A California Court of Appeals has ruled that Trial Court was not wrong by concluding that the funds in the parties brokerage account were a marital community loan from Mothers parents (not a gift) or by ordering stepped-down spousal support payments that were not in an amount sufficient to maintain the marital standard of living. In the case of In re Marriage of Grimes and Mou, Father and Mother were married in January of 2004, and separated in July of 2015. Father filed for divorce in April of 2016. During the marriage, Father worked as an engineering manager at Google/YouTube earning a six-figure base salary, plus bonuses. Mother, a Chinese immigrant who is fluent in English and Mandarin and held a masters degree in finance, worked as a treasury analyst and generally earned six-figures as well. From 2011, through 2015, Mother and Fathers yearly gross income rose from $316,260 to $778,660. They had a middle to upper middle-class lifestyle in Palo Alto, a child in private school, three cars, yearly vacations, and regular restaurant meals.
For a year after separation, Father paid the rent and utilities on the Palo Alto house to the tune of over $5,000 per month. Father estimated that he had paid voluntary spousal support to Mother of between $250,000 and $300,000 from July of 2015, to May of 2018.
When the parties decided to buy a house, Mother assured Father that she could get money from her brother or her parents, as a gift or a loan. A total of $229,936 was deposited into Mothers brokerage account from various relatives. However, when Father filed their joint income tax returns for 2014, and 2015, he reported gains from the account as income to him and Mother.
At trial, a vocational expert testified that at age 49, Mother would be a little disadvantaged in the job market, but that she was readily employable and able to work toward being self-supporting. The expert opined that there was a range of appropriate jobs for someone with Mothers education and work history, and that she was capable of earning between $101,008 and $123,257 annually.
As to the funds in the brokerage account, Mother testified that after she and Father decided not to buy a house, she offered to return the money that her relatives had provided, but they told her to keep it and invest it for them. Father said he believed that the funds were a gift or at worst, a loan.
After hearing evidence and argument, Trial Court found that the funds at issue in the brokerage account had not been shown to be a gift from Mothers parents, but rather a loan to the community. Trial Court ordered the loan debt divided equally between the parties, with each party to pay half of the loan to Mothers relatives. Trial Court ordered the rest of the brokerage funds divided equally between Mother and Father. Trial Court ordered Father to pay step-down spousal support to Mother of $3,000 per month from June 1, 2018, through December 31, 2019, plus 20% of Fathers additional income over $300,000; $2,000 per month from January 1, 2020, through December 31, 2021; and $1,000 per month from January 1, 2022, through November 30, 2026. Trial Court noted that after it set Mothers earning capacity at $90,000, she got a job earning $96,000, but found that Mothers job search efforts were not appropriately and fully focused. Trial Court set the termination of spousal support at either party’s death, Mothers remarriage, further court order or written agreement, or the date that the youngest child reached age 18 (November 30, 2026).
On October 29, 2018, Trial Court issued further findings and orders after hearing, ordering Mother to transfer half of the brokerage funds to Father and ordering Father to pay his half of the loan debt directly to Mother.
Claiming that Trial Court erred by characterizing brokerage funds as a loan and ordering so little spousal support, Mother appealed the first order after hearing. On January 23, 2019, Trial Court entered a divorce judgment that incorporated the earlier order.
Now, acting on Mothers appeal, California Court of Appeals has affirmed Trial Courts decisions. The Appellate Court has ruled that (1) Mother appealed from an unappealable order but justices choose to treat her appeal as having been taken from the January 23, 2019, judgment since it did not implicate the October 2018, order and doing so will not prejudice Father; (2) on the present record, Trial Court could reasonably reject Mothers testimony regarding the brokerage funds and infer that the parties treated the funds as a loan; and (3) Trial Courts spousal support award was not an abuse of discretion since Trial Court was not required to order support sufficient to maintain the parties marital standard of living, Trial Court considered the appropriate Family Code Section 4320 factors, and Mother could reasonably be expected to become self-supporting.
