Court Opinion

ID: 4576656
Source: CourtListenerOpinion
Date Created: 2020-10-14 19:02:17.021078+00
Date Added: 2024-06-11T13:33:01.643831
License: Public Domain

Filed 10/14/20 Marriage of Gallemore CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

In re Marriage of RON P. and                              B294085
ESMERALDA GALLEMORE.

RON P. GALLEMORE,                                         (Los Angeles County
                                                          Super. Ct. No. 18STFL00261)
         Respondent,

         v.

ESMERALDA GALLEMORE,

         Appellant.

      APPEAL from orders of the Superior Court of Los Angeles
County, Roy L. Paul, Temporary Judge. (Pursuant to Cal. Const.,
art. VI, § 21.) Affirmed.
      John L. Dodd & Associates, John L. Dodd and Benjamin
Ekenes for Appellant.
      Young & Spiegel and Lance S. Spiegel for Respondent.
      Esmeralda Gallemore appeals from a temporary spousal
and child support order, in which the family court ordered her
husband Ron1 to pay $41,630 per month in pendente lite spousal
support and $18,020 per month in child support. Esmeralda
contends the court’s order was not supported by substantial
evidence because the court calculated Ron’s income available for
support based on erroneous revenue and expense projections for
the eye clinic Ron owned, Retina Macula Institute (RMI).
Esmeralda also appeals from the court’s order denying her
motion for new trial. We affirm both orders.

      FACTUAL AND PROCEDURAL BACKGROUND

A.    Ron and Esmeralda’s Marital Dissolution Action2
      Esmeralda and Ron were married on July 4, 2004 and have
twin sons born in 2011. Ron is an eye surgeon and the owner of
RMI, a successful ophthalmology practice in Torrance. RMI
employs Ron and five other physicians, in addition to several
medical and support staff. Esmeralda worked as RMI’s office
administrator until the parties’ separation. From 2013 through
2017 RMI had yearly gross revenues of more than $9 million.
Ron and Esmeralda reported nearly $4 million in income from
RMI on their 2016 joint tax return.

1     We refer to the parties by their first names because they
share a last name.
2     The background facts are taken from Esmeralda’s
declaration in support of her request for temporary child and
spousal support and from Ron’s responsive declaration.

                                2
      On January 9, 2018 Ron filed a petition for dissolution of
marriage seeking joint legal and physical custody of the children.
On January 10, 2018 Esmeralda filed a dissolution petition
seeking sole custody of the children and spousal and child
support.3 On January 10, 2018 the family court granted
Esmeralda’s ex parte application for a temporary domestic
violence restraining order preventing Ron from harassing or
contacting Esmeralda and ordering him to stay away from
Esmeralda and the parties’ residence. Ron filed a responsive
declaration opposing Esmeralda’s request for a permanent
restraining order and seeking his own domestic violence
restraining order. In his supporting declaration, Ron stated
Esmeralda unilaterally withdrew at least $390,000 from RMI’s
operating bank account.4 On March 26, 2018 the family court
(Judge John A. Slawson) denied the parties’ requests for
restraining orders.

3     Ron’s petition was assigned Los Angeles County Superior
Court case No. 18STFL00261, and Esmeralda’s petition was
assigned case No. 18STFL00277. On January 31, 2018 the
family court (Judge Shelley Kaufmann) ordered the two cases
related and consolidated under case No. 18STFL00261.
4     Esmeralda stated in her responsive declaration she
withdrew $50,000 “in surplus funds from the practice account” on
January 8, 2018 to pay her divorce attorney’s retainer fee, and in
November and December 2017 she transferred $340,000 from the
RMI accounts into her own account because she was “afraid of
being left with no access to funds.” She stated she used a
majority of those funds for her and the children’s living expenses
and “simply do[es] not have the funds to return to the business
practice.”

                                3
B.     Esmeralda’s Request for Temporary Spousal and Child
       Support
       On February 26, 2018 Esmeralda filed a request for order
(RFO) on custody, visitation, child support, spousal support, and
attorneys’ fees. In her attached income and expense declaration,
Esmeralda stated she was unemployed and claimed monthly
expenses of $207,736, including $15,000 for child care;5 $14,000
for food and household expenses; $19,000 for hair, make-up, skin
care, and other personal expenses; $7,000 for a personal
assistant; and $5,200 for a dance coach. She reported $12,500 in
monthly rental income from the family home and $150,000 in
cash and checking accounts. Esmeralda sought pendente lite
spousal support and child support. Esmeralda’s forensic
accountant Alfred Warsavsky calculated guideline support at
$37,557 per month in child support and $108,206 per month in
spousal support. Esmeralda sought sole legal and physical
custody over the children, with Ron visiting the children three
days a week. She also sought $250,000 in attorneys’ fees and
costs.
       On March 19, 2018 Ron filed a responsive declaration in
opposition to Esmeralda’s request in which he requested joint
custody of the children with an equal timeshare based on each
parent having the children on two weekdays and alternating
three-day weekends, pending a custody evaluation. Ron agreed
to pay guideline child support and temporary spousal support

5     At the hearing on the RFO, Esmeralda testified she was
currently paying four nannies $4,000 each per month to care for
the children and had reduced the number of nannies from five
because she was no longer working.

                                4
based on the analysis of his forensic accountant, Scott Decker.
Ron submitted two DissoMaster6 reports, one providing for
$7,078 in monthly child support and $20,335 in spousal support
and the other providing for $7,233 in child support and $20,884
in spousal support.7 In his income and expense declaration, Ron
stated he received $65,000 in monthly salary and $250,000 in
monthly business income from RMI, and his monthly expenses
were $17,164.

C.    Hearing on Esmeralda’s Request
      The family court8 heard the RFO on April 24, April 25, and
May 8, 2018. Prior to the hearing, the parties stipulated that for
the 12 months ending December 13, 2017, Ron’s reported income
was $780,000 and RMI generated a net income of $3,019,060.
The parties also stipulated Ron’s timeshare with the children was
17 percent. Esmeralda, Ron, Warsavsky, and Decker testified at
the hearing, as well as Timothy Hughes, an accountant who for

6     DissoMaster is a computer software program widely used
by courts and the family law bar in setting child and spousal
support pursuant to the statewide uniform guidelines set by the
Family Code and local rules. (See In re Marriage of Olson (1993)
14 Cal.App.4th 1, 5, fn. 3.)
7    Decker explained the two DissoMaster calculations differed
based on whether RMI perquisites were included as taxable or
nontaxable income.
8     The parties stipulated to have the matter heard by Judge
Roy L. Paul, a retired judge of the Los Angeles County Superior
Court, as a temporary judge appointed pursuant to California
Rules of Court, rule 2.831 and article VI, section 21, of the
California Constitution.

                                5
three years provided accounting, controller, and bookkeeping
services to RMI and accounting services to Ron and Esmeralda.
      For purposes of the hearing, the experts prepared a joint
report addressing 18 topics of disagreement concerning the RMI
income attributable to Ron, four of which are at issue in this
appeal. Decker took the position RMI’s net income should be
adjusted downward from the income reported in RMI’s 2017
financial statements to account for lost practice income due to a
reduction in Ron’s work hours, depreciation expenses, unpaid
taxes, and replenishment of cash reserves for operations.
Warsavsky rejected all of the downward adjustments and took
the position more than $500,000 of perquisites should be added to
Ron’s income available for support, in addition to several smaller
upward adjustments. Decker opined Ron’s monthly income
available for support was $223,372; Warsavsky opined Ron’s
monthly income available for support was $392,146.

D.    Statement of Decision and Findings
      On July 18, 2018 the family court issued its statement of
decision, ordering Ron to pay $41,630 per month in temporary
spousal support and $18,020 per month in temporary child
support commencing January 15, 2018.9 In its statement of
decision, the court ruled on each of the parties’ 18 topics of
disagreement. In addition, the court examined Esmeralda’s
reasonable needs and found her trial testimony was not credible,

9     On May 25, 2018 the family court issued a proposed
statement of decision, and on June 6 Esmeralda filed objections.
The court sustained one of Esmeralda’s objections concerning the
parties’ real property and overruled the others.

                                6
explaining, “[Esmeralda’s] testimony was evasive, she had no
recall of many facts, as well as an unwillingness to answer or a
failure to understand very simple straightforward questions. She
appeared to have selective recall as to the business operations as
well as her personal expenses.” Among other things, Esmeralda’s
“stated personal expenses appear greatly overinflated and
exaggerated” and “included many unsupported numbers that
have no foundation and have changed during testimony.” She
also “presented contradictory evidence regarding the existence
and uses of a tax savings account.” The court noted Esmeralda
stated she used QuickBooks accounting software for her personal
finances but failed to produce the data files to Ron’s expert,
despite multiple requests. Her income and expense declaration
stated she held $150,000 in cash, but she testified at the hearing
she only had $700. The court concluded, “Based upon the
insufficient, contradictory, and lack of competent evidence
presented by [Esmeralda], the [c]ourt finds [she] has failed to
meet her burden of proving her reasonable needs. The [c]ourt
finds the needs of the children including special needs and
[Esmeralda] will be met by this order.” On September 7, 2018,
the court issued a support order and statement of findings
consistent with the statement of decision.

E.    Subsequent Proceedings
      On July 27, 2018 Ron filed an RFO for modification of child
support based on an increase in Ron’s custodial timeshare from
17 percent to 50 percent. On August 9 Ron provided Esmeralda
with an updated income and expense declaration and a copy of
RMI’s QuickBooks accounts for the 12-month period ending
July 31, 2018. Based on Warsavsky’s analysis of the financial

                                7
data, on September 20, 2018 Esmeralda filed a motion for new
trial. After a hearing, on October 29 the family court issued a
written ruling denying the motion.10 Esmeralda timely appealed
the support order and the order denying her new trial motion.

                         DISCUSSION

A.     Standard of Review
       “The standard of review that applies to an order for
temporary spousal support is abuse of discretion.” (In re
Marriage of Lim & Carrasco (2013) 214 Cal.App.4th 768, 773
(Lim); accord, In re Marriage of Wittgrove (2004) 120 Cal.App.4th
1317, 1327 (Wittgrove).) Likewise, “appellate courts review child
support awards for an abuse of discretion.” (In re Marriage of
Hein (2020) 52 Cal.App.5th 519, 529 (Hein); accord, In re
Marriage of Morton (2018) 27 Cal.App.5th 1025, 1038.)
       “Under this standard, we consider only ‘whether the court’s
factual determinations are supported by substantial evidence and
whether the court acted reasonably in exercising its discretion.’
[Citation.] ‘We do not substitute our own judgment for that of the
trial court, but confine ourselves to determining whether any
judge could have reasonably made the challenged order.’” (In re
Marriage of Macilwaine (2018) 26 Cal.App.5th 514, 527
(Macilwaine); accord, Hein, supra, 52 Cal.App.5th at p. 529; In re
Marriage of Smith (2015) 242 Cal.App.4th 529, 532 [a support

10    On November 16, 2018 the family court granted Ron’s RFO
and entered a new support order effective August 1, 2018.
Accordingly, the temporary support order at issue in this appeal
was effective from January 15, 2018 through July 31, 2018.

                                8
order “‘will be overturned only if, considering all the evidence
viewed most favorably in support of its order, no judge could
reasonably make the order made’”].) “On review for substantial
evidence, we examine the evidence in the light most favorable to
the prevailing party and give that party the benefit of every
reasonable inference. [Citation.] We accept all evidence
favorable to the prevailing party as true and discard contrary
evidence.” (In re Marriage of Drake (1997) 53 Cal.App.4th 1139,
1151.)
       However, in reviewing a child support order 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.”’”
(In re Marriage of Williamson (2014) 226 Cal.App.4th 1303, 1312;
see Macilwaine, supra, 26 Cal.App.5th at p. 527 [“‘[T]he trial
court’s discretion is not so broad that it “may ignore or
contravene the purposes of the law regarding . . . child
support.”’”].) We independently review whether the court
“followed established legal principles and correctly interpreted
the child support statutes. . . .” (In re Marriage of Alter (2009)
171 Cal.App.4th 718, 731.)

B.    Law Governing Spousal and Child Support
      Under Family Code section 3600,11 a family court may
order temporary spousal support in “any amount that is
necessary for the support of the other spouse,” as long as the
amount is consistent with section 4320 (listing circumstances to

11   All further undesignated statutory references are to the
Family Code.

                                9
consider in ordering support) and section 4325 (limiting spousal
support to a spouse convicted of domestic violence). “The purpose
of pendente lite spousal support is to maintain the parties’
standards of living in as close as possible to the preseparation
status quo, pending trial. In fixing temporary spousal support,
trial courts are not restricted by any set of statutory guidelines.
The amount of the award lies within the trial court’s sound
discretion, and is reversible only on a showing of clear abuse of
discretion.” (In re Marriage of Ciprari (2019) 32 Cal.App.5th 83,
103-104; accord, In re Marriage of Samson (2011)
197 Cal.App.4th 23, 29 [An award of temporary spousal support
“is based on the supported spouse’s needs and the other spouse’s
ability to pay.”]; In re Marriage of Murray (2002) 101 Cal.App.4th
581, 594 [“Awards of temporary spousal support . . . may be
ordered in ‘any amount’ [citation] subject only to the moving
party’s needs and the other party’s ability to pay.”].) “‘[I]n
exercising its broad discretion, the court may properly consider
the “big picture” concerning the parties’ assets and income
available for support in light of the marriage standard of living.’”
(Lim, supra, 214 Cal.App.4th at p. 773; accord, Wittgrove, supra,
120 Cal.App.4th at p. 1322.)
       Child support payments, by contrast, are prescribed by
statutory guidelines set forth in section 4050 et seq. “[A]dherence
to the guidelines is mandatory, and the trial court may not
depart from them except in the special circumstances
enumerated in the statutes.” (In re Marriage of Cheriton (2001)
92 Cal.App.4th 269, 284.) Section 4055 sets forth a mathematical
formula for computing the guideline amount of child support
based on the relative income of the parents and their time-
sharing arrangement for physical custody of the children. This

                                10
calculation is incorporated into the DissoMaster program to
generate child support guidelines. (In re Marriage of Olson,
supra, 14 Cal.App.4th at p. 5, fn. 3.) “The mandatory formula for
calculating child support takes into account both parents’ ‘net
monthly disposable income’ [citations], which is determined
based upon the parents’ ‘annual gross income.’” (In re Marriage
of Alter, supra, 171 Cal.App.4th at p. 731.) “Parental income is
‘broadly defined’ for the purpose of calculating child support
under the statutory guidelines.” (In re Marriage of Williams
(2007) 150 Cal.App.4th 1221, 1237.) Section 4058, subdivision
(a)(2), defines “annual gross income” as “income from whatever
source derived,” including, without limitation, salaries and
wages, investment income, and “[i]ncome from the proprietorship
of a business, such as gross receipts from the business reduced by
expenditures required for the operation of the business.”
       Moreover, a court making a temporary support order must
base its determination of a spouse’s income on a “fair and
representative” time sample that reflects the spouse’s true
income. (In re Marriage of Riddle (2005) 125 Cal.App.4th 1075,
1081 (Riddle) [family court abused its discretion by computing
temporary child and spousal support based on testimony of
husband’s expert as to cashflow over a two-month period instead
of a 12-month sample].) “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.”
(§ 4060; accord, Riddle, 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

                               11
support. However, the law recognizes that is not always the
case.”].)

C.    Substantial Evidence Supports the Family Court’s
      Determination of Spousal and Child Support
      Esmeralda contends (1) the family court erred in finding
RMI’s net operating income would decrease in 2018 based on a
reduction in Ron’s work schedule; (2) the court erred in reducing
the income Ron had available for support by $354,000 to
replenish RMI’s cash reserves; (3) Ron’s meal and entertainment
expenses were perquisites that should have been added to his
income; and (4) the court should not have reduced Ron’s income
available for support based on RMI’s expenditures of $38,940 on
equipment in 2017. The family court did not abuse its discretion
because substantial evidence supports the court’s findings.

      1.    RMI’s projected 2018 net operating income
             a.    Evidence and court findings
       Ron testified he performed approximately 15,000
procedures in 2017, including eye injections, lasers, and surgical
procedures; the other four physicians affiliated with RMI
collectively performed 2,500 procedures. Ron’s caseload in 2017
was double his caseload a few years earlier, when he treated
approximately 25 to 40 patients per day. On several occasions in
2017, Ron tried to reduce his caseload and told Esmeralda he
could not sustain the volume of patients. Ron testified the high
patient volume was hurting the quality of his life and family and
impacting the quality of patient care: “When you are seeing 150
patients a day, you have to keep the eye correct, you have to hold
[the patient’s] hand, you have to make sure they understand

                                12
what they are going thorough, why they are going through the
procedure. If you don’t, you are going to open yourself up to
liability with lawsuits and you are also not taking full care of the
patient.” Ron asserted Esmeralda opposed his efforts in 2017 to
reduce his caseload because she wanted to maximize RMI’s
income.
       After the parties’ separation in January 2018, Ron worked
with his staff to reconfigure the patient scheduling template so
his staff could schedule him for no more than 10 procedures per
hour. Although Ron made the change in January 2018, it did not
take effect for a few months. Ron also hired another physician,
Michael Heeg, and increased the hours of the other RMI
physicians. Dr. Heeg began working at RMI on April 25, 2018,
the day the hearing commenced. At the time of the hearing, the
existing physicians were performing 160 more procedures per
week than 2017 levels, and Dr. Heeg was scheduled to work three
days per week and to perform 50 procedures a day.
       Hughes prepared a 2018 budget for RMI.12 He testified
RMI’s expenses were projected to increase by $126,722 per month
over the 2017 monthly average as a result of the hiring of
Dr. Heeg’s, increased payment to the other RMI physicians for
their added caseload, and other costs related to hiring and
staffing changes. Hughes testified there would be no increase in
2018 revenue, however, because RMI would see the same total

12    Esmeralda contends the family court abused its discretion
in overruling her objection to admission of Hughes’s 2018 RMI
budget and his 2018 budget projections. The family court did not
abuse its discretion because Hughes provided a foundation for his
testimony, explaining how the changes that had been
implemented affected RMI’s projected revenues.

                                13
number of patients in 2018 as it did in 2017 due to changes in the
work flow and the physicians’ changed work levels.
      In its statement of decision, the family court found, “[T]he
evidence supports [Ron’s] testimony that he can no longer
maintain seeing approximately 150 patients a day and has taken
steps to reduce his volume to 60 to 70 patients a day. Costs for
RMI have increased because [Ron] has altered his business
practices by increasing the hours of the other physicians as well
by the hiring of a new physician. The testimony of RMI’s
accountant, Tim Hughes, established to the satisfaction of the
[c]ourt that the increased cost to the practice for the additional
physicians’ hours and the increased staff needed to support them,
will decrease RMI’s operating income in 2018 by $110,058 per
month.”13

            b.    Substantial evidence supports the family
                  court’s finding RMI’s net operating income
                  would decrease in 2018 because of Ron’s
                  reduced workload
      Esmeralda contends there was not substantial evidence
that Ron decreased his caseload by the time of the April 2018
hearing, pointing to inconsistencies in Ron’s testimony as to the
number of procedures he performed in 2017 and 2018.

13    The statement of decision does not explain why the family
court found RMI’s monthly expenses increased by $110,058
instead of the $126,722 amount in Hughes’s projected budget. On
appeal, Ron asserts the court did not include recruitment fees
paid to hire Dr. Heeg as an expense.

                                14
Substantial evidence supports the family court’s finding Ron had
taken steps to significantly reduce his patient volume in 2018.
       Ron testified that in 2017 he had been seeing 150 patients
in a day, which was unsustainable, so he reduced the number of
procedures he would perform in 2018 to 10 procedures per hour.
He also testified on cross-examination, as Esmeralda points out,
he was averaging 30 to 50 procedures per day as of April 2018.
Ron did not explain whether this amount was averaged over the
year or a daily number (that is, working only three to five hours
in a day). Esmeralda points to Ron’s testimony during direct
examination in which he stated in 2017 he averaged 30 to 50
procedures a day, without explaining the difference between his
two estimates (150 or 30 to 50 procedures per day).
       No doubt there are inconsistencies in Ron’s testimony. It is
unclear what the basis was for Ron’s testimony he “averaged” 30
to 50 procedures in a day in 2017, but his testimony he performed
approximately 15,000 procedures in 2017 would have required
him to perform a significantly higher number of daily procedures.
For example, if he performed procedures on 200 days in 2017
(assuming approximately four days a week for 48 weeks), he
would have performed 75 procedures in a day. Further, Ron
testified his patient load had doubled by 2017, from a prior
patient load of 25 to 40 patients per day. Based on Ron’s
testimony he reduced the number of daily procedures he
performed in 2017 from 150 per day to 10 procedures per hour
(also described as 30 to 50 procedures per day), substantial
evidence supported the family court’s finding Ron had reduced
his daily volume to no more than 60 or 70 patients a day
(impliedly assuming Ron worked six- to seven-hour days). The
fact Ron may have decreased his workload even further to 30 to

                                15
50 procedures a day does not support Esmeralda’s position.
Further, the family court’s failure to rely on Ron’s inconsistent
testimony he only performed 30 to 50 procedures on average each
day in 2017 was not an abuse of discretion because we “accept all
evidence favorable to the prevailing party as true and discard
contrary evidence.” (In re Marriage of Drake, supra,
53 Cal.App.4th at p. 1151.)
      The family court was also correct as a matter of law that
Ron was not required to maintain an unreasonable work regimen
or have income imputed to him based on an unreasonable work
regimen. (In re Marriage of Simpson (1992) 4 Cal.4th 225, 236
[support order should be based on income from an “objectively
reasonable work regimen” and a “regimen requiring excessive
hours or continuous, substantial overtime . . . generally should be
considered extraordinary”].)
      Esmeralda also points to Ron’s testimony the other
physicians increased the number of procedures they performed in
2018, which she argues would have increased RMI’s net
operating income. But Hughes testified such changes in the
workflow and the physicians’ relative work levels would not
increase the aggregate number of patients treated by RMI or
increase its revenues.14 Moreover, Esmeralda does not dispute

14    The weekly increase in procedures by the other RMI
physicians totaled approximately 310 procedures (150 for
Dr. Heeg and 160 for the other physicians). Ron’s testimony he
reduced his number of procedures from 150 in a day to 70 or 80
(the court’s calculation assuming seven- to eight-hour days)
would have reduced his weekly procedures (assuming four-day
weeks) by 290 to 320 procedures. If Ron reduced his daily

                                16
that Ron’s salary did not change despite his reduced caseload, nor
does she dispute RMI had to pay Dr. Heeg’s salary and pay the
other physicians more for their additional procedures.15
       Esmeralda also points to evidence in RMI’s 2018 budget
that the practice was increasing its expenditures on Eylea, an
injectable drug for macular degeneration, by approximately
$90,000 per month (equivalent to 45 doses), but the budget did
not reflect an offsetting reduction in RMI’s purchases of
alternative drugs. From this fact, Esmeralda concludes, “RMI
therefore must have been projecting an increase not only in Eylea
injections, but in overall procedures—with use of the alternative
projects remaining constant.” (Italics omitted.) Esmeralda’s
assertion is speculative given the absence of testimony regarding
RMI’s purchasing practices and whether it had shifted to Eylea
from its use of other drugs for injections.
       Because there was substantial evidence RMI’s projected net
operating income would decrease in 2018 due to the additional
personnel costs resulting from Ron’s reduction in patient load,

procedures even further (for example, to 30 to 50 procedures per
day), this reduction would have been even greater.
15    Esmeralda takes exception to the inclusion in Hughes’s
budget of expenses of $2,333 per month for recruitment and
$1,600 per month in credentialing costs for Dr. Heeg, which she
claims were one-time costs. But Hughes testified the recruitment
fee was $28,000, which averaged $2,333 per month prorated
across 2018. There was no evidence whether the credentialing
fee was recurring. Regardless, as noted, the family court
recognized only $110,058 of the $126,722 of RMI expenses
included in Hughes’s 2018 budget as a reduction against Ron’s
income available for support.

                               17
the court did not abuse its discretion in reducing Ron’s business
income available for support by $110,058.16

      2.    RMI’s cash reserves
             a.   Evidence and court findings
      In her pretrial deposition and declarations, Esmeralda
admitted she withdrew $340,000 from RMI’s bank account in
November and December 2017, which she transferred into “a new
account Ron did not know about.” Esmeralda withdrew an
additional $50,000 on January 8, 2018 to pay her lawyer’s
retainer fee.
      In the experts’ joint report, Ron claimed $354,000 should be
deducted from the RMI net income available for support to
replenish the company’s cash reserves. According to Decker, the
cash balance in RMI’s bank accounts in December 2017 was only
$16,386, significantly below RMI’s historical reserves and below

16     Esmeralda’s reliance on Philbin v. Philbin (1971) 19 Cal.
App.3d 115, for the proposition a support award premised on
projected contingent future changes in income is improper, is
misplaced. In Philbin, the Court of Appeal concluded the family
court properly entered an order reducing the husband’s support
obligation after his earnings in the entertainment industry
decreased, but the court had abused its discretion by ordering the
husband’s support obligation automatically to increase after six
months even though the husband testified he had no future job
offers and worked in a depressed industry, finding the order was
based “on the grossest kind of speculation.” (Id. at pp. 121-122.)
Here, the family court’s order was based on changes Ron had
implemented in his patient load by the time of the April 2018
hearing and the experts’ calculation of the impact of those
changes on RMI’s net operating income.

                                  18
the cash reserves of similarly sized medical practices, placing
RMI at risk of being unable to meet its obligations. By
comparison, the average month-end balances in RMI’s bank
accounts in 2015 and 2016 had been $550,438.
       Ron and Hughes testified RMI was unable to make payroll
in the first half of January 2018 because of the depleted cash
reserves, and Ron forwent his biweekly salary so staff could be
paid. Ron took an equity draw of $13,000 in January 2018, in
contrast to his taking a $150,000 draw in both February and
March.
       Warsavsky opined RMI generated sufficient cash from its
operations that it was not necessary to divert additional funds
into cash reserves. RMI received payments for services in 2018
totaling about $600,000 in January; between $500,000 and
$600,000 in February; and $1 million in March.
       The family court found RMI’s cash reserves were “well
below the historical level of cash of month end balances in its
bank account during 2015, and 2016 of $550,438,” and it adopted
Ron’s position the cash reserves should be replenished “to
maintain sufficient operating capital.” The court found $354,000
($29,500 per month) should be deducted from the RMI net
operating income available for support.

            b.    Substantial evidence supports the family
                  court’s finding RMI needed to replenish its cash
                  reserves
      Esmeralda contends Ron’s one-month “snapshot” of RMI’s
cash position in December 2017, which she asserts is a month in
which businesses pay off their bills to defer income for tax
planning purposes, did not provide substantial evidence RMI’s

                               19
cash reserves needed to be replenished. She also argues Ron’s
evidence that RMI’s month-end balances averaged $550,438 over
a two-year period omitted evidence of monthly fluctuations and
was “not a reflection of the typical year-end balance,” citing to
Riddle, supra, 125 Cal.App.4th at page 1081.
       It is Esmeralda’s contentions that are speculative. It is
undisputed Esmeralda withdrew $350,000 from RMI’s bank
accounts in late 2017, and there is substantial evidence that, as a
result, RMI’s cash balance was so low at the end of December
that Ron forwent his salary and took a reduced draw in January
2018 so RMI could pay its other employees. In addition, although
Esmeralda is correct there is no evidence of the variations in
historical month-end reserves, RMI’s December 2017 cash
balance significantly deviated from the historical average of
$550,438. Warsavsky’s testimony RMI received $600,000 to
$1 million in monthly gross revenue in the early months of 2018
is not to the contrary because it ignores RMI’s monthly expenses
and outlays.17

      3.    Meals and entertainment expenses
           a.    Evidence and court findings
     In the experts’ joint report, Esmeralda claimed $78,373 of
meal and entertainment expenses that were charged to RMI’s
American Express credit card in 2017 were perquisites that

17    Esmeralda’s contention the family court erred by
recognizing an ongoing monthly reduction of $29,500 although
the cash reserves would be replenished within 12 months is moot
because the support award was only effective through July 31,
2018.

                                20
should be counted towards Ron’s income available for support.
Warsavsky stated “99% of the meals and entertainment expense
represent payments to American Express and include charges for
sporting events, amusement parks, movies, and at a minimum,
weekly restaurants charges. Based on discussions with
Esmeralda Gallemore, there were no business purpose for meals
and entertainment. As a result, 100% of meals and
entertainment expense has been included as perquisite . . . .”
        Warsavsky testified he and his staff spoke with Esmeralda
about Ron’s expenses on at least four or five occasions, and
Esmeralda told them what the charges were for. Warsavsky also
examined “the detail transaction by transaction of 10 pages
charged to the American Express bills and they were virtually all
for small expenses that appeared to be personal in nature.” The
credit card statements he relied on provided the “date of the
transaction and the amount and the location, but not specifically
the business purpose or the individual who was at the event.”
        Decker stated in the joint report, “[Ron] has indicated that
all of the items that were included in the [m]eals and
[e]ntertainment expense are business related. . . . I have selected
specific [Amerian Express] charges in the [m]eals and
[e]ntertainment expense to test. Based on the information
provided for [Ron] on these specific [American Express] charges[,]
the amounts included in the [m]eals & [e]ntertainment expense
appear to be business related.” At the hearing, Decker explained
he “selected several different charges that were meals and
entertainment and asked Ron were these personal or business,
and the information that I got back indicated . . . specifics about
them that indicated they were business-related for the ones I
selected for testing.” Decker also consulted with RMI’s

                                21
accountants Hughes and Calvin Chou to determine the nature of
the charges.
      The family court declined to treat Ron’s meals and
entertainment expenses as perquisites, explaining Esmeralda’s
“accountant relied on discussions with [Esmeralda], whereas
[Ron’s] accountant selected specific charges to test and, based on
information provided by [Ron] regarding those specific charges,
determined that the amount of the meals and entertainment
expense appeared to be business related.”

            b.       Substantial evidence supports the family
                     court’s finding Ron’s meal and entertainment
                     expenses were not perquisites
       The experts presented contradictory testimony about the
nature of Ron’s meal and entertainment expenses on his
corporate credit card. But as the family court found, Decker
requested further information from Ron and the RMI
accountants, tested the individual charges, and found them to be
bona fide business expenses. By contrast, Warsavsky relied in
significant part on Esmeralda’s characterization of the charges,
and the court found Esmeralda was not credible in her own
testimony, exhibiting evasion and “selective recall as to business
operations.” In light of the family court’s credibility findings, to
which we defer, substantial evidence supports the court’s finding
Ron’s expenses were not perquisites. (See Jennifer K. v. Shane K.
(2020) 47 Cal.App.5th 558, 578-579 [“Essentially, the issue is the
credibility of the parties; and as to that matter we must defer to
the trial judge.”].)

                                22
      4.    Equipment purchases
             a.    Evidence and court findings
       In the experts’ joint report, Decker asserted the family
court should deduct $82,184 from Ron’s income available for
support to cover RMI’s depreciation expenses in 2017. Decker
requested in the alternative, “[I]f depreciation expense is not
included then the purchases of depreciable assets that were made
during the year should be deducted. During 2017, [RMI]
purchased $48,950 of depreciable assets.” Warsavsky responded
that depreciation expenses are non-cash expenses that should not
be included in operating expenses for a service-oriented business
that has no cost of sales and no inventory. Warsavsky testified,
“Consequently, the need to replace machinery and equipment for
a temporary support order should be excluded [from income] in
this case in order to preserve the status quo of [Esmeralda].”
       The family court agreed with Warsavsky and declined to
deduct $82,184 in depreciation expenses. However, the court
adopted Ron’s alternative position and found “the $38,940 paid
for assets in 2017 . . . was an actual cash outlay of RMI to replace
equipment in order to maintain the operations of the business,
and is therefore properly deducted from income for purposes of
support.”

            b.     Esmeralda has forfeited any challenge to the
                   family court’s deduction of $38,940 for RMI’s
                   2017 equipment expenditure
      Esmeralda contends the “purchase of a long-term or
noncurrent asset is not an ‘expense’ . . . because such a
transaction is a redistribution of assets, i.e., a transfer of a
current asset such as cash in exchange for a fixed asset such as

                                23
equipment,” and accordingly it was improper for the family court
to treat RMI’s 2017 equipment purchases as an RMI expense to
reduce Ron’s income available for support. (Italics omitted.)
However, Esmeralda did not make this argument below, and
Warsavsky did not claim RMI’s 2017 expenditures on equipment
could not be deducted as an expense. Moreover, in her detailed
objections to the family court’s proposed statement of decision,
Esmeralda did not object to the family court’s finding on this
issue.
       Although Ron asserted his alternative argument on
depreciation in his written closing argument, Esmeralda made a
strategic decision not to address Ron’s fallback position in her
written closing argument or her objections to the family court’s
proposed order. As a consequence, the hearing record contains no
evidence about the nature of the 2017 expenses and whether the
purchases were for “long-term or noncurrent assets” that should
be treated as an income-neutral investment, as Esmeralda now
contends.
       Under these circumstances, Esmeralda has forfeited her
argument RMI’s 2017 equipment expenditures should not be
deducted. (Johnson v. Greenelsh (2009) 47 Cal.4th 598, 603
[“issues not raised in the trial court cannot be raised for the first
time on appeal”]; Hanna v. Mercedes–Benz USA, LLC (2019)
36 Cal.App.5th 493, 513 [“‘“As a general rule, theories not raised
in the trial court cannot be asserted for the first time on
appeal . . . .”’”].) “‘“This rule is based on fairness—it would be
unfair, both to the trial court and the opposing litigants, to
permit a change of theory on appeal . . . .”’” (American Indian
Health & Services Corp. v. Kent (2018) 24 Cal.App.5th 772, 789;
accord, C9 Ventures v. SVC-West, L.P. (2012) 202 Cal.App.4th

                                 24
1483, 1492 [“opposing party should not be required to defend for
the first time on appeal against a new theory”].)

D.     The Family Court Did Not Abuse Its Discretion in Denying
       Esmeralda’s New Trial Motion
       1.    Factual and procedural history
       On August 9, 2018 Warsavsky obtained a copy of RMI’s
QuickBooks file containing RMI’s financial information through
July 31, 2018. Based on this information, Warsavsky prepared a
profit and loss statement for the 12-month period through
July 2018. He also created a profit and loss statement for the
period January 1 through July 31, 2018, and he compared that
data to the same seven-month period in 2017. Warsavsky found
RMI’s physician expenses totaled $809,938 in the first seven
months of 2018, compared to $708,220 in the same period in
2017. RMI’s total income over this period increased by
$437,351.84, and its total expenses decreased by $72,268.86. Net
income accordingly rose by $153,337.45, or 9.19 percent over the
previous year. Net operating income increased by $255,056.14, or
10.74 percent. Warsavsky also determined RMI had the
following cash balances in its bank accounts: $112,926 in
January 2018; $217,543 in February 2018; $447,669 in
March 2018; $306,321 in April 2018; $406,845 in May 2018;
$389,726 in June 2018; and $436,473 in July 2018.
       Esmeralda moved for a new trial based on this evidence
(and other grounds not at issue on appeal). Relying on
Warsavsky’s declaration, Esmeralda argued the new information
showed that contrary to Hughes’ projections, RMI’s income had
increased over the first seven months of 2018. Further, although
physician expenses increased as Hughes had projected, these

                               25
increases were more than offset by increased revenue and
reduced costs. Esmeralda also argued the evidence RMI had a
cash balance of $447,669 at the end of March 2018 showed no
cash infusion was required to replenish RMI’s reserves.
      The family court denied Esmeralda’s new trial motion,
explaining, “The newly discovered evidence reflects
circumstances that occurred after trial, and is therefore
immaterial to the Court’s determination at trial.” The court did
not reach whether the evidence was newly discovered or whether
Esmeralda exercised reasonable diligence in obtaining it.

       2.     Standard of review and applicable law
       “The denial of a new trial motion is reviewed for an abuse
of discretion, except that a trial court’s factual determinations are
reviewed under the substantial evidence test.” (Minnegren v.
Nozar (2016) 4 Cal.App.5th 500, 514, fn. 7; see People v. Johnson
(2019) 8 Cal.5th 475, 524 [“We will not disturb a trial court’s
denial of a motion for a new trial unless ‘a “manifest and
unmistakable abuse of discretion’” clearly appears.”].)
       “The trial court may grant a new trial based on newly
discovered evidence if the moving party shows the evidence is
newly discovered, reasonable diligence was used to find it, and
the new evidence is material to the moving party’s case.”
(Santillan v. Roman Catholic Bishop of Fresno (2012)
202 Cal.App.4th 708, 727-728 (Santillan); Code Civ. Proc., § 657
[court may grant new trial based on “[n]ewly discovered evidence,
material for the party making the application, which he could
not, with reasonable diligence, have discovered and produced at
the trial”].) “Evidence is material when it is likely to produce a

                                 26
different result.” (Santillan, at p. 728; Hill v. San Jose Family
Housing Partners, LLC (2011) 198 Cal.App.4th 764, 779.)

       3.    Analysis
       Esmeralda contends the court erred in ruling her newly
discovered evidence reflected circumstances occurring after trial,
arguing the financial data also covered the period from January
through April 2018. However, Warsavsky’s declaration and the
attached data addressed only the aggregate seven-month period
from January through July 2018. It was not the family court’s
role to comb through raw financial data to find information the
moving party failed to identify.18
       Further, Esmeralda failed to show the information about
RMI’s cash balances at the end of January, February, and March
2018 was not available at the time of the RFO hearing.
Esmeralda’s trial counsel cross-examined Decker about the cash
balances during this period, and Decker testified, “January was
the lowest and then it when up a little in February, I believe, and
then it did go up significantly. . . . It may have [gone] up a decent
chunk, I believe, in March. I can get the specific amounts but

18    Nor does the fact net operating income increased over the
seven-month period necessarily undermine Hughes’ 2018
projections at the time of the support hearing in April 2018.
There was substantial evidence the changes to Ron’s caseload did
not take full effect for a “few” months after they were
implemented in January 2018, and Dr. Heeg did not begin to see
patients until the end of April. Conversely, there is evidence it
typically took RMI 60 to 90 days to recover payment for services,
and thus RMI’s income in early 2018 reflected operations in late
2017 when Ron maintained his peak caseload.

                                 27
would have to grab the documents.” Decker’s testimony is
consistent with the new evidence, and Esmeralda’s attorney
failed to request Decker retrieve the documents to provide the
requested information despite Decker’s testimony the
information was readily available.19 (See Santillan, supra,
202 Cal.App.4th at p. 728 [To support a new trial motion,
“evidence must be newly discovered after the trial or too late to
produce at trial.”].) Although the family court did not address
whether the new trial evidence was newly discovered or whether
Esmeralda pursued it diligently, ‘we review the ruling, not the
court’s reasoning, and, if the ruling was correct on any ground,
we affirm.’” (People v. Chism (2014) 58 Cal.4th 1266, 1295,
fn. 12; accord, People v. Kirvin (2014) 231 Cal.App.4th 1507,
1516.)
       Because Esmeralda failed to present evidence that was
relevant to the support award that she could not have discovered
earlier, the court did not abuse its discretion in denying her new
trial motion.

19     The data concerning the month-end cash balances in
January through March 2018 all show a balance significantly
below the two-year historical cash balance of $550,438. Even in
July 2018 the cash balance had only grown back to $436,473.
The newly discovered evidence is consistent with the family
court’s order on the cash reserves and undermines Esmeralda’s
argument that Decker’s December 2017 cash balance “snapshot”
and the undifferentiated two-year average were not a sufficiently
“fair and representative” sample to show RMI’s true cash
reserves. (Riddle, supra, 125 Cal.App.4th at p. 1081.)

                                28
                         DISPOSITION

       The family court’s September 7, 2018 order for pendente
lite spousal and child support and the October 29, 2018 order
denying Esmeralda’s new trial motion are affirmed. Ron is to
recover his costs on appeal.

                                               FEUER, J.
We concur:

             PERLUSS, P. J.

             SEGAL, J.

                               29