IN RE MARRIAGE OF WOLF No. A126557.
In re Marriage of MARTIN WOLF and JONI WOLF. MARTIN WOLF, Respondent, v. JONI WOLF, Appellant.
Court of Appeals of California, First District, Division Three.
Filed January 31, 2011.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
This is an appeal from a post-judgment order denying the motion of appellant Joni Wolf (Joni) to modify spousal support.
FACTUAL AND PROCEDURAL BACKGROUND
Joni and Martin Wolf were married in 1985 and separated in 2001, a week short of sixteen years. A petition to dissolve the marriage was filed in March of 2001, at which time Joni and Martin had two daughters, ages 12 and 10.
In January 2002, Joni, then 45 years old, underwent a vocational evaluation conducted by expert Susan Stevenson in connection with these proceedings. Ms. Stevenson's subsequent report, submitted to the trial court, assessed Joni's ability to attain employment with the goal of financial self-sufficiency compatible with the marital standard of living based upon, among other things, Joni's education, employment history, age, health, marketable skills, and local job conditions. While noting Joni was college-educated and had engaged in a successful broadcasting career in Nebraska from 1978 to 1989, the report ultimately concluded broadcasting "is not a realistic reentry path for an older woman who has been out of a very competitive field for a significant period of time." The report identified real estate appraisal as a realistic employment path that Joni had expressed interest in, and identified specific steps for her to take to gain the requisite qualifications. Alternatively, the report suggested "paralegal" as a potential line of work for Joni.
Pursuant to the dissolution order, Joni received community assets totaling approximately $1,048,230, including $285,413.12 in cash and a family residence worth $1,390,000 with a $718,457 mortgage. She also received approximately $400,000 in retirement benefits.
On February 27, 2004, a final judgment was entered by Judge Craddick, which included an order of spousal support providing as follows: From January 1, 2003 through December 31, 2005, Joni would receive $4,600 per month in spousal support. From January 1, 2006 through January 1, 2008, Joni would receive $3,100 per month in spousal support. After January 1, 2008, Joni would receive no further spousal support, but the trial court would retain jurisdiction over this issue, and could order additional spousal support if Joni could establish that, despite good faith efforts to become self-supporting, she continued to need such support.
In so ordering, Judge Craddick set the marital standard of living at $16,711 per month for the entire family of four (Joni, Martin and their two daughters). This amount was based upon "an upper-middle class lifestyle" beginning in the early 1990's, when Martin's annual income for his business of mergers and acquisitions of internet companies approached $200,000. Judge Craddick acknowledged that Martin had earned over $1.8 million in 2000, the final year before the couple separated, but found this amount to be an anomaly stemming from the volatile nature of his business, which had increased the family savings without significantly altering their lifestyle. As such, Martin's 2000 earnings were not factored into the marital standard of living.
With respect to the step-down spousal support order, Judge Craddick made several findings relating to Joni's needs and her capacity to be self-supporting. In particular, Judge Craddick found that Joni had been repeatedly warned of her legal duty to make reasonable efforts to become self-supporting, yet had ignored these warnings for nearly two years. Judge Craddick also found that, according to Ms. Stevenson's 2002 vocational report, Joni's annual income should increase to $70,000 by January 2008, at which time support would be reduced to zero subject to a reservation of jurisdiction so long as she diligently pursued employment.
Joni did not appeal Judge Craddick's 2004 decision and judgment, which therefore became legally binding on the parties. However, in March 2008, after her spousal support was reduced to zero under the judgment, Joni filed a motion seeking to modify spousal support. In doing so, Joni sought reinstatement of spousal support, to be continued indefinitely, claiming she had nearly $12,000 in monthly expenses and virtually no income. At the time of her motion, Joni had received spousal support for nearly eight years, half the length of her nearly 16-year marriage to Martin.
In support of her motion, Joni submitted a declaration identifying several grounds for her alleged continuing need for spousal support. In particular, Joni stated that she had engaged in extensive efforts to gain full-time employment since the divorce, but had been unsuccessful due to, among other things, her many-year absence from the job market while caring for her daughters, her ongoing medical problems for which she had surgery in December 2005 requiring several months of recovery, and her ill-fated plans to marry a man who was diagnosed with a serious illness during their engagement. She was also experiencing financial hardship stemming from the high costs of maintaining the family residence and meeting the needs of her teenage daughters. Martin, in the meantime, had experienced much professional and financial success running a mergers and acquisitions business, which he started during their marriage, and thus, according to Joni, was more than capable of providing continued support. Ultimately, the trial court denied Joni's modification motion, determining as an initial matter that she had failed to meet her burden to prove that she had made reasonable, good faith efforts to become self-supporting. This was despite the fact that, on July 3, 2008, several months after filing her motion and four and a half years after Judge Craddick's judgment, Joni had finally secured full-time employment as a legal assistant making about $58,000 annually. In so finding, the trial court reasoned as follows:
In addition to pointing out Joni's inadequate efforts to become self-supporting, the trial court found, based upon the record before it, that she had "mismanaged and dissipated" a substantial amount of community property awarded to her when the marriage was dissolved, and had otherwise failed to prove any material change in circumstances requiring modification of the 2004 spousal support order.
On appeal, Joni expressly declines to challenge any of the trial court's factual findings in denying her motion to modify the spousal support order, including that she failed to make reasonable efforts to become financially self-supporting.
"`[A] motion for modification of spousal support may only be granted if there has been a material change of circumstances since the last order.' [Citation.]" (In re Marriage of Olson (1993) 14 Cal.App.4th 1, 9.) The moving party bears the burden of establishing such a material change. (In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 78-79.) "In determining whether a change of circumstances has occurred, the trial court is required to reconsider the same standards and criteria set forth in . . . Family Code section 4320 it considered in making the initial long-term order at the time of judgment and any subsequent modification order. [Citation.]" (Id. at p. 77.) These statutory criteria include the parties' respective earning capacity, the supporting party's ability to pay spousal support, the parties' respective needs, their ages and health, the duration of the marriage, the supported spouse's ability to engage in gainful employment, the balance of the hardships to the parties, and any other factor the court finds just and equitable. (§ 4320.) Further, in considering these factors, the trial court must keep in mind "[t]he goal that the supported party shall be self-supporting within a reasonable period of time." (§ 4320, subd. (l).)
As the California Supreme Court has explained, the factors enumerated in section 4320 reflect the well-established public policy that, after dissolution of marriage, a spouse should, to the best of his or her ability, strive for financial independence rather than continued dependence on the other spouse. (In re Marriage of Morrison (1978) 20 Cal.3d 437, 451-453; §4320, subd. (l).) Thus, to meet this policy, when appropriate, the trial court should design spousal support orders with the ultimate goal of encouraging healthy and capable spouses to become self-supporting within a reasonable period of time following the dissolution of marriage.
Moreover, the trial court must also keep in mind that "the standard rule that modifications in support orders may only be granted if there has been a material change of circumstances since the last order [citation] was designed to prevent repeated attempts to modify support orders without justification, not to circumvent the goal that supported spouses become self-supporting within a reasonable period of time. [Citation.]" (In re Marriage of Schaffer (1999) 69 Cal.App.4th 801, 803-804.)
Within the legal parameters set by section 4320 and the relevant case law, the trial court enjoys broad discretion in ruling on a modification motion. On appeal, this court will find an abuse of discretion only where it can be said that "no judge reasonably could have made the same order." (In re Marriage of Stephenson, supra, 39 Cal.App.4th at p. 76.)
Here, as set forth above, the spousal support order adopted under the 2004 judgment provided for the gradual reduction in the amount of support over four years, reaching zero on January 1, 2008, subject to a reservation of jurisdiction. This order, which was not appealed, was based in part on the trial court's finding that Joni had engaged in a "delay of nearly two years in taking any reasonable steps toward becoming self-sufficient." Orders of this type are quite common in marital dissolution proceedings, and are often referred to as "Richmond" orders in acknowledgement of the holding of In re Marriage of Richmond, supra, 105 Cal.App.3d at pp. 355-356. "The effect of a `Richmond' order is to tell each spouse that the supported spouse has a specified period of time to become self-supporting, after which the obligation of the supporting spouse will cease." (In re Marriage of Prietsch & Calhoun (1987) 190 Cal.App.3d 645, 665.) "[A] `Richmond' order is the most appropriate form of order for spousal support in all cases except (1) where spousal support is either not ordered, or is ordered for a fixed term of short duration, (2) in the most lengthy marriages where the circumstances justify truly `permanent' spousal support, or (3) where the supported spouse does not possess the capacity to become self-sufficient." (Id. at p. 666.)
As reflected in the language of the order in this case, the effect of a Richmond order is to shift to the supported spouse the burden of showing good cause for a change in the support order on the assumption that the supported spouse is most able to exercise the control necessary to meet the expectations underlying the trial court's order. (In re Marriage of Prietsch & Calhoun, supra, 190 Cal.App.3d at p. 666.) Here, the trial court determined that Joni had not met this burden, a determination we accept as true given Joni's decision not to challenge it on appeal. (In re Adrian R. (2000) 85 Cal.App.4th 448, 452-453; In re Marriage of Stephenson, supra, 39 Cal.App.4th at p. 82, fn. 5.) Joni does, however, challenge the trial court's initial decision to bifurcate the issue of her efforts to become self-supporting, with the result of putting on the back burner consideration of the other factors relevant to spousal support that are enumerated in section 4320. She further contends that, after bifurcating this issue, the trial court failed to admit and consider evidence relating to these other factors. As we will explain below, we believe Joni's contentions are based upon a mischaracterization of the record.
As an initial matter, we agree with Joni that a trial court must consider all appropriate section 4320 factors when deciding a motion to modify spousal support, not just the supported spouse's efforts to become financially self-sufficient. Indeed, contrary to Martin's suggestions, the law is quite clear on this point. (E.g., In re Marriage of Stephenson, supra, 39 Cal.App.4th at p. 77 ["In determining whether a change of circumstances has occurred, the trial court is required to reconsider the same standards and criteria set forth in . . . section 4320"]; In re Marriage of Shaughnessy (2006) 139 Cal.App.4th 1225, 1241 ["`spousal support . . . is a determination to be made by the trial court in each case before it, based upon the facts and equities of that case, weighing each of the circumstances or guidelines specified by the Legislature in [former] section 4801, subdivision (a) [current section 4320], which are applicable to that case, as well as those specified by appropriate appellate case law'"].)
However, California law is also quite clear that, where, as here, a spousal support order calls for reduction in support to zero on a given date subject to a reservation of jurisdiction, the trial court may deny a spouse's modification motion based upon his or her failure to make "good faith efforts to become self-sufficient" (In re Marriage of Pekar (1985) 173 Cal.App.3d 367, 372), or his or her "unreasonable delay in seeking employment consistent with the party's ability" (In re Marriage of Sheridan (1983) 140 Cal.App.3d 742, 748-749). This is consistent with "the goal that the supported party shall be self-supporting within a reasonable period of time." (§ 4320, subd. (l).)
In addition, the trial court may deny a spouse's modification motion based upon his or her mismanagement of marital assets. (In re Marriage of McElwee (1988) 197 Cal.App.3d 902, 909-910 ["just as lack of diligence in seeking employment may lead to a refusal to award spousal support [citation], so too may improvident management of assets, which were sufficient to provide self-sufficiency in the accustomed lifestyle, justify termination of support and jurisdiction even though such an order may result in an alteration in the supported spouse's lifestyle"].) "To hold otherwise, would encourage profligacy and discourage sound investment and prudent management to the detriment of all concerned." (Id. at p. 910.)
In this case, we believe the trial court exercised its broad discretion in accordance with these principles. While it is true the trial court initially stated its intent to bifurcate the issue of whether Joni had made reasonable efforts to become self-supporting, one of the conditions for modification under Judge Craddick's 2004 order,
Also at the hearing, Martin stipulated to his ability to pay Joni any reasonable amount of spousal support ordered by the court, thereby negating the need for evidence relating to his earning capacity or current finances.
Finally, and most significant for purposes of this appeal, before closing arguments on Joni's motion, the trial court specifically asked whether either party would like an opportunity to present further evidence on any of the section 4320 factors. In doing so, the trial court singled out Joni's attorney for this opportunity, given that much of Joni's presentation of evidence preceded his entry into the case. Joni's attorney, noting the stipulation regarding Martin's ability to pay any reasonable amount of support, as well as his client's competent efforts at self-representation, confirmed they were "ready to roll" without further evidence. Joni's attorney thereafter provided a comprehensive closing argument in support of her motion, during which he walked through each of the section 4320 factors and argued, based upon evidence in the record, the extent to which these factors weighed in favor of modifying the previous order.
After taking the matter under submission, the trial court filed a comprehensive and thoughtful 20-page statement of decision, clearly setting forth its analysis of the appropriate section 4320 factors before ultimately denying Joni's modification motion on three grounds: (1) Joni failed to make reasonable efforts to become self-supporting; (2) she failed to prove a change in circumstances warranting modification; and (3) she spent money excessively while also mismanaging and dissipating her assets.
In particular, the statement of decision noted that, with respect to the marital standard of living, a factor that may decrease in relative importance over time (In re Marriage of Rising (1999) 76 Cal.App.4th 472, 479), "neither party said anything material." The trial court reasoned that this standard was set at $16,711 per month for a family of four by Judge Craddick in 2004, and included several amounts that no longer had relevance, including $2,000 per month for the children's nanny and $2,000 per month for their private school education.
With respect to each party's earning capacity and the extent to which it was sufficient to maintain the marital standard of living (§ 4320, subds. (a), (c)), the trial court noted that, according to the evidence, Joni was currently earning $4,666 monthly and Martin stipulated that he could pay any reasonable award of spousal support. As such, the significance of this issue was largely negated.
With respect to contributions to a spouse's education, training or career position (§ 4320, subd. (b)), the trial court found no evidence supporting Joni's attorney's argument that she helped Martin "build his business." The trial court further noted there was evidence in the record that the family employed nannies to provide child care during the marriage, assisting Joni with her household duties.
With respect to the parties' needs (§ 4320, subd. (d)), the trial court acknowledged Joni's testimony that she had monthly expenses of $10,775, which included $6,104 for maintaining the house, $1,500 for utilities, and $3,150 for personal expenses.
With respect to assets and obligations (§ 4320, subd. (e)), the trial court noted there was evidence that Joni had dissipated hundreds of thousands of dollars in assets, but still had liquid assets totaling in excess of $400,000. In addition, she had spent $203,100 in 2005, $229,705 in 2006, and $131,728 in 2007.
With respect to Joni's ability to engage in employment without unduly interfering in the children's interests (§ 4320, subd. (g)), the trial court pointed out this was no longer an issue given the daughters' respective ages and the fact that the youngest was living full time with Martin.
With respect to the parties' ages and health (§ 4320, subd. (h)), Joni, 53 or 54 years old at the time, had experienced some recent health concerns, but the trial court found these concerns no longer interfered with her ability to work.
Finally, with respect to the parties' balance of hardships (§ 4320, subd. (k)), the trial court noted that, if Joni had promptly heeded the warnings of Judge Craddick, she could have been earning at least $70,000 per year, which, considered together with the "very substantial assets" she received when the marriage dissolved, would have sufficiently met her needs. In any event, it was Joni's burden to prove otherwise, which the trial court found she did not do, particularly in light of evidence that she continued to mismanage and dissipate assets by, among other things, living in and maintaining a home quite large for one person. Thus, the trial court concluded, "[i]t is simply not fair for Ms. Wolf to have frittered away her assets recklessly, failed to heed the Gavron warning she received even post-judgment, and then ask Mr. Wolf to subsidize her misjudgments and extravagances."
Given this extensive record of the trial court's analysis of the relevant section 4320 factors, we reject Joni's contention that the trial court committed legal error in denying her modification motion.
The post-judgment order denying wife's motion to modify spousal support is affirmed. Wife shall bear costs on appeal.
Pollak, Acting P. J.
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