Source: https://www.gwwlaw.com/cases/in-re-marriage-of-cohen/
Timestamp: 2019-04-22 14:15:19+00:00

Document:
In re Marriage of Cohen was a recently decided family law dissolution of marriage case which dealt with a request for a reduction of a high earner ex-husband/father’s child support obligations as well as his request to terminate spousal support after his ex-wife’s remarriage. The appellate court made findings that the trial court correctly denied the ex-husband/father’s request to reduce the child support amounts and also affirmed the lower court’s ruling which denied his request to terminate spousal support due to his ex-wife’s subsequent remarriage.
In re Marriage of LAURALIN ANDERSON COHEN and RICHARD COHEN.LAURALIN ANDERSON COHEN, Respondent, v. RICHARD COHEN, Appellant; ORANGE COUNTY DEPARTMENT OF CHILD SUPPORT SERVICES, Intervener.
Subsequent History: [***1] The Publication Status of this Document has been Changed by the Court from Unpublished to Published October 3, 2016.
Prior History: Appeal from orders of the Superior Court of Orange County, No. 06D009414, Nathan R. Scott, Judge.
HOLDINGS: -Averaging bonus income over two years in calculating child support was a reasonable exercise of the trial court’s discretion under Fam. Code, §§ 4058, 4059, 4060, 4064, because that was the period the bonus was intended to cover; -A “de novo” modification clause in a stipulated divorce judgment providing for above-guideline child support did not avoid the requirement to show a change of circumstances, which was not shown, in seeking a reduction to the guideline amount; -A stipulation excluding an imminent remarriage showed a clear intent to waive termination under Fam. Code, § 4337, and to continue spousal support after the contemplated remarriage; -In denying a reduction of spousal support based on a temporary loss of income, the trial court properly considered the factors set out in Fam. Code, § 4320, including the supported spouse’s caretaking obligations.
HN1 Under Fam. Code, § 4058, the definition of income includes bonuses. Fam. Code, § 4064, provides that a court may adjust child support as appropriate to accommodate the seasonal or fluctuating income of either parent. To boil down the law involving how bonuses affect income calculations for purposes of child support determination, the treatment must be fair and representative. Averaging out a bonus makes sense over the period the bonus was intended to cover. Generally speaking, there is heavy emphasis in the law on the income tax calendar year as the basic unit on which to calculate income. Fam. Code, § 4059. But the relevant time period may be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income. Since Fam. Code, §§ 4060, 4064, are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after all, the whole point of discretion is a recognition that there are times when there should not be a bright-line rule.
HN3 Child support obligations are law-imposed as distinct from contractual, so the court always retains authority to assure a minimum level of adequate child support. The authority of the court to modify the decree in a proper case, and to provide when necessary that a party shall discharge his paramount duty in caring for and defraying the expense of educating his children, is not doubted. The stipulation of the parents cannot divest them, as against the children, of this duty.
HN4 The reason for the change of circumstances rule is the doctrine of res judicata. Authority to modify an allowance of child support does not include the right to alter the award upon the state of the case existing when the decree was entered.
Dissolution of Marriage; Separation § 100 > Permanent Child Support Orders > Determination of Amount > Bonuses.
Under Fam. Code, § 4058, the definition of income includes bonuses. Fam. Code, § 4064, provides that a court may adjust child support order as appropriate to accommodate seasonal or fluctuating income of either parent. To boil down the law involving how bonuses affect income calculations for purposes of child support determination, the treatment must be fair and representative. Averaging out a bonus makes sense over the period the bonus was intended to cover. Generally speaking, there is heavy emphasis in the law on the income tax calendar year as the basic unit on which to calculate income (Fam. Code, § 4059). But the relevant time period may be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income. Since Fam. Code, §§ 4060, 4064, are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after all, the whole point of discretion is a recognition that there are times when there should not be a bright-line rule.
Dissolution of Marriage; Separation § 104 > Permanent Child Support Orders > Modification > Grounds > Change of Circumstances.
A change of circumstances is required before a modification of child support.
Dissolution of Marriage; Separation § 103 > Permanent Child Support Orders > Modification > Stipulation.
Child support obligations are law imposed as distinct from contractual, so the court always retains authority to assure a minimum level of adequate child support. The authority of the court to modify the decree in a proper case, and to provide when necessary that a party shall discharge his or her paramount duty in caring for and defraying the expense of educating the children, is not doubted. The stipulation of the parents cannot divest them, as against the children, of this duty.
The reason for the change of circumstances rule is the doctrine of res judicata. Authority to modify an allowance of child support does not include the right to alter the award upon the state of the case existing when the decree was entered.
Dissolution of Marriage; Separation § 103 > Permanent Child Support Orders > Modification > Stipulation > Change of Circumstances.
A parent’s reliance on a “de novo” modification clause in a stipulated divorce judgment providing for above-guideline child support was untenable as a basis for seeking a reduction without showing a change of circumstances. That position would reduce family law orders and judgments to mere temporary placeholders in contravention of res judicata.
Counsel: John R. Schilling for Appellant.
The Law Offices of Saylin & Swisher, Brian G. Saylin, Lindsay L. Swisher and Daniela A. Laakso for Respondent.
Kamala D. Harris, Attorney General, Julie Weng-Gutierrez, Assistant Attorney General, Linda M. Gonzalez and Jennevee H. de Guzman, Deputy Attorneys General, for Intervener.
Judges: Opinion by Bedsworth, J., with O’Leary, P. J., and Thompson, concurring.
The marriage underlying this case was sadly overburdened and failed. Unfortunately, the divorce is also problematic. Essentially, a very high earner making $1.9 million during the marriage agreed to a stipulated divorce judgment providing for above-guideline child and spousal support. In this appeal from what was (mostly) the denial of the high earner’s postjudgment request for a reduction of his child support obligations to guideline, and his request to terminate spousal support in the wake of the wife’s remarriage, he presents two issues of law.
(1) There was a clause in [***2] the stipulated judgment to the effect that any future modification proceeding would be reviewed de novo. Did that clause [*1017] eliminate the usual change-of-circumstances rule that applies to postjudgment modifications? We answer no. The law does not allow litigants to agree to what are in effect “temporary” judgments, revisable at will.
(2) There was a clause in the stipulated judgment that said if the high earner’s ex-wife remarried a person making less than $400,000 a year, the high earner would still keep paying her spousal support—but at a reduced rate. Did the ex-wife’s remarriage terminate spousal support anyway, given that the clause did not expressly mention Family Code section 4337,1 [**848] the statute that makes spousal support terminable at remarriage? Again we answer no. The lack of an express reference to section 4337 did not function as a kind of “king’s X” to contradict the plain intent of the clause—particularly since the parties modified the stipulated judgment in October 2012 to provide for continued spousal support after the wife’s imminent remarriage.
We thus conclude there is no error in the orders challenged here. The trial court correctly denied the [***3] high earner’s requests to modify the child support amounts down to a guideline amount,2 and also correctly denied his request to terminate spousal support in the wake of the ex-wife’s subsequent remarriage.
Lauralin Anderson Cohen and Richard Cohen were married in 1990 and separated in 2006. They had four children. Lauralin3 then petitioned for dissolution of the marriage. A little less than five years later, the couple entered into a stipulated judgment for dissolution.
Richard is a highly paid executive in the clothing industry who had earned about $1.9 million a year during the marriage. But his income had gone down by 2011. The stipulated judgment recites that Richard’s income in March 2011 was $70,166 per month, which works out to $841,992 annually.
The stipulated judgment provides for total monthly child support payments in excess of $17,366 a month.4 In computing that amount, Richard is given [*1018] credit for having a 90 percent time share with one of the children, Dean, and [***4] a 10 percent time share with two of the other children, Jason and Skylar. The fourth child, Daniel, is quadriplegic as a result of cerebral palsy, and requires continual nursing care.5 There is no dispute that the child support order is higher than statutory legal guidelines (see § 4055 et seq.) require.
In January 2014, Richard filed a request for order (RFO) seeking, among other things, a reduction in his child support obligation based on significant [*1019] declines in his income incurred in the years 2012 and 2013. Clearly his income had declined in those two years.7 However, by the time Richard’s request was finally heard on February 3, 2015, the parties had achieved a stipulation which took care of all issues prior to January 1, 2014. Thus Richard’s RFO was based only on his income in 2014 going forward.
And by February 2015, things had significantly turned around for Richard. In May 2014, Richard had begun working for a Hong Kong based company, Trinity Limited. That month Trinity began paying him a salary of $500,000 a year ($41,666 a month). Plus, it paid him a $500,000 signing bonus, predicated on meeting certain “targets” over the course of the next two years.
Three requests were presented to the court on Richard’s motion: (1) reduction of child support to guideline level, particularly in light of the de novo clause in the stipulated judgment; (2) termination of Lauralin’s spousal support based on a remarriage that occurred in October 2012, and (3) an increase of Richard’s time share percentage regarding Skylar to 100 percent based on his payment [***8] of 100 percent of the costs of Skylar’s being in a school for mentally ill children. Richard challenges the trial court’s decision as to issues (1) and (2), which he lost except for a four-month reduction for the first four months of 2014. Issue (3) has been abandoned on appeal.
In regard to issue (1), the child support reduction, the trial judge noted that, considering Richard’s new employment with Trinity at $41,666 a month plus proration of his $500,000 bonus over the 24 months from May 2014 (another $20,833 a month), and an “ex pat” benefit paid by Trinity [**850] ($10,833 a month), Richard was now making more money than he was making at the time of the May 2011 judgment—at least$73,932 a month against the earlier $70,166.8 On the other hand, if one were to take into account the first four lean months of 2014—in which Richard had made $27,830 per month—the total average for the year 2014 would be $62,695, which, if our math is correct, would represent a roughly 11 percent drop in income from the level provided for in the 2011 stipulated judgment.
The trial [***9] judge resolved these disparities by amortizing the two-year $500,000 bonus prospectively from May 2014 forward. In practical terms, [*1020] that meant the court granted Richard’s request to reduce child support for the first four months of 2014 (prior to the Trinity employment), but from May 2014 forward, there were no adverse changes of circumstance to justify modification.
As to issue (2), it turned out that Lauralin had remarried on October 19, 2012, which was just a little more than 18 months since the date of the March 3, 2011 stipulated judgment. Had nothing been done, her 2012 remarriage, by the terms of the March 2011 judgment, would have terminated all spousal support.
However, on October 15, 2012, four days before her remarriage, she and Richard, each now in propria persona,9 entered into a stipulation which retroactively changed the 24-month period that began on March 3, 2011, to an 18-month period. The net effect of the stipulation allowed Lauralin to remarry within the next few days and still continue receiving spousal support.
In an income and expense declaration filed May 2014, Lauralin’s new spouse’s income is listed as $5,416 a month (or less than $65,000 a year). Forty-five percent of that amount is $2,337.20, which reduced Richard’s $19,166 [***11] obligation to $16,828.80.
The court’s orders and reasoning were formally set out in a signed order filed April 17, 2015. Richard timely filed a notice of appeal from the orders of April 17, 2015, on June 4, 2015.
We first deal with a relatively minor issue in Richard’s appeal, which is his argument that if the trial court had used a 12-month January-to-December 2014 calendar year average, the court would have recognized that Richard had indeed shown a change of circumstances. That is, if one isolates the 12 months of calendar 2014 and takes an average based on those particular 12 months, exhibit 1 showed an 11 percent reduction in monthly income in comparison to March 2011 ($62,695 versus $70,166).
But in [***14] this case, the trial court’s decision to average out Richard’s bonus over the two years prospectively May 2014 to May 2016 makes sense. This is the period the bonus was intended to cover. The trial court’s decision corresponds to the economic substance of that bonus, which was essentially paying Richard for anticipated good results for the next two years going forward, and, more to the point, locked him into proverbial golden handcuffs to keep him so working for those years. Conversely, the bonus was certainly not given in payment for any work done in the first four months of 2014.
It is true that, generally speaking, as the court said in Riddle, there is “heavy emphasis” in the law on the income tax calendar year as the basic unit on which to calculate income. (Riddle, supra, 125 Cal.App.4th at p. 1083, citing § 4059.)12 But the court was also careful in Riddle to point out that the relevant time period might be longer, or perhaps sometimes even somewhat shorter, than a year, depending on the nature of the payor parent’s income: “Since section[s] 4060 and 4064 are framed in discretionary terms, it would be outside the proper province of an appellate court to prescribe a bright-line rule for the precise parameters of a proper sample; after [***15] all, the whole point of discretion is a recognition that there are times when there shouldn’t be a bright-line rule.” (Id.at p. 1083; see id. at pp. 1083–1084 [contrasting various professions].) In the present case, amortization over two years was the most reasonable way of treating Richard’s May 2014 signing bonus.
[**854] But the other authority Catalano cited— and one which Richard also relies on directly— Thomas, cannot be so readily distinguished. Thomas, in fact, provides some real support for Richard’s position. In Thomas, a former husband sought and obtained a $25-a-month reduction in child support per child without proof or even allegation of change of circumstances. (See Thomas, supra, 120 Cal.App.3d at p. 34.) We now explain why we decline to follow the Thomas decision.
Thomas was thus different from the situation in Moore. Had the Thomas court followed the basic California rule, it would have analyzed the wife’s appeal in terms of whether the payor parent had met the burden he had to show a change of circumstances since the previous order. (E.g., In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 77 [46 Cal. Rptr. 2d 8] [burden on party seeking modification, citing cases].) Under the facts as stated in Thomas, the result would have been different. We need merely add such a burden on the payor father in Thomas would have hardly been unreasonable: Surely he could have offered a declaration as to what he was making just four years earlier when he agreed to the $125 per child support order. [**855] (See Thomas, supra, 120 Cal.App.3d at p. 34.) The Thomas court, faced with unusual facts that made their result just, had no reason to conduct this analysis.
CA(5) (5) As Snyder makes clear, Richard’s reliance on the “de novo” clause is untenable. His position would reduce family law orders and judgments to mere temporary placeholders in contravention of res judicata.
The orders appealed from are affirmed. Lauralin shall recover her costs on appeal.
O’Leary, P. J., and Thompson, J., concurred.
* Pursuant to California Rules of Court, rule 8.1105(b) and rule 8.1110, this opinion is certified for publication with the exception of parts III.C. and III.D.
1 All further statutory references are to the Family Code.
2 The trial court did reduce support for a four-month period in 2014, a temporary reduction which the husband does not challenge in this appeal, and which we explain in more detail below.
3 We use first names for convenience.
According to Lauralin, the reason for some of the disparities in the payments to the children was to facilitate some publicly assisted nursing care for two of the children, Daniel and Jason. That public assistance is the reason the Attorney General’s office has filed a brief here on behalf of Orange [***5] County Department of Child Support Services.
5 All four children face some sort of significant disability. According to Lauralin’s declaration, in addition to Daniel, who has cerebral palsy, Jason is autistic and given to seizures, and Dean and Skylar (who are adopted siblings) each have attention deficit hyperactivity disorder; Dean also has reactive attachment disorder while his sister Skylar is bipolar.
Daniel is now an adult but incapacitated under section 3910 and thus still receiving support.
6 Fifteen thousand dollars a month plus an annual payment of $50,000, which works out to the $19,166.66 figure on a monthly basis.
7 Just as the May 2011 judgment was being entered, Richard lost his job with Robert Talbott Inc., so [***7] his income for May and June of 2011 was zero. From July 2011 to July 2012, he made $30,000 a month at Saks Fifth Avenue, and in 2012 about $44,000 a month from Saks, which continued to September 2013. He lost his position at Saks that month, but soon found employment with the WDiamond Group at about $20,000 a month, which is where his income stood in January 2014. But as we shall soon see, his employment fortunes were about to change for the better.
8 The figures were conveniently presented to the court in a spreadsheet labeled exhibit 1 and agreed to by both parties. Nice work.
9 The paperwork was prepared by Lauralin, and recites that both she and Richard are in propria persona.
13 The point of the Attorney General’s brief in this case is to underscore the fact that parents cannot contract around certain levels of child [***16] support, since the state has an interest in the well-being of children independent of the parents. The Attorney General, however, makes no argument that simply reducing Richard’s child support levels to guideline amounts would somehow contravene public policy.
14 For purposes of this opinion, there is no need, as there was in In re Marriage of Bodo (2011) 198 Cal.App.4th 373 [129 Cal. Rptr. 3d 298] (Bodo), to contemplate the difference between a “material” change of circumstances as distinct from a “substantial” change of circumstances.
17 The book was a hornbook style treatise based on various selected cases from both American and British courts. We are indebted to the California Supreme Court library for supplying us with the passage and surrounding text on which the Snyder court relied.
* See footnote, ante, page 1014.

References: v. 
 § 4337
 § 4320
 § 4058
 § 4064
 § 4059
 § 100
 § 4058
 § 4064
 § 4059
 § 104
 § 103
 § 103
 § 4055
 § 4059