 2014, and assuming that all of Cartel's expenses for those periods except agent commissions and payroll taxes were perquisites.[12] This resulted in average income of $4, 037, 636 per year or $336, 470 per month. Based on this enhanced income, Blumenthal prepared a DissoMaster report indicating guideline child support was $25, 325 per month.

         B. The Hearing and the Court's Ruling

         Neither party presented additional evidence at the March 23, 2015 hearing. Initially, the parties debated whether respondent was an extraordinarily high wage earner and the amount of guideline support. After hearing argument, the court concluded that respondent was an extraordinarily high wage earner under section 4057. It further found that respondent's representations concerning Cartel's expenses were unsubstantiated, as they were based on “one document, for which there [was] not even a declaration of his business manager of how it was prepared or if it was prepared in the ordinary course.” Accordingly, “for the purposes of... analysis, ” the court began with appellant's figures, both for respondent's monthly income -- over $300, 000 -- and the guideline amount -- $25, 325. The court described these figures as “probably excessive” and “inflated, ” as the expenses included as income to respondent by Blumenthal appeared to be “fairly typical categories of business expenses, ” but found Blumenthal's calculations to be “the most accurate number[s] I've got.”

         With respect to whether the guideline amount was excessive, respondent's counsel argued that appellant's request for sufficient funds to rent a four-bedroom house and hire a nanny exceeded the needs of the child, and whether the guideline amount was $11, 840 or $25, 325, it was excessive. He contended the court should award an amount “consistent with [the] $7, 000 per month, that we've suggested, which is her expenses less her income.” Counsel did not address respondent's resources or the expenses necessary to maintain his other children.

         Like respondent's counsel, the court addressed its remarks to appellant's expenses. Addressing the appropriateness of the guideline amount, the court stated: “[Appellant's] income and expense declarations consistently show expenses that don't approach [$25, 325], that never exceed $9, 000 per month, excluding some expenses which... [respondent] has been picking up.... [¶]...[¶] Her claimed expenses are $9, 013. She includes the $400 in tuition that the respondent pays.... And I saw the rent she paid.... [¶]...[¶] If I just... take her expenses[, ] -- which she doesn't claim are solely for... [Z.]. She says those are her personal expenses and she's included the full amount of her rent -- I have to infer that some amount of those expenses are attributable to the other two children for which respondent isn't responsible. But it's impossible for me to... sort them out.” The court then ordered respondent to pay Z.'s tuition at a school “comparable in nature to the schools attended by his other children, ” 75 percent of reasonable extracurricular activities and school expenses not covered by tuition, all of Z.'s health insurance, and 90 percent of uncovered medical expenses. Without mention of respondent's expenses for himself and the children living with him, the court stated that ...

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