Opinion
Here we hold the trial court did not abuse its discretion in setting child and spousal support amounts that exceed appellant’s total monthly income. Substantial evidence supports the conclusion that appellant’s extensive property holdings and the existence of special circumstances permit a deviation from codified support guidelines.
Appellant contends that the trial court exceeded its authority by effectively forcing him to sell his ancestral home and other inherited separate property to perpetuate an excessive level of marital spending. Appellant asserts that the trial court also erred in ordering him to make additional support payments for certain housing and educational expenses.
We modify the judgment as to the additional payments ordered, but otherwise affirm.
Factual and Procedural Background
Facts
Christian and Vaughn de Guigne were married in 1984, when Christian was 47 years old and Vaughn was 30.
Christian was born into wealth and social prominence. His family home is a 16,000-square-foot Hillsborough mansion built by his grandfather in 1918. The residence is surrounded by 47 Va acres of land containing hiking trails, streams, wildlife, and gardens, in a setting of extraordinary quiet and privacy. The house has multiple bedrooms, 11 bathrooms, a ballroom, pavilion, formal dining room, library, and swimming pool. It contains valuable artwork, jewelry, furnishings and other items of personal property collected by Christian’s parents and grandparents.
When Christian and Vaughn met in the early 1980’s, Christian was not employed and had not worked since 1972. He relied on income from securities and family tmsts. From 1964 to 1984, he lived in a Telegraph Hill house purchased with money from his father. Vaughn was also bom in Hillsborough in very comfortable circumstances. However, due to her parents’ divorce, Vaughn’s standard of living was reduced when she was a teenager. Although she had a master’s degree in art therapy when she met Christian, Vaughn was doing part-time volunteer work and was supported by a stock portfolio established by her father.
Christian inherited the Hillsborough property and its contents. He and Vaughn moved into the mansion shortly before their marriage and lived there together until Christian moved out in 1996. The family maintained an opulent lifestyle.
According to Vaughn, Christian insisted on a lifestyle similar to that enjoyed by his parents and expected Vaughn to emulate the very high standards of dress and fashion set by his mother. Christian strenuously disputed this assertion and recounted unsuccessful attempts to curtail his wife’s spending. It is clear, however, that neither parent worked and the court found that annual household expenses averaged $450,000, consistently exceeding Christian’s annual income of $240,000 from securities holdings and family trusts. Christian had sole control over the family finances and consistently liquidated his separate property assets during the marriage. Between 1986 and 1997, Christian withdrew over $4 million from his securities account. He also sold an antique knife collection for $425,000 and his Telegraph Hill house for $725,000. Some of the proceeds were used to meet household expenses.
The marriage generated no community property. Christian testified that his separate property Hillsborough estate was worth $8.5 million. Vaughn’s appraisal experts placed the value at $25 million to $30 million if the house and land were sold as a unit. According to expert testimony, the value of the home on seven and one-half acres would be $7.5 million to $10 million, and the remaining 40 acres would be worth $15 million or more. The real estate is by far Christian’s most significant asset. The corpus of Christian’s primary family trust was valued at an estimated $3.8 million at the time of trial, but these assets are not under Christian’s control. Vaughn’s securities account was worth $260,000 at the time of trial.
Support Orders
The issues of child and spousal support were tried before a retired judge sitting pro tempore by stipulation of the parties. Vaughn sought an award of child and spousal support in excess of $32,000 per month, in addition to the costs of housing and household help which she contemplated would be added to Christian’s support obligation once her permanent residence was determined. Applying statutory guidelines to his annual trust and securities income of $240,000, Christian requested an order for child support of $4,844 per month and monthly spousal support of $6,706. In addition, he expressed a willingness to pay for the children’s tuition and other education expenses. Subject to certain conditions, he proposed that Vaughn and the children remain in the Hillsborough residence, with reduced household staff. On his income and expense declaration, Christian listed his own monthly living expenses as $13,313. This sum included $1,470 for dues in six private clubs.
The trial court ordered Christian to pay $15,000 per month in child support and $12,500 per month in spousal support beginning when Vaughn obtained rental housing. The court also required Christian to pay all the children’s private school tuition and tutoring expenses, and to pay Vaughn a lump sum of $30,000 to cover rental deposits and furniture purchases. A judgment of dissolution in accordance
Discussion
I. Appealability
Vaughn challenges our jurisdiction to hear Christian’s appeal under Code of Civil Procedure section 904.1. According to Vaughn, the judgment is neither final nor appealable because it includes a provision specifying that Vaughn’s prospective move into rental housing might constitute a changed circumstance warranting modification of support. Initially, the trial court expressed reluctance to set permanent support terms without knowing what Vaughn and the children’s actual expenses would be. The modification provision incorporated in the final judgment addresses this uncertainty.
Inclusion of this language does not render the judgment nonappealable. The judgment created enforceable rights and obligations modifiable as provided by statute. Any support judgment may be modified in light of changed circumstances. (See Fam. Code, § 3651.)
II. Child Support
A. Background
Statutory guidelines regulate the determination of child support in California. (See §§ 4050-4203; In re Marriage of Fini (1994)
Section 4053 makes clear that the court’s paramount concern in adhering to or departing from the guideline amount must be the interests of the children: “(a) A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life[;] [f] (b) Both parents are mutually responsible for the support of their children[;] HQ . . . [f] (d) Each parent should pay for the support of the children according to his or her ability[;] flO (e) The guideline seeks to place the interests of children as the state’s top priority[;] [^] (f) Children should share in the standard of living of both parents. Child support may therefore appropriately improve the standard of living of the custodial household to improve the lives of the children. . . .”
Here, the court awarded child support in an amount three times greater than the guideline provides, citing section 4057, subdivision (b)(5) as the basis for this departure. That provision permits a deviation from the guideline if the court finds that “[application of the formula would be unjust or inappropriate due to the special circumstances of the particular case.” The question, then, is whether special circumstances support the deviation here.
The court found that a $4,844 per monthly child support award would subvert the overriding principle behind the support guideline. It would not serve the interests of the de Guigne children, which must remain paramount. Those interests
Our review is limited to determining whether the court’s factual determinations are supported by substantial evidence and whether the court acted reasonably in exercising its discretion. (McGinley v. Herman (1996)
B. Special Circumstances
(3a) reliance on special circumstances as a basis for an award exceeding guideline amounts. Section 4057 (b) provides that any deviation from the guidelines must be consistent with the principles in section 4053, which designates interests of the children as a top priority and provides that parents should support their children at a level commensurate with their ability. These principles seem primarily to mitigate against downward deviation.
Further, section 4057 does not catalogue all of the special circumstances in which the formula amount would be inappropriate. The words “including, but not limited to” reflect the Legislature’s intent to give courts broad discretion to determine when such circumstances apply. According to the bill’s author, 1993 legislative amendments putting section 4057 in its present form were designed to clarify that courts retain their “traditional discretionary authority” to adjust child support orders according to the circumstances of each case. (Letter from Sen. Gary Hart, appen. to Court of Appeal’s decision in In re Marriage of Fini, supra, 26 Cal.App.4th at pp. 1045-1046.)
Marital Overspending
According to Christian, marital overspending is not a special circumstance warranting application of section 4057. For this proposition, he relies primarily on In re Marriage of C. (1997)
Marriage of C. does not assist Christian. The court there was not faced with the question of how guideline support would impact the children’s standard of living, but instead with how payment would affect the supporting parent. In fact, the Marriage of C. court stressed that the statutory scheme seeks to mitigate the financial impact of divorce on the children, not the parents. (Marriage of C., supra, 57 Cal.App.4th at pp. 1106, 1107, fn. 3.) Christian’s suggestion that a drastic reduction in the children’s lifestyle can never constitute a special circumstance flies in the face of this statutory priority.
Christian’s reliance on Simpson and Smith is likewise misplaced as both aré readily distinguishable. Each involved a couple that lived on the income produced by the husband’s salary. In order to support the couples’ chosen lifestyle the husbands worked extraordinary hours. The wives maintained that, following dissolution, their support levels should reflect the marital standard. Both couples lived beyond their means, in the sense that they depended upon the income derived from a salary and that exceptionally burdensome work schedules were required to generate the salary needed. Both the Simpson and Smith courts concluded that a lifestyle supported in such a fashion was unreasonable.
This case presents a different paradigm. Here the de Guignes did not support themselves by working. Christian held a variety of assets, some of which produced income and some of which were sold to generate liquid capital. Christian financed the family’s lifestyle in this fashion throughout the marriage, generating well over $4 million. By the time of the dissolution non-real-estate sources had been substantially depleted. The trial court concluded that throughout the marriage, Christian had chosen to live on money beyond that generated by investments. Thus, it was inappropriate that Christian’s support obligation be based on that investment income alone, while he sheltered and benefited from substantial assets that produced no income. Rather, the court found it more consistent with the statutory principles of child support for the court to consider all of Christian’s assets in determining his earning capacity.
In evaluating the court’s decision, In re Marriage of Destein (2001)
The trial court based its child support award, in part, on earning capacity attributed to the husband’s real estate holdings. In upholding the award the appellate court noted that section 4058 expressly authorizes the court to attribute income even if there is no evidence that a supporting parent has taken steps to reduce his or her income. (Destein, supra,
The recent case of In re Marriage of Cheriton (2001)
Disparity in Living Arrangements
The trial court found that application of the formula would compel the children to reside in rental housing while Christian continued to live in his separate property mansion and enjoy the use of $25 million to $40 million in non-income-producing assets. Christian attacks the court’s conclusion that these facts constitute a special circumstance. According to Christian, such circumstances are not special because an imbalance between the separate property assets of the spouses at the end of a marriage is not unusual, nor is it uncommon for one spouse to live in rental housing while the other lives in a separate property home. Christian’s characterization of the operative facts, however, glosses over the huge quantitative disparity that lies at the heart of the trial court’s decision.
The Hillsborough property is not a typical residence. It rests on substantial acreage situated in one of the most exclusive and desirable locations in the Bay Area. According to credible expert testimony, selling 40 acres of the property and investing the proceeds could yield sufficient income
C. Justifying Increases over Guideline Amount
Christian contends that, even if special circumstances exist, the court abused its discretion by failing to tie the elevated child support levels to specific unmet needs of the children. According to Christian, the statute contemplates that “the court begins with guideline support and increases it only with reference to specific unusual needs.” Although we agree that a court cannot arbitrarily impose an above-guideline support amount, we decline to read into the statute a requirement that each dollar above guideline must in all cases be earmarked for a specific purpose. The only statutory requirement when a court departs from the guidelines is that specified in section 4056, subdivision (a). That provision calls for specific articulations either in writing or on the record of the guideline amount, the reasons for a deviation and how the deviation is consistent with the children’s best interest.
When the trial court identifies a child’s unusual need as a special circumstance under section 4057, subdivision (b)(5)(C), the increase allowed should, of course, be limited to covering the expense involved. This was not such a case. Here, the court was not focusing on specific unmet needs, but was attempting to mitigate an overall decline in the children’s standard of living. The $15,000 child support awarded was rationally related to the children’s predissolution standard of living and expenses, and to Christian’s ability to pay. Substantial evidence supports the court’s factual findings.
D. Reliance on Separate Property
Christian argues that the court’s order improperly requires him to pay support from his separate property. His argument misses the mark for two reasons. First, this marriage produced no community property. Any order would be satisfied from Christian’s separate property, just as that property supported the family during the marriage. The fact that no community property came from the marriage does not relieve Christian of his support obligation.
Second, Christian urges that the court “has no jurisdiction” over his separate property. He cites the proper rule in the wrong context. During a dissolution proceeding, the court must make any number of decisions. Among these are division of community property and determination of postdissolution child and spousal support. In dividing the marital estate, the court’s authority is limited. The court has jurisdiction to divide community property and to confirm separate property to each spouse. (In re Marriage of Braud (1996)
E. Conclusion
Christian urges that his daughters should live on a much reduced level based solely on the income his investments and trusts generate. His argument overlooks several key facts. The reduced lifestyle is very different from the one he consistently chose to provide for his children throughout their life. He never elected to support his family based on his investment income alone. He will be able to retain a property worth millions of dollars and continue to live in an exceptionally comfortable setting as a result.
The trial court’s order does not force Christian to work exhausting hours, or any hours at all. Instead he is required to continue supporting his family at a level approaching the one he established and maintained over many years, to the extent his circumstances make possible. He may choose to meet this obligation in a variety of ways. Among his options are working, continuing to alienate assets or converting some holdings to produce income.
Section 4053 gives a court great latitude in applying its principles to individual cases. In outlining relevant considerations, the Legislature did not limit the guidelines simply to parental income from salary, return on investment, or from any other particular source. Rather, it adopted the broader concepts of station in life, ability to pay, and standards of living.
The court considered Christian’s circumstances and station in life, his ability to pay support, the best interests of his children and the degree to which his daughters will share in his own standard of living. The special circumstance operative here is not just that the de Guignes lived opulently during the marriage, but also that Christian has the ability to continue to support his children at quite a comfortable level consistent with his station in life. The court concluded it would not be in the children’s best interest to have their lives changed so radically while their father sheltered, and continued to enjoy, a substantial asset that produced no income.
We are not called upon to determine whether we would have made such an award, but whether any judge could reasonably have done so. Based on this record we cannot conclude the order exceeds the bounds of reason. (Smith, supra, 225 Cal.App.3d at pp. 479-480.)
III. Spousal Support
In challenging the court’s $12,500 monthly spousal support award, Christian reiterates his argument that marital expenditures cannot be used as a reference point because the family was living beyond its means during the marriage.
A family court has broad discretion to determine an amount of spousal support that is “just and reasonable, based on the standard of living established during the marriage.” (§ 4330.) “ ‘A trial court’s exercise of discretion will not be disturbed on appeal unless,
Here, Christian estimated that he would need approximately $150,000 per year to live on if he moved back into his Hillsborough residence and reduced his expenses. We cannot say that it was an abuse of discretion for the trial court to order the same level of support for Vaughn, who will have to cover housing costs out of that amount.
IV. Additional Support
The trial court’s support order included two additional elements that Christian contends are unauthorized by statute: (1) a lump-sum award of $30,000 (comprised of $10,000 in child support and $20,000 in spousal support) for payment of any required rental housing deposit, with the remaining balance to be used for purchasing furniture; (2) a requirement that Christian pay 100 percent of the children’s private school tuition and tutoring. We agree in large part with Christian’s contentions.
Regarding child support, a trial court has no discretion to fashion its own add-ons in the absence of statutory authorization. (Boutte v. Nears (1996)
Section 4062 specifically authorizes as additional child support “[c]osts related to the educational or other special needs of the children.” However, section 4061 specifies that any amounts ordered to be paid under section 4062 must either (1) be apportioned one-half to each parent; or (2) if either parent objects to such apportionment and the court finds it appropriate, be divided in proportion to the parents’ respective incomes adjusted as specified for child and spousal support payments. (§ 4061, subds. (a), (b), (c), (d).) In this case, apportionment based on the parties’ adjusted incomes would have resulted in apportioning 100 percent of these costs to Vaughn rather than to Christian. Accordingly, we agree with Christian that the order regarding educational expenses is in
Disposition
We modify the judgment as follows: (1) appellant’s obligation to make a lump-sum payment for rental deposits and furniture is reduced to $20,000 in spousal support only, with appellant to receive timely credit against his spousal support obligations for any portion of the lump-sum payment the landlord returns or applies to cover rent; (2) the children’s private school tuition and tutoring expenses shall be paid equally by each parent. In all other respects, the judgment is affirmed. Each party to bear its own costs on appeal.
McGuiness, P. J., and Parrilli, J., concurred.
A petition for a rehearing was denied May 24, 2002.
Notes
Because the parties share a common surname we use their given names to avoid confusion.
Unless otherwise indicated all further statutory references are to the Family Code.
The parties also cite Johnson v. Superior Court (1998)
Christian contends that Vaughn cannot complain about being forced into lesser housing because he proposed that the children remain in the Hillsborough home. However, as the trial court found, the conditions attached to Christian’s proposal, including reduced household help and limitations on Vaughn’s ability to refurbish and use the property, made this alternative unworkable.
