Filed 9/11/19 Marriage of Succow CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

In re the Marriage of CAROL AND RANDALL SUCCOW.

CAROL SUCCOW,

Respondent,

v.

RANDALL SUCCOW,

Appellant.

E070598

(Super.Ct.No. FAMSS1003539)

OPINION

APPEAL from the Superior Court of San Bernardino County. Arthur Harrison, Judge. Affirmed.

Law Offices of H. William Edgar, H. William Edgar for Appellant.

Arias & Lockwood, Christopher D. Lockwood for Respondent.

Carol Succow, (Wife), and Randall Succow, (Husband), divorced after 31 and one-half years of marriage. In 2013, after Wife was terminated from her employment, the spousal support order was modified, requiring Husband to pay Wife $1500 per month. Husband ceased paying support in December 2015. In February 2016, he filed a motion to modify the support order to terminate payments on the grounds of changed circumstances, claiming his brother-in-law had fired him, resulting in reduced income. Following a court trial, the trial court found there were no significant changed circumstances warranting an order reducing or terminating spousal support. The court also imposed sanctions as attorney’s fees for his noncompliance with discovery. Husband appeals.

On appeal, Husband argues the trial court abused its discretion in denying his request for modification because (1) the court failed to consider the standard of living of the parties at the time of the original judgment and Wife’s failure to become self-supporting; (2) it presumed facts not supported by the evidence; (3) it failed to consider wife’s ability to withdraw funds from her retirement account in balancing the factors governing modifications of support (Fam. Code, § 4320); and (4) Wife had not made reasonable attempts to become self-supporting following the termination of her employment. We affirm.

BACKGROUND

Husband and Wife were married in 1978 and divorced in February 2012, 31 and one-half years later, by way of a stipulated judgment in February 2012. The judgment of dissolution made provisions for the division of community property, including retirement accounts, a 401k plan, an annuity, and Watts/Epstein equalization payments.

At the time of dissolution Wife was employed by Union Bank, where she had worked for 16 years as a customer service manager earning $28 per hour, or nearly $5000 per month, roughly $1000 per month less that what Husband earned. For that reason, the stipulated judgment provided for termination of temporary spousal support that had been set in the amount of $119 per month in October 2011, but the court reserved jurisdiction of the issue of support, until remarriage of Wife, death of either party, or further order of the court.

Wife was terminated from her job in 2012, after being informed that a teller was out of balance, and that in January or February of 2012, she had put the wrong date on a report. In addition, in March 2012, she was informed she had left her desk unlocked against company policy. Wife was unemployed between April and October 2012.

In October 2012, after searching diligently for a job paying a salary comparable to what she earned at the bank, Wife commenced employment with ARS, earning $13.56 per hour, or $2350.40 per month, for an annual salary of $28,204.80. As a result, Wife was unable to use the amount awarded to her in the original judgment as an equalization payment to purchase a home as she had planned, because she was forced to use it to meet living expenses.

At that time, Husband was living in the State of Washington, working as General Manager for his brother-in-law at DCP Company, which his brother-in-law owned, and where he earned $5963.92 per month, for an annual salary of over $71,000. However, in 2012, Husband made an application for a home loan, on which he claimed monthly earnings of $9555 per month. He testified he had earned that amount for the month in which he applied for the loan, but also indicated that if spousal support were increased, his brother-in-law would increase his salary to meet his monthly needs.

The trial court concluded that Wife had not willfully committed acts so that she would be fired, and did not intend to be fired. The court also found that Wife had documented diligent efforts to find comparable employment, she continued in search of employment closer to her residence that paid higher wages, and that Husband failed to meet his burden of proving that there were jobs paying salaries comparable to her salary at the time of the judgment of dissolution. Additionally, based on Husband’s testimony and the information on his loan documents, the court concluded it could rely on Husband’s stated salary on the loan application as evidence of his income, concluding he had the ability to manipulate or secrete his income.

Based on those findings, the court ordered a modification of Wife’s spousal support on June 28, 2013. The court awarded Wife spousal support in the amount $1000 per month for the period between May and October 2012, and $1500 per month after October 2012, plus $5000 in attorney’s fees.

Husband paid his support obligation until December 2015. In January 2016, he filed a Request for Order (RFO) modifying spousal support. The request for order stated that Husband had been laid off from his job on December 23, 2015, that he had applied for unemployment benefits, and that he anticipated receiving benefits in the amount of $664 per week. He sought modification of the spousal support because his income would be reduced. However, in the two years leading up to the hearing on his RFO, Husband resisted all discovery requests served on him to determine his income or reduction of same, requiring multiple meet-and-confer letters and a motion to compel in order to obtain relevant information.

At trial on the RFO, the parties stipulated they would only present evidence on factors alleged to have changed during the intervening period after the 2013 spousal support order. Husband testified he currently works as a handyman and had done so for two years, although previously he worked for DCP Company, owned by his brother-in-law. Husband claimed he earned $70,000 at DCP. However, on December 23, 2015, he “agreed to a no layoff situation,” and was “fired.” However, Wife had received written communication from Husband’s brother-in-law in November 2015, stating that Husband had a part-time job and that he would be leaving his DCP job in mid-December.

On cross-examination, Husband acknowledged his 2015 tax return showed wages in the amount of $118,820. His 2015 tax return showed an adjusted gross income of $119,495. In addition, he earned $20,901 from his business, based on gross receipts of $47,347. Yet, Husband denied he started his business in 2015. Instead, he claimed he simply opened business accounts in 2015 for small jobs he did, to which the $47,347 was attributed for work done between September and November 2015.

Husband’s gross income for 2016 was approximately $179,213, with expenses in the amount of $129,117, and a profit of only $50,096. Husband testified that he had income of $57,571. The expenses claimed on the 2016 Form 1040 apparently included several questionable items, including a real estate or royalty deduction of $11,547 for property owned in Costa Rica by his current wife, whom he married in 2016, and which he claimed as a deduction. On the 2016 Schedule C, Profit or Loss from Business form, he claimed $9399 as depreciation for tools, equipment, machinery and a trailer, and $6318 for car and truck expenses, although he did not pay any out of pocket expense. He acknowledged that these deductions would have to be added back in as income.

He also indicated on his 2016 Schedule C form that he spent $10,571 for legal and professional services, which he described as “professional accounting services,” claiming he spent $1000 per month for an accountant. However, he later admitted he ran his business out of his current wife’s home, where she kept all the books, maintaining records on Quicken or QuickBooks. She printed out a report, which was sent to the accountant in order to prepare the tax returns.

On his business Profit and Loss statement for 2016, he claimed utilities in the amount of $2021 as a business expense, although it was for the personal residence. After adding back deductions that were not allowable, his net earnings were $77,904, for an average monthly amount of $6499.50, which would leave a surplus, based on the monthly expenses of $3465 claimed on his Income and Expense Declaration, from which spousal support could be paid.

Wife testified she was still employed by ARS, but now earned $15.50 per hour. She has looked for other employment, and even had interviews, but has been unsuccessful, possibly because she is overqualified Her monthly income is $2634, while her expenses are $3270, requiring her to take out $1354 per month from her retirement fund in order to barely meet her monthly needs. She also had to make a one-time withdrawal of $30,555.56 in 2017 to reduce her credit card debt after her recent diagnosis of cancer; the withdrawals from her retirement accounts were to pay bills after Husband stopped making spousal support payments. She has $25,000 left in one retirement account, and $200,000 in a 401k retirement account, and had to reduce her contributions to the 401k account to one percent, instead of eight percent, which she was making while she received support payments.

Wife has had to start living off her credit cards when Husband stopped payment support. She has difficulty paying her bills and cannot afford to travel to visit her daughter and grandchildren, or buy gifts for the family. Wife was diagnosed with follicular cancer in April 2017, while awaiting trial in this matter, and after surgery in June 2017 to remove two lymph nodes, the diagnosis was confirmed in July 2017. At age 62, Wife is not in a financial position to retire.

The court issued its Statement of Decision on March 5, 2018. Like the court that ordered the original spousal support in 2013, the trial court here concluded that Husband was not forthcoming in providing or complying with discovery obligations, and was not forthright with the court regarding his income. It concluded Husband had shown a change, but not a substantial change of circumstances warranting termination or reduction of spousal support.

In reaching this conclusion, the court found Husband’s 2016 (and presumably the 2017, given Husband’s testimony that his income for 2017 was similar to 2016) income is comparable to his 2015 income, where Husband’s income on that return was $118,000 in wages and $47,000 in gross business income. The court also found Husband inappropriately claimed $10,571 for business expenses, $9,399 for depreciation, the entirety of the vehicle expenses, and business expenses claimed to be for attorney fees and bookkeeping services, where his second wife performed those services. In short, the court found those expenses unduly inflated.

The court went on to hold that Husband has a spouse, working for his business, and they live in a state without state income tax, leaving Husband with disposable/discretionary income. The court also concluded that Wife continues to have a need, and based on her medical issues, her reduced monthly income from her employment, and her expenses, it found her standard of living had been significantly reduced from that of the marital standard of living at the time of separation. The court concluded that considering the entirety of the testimony and other evidence, there had not been a substantial change in Husband’s ability to pay spousal support, nor was there a change of circumstances in Wife’s need for support. Spousal support was ordered to continue until re-marriage of Wife, further order of the court based upon a significant change of circumstances, or the death of either party.

The court also found that Wife’s requests for sanctions for discovery violations and pursuant to Family Code section 271 were warranted; it merged the discovery sanctions with the Family Code section 271 sanctions as attorney’s fees in the amount of $14,000, payable at $400 per month commencing May 15, 2018, and continuing until paid in full, with an acceleration clause in case any payment became ten days overdue.

Husband timely appealed.

DISCUSSION

On appeal, Husband argues that the court abused its discretion in denying his request to modify (terminate) spousal support. Specifically, he argues (1) the court failed to consider the standard of living of the parties at the time of the original judgment; (2) presumptions made by the court are not supported by the evidence; (3) the court failed to consider that Wife was able to withdraw funds from her retirement account; and (4) Wife did not make reasonable attempts to become self-supporting. We disagree.

A party moving to modify or terminate spousal support has the burden to show a material change in circumstances. (In re Marriage of West (2007) 152 Cal.App.4th 240, 246.) A change in circumstances “means a reduction or increase in the supporting spouse’s ability to pay and/or an increase or decrease in the supported spouse’s needs. It includes all factors affecting need and the ability to pay.” (Ibid.) A supported spouse’s receipt of additional income in the form of retirement benefits may constitute a change in circumstances. (In re Marriage of Shimkus (2016) 244 Cal.App.4th 1262, 1274–1276.)

“The trial court has broad discretion in deciding whether to modify a spousal support order based upon changed circumstances.” (In re Marriage of Swain (2018) 21 Cal.App.5th 830, 836.) In exercising its discretion, the trial court considers the same criteria set forth in Family Code section 4320 as it was obligated to consider in making the initial support order. (In re Marriage of Shaughnessy (2006) 139 Cal.App.4th 1225, 1235.) However, a modification order must be “based on current facts and circumstances.” (In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 592.)

In exercising its discretion, a trial court must “follow established legal principles and base its findings on substantial evidence.” (In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 47.) “If the trial court conforms to these requirements its order will be upheld whether or not the appellate court agrees with it or would make the same order if it were a trial court.” (Id. at p. 47.) However, “a court abuses its discretion if its findings are wholly unsupported, since a consideration of the evidence ‘is essential to a proper exercise of judicial discretion. [Citation.]’” (In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 197, quoting Johns v. City of Los Angeles (1978) 78 Cal.App.3d 983, 998; see also, In re Marriage of Swain, supra, 21 Cal.App.5th at pp. 836-837.)

Husband’s premise that he established a change of circumstances does not support his conclusion that a modification or termination of spousal support was thereby required. “‘A modification of spousal support cannot be granted in the absence of proof of a change in circumstances. However, the converse is not true; a showing of changed circumstances does not necessarily mandate a modification of spousal support.’ [Citation.]” (In re Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1484.)

“‘Modification of spousal support, even if the prior amount is established by agreement, requires a material change of circumstances since the last order.’ [Citation.]” (In re Marriage of Dietz (2009) 176 Cal.App.4th 387, 396, italics added.) “‘Change of circumstances’ means a reduction or increase in the supporting spouse’s ability to pay and/or an increase or decrease in the supported spouse’s needs.” (Ibid.) “It includes all factors affecting need and the ability to pay.” (In re Marriage of McCann (1996) 41 Cal.App.4th 978, 982.)

Here, Husband does not argue that the trial court erred in concluding he failed to show a significant (or material) change of his own circumstances, choosing, instead, to challenge the court’s findings relating to Wife’s need. Wife’s need (or Husband’s contention she lacked same) was not the basis for his RFO. We therefore assume that the trial court’s findings as conclusions as to Husband’s earnings and lack of forthrightness regarding his income are correct. We proceed to address Husband’s individual attacks on the Statement of Decision.

a. Court Properly Did Not Consider the Standard of Living of the Parties at the Time of the Original Judgment and Wife’s Failure to Become Self- Supporting Because the Parties Stipulated Otherwise.
b.
Husband’s first challenge is that the trial court failed to consider the parties’ standard of living at the time of the original judgment. We disagree for two reasons. First, the court took judicial notice of the original stipulated judgment and the subsequent modification of spousal support, where the parties’ standard of living was established, and the court expressly found that Wife’s standard of living had been significantly reduced from that of the marital standard of living at the time separation.

Second, the issue of the parties standard of living at the time of the original judgment was waived by a stipulation by the parties at the inception of the hearing on Husband’s RFO, by which they agreed to limit trial to the Family Code section 4320 circumstances related to changed circumstances. Specifically, after agreeing there was a previous spousal support trial, Husband’s counsel noted wife “had requested judicial notice of that.” Husband’s counsel went on to inform the court that he and Wife’s counsel “agreed that we would use this time to talk about the changes since that order.”

The stipulation to limit evidence to the circumstances that changed after the initial spousal support order waives any right to have the court consider the same. (See In re Marriage of Rodriguez (2018) 23 Cal.App.5th 625, 639 [father’s stipulation to admission of a letter into evidence waived any challenge to the admissibility of same].) A stipulation is a consent. (Id. at p. 638) Husband’s consent waived any right to argue that the court should have considered circumstances pre-dating the 2013 spousal support order.

c. Husband’s Claim re Erroneous Presumptions Not Supported by Evidence.
d.
Husband’s next challenge takes issue with a statement in the written decision indicating that “[u]ntil trial, Petitioner’s counsel had suggested that Mr. Succow had voluntarily left the employment to reduce his income.” This was an accurate statement, referring to Wife’s trial brief, where Wife’s counsel stated that “Respondent has voluntarily quit his job in order to start a business,” after citing In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 825, for the proposition that “earning capacity usually is considered in setting spousal support only where the record shows the supporting spouse has deliberately attempted to avoid family financial responsibilities.”

The trial court was merely reciting the respective positions of the parties in summarizing the testimony from trial. It went on to summarize Husband’s testimony that he was fired. The statement is a fair description of the positions of the parties. The trial court made no findings or conclusions related to the nature of the termination of Husband’s employment with DCP Company, and thus engaged in no erroneous presumptions. There were no erroneous presumptions.

e. Court Was Not Required to Consider the Wife’s Withdrawal of Funds From Her Retirement Account In Balancing the Section 4320 Factors.
f.
Husband argues that the fact Wife was withdrawing funds from her retirement accounts, coupled with Husband’s reduced income (which was not established by the evidence) showed a change of circumstances, and that the court failed to consider the accessibility of retirement funds. We disagree, again, for two reasons.

First, although the court noted no documents relating to the retirement funds were produced, it discussed Wife’s testimony on the issue of having to withdraw from her retirement funds to make ends meet. This contradicts Husband’s statement that the court did not consider Wife’s retirement accounts. But this does not mean Wife had a reduced need for support. The second part of the factor is whether these funds were additional funds or funds that had increased since the original support order.

Wife was forced to withdraw funds from a retirement account awarded to her as part of the property settlement agreement, entered into in 2012. As such, it does not represent an increase in her earning ability or a reduction in her need for support. In other words, the availability of those funds to her is not a material change in circumstances. The accessibility and possible increase in value of retirement accounts that were part of the property division, are considered part of the parties’ expressed reasonable expectations in entering the stipulated judgment and cannot constitute a material change of circumstances. (In re Marriage of Dietz, supra, 176 Cal.App.4th at p. 400.)

Thus, where the income is from a community property source that was awarded to wife in the property settlement, it is not considered a change of circumstances. (In re Marriage of Norvall (1987) 192 Cal.App.3d 1047, 1061, citing In re Marriage of Kuppinger (1975) 48 Cal.App.3d 628, 635.)

The trial court did consider and acknowledge that Wife had to deplete her retirement savings to make ends meet, but properly did not consider those funds as establishing a reduced need for support.

g. Husband Failed to Carry His Burden of Proving that Wife Had the Opportunity to Become Self-Supporting.
h.
Husband argues that the court failed to mention Wife’s inability to become self-supporting despite testimony that the 2012 judgment in the dissolution had set spousal support at a minimal amount because the parties earned similar wages. Once more, there are two problems with this assertion: First, it refers back to an order that predated the spousal support order that Husband was attempting to modify, contrary to the parties stipulation that the court should consider only changed circumstances after the 2013 modification of spousal support.

Second, it assumes facts not in evidence, and of which Husband had the burden of proof. It is true that a trial court may consider earning capacity in determining spousal support, just as it may with child support. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 642.) This requires the trial judge to balance a number of different factors, as enumerated in the statute. (Fam. Code, § 4320; In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 308.)

However, it is the moving party who bears the burden of showing sufficient facts to establish the change of circumstances that justifies modifying what a previous court order has already wrought. (In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1303; In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556.)

Thus, a party seeking to have higher income imputed to a supported spouse bears the burden of demonstrating opportunity to earn that income: the burden “cannot be met by evidence establishing merely that a spouse continues to possess[] the skills and qualifications that had made it possible to earn a certain salary in the past—even where it was undisputed that the spouse had voluntarily left that prior position.” (In re Marriage of Berger (2009) 170 Cal.App.4th 1070,1079.) “It is not sufficient to demonstrate only what the party had been making before the loss of income; the moving party must also adduce evidence of vocational abilities and employment.” (Mendoza v. Ramos (2010) 182 Cal.App.4th 680, 685-686, citing Bardzik, supra, 165 Cal.App.4th at p. 1295.)

Here, as the party requesting the modification, the burden was on Husband to prove that Wife had the actual opportunity to earn the income sufficient to make her self-supporting that he imputes to her. Wife testified that she had continued to seek better employment at a salary comparable to her Union Bank job, from which she was terminated in 2012, since then, without success. Husband did not refute this evidence, or introduce evidence of an employer offering Wife a job paying a salary comparable to her Union Bank salary. Given her recent diagnosis of cancer, her ability to become self-supporting has not been enhanced with the passage of time since the original support order.

Additionally, it is disingenuous for Husband to testify there were no jobs that would hire him at a salary comparable to what he earned at DCP Company because of his age (62 years), while he apparently believes Wife should have no difficulty in the same respect despite the fact she is the same age and has cancer. Considering the evidence demonstrating that Husband was not, in fact, earning less than he did in 2015, his argument in the trial court that he had reduced financial means to pay support falls a little flat.

It was Husband’s burden to prove Wife had the ability and opportunity to earn more than she currently earns in order to impute an earning capacity that would allow her to become self-supporting. Having raised no arguments challenging the trial court’s findings as to his earnings or lack of forthrightness about his income, nor any challenge to the imposition of attorney’s fees as sanctions, Husband has failed to meet his burden of proving a material change of circumstances warranting a modification or termination of spousal support or other reversible error.

DISPOSITION

The judgment is affirmed. Wife is awarded costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ

P. J.

We concur:

CODRINGTON

J.

SLOUGH

J.