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High Earner's Expenses & Lifestyle Must be Considered in Calculating Child Support

Posted By Anthony P. Azemika, Esq.   |   Comments (0)
Family Law, Divorce, Legal Cases, Child Support,

 

 

     A California Court of Appeals has ruled that a Trial Court was wrong by failing to list its reasons for deviating from guideline in making child support order of less than guideline for the child of an extraordinarily high earner and by relying on Mother and Child’s expenses and lifestyle instead of the high earner’s expenses and lifestyle. In the case of Y.R. v. A.F., Father and Mother had a brief affair during which Mother discovered that she was pregnant with Father’s child. Mother gave birth to their daughter in July of 2006. Father, a successful director with a wife and three kids, paid some of Mother and Child’s expenses and gave Mother $5,000 per month. Mother, a hair stylist, did not seek a formal support order until October of 2014. In her petition, Mother sought an order establishing Father’s paternity, and requiring Father to pay Child’s health insurance, uninsured health care expenses, and half of Child’s extracurricular activities.

     After filing her petition, Mother sought documents regarding Father’s income and expenses, lifestyle, and payments for other expenses of his children. In response, Father stated that he was an extraordinarily high income earner, per California Family Code Section 4057, and could pay any child support order commensurate with Child’s reasonable needs. Instead of responding to Mother’s discovery requests, Father provided a declaration, listing his salary at $2.2 million per year or $190,000 per month. Mother disputed that Father was such a high income earner, but did not seek further responses. In her declaration, Mother described living in a three-bedroom, two-bath apartment in Santa Monica, which was “cramped” because her other two children also lived there. Mother asserted that she should be able to have a four-bedroom condo in the same area at a monthly rental of between $6,000 and $15,000 per month. She also asserted that Child should have a nanny, tutoring, take various lessons, and go to camp. She reported income of $1,833 per month and expenses of more than $6,000.

     In response, Father reported an annual salary of a little more than $2 million, monthly rent of $20,000, more than $3,000 per month each for various living expenses, $31,000 per month for other expenses and so on. Father submitted a DissoMaster report, calculating guideline support for Father at $11,840 per month. Father argued that ordering that amount would exceed Mother and Child’s stated expenses and urged Trial Court to order less than guideline. Father did not discuss his lifestyle, or calculate reasonable support based on his monthly income and expenses. Mother disputed Father’s income and her accounting expert calculated Father’s average income at $336,000 per month, for a guideline support order of $25,000 per month.

     After a hearing, Trial Court found that Father was an extraordinarily high wage earner, but his income and expense report was unsubstantiated. Focusing on Mother’s income and expenses, Trial Court found that guideline support would exceed Child’s needs. Trial Court then ordered Father to pay Child’s school tuition, 75% of her extracurricular activities and school expenses, all of Child’s health insurance, and 90% of Child’s uncovered medical expenses. It ordered him to pay child support of $8,500 per month as a reasonable amount to allow Child to live at an appropriate standard. When Mother’s attorney objected that Mother and Child’s past expenses were not commensurate with Child’s current needs, Trial Court disagreed, saying that Mother had the burden of showing that Child’s reasonable needs would not be met by the order. Trial Court final order contained the income and expense figures on which it had relied, but did not explain its reasons for deviating from guideline or state why the award was in Child’s best interests. Mother appealed, and now California Court of Appeals has reversed and remanded the case back to Trial Court with directions.

     The Appellate Court has ruled that (1) Trial Court failed to comply with statutory requirements for deviating from guideline; (2) as parent invoking high earner exception, Father had the burden of showing that guideline child support would be unjust or inappropriate; and (3) Child’s needs should not have been determined by Mother’s income and expenses, but by Father’s disposable income and standard of living (regardless of whether it benefits Mother’s other children). The Appellate Court reverses and remands the case back to Trial Court to assess whether $25,000 per month guideline support order would exceed Child’s needs and if so, to state in writing or on the record the reasons why the child support order should differ from guideline and is consistent with Child’s best interests.

 

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