McHugh v. Orange County Department of Child Support Services
231 Cal. App. 4th 1238
| Cal. Ct. App. | 2014Background
- Charles and Connie McHugh separated; initial temporary child support (Nov 2009) was set based on Charles’s Amcor income of $24,159/month.
- Charles later claimed income fell after losing a major client and then was fired by Amcor in April 2011; he obtained lower‑paying employment and sought to reduce support.
- Amcor investigated and concluded Charles diverted business to his father’s competing company and shared commissions; Charles admitted misconduct to Amcor but refused employer conditions (full disclosure, restitution, last‑chance agreement) and was terminated; Amcor sued him and his father.
- Connie argued Charles’s termination was effectively a voluntary divestiture to avoid support and asked the court to impute income to Charles at his prior Amcor level; the trial court granted Connie’s request and denied Charles’s reduction motion.
- On appeal, the Court of Appeal affirmed, holding the trial court reasonably exercised discretion under Fam. Code §4058(b) to impute income based on prior earnings where termination reflected deliberate divestiture and imputation served the child’s best interests.
Issues
| Issue | Plaintiff's Argument (Charles) | Defendant's Argument (Connie) | Held |
|---|---|---|---|
| Whether trial court erred in refusing Charles’s request to reduce support after job loss | Charles lacked present ability/opportunity to keep Amcor job; therefore support should be reduced to his lower current income | Charles bore burden to show he lacked ability/opportunity; Amcor offered conditions to keep job that Charles did not show he could not satisfy | Held: Court reasonably found Charles failed to meet burden; substantial evidence he could have kept job but refused conditions |
| Whether income may be imputed based on prior earnings when parent was terminated | Court cannot impute prior earnings absent evidence of present opportunity to earn same income | Court may impute prior earnings when parent’s exit/termination reflects voluntary divestiture of resources needed for support and imputation is in child’s best interest | Held: Imputation permissible here because Charles’s misconduct aimed at reducing support and he refused to accept conditions to retain job |
| Allocation of burdens when modifying support (reduce v. increase) | Charles argues Connie had to show he had present means to meet employer conditions | For increase (payee moving), payee must show payor has ability/opportunity to earn imputed income; payor must show inability only when seeking reduction | Held: Correct allocation — moving party bears burden; Connie met burden to show ability/opportunity; Charles failed to show inability |
| Whether Connie’s earlier motion to set aside bars her later counter to increase support (res judicata) | Charles: Earlier denial precludes relitigation; Connie should be barred from increasing support now | Connie: Earlier motion sought to set aside based on alleged fraud at the earlier date; counter sought relief based on changed circumstances (post‑March 2011 facts) | Held: No res judicata — the two proceedings raised different issues; trial court could consider changed circumstances and impute income |
Key Cases Cited
- In re Marriage of Regnery, 214 Cal.App.3d 1367 (1989) (imputing prior earnings where parent voluntarily abandoned employment to evade support obligations)
- In re Marriage of Padilla, 38 Cal.App.4th 1212 (1995) (affirming imputation when parent left job and failed to show new venture produced income; parent cannot divest earning ability at child’s expense)
- In re Marriage of Ilas, 12 Cal.App.4th 1630 (1993) (imputation to parent who left prior employment for schooling; parent must still meet support obligations)
- In re Marriage of Eggers, 131 Cal.App.4th 695 (2005) (refused imputation where misconduct causing termination did not equate to deliberate divestiture sufficient to impute prior earnings)
- In re Marriage of LaBass & Munsee, 56 Cal.App.4th 1331 (1997) (moving party must show ability and opportunity to earn imputed income; payor need not prove they would have obtained the job)
- In re Marriage of Bardzik, 165 Cal.App.4th 1291 (2008) (discussing burden allocation and relevance of motivation; ability and opportunity are central)
- In re Marriage of Smith, 90 Cal.App.4th 74 (2001) (statutory guideline overview and scope of discretion to consider earning capacity)
- Mendoza v. Ramos, 182 Cal.App.4th 680 (2010) (defining earning capacity as ability and opportunity; current opportunity evidence often required)
- Leung v. Verdugo Hills Hospital, 55 Cal.4th 291 (2012) (review standard: resolve conflicts in evidence in favor of prevailing party; substantial‑evidence review)