McGinley v. Herman

• Decision Date: 07 November 1996
• Docket Number: No. B090365,B090365
• Citation: 50 Cal.App.4th 936,57 Cal.Rptr.2d 921
• Parties: , 96 Cal. Daily Op. Serv. 8159, 96 Daily Journal D.A.R. 13,509 Lori McGINLEY, Plaintiff and Appellant, v. Stan HERMAN, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

Page 921

57 Cal.Rptr.2d 921

50 Cal.App.4th 936, 96 Cal. Daily Op. Serv. 8159,

96 Daily Journal D.A.R. 13,509

Lori McGINLEY, Plaintiff and Appellant, v. Stan HERMAN, Defendant and Respondent.

No. B090365.

Court of Appeal, Second District, Division 1, California.

Nov. 7, 1996.

Cuneo & Hoover, J. Nicholas Cuneo and Sarah J. Hoover, Los Angeles, for Plaintiff and Appellant.

Kolodny & Anteau and William P. Glavin, IV, Los Angeles, for Defendant and Respondent.

MASTERSON, Associate Justice.

Children are entitled to share in the standard of living of both parents. To this end a presumption exists that the amount of a child support award is determined pursuant to uniform guidelines. However, the presumption may be rebutted if one of the parents has an "extraordinarily high income." In this case, after finding that the father had an extraordinarily high income, the court awarded child support in an amount that did not relate to the father's standard of living in any meaningful way. We find this award to constitute an abuse of discretion. Accordingly, on the mother's appeal asserting that the amount of support awarded from the father was inadequate, we reverse and remand for a new support determination.

BACKGROUND

In February 1994, Lori McGinley filed a complaint to establish that Stan Herman is the father of her child, born out of wedlock in January 1993, and for child support. In an accompanying income and expense declaration, McGinley stated that she had a monthly net disposable income of $400 and expenses of $7,627 per month. She sought support from Herman, who she claimed to be "one of the most successful real estate agents in the entire Los Angeles area," in an unspecified amount to be established under the uniform child support guidelines.

In response, Herman admitted paternity and agreed to pay "reasonable child support based on the 18 month old minor child's reasonable needs." He declared that, as a real estate investor, he recently suffered substantial losses due to the downturn in the real estate market and the Northridge earthquake. His income and expense statement indicated an "average monthly cash flow deficit of $42,532." Herman submitted evidence, including the declaration of a certified public accountant, in support of this figure. Herman's evidence placed his "living expenses" at $31,457 a month. Herman also disputed several of McGinley's claimed expenses.

In reply, McGinley submitted the declaration of a certified public account who, based on an examination of Herman's business records, concluded that Herman's net worth was over $11 million, that his living expenses were $80,390 per month, and that he had $116,256 "cash available for support" each month. ¹ Utilizing the latter figure, the accountant calculated Herman's monthly support obligation under the uniform guidelines At trial, the court refused McGinley's request to have her accountant testify, stating that it was "not going to have a CPA contest here where they juggle numbers." Nonetheless, Herman stipulated that he "lives a lifestyle that is considered by some to be an extravagant lifestyle, in light of the deficits he has incurred." The court stated that it would find Herman to have an "extraordinarily high income," thus removing the support award from the uniform child support guidelines.

at $14,617. McGinley requested support in this amount.

The only evidence taken at trial concerned McGinley's lifestyle. McGinley testified that she did not graduate from high school. She is not employed and is studying to get a real estate license. She owns a house that she rents out and lives with her child in a 600 square foot apartment which is next to a busy highway. McGinley described the expenses she incurs for the child's preschool, swim lessons, and baby-sitting. She would like to live somewhere with a backyard in which the child can play.

McGinley argued to the court that, under controlling law, her child was entitled to be supported in a manner that reflected the lifestyle of his father. Herman argued that a monthly award of $1,500, with an additional $500 per month into a blocked account for college expenses, would meet the child's present actual needs, especially since he is not yet in school or involved in other activities.

In making its ruling, the trial court stated that it would be "nonsensical" to award McGinley the guidelines amount of child support based on a "casual relationship that result[ed] in the birth of a child." ² The court stated that a support figure of $2,000 "came to mind, because we have a lot of cases like this. And that's usually been the real limits that I've seen." The court further stated that, "without a specific finding as to the exact amount, [Herman] has an extraordinarily high earning capacity and/or real income." The court also found that McGinley has a net disposable income of zero.

Based on these and other findings discussed infra, the trial court awarded monthly child support of $1,750, with an additional $400 per month for one-half of McGinley's child care expenses, for a total of $2,150. An additional $750 per month was ordered to be deposited into a blocked interest bearing account to pay for the child's college or post-college education. Herman was also ordered to provide medical insurance for the child and a life insurance policy on himself naming the child as the beneficiary.

STANDARD OF REVIEW

"[T]he amount of child support rests in the sound discretion of the trial court and an appellate court cannot interfere with the trial court order unless, as a matter of law, an abuse of discretion is shown. [Citations.]" (In re Marriage of Aylesworth (1980) 106 Cal.App.3d 869, 876, 165 Cal.Rptr. 389.) As stated in the context of spousal support, " '[s]o long as the court exercised its discretion along legal lines, its decision will not be reversed on appeal if there is substantial evidence to support it. [Citations.]' [Citation.]" (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 480, 274 Cal.Rptr. 911.)

DISCUSSION

McGinley contends that the trial court abused its discretion in setting an amount of child support that was inadequate. ³ We find A. Applicable Law

that the trial court's discretion was not exercised along legal lines. We therefore reverse and remand for a new support determination.

This case is governed by the Statewide Uniform Child Support Guidelines, which took effect in July 1992 as Civil Code sections 4720 et seq., and are now set forth as Family Code sections 4050 et seq. (unless otherwise specified all further section references are to the Fam.Code). Under these guidelines, the interests of the child are given "top priority." (§ 4053, subd. (e).) "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).) The guidelines set forth a complex formula for determining child support based on the circumstances of the parents and child. (§ 4055.) The support amount rendered under the guidelines formula "is intended to be presumptively correct in all cases ...." (§ 4053, subd. (k).) This presumption may, however, be rebutted by evidence of various factors, including that "[t]he parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children." (§ 4057, subd. (b)(3).)

Long before these principles were incorporated into statute, it was well established that "[a] child, legitimate or illegitimate, is entitled to be supported in a style and condition consonant with the position in society of its parents." (Kyne v. Kyne (1945) 70 Cal.App.2d 80, 83, 160 P.2d 910.) "The father's duty of support for his children does not end with the furnishing of mere necessities if he is able to afford more." (Bailey v. Superior Court (1932) 215 Cal. 548, 555, 11 P.2d 865.)

McGinley places great reliance on two more recent cases that have applied these principles, albeit before the uniform child support guidelines were enacted--In re Marriage of Catalano (1988) 204 Cal.App.3d 543, 251 Cal.Rptr. 370 and In re Marriage of Hubner (1988) 205 Cal.App.3d 660, 252 Cal.Rptr. 428. In Catalano, the mother sought an increase in child support from $475 to $2,000 per month. The trial court increased the amount to $1,110 and both parents appealed. (Id. at pp. 547-548, 251 Cal.Rptr. 370.) The father was concededly wealthy, owning at least two residences and numerous automobiles, including a Rolls Royce. The mother's lifestyle had been in decline since separation from the father, resulting in the need for her to invade capital. ⁴ (Id. at pp. 555-556, 251 Cal.Rptr. 370.) The court observed that "[a] child's 'need' for more than the bare necessities ... varies with the parents' circumstances. [Citations.] [p] Accordingly, where the supporting parent enjoys a lifestyle that far exceeds that of the custodial parent, child support must to some degree reflect the more opulent lifestyle even though this may, as a practical matter, produce a benefit for the custodial parent." (Id. at p. 552, 251 Cal.Rptr. 370.) The Catalano court found that, under the circumstances presented, "the only tolerable award would be the full $2,000 that [the mother] requested. Anything less would ignore the tremendous disparity between [the child's] lifestyle and that of his father." (Id. at p. 556, 251 Cal.Rptr. 370.)

In Hubner, the mother's net disposable monthly income was $1,000 and the father's was over $43,000. The support guidelines then in effect were discretionary and included a statement of "legislative intent that children share in their parents' standard of living." (Former Civ.Code, § 4724, subd. (a).) Pursuant to a schedule developed under these guidelines, the mother asked for child support of not less than $6,000 a month.

                The trial court awarded $2,215, finding

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