Douthit v. Jones (In re Douthit)

• Decision Date: 06 August 2015
• Docket Number: B254719
• Court: California Court of Appeals Court of Appeals
• Parties: In re Marriage of RANDALL DOUTHIT and PATRICE JONES. RANDALL DOUTHIT, Respondent, v. PATRICE JONES, Appellant.

In re Marriage of RANDALL DOUTHIT and PATRICE JONES.

RANDALL DOUTHIT, Respondent, v. PATRICE JONES, Appellant.

B254719

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

August 6, 2015

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BD469787)

APPEAL from a judgment of the Superior Court of Los Angeles County, Robert E. Willett, Judge. Affirmed in part, reversed in part, and remanded.

Meyers Nave, Harry W.R. Chamberlain II, Jenny L. Riggs, Mary Tsai; Law Offices of Marjorie G. Fuller, Marjorie G. Fuller; Buchalter Nemer, Harry W.R. Chamberlain II and Robert M. Dato for Appellant.

Trope & DeCarolis, Michael L. Trope, Andrew Stein for Respondent.

INTRODUCTION

After a 12-and-half-year marriage, Randy Douthit (Randy) filed a petition for dissolution of his marriage to Patrice Jones (Patrice).¹ On appeal, Patrice contends that the trial court erred in reducing and ultimately terminating her spousal support payments; in characterizing as separate property Randy's earnings under a post-separation contract; in not permitting her to buy out Randy's community interest in their house in Malibu; in failing to award her reimbursement from community assets for her payment of property taxes on the Malibu house; in undervaluing Randy's business, Douthit Productions (DP); in failing to enter qualified domestic relations orders with respect to Randy's pensions, 401(k)'s, and other retirement accounts; in failing to remedy adequately Randy's breaches of his fiduciary duty; and in its award to her of attorney and expert witness fees.² We hold that the trial court erred in its valuation of DP. We otherwise affirm the judgment.

BACKGROUND³

Randy and Patrice were married on January 28, 1995. They separated 12 and a half years later on July 24, 2007. They did not have any children together. Before the marriage, Randy had a long and successful career in television production for many hit shows. Since 1996, he had been the executive producer of the Judge Judy Show. In 2002, he also became a director of that program. DP loaned Randy's services to BigTicket, Inc., a CBS production company, that produced for television the Judge Judy Show. DP's contract with Big Ticket, Inc. expired in 2013.

Patrice was 21 years old when she met Randy. At the time, she was employed as a freelance model. Randy and Patrice moved in together almost immediately, and, by mutual agreement, Patrice stopped working. They lived together until they married. Randy was earning after taxes more than $1.9 million per year, and they lived an upscale lifestyle. The parties owned houses on Broad Beach Road in Malibu (Malibu house) and Sierra Mar Drive in Los Angeles (Sierra Mar house). They agreed that the houses were community property.

DISCUSSION

I. Spousal Support

Patrice contends that the trial court failed to consider properly the marital standard of living and Family Code⁴ section 4320⁵ factors in awarding permanent spousal supportthat was substantially less than the temporary spousal support she received and in ordering her permanent spousal support terminated after five years and seven months. The trial court acted within its discretion in its support orders.

A. Background

At the outset of the case, Patrice requested and the trial court granted temporary spousal support of $66,301 a month. Patrice's temporary spousal support began on November 26, 2007, and terminated on November 30, 2012. The trial court awarded permanent support of $65,000 for the months of December 2012 and January 2013, and $34,458 for the period from February 1, 2013, through June 30, 2018, at which timepermanent spousal support would cease. The total temporary and permanent spousal support awarded exceeded $6.3 million.

In its statement of decision, the trial court considered the marital standard of living and each of the applicable section 4320 factors. The trial court found that the marital standard of living was upper middle class to affluent. The parties had expensive automobiles, jewelry, furniture, and art; they had two homes; and when they traveled, they enjoyed expensive trips. The trial court also found, "As with other evidence offered to demonstrate the marital standard of living, [Patrice] exaggerated the frequency of such trips."

Patrice was in charge of the parties' finances. During the marriage, Randy was concerned that Patrice was spending beyond their means and asked her several times to reduce her spending, without any apparent impact on her. Randy was concerned about becoming bankrupt and the parties' lack of savings. His financial concerns stemmed from the fact that his income depended on the continued success of the Judge Judy Show, the show's star's willingness to continue on the show, and his own contract renewals.

The trial court found that Randy and Patrice lived beyond their means, and had to borrow to pay such obligations as mandatory retirement plan contributions and taxes. At the date of separation, Randy and Patrice had over $475,000 in debt, exclusive of real estate debt. Additionally, they owed over $300,000 in back income taxes and $179,000 for jewelry.⁶ Randy's defined benefit pension was underfunded due to missed payments. Other than the defined benefit program, the parties had no savings or financial investments. The combined debt on the Malibu and Sierra Mar houses exceeded the houses' combined stipulated market value.

The parties stipulated that Patrice's monthly pre-tax earning capacity was $3,542. They further stipulated that Randy's monthly after-tax income during marriage was$132,000, exclusive of residual and profit sharing income. The trial court found that from all sources of income, Randy had $159,105 a month available for support.

The trial court found that Patrice had a 10th grade education, had not graduated from high school, and did not have a graduate equivalency degree. She stopped working when she and Randy started living together and did not work during the marriage. Her vocational training was in music and entertainment. She took singing and piano lessons. According to Patrice, Randy supported her musical training. Patrice's "career concept" was that she would provide musical support for productions on which Randy worked, including the Judge Judy Show. The trial court found that testimony about Patrice's "career concept" was "very vague" and that it did not appear that the concept ever came to fruition.

During the period from the parties' date of separation to trial, Patrice incurred about $1 million of expenses in connection with her music career against $70,973 in gross receipts.⁷ Virtually all of the money used for Patrice's career expenses came from support Randy paid. Patrice acknowledged her obligation to become self-supporting, but defined career success in terms of the size of her audiences and not the income her performances might generate. The trial court found that "no evidence [had been] offered about a specific plan, program, method, schedule, measurable attainments or other detail about how her career would, should or could further develop. And, there was no evidence offered about needed training or education to develop other, more marketable skills. Indeed, [Patrice] eschewed any interest in other careers, and emphasized devotion to her musical endeavors."

The trial court concluded that Randy's earning capacity was sufficient to maintain the marital standard of living, but that Patrice's earning capacity was not. The trial court ruled that given the length of the marriage and disparity in earning capacity, Randyshould continue to pay support to allow Patrice to "adjust to becoming self-supporting. The court concludes that [Patrice] has not taken advantage of her opportunities to become more self-reliant since separation and that she had taken no serious steps toward becoming self-supporting." In addition to the sums she expended on her music career, Patrice chose to live in the Malibu house, incurring about $30,000 to $33,500 in monthly expenses even though she stipulated that the house's fair monthly rental value was $12,500, and making about $130,000 in improvements to the house. Patrice's decisions to expend such sums, the trial court found, did not suggest a serious attempt to become self-supporting within a reasonable period

Patrice claimed monthly expenses of $111,574 and income of $66,301 (i.e., her temporary spousal support). The trial court found that Patrice's claimed expenses did not evince an outlook that contemplated self-sufficiency. When cross-examined about her expenses, Patrice had difficulty explaining them and became confused about what was included in various expense categories. The trial court concluded that Patrice's expenses were purposely exaggerated to demonstrate a need for support and that she had no intention of becoming self-supporting within a reasonable time. It stated, "That [Patrice] is willing to spend $45,000 more per month than her income (or claim a 'need' to do so) supports the court's conclusion that she has not within the last 5 years made any serious attempt to become self-sufficient and the evidence does not support any basis to conclude she has a present intention to do so in a 'reasonable period of time.'"

Having considered all of the factors under section 4320, the trial court concluded that "it would not be fair or equitable to require [Randy] to pay more for the poor choices [Patrice] has made by squandering so much money on her musical endeavors and by over-spending, for example on housing. The court also exercises its discretion to set spousal support so that [Patrice] may continue to enjoy a high standard of living, but also to...