In re Marriage of Cheriton

Decision Date14 September 2001
Docket NumberNo. H019424.,H019424.
Citation111 Cal.Rptr.2d 755,92 Cal.App.4th 269
CourtCalifornia Court of Appeals Court of Appeals
PartiesIn re the Marriage of David R. and Iris M. Fraser CHERITON. David R. Cheriton, Respondent, v. Iris M. Fraser, Appellant.

Richard Sherman, Berkeley, De Goff & Sherman, James T. Danaher, Santa Cruz, Attorneys for Appellant.

Bernard N. Wolf, San Francisco, Bradford Baugh, Los Altos, Baugh & Goodley, Attorneys for Respondent.

WUNDERLICH, J.

This is a marital dissolution action. At issue on appeal are child support, spousal support, and attorneys' fees. Because the trial court erred in setting support and in denying fees, we reverse and remand.

FACTS AND PROCEDURAL HISTORY

Appellant Iris M. Fraser ("Iris") and respondent David R. Cheriton ("David") were married in February 1980.1 They have four children, all born between 1980 and 1988.

Iris performs and teaches music. David is a professor of computer science at Stanford University. David is also a researcher and an inventor. In addition, he works as a consultant to Cisco Systems, Inc. David's business relationship with Cisco began when he and a partner sold Cisco their business, Granite Systems, Inc. As a result of his work with Cisco, David received a substantial number of vested Cisco stock options, valued at more than $45 million as of the time of trial.2

Iris and David initially separated in 1986, but they reconciled in 1988. At the time of their reconciliation, the parties entered into a Post Nuptial Agreement ("the agreement"). The agreement defined the parties' property rights. For the most part, future property acquisitions and earnings would constitute separate property under the agreement. The parties agreed that all of David's income would be his separate property, except his salary and employee benefits from Stanford University (or an equivalent position), while half of Iris's earnings would be community property. The agreement also required Iris to actively pursue employment to maximize her income, consistent with the needs of the parties' children. Although Iris subsequently challenged the agreement, its validity was upheld.

Iris and David separated again in 1994. David petitioned for dissolution of the marriage. The parties stipulated that David would pay temporary child support of $2,171 per month and temporary spousal support of $689 per month. Iris and the four children moved from the family residence into a small rented house. The children shared the bedrooms, while Iris slept in the living room on a sofa bed. David remained in the family home.

Eventually, the parties stipulated to a dissolution judgment, which was filed by the court in December 1997. The judgment resolved many issues in the parties' dissolution action, including the division of property. The judgment also required David to create a trust for the children, funded by Cisco stock, to provide for specified educational and housing needs.3 Child support and spousal support issues were bifurcated for later trial, as was the issue of attorneys' fees incurred by Iris after November 20, 1997.

In May 1998, a one-day trial was conducted on the reserved support and fee issues. The parties offered evidence and argument on the child support and spousal support issues. The trial judge closed the hearing at the end of the court day, indicating that she would "deem the matter submitted except for the issue of attorney's fees which we've submitted in writing."

In June 1998, the court issued a detailed statement of decision, to which Iris objected on various grounds. In July 1998, the court issued an amended statement of decision, which was consistent with its initial statement of decision in all material respects. In it, the court: (1) made findings with respect to David's income and assets, including his stock and stock options; (2) made findings regarding Iris's income and earning potential and her assets; (3) imputed income to Iris based on her earning potential; (4) considered the effect on support of the children's trust, which was to be created as part of the property settlement; (5) analyzed the marital standard of living; (6) refused to impute income based on the parties' ownership of stock options; (7) ordered David to pay child support of $2,292 per month for the four children; (8) established detailed procedures for future modifications of child support; (9) set spousal support for Iris at $2,000 per month with automatic reduction and termination provisions; and (10) ordered each side to bear its own attorneys' fees.

In October 1998, the court entered formal judgment consistent with the amended statement of decision. This appeal by Iris ensued.

ISSUES ON APPEAL

Challenging specific aspects of the judgment, Iris claims that the trial court erred in setting child support and spousal support and in refusing to award her attorneys' fees. Her specific challenges to the judgment are discussed in detail below.

STANDARD OF REVIEW

We apply the abuse of discretion standard to all of the issues presented.

First, child support awards are reviewed for abuse of discretion. (See, e.g., In re Marriage of Wood (1995) 37 Cal.App.4th 1059,1066, 44 Cal.Rptr.2d 236; In re Marriage of Chandler (1997) 60 Cal. App.4th 124, 128, 70 Cal.Rptr.2d 109.) We observe, however, that the trial court has "a duty to exercise an informed and considered discretion with respect to the [parent's child] support obligation. . . ." (In re Marriage of Muldrow (1976) 61 Cal. App.3d 327, 332, 132 Cal.Rptr. 48.) Furthermore, "in reviewing child support orders we must also recognize that determination of a child support obligation is a highly regulated area of the law, and the only discretion a trial court possesses is the discretion provided by statute or rule. [Citations.]" (In re Marriage of Butler & Gill (1997) 53 Cal.App.4th 462, 465, 61 Cal.Rptr.2d 781.) In short, the trial court's discretion is not so broad that it "may ignore or contravene the purposes of the law regarding . . . child support. [Citations.]" (County of Stanislaus v. Gibbs (1997) 59 Cal.App.4th 1417, 1425, 69 Cal. Rptr.2d 819.)

We also apply the abuse of discretion standard in assessing Iris's challenges to the award of spousal support. "In awarding spousal support, the court must consider the mandatory guidelines of section 4320. Once the court does so, the ultimate decision as to amount and duration of spousal support rests within its broad discretion and will not be reversed on appeal absent an abuse of that discretion. [Citation.]" (In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 93, 91 Cal. Rptr.2d 374, fn. omitted.)

Finally, attorneys' fee awards in marital dissolution cases are also reviewed for an abuse of discretion. (In re Marriage of Drake (1997) 53 Cal.App.4th 1139, 1166, 62 Cal.Rptr.2d 466.)

DISCUSSION
1. Child Support.

California has a strong public policy in favor of adequate child support. (See, e.g., County of Kern v. Castle (1999) 75 Cal. App.4th 1442, 1455, 89 Cal.Rptr.2d 874; Stewart v. Gomez (1996) 47 Cal.App.4th 1748, 1754, 55 Cal.Rptr.2d 531.) That policy is expressed in statutes embodying the statewide uniform child support guideline. (See, Fam.Code, §§ 405-4076.)4 "The guideline seeks to place the interests of children as the state's top priority." (§ 4053, subd. (e).) In setting guideline support, the courts are required to adhere to certain principles, including these: "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." (§ 4053, subd. (a).) "Each parent should pay for the support of the children according to his or her ability." (§ 4053, subd. (d).) "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." (§ 4053, subd. (f).)

To implement these policies, courts are required to calculate child support in accordance with the mathematical formula set forth in the statute. (See § 4055. See generally, Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2001) ¶ 6:165, p. 6-63; 2 Kirkland et al., Cal. Family Law: Practice and Procedure (2d. ed. 2001) Child Support Orders, § 41.05, p. 41-9.) Determining child support under the guidelines has been criticized as a "complex and unduly costly" process "which requires the use of a computer and which is not understood by anyone, least of all the affected parties." (In re Marriage of Fini (1994) 26 Cal.App.4th 1033, 1040-1041, 31 Cal.Rptr.2d 749.)5 Nevertheless, adherence to the guidelines is mandatory, and the trial court may not depart from them except in the special circumstances enumerated in the statutes. (§§ 4052; 4053, subd. (k); County of Stanislaus v. Gibbs, supra, 59 Cal.App.4th at p. 1419, 69 Cal.Rptr.2d 819.) Those special circumstances include a parent's extraordinarily high income. (§ 4057, subd. (b)(3); Johnson v. Superior Court (1998) 66 Cal. App.4th 68, 72, 77 Cal.Rptr.2d 624; McGinley v. Herman (1996) 50 Cal. App.4th 936, 938, 57 Cal.Rptr.2d 921.)

With that background in mind, we turn to the specific child support issues that Iris raises in this case.

a. Did the trial court err in failing to account for David's wealth in setting child support?

Iris argues generally that the trial court abused its discretion to the extent its order precluded the children from sharing in David's wealth. That proposition finds some support in the cases. Thus, in one case, a trial curt was found to have "abused its discretion by depriving the child of his right to share in his father's unusual wealth." (In re Marriage of Hubner (1988) 205 Cal.App.3d 660, 667, 252 Cal.Rptr. 428 [decided under the predecessor statute, the Agnos Act]. See also, In re Marriage of Ostler & Smith (1990) 223 Cal.App.3d 33, 54, 272 Cal.Rptr. 560 [same].) I...

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