IN RE: the MARRIAGE OF Richard and Barbara SIMPSON.

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Court of Appeal, Second District, Division 7, California.

IN RE: the MARRIAGE OF Richard and Barbara SIMPSON. Richard O. SIMPSON, Appellant, v. Barbara J. SIMPSON, Respondent.

B048099.

Decided: February 13, 1992

Michael J. Rand, Encino, for appellant. Tredway, Brandmeyer & Lumsdaine and Cheri A. Kadotani, Downey, for respondent.

Husband appeals from a judgment of dissolution.   He contends that the court erred in basing his spousal and child support payments on his ability to earn rather than his actual earnings, in failing to make a finding respecting the parties' standard of living, and in ordering that security be held for child support.   We affirm.

FACTUAL AND PROCEDURAL SYNOPSIS

Husband and Wife were married on June 11, 1981, and separated on December 16, 1988.   Their daughter Heather was born January 26, 1982.

At the order to show cause hearing held on July 5, 1989, the court ordered that commencing on May 1, 1989, Husband was to pay Wife $580 per month for child support and $630 per month for spousal support.

The court determined that as of July 5, 1989, $2,437.50 was past due in child and spousal support and ordered that amount be paid from Husband's share of the trust account set up as a result of the sale of the family residence, which was Husband's separate property.   The court ordered that $114,280 be held in the trust account and $62,000 be distributed to Husband.

The dissolution trial was held on October 23 and 24, 1989.

At the time of trial, Husband was 38 years old.   Husband had been with his union for 17 years, working as a stage hand in various television studios and theaters.   Most of this work involved working in theaters.   Husband earned $18 per hour for theater work and $13.26 per hour for television work.

Husband was a casual daily worker who telephoned his union hall every day for work.   Sometimes, he was able to work two jobs a day.   Husband constantly worked more than one job for the two years prior to July 1989.   At times, Husband would only have to work for one hour to be paid for a half day.   This practice allowed Husband to work three hours for three jobs a day.   Husband's seniority allowed him to have the choice of better jobs.

At the time of trial, Husband earned $2,000 to $2,200 per month.   Husband earned $61,000 in 1986, $62,000 in 1987 and $70,695 in 1988.   To earn the $70,695, Husband worked two and sometimes three jobs each day.

Four days after the order to show cause hearing, Husband changed from theater work to television work and changed his hours to a “normal eight-hour day” because working nights and weekends was very stressful and he was not capable of working 16 hours a days, 7 days a week.   Husband stated that he worked more than one job to make money to send Wife to school.

At the time of trial, Wife was 36 years old and had custody of Heather, who was then 7.   Wife was student teaching full-time.   Wife anticipated that she would obtain her elementary multiple subject credential on December 15, 1989, and that as of January 1990, she would be hired as a long-time substitute teacher and eventually as a full-time teacher.

As of the date of trial, Husband had paid only $100 of the court-ordered child and spousal support.   The court ordered that the arrearages be paid from the trust account.

The court found that Husband's gross yearly income was $60,000 and that he “voluntarily reduced his ability to earn during the proceedings which was unjustified and a purposeful reduction in his income to support the minor child and [Wife].”   The court found that Husband's gross monthly income was $5,000 and his net monthly income was $3,615.

The court found that Wife's current income was zero and anticipated that Wife would be able to earn $1,580 per month gross and $1,214 per month net as a substitute teacher beginning in January 1990.

The court ordered that commencing November 1, 1989, Husband was to pay Wife $650 per month child support and $1,000 per month spousal support, to be reduced to $550 per month child support and $500 per month spousal support commencing February 1, 1990.   The court determined that three years was the time period for spousal support.   The court also ordered that $23,000 be held as security for child support from Husband's share of the proceeds in the trust account.

DISCUSSION

I. Standard of Review.

 Husband contends that the court abused its discretion by predicating the awards of spousal and child support upon his previous ability to earn rather than his actual earnings.   Support awards are reviewed under an abuse of discretion standard, evaluating whether there is substantial evidence to support the award.  (Hogoboom & King, Cal. Practice Guide:  Family Law I (The Rutter Group 1991) ¶ 16:60–16:67, pp. 16–28—16–29;  Armstrong v. Armstrong (1976) 15 Cal.3d 942, 947, 126 Cal.Rptr. 805, 544 P.2d 941;  In re Marriage of Morrison (1978) 20 Cal.3d 437, 454, 143 Cal.Rptr. 139, 573 P.2d 41.)

“ ‘ “A reviewing court must accept as true all evidence tending to establish the correctness of the findings of the trial judge.   All conflicts in the evidence must be resolved in favor of the [prevailing party] and all legitimate and reasonable inferences must be indulged in to uphold the judgment.   It is well settled that whenever a finding or judgment of the trial court is attacked as being unsupported, the power of the reviewing court begins and ends with the determination of whether there is any substantial evidence, contradicted or uncontradicted which will support the conclusions reached by the trial court.   [Citation.]  All evidence most favorable to [the prevailing party] must be accepted as true and that which is unfavorable discarded as not having sufficient verity to be accepted by the trier of fact.   If the evidence so viewed is sufficient as a matter of law, the [judgment] must be affirmed [citation].” ’ ”  (In re Marriage of Okum (1987) 195 Cal.App.3d 176, 181–182, 240 Cal.Rptr. 458.)

II. Substantial evidence supports the court's finding that Husband's gross monthly income was $5,000.

 “It has long been the rule the court can consider the payor's earning capacity when determining child or spousal support.  [Citations.]  However, this rule has been applied only where the parent has demonstrated a willful intention to avoid fulfilling financial obligations through deliberate misconduct.”  (In re Marriage of Regnery (1989) 214 Cal.App.3d 1367, 1371, 263 Cal.Rptr. 243.)

The seminal case regarding the court's ability to award spousal support and child support based upon a parent's ability to earn as distinguished from actual income is Philbin v. Philbin (1971) 19 Cal.App.3d 115, 96 Cal.Rptr. 408.   In Philbin, the court reasoned that “the rule seems to be applied only when it appears from the record that there is a deliberate attempt on the part of the husband 1 to avoid his financial family responsibilities by refusing to seek or accept gainful employment [citation], wilfully refusing to secure or take a job [citations], deliberately not applying himself to his business [citation], intentionally depressing his income to an artificial low [citations], or intentionally leaving his employment to go into another business [citation].”  (Id., at p. 121, 96 Cal.Rptr. 408.)

“The ability to earn standard is not appropriate where the obligor either lacks earning ability because of health, age or training limitations, or there is no available employment consistent with his or her ability.  [In re Marriage of Regnery, supra, 214 Cal.App.3d 1367, 1372, 263 Cal.Rptr. 243.]   Accordingly, it may be an abuse of discretion to employ the ability to earn standard where there has been no determination on the obligor's ‘good’ vs. ‘bad faith’ intentions.”  (Emphasis deleted.)  (Hogoboom & King, Cal. Practice Guide:  Family Law I, supra, § 6:90.3, p. 6–151.)

At the time of trial, the Agnos Child Support Standard Act of 1984 2 (“Agnos Act”), Civil Code section 4720 3 et seq., permitted the court to consider a parent's earning capacity in determining the mandatory minimum child support award.  (Former §§ 4720, subd. (e) & 4721, subd. (a)(1).)   Although one court observed that the Agnos Act permitted attribution of “earning capacity” to an unemployed or underemployed parent without specifically narrowing the consideration to deliberate attempts to foil support obligations (In re Marriage of Everett (1990) 220 Cal.App.3d 846, 859, 269 Cal.Rptr. 917), we have analyzed this appeal under the more restrictive bad faith test since Wife did not address the fact that Husband appealed from the awards of child and spousal support and Husband did not discuss whether the test for using earning capacity is the same for child support and for spousal support.

There being no question about Husband's ability to do work or the availability of work, the issue in this case was whether Husband's voluntary change to working at lower paying jobs and limiting himself to an eight-hour day, reflected a bad faith attempt to avoid financial obligations.   The court found that Husband “voluntarily reduced his ability to earn during the proceedings which was unjustified and a purposeful reduction in his income to support the minor child and [Wife].”   Though not stated as such, that finding is a finding of bad faith on Husband's part.

Husband argues that the uncontroverted evidence in the instant case was that the parties intended for him to work excessive hours for only a limited time, for the limited purpose of sending Wife to school, that he testified that the work was too stressful and he was no longer capable of doing it, and that there was no evidence that he wrongfully decreased his earnings.   Looking at the evidence and the reasonable inferences to be drawn from it in Wife's favor and disregarding Husband's unsupported self-serving testimony, the record is to the contrary.

In the case at bar, Husband had worked two or three jobs per day for at least two years.   Most of the jobs worked were in higher-paying theater work.   Four days after the court issued temporary spousal and child support awards, Husband changed his employment to straight days of eight hours in the lower-paying television work rather than theater work ($13.26 per hour versus $18 per hour).   Furthermore, Husband paid only $100 of the court-ordered support from July 5, 1989, to October 23, 1989, the date of the dissolution trial, despite being gainfully employed.   Husband also received proceeds of $62,000 from the sale of the family residence (although the court denied a motion to reopen to consider the court order establishing this fact, the same judge had issued the order).

This case is somewhat similar to In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 592–594, 251 Cal.Rptr. 379, a case where the appellate court upheld the trial court's application of the ability to earn standard in refusing to grant the husband's request to terminate or decrease his spousal support obligation.   In Sinks, the husband had opted for an early retirement, and the trial court found that his voluntary retirement was an attempt to shirk his support obligations.  (Id., at p. 594, 251 Cal.Rptr. 379.)

Husband cites In re Marriage of Williams (1984) 155 Cal.App.3d 57, 202 Cal.Rptr. 10, for the proposition that the desire to lead a simpler life does not constitute a deliberate reduction in income.  Williams involved a wife who sought an increase in the amount of child support, arguing that the trial court had failed to consider the ability to earn of her former husband and his second wife and that their actions in moving to Reno were a deliberate attempt to avoid his financial responsibilities.  (Id., at pp. 62–63, 202 Cal.Rptr. 10.)

The appellate court concluded that the amount of support award was not an abuse of discretion, noting that the trial court obviously believed Mr. Williams' testimony that he and his second wife had moved to Reno to lead a simpler life, the trial court had increased his child support obligations by 25 percent and that Mrs. Williams failed to demonstrate she needed more money.   (Id., at p. 63, 202 Cal.Rptr. 10.)

 It is obvious that the court here did not believe Husband's testimony that the work was too stressful and that he was no longer capable of working those hours.   Credibility is a matter within the trial court's discretion.4  (See In re Marriage of Everett, supra, 220 Cal.App.3d 846, 861, 269 Cal.Rptr. 917.)   Husband was only 38 at the time of trial and did not testify as to any physical ailments precipatated by his working long hours nor did he testify that the work itself was stressful, only that the hours were.   Furthermore, at the time of trial, Wife was still finishing her schooling by student teaching, a prerequisite to her obtaining her teaching credential.

Although Husband might have had a legitimate desire to spend more time with his daughter, given the suspicious timing of his decision, followed by his failure to make other than one token payment of $100 for support (a sum certainly not amounting to a good faith attempt to comply with the court order), the court was entitled to disbelieve his statements as to his motivation in changing the nature of his work.

 Husband cites In re Marriage of Smith (1990) 225 Cal.App.3d 469, 274 Cal.Rptr. 911, to support his argument that the court's award was unreasonable as it created a staggering financial obligation and work load for him in that his gross monthly income was $2,100, and his support payments were $1,650 (to be reduced to $1,150).   Husband argues that even if he worked the entire year doing nighttime theater work, earning the maximum of $18 per hour, he would have to work more than 67 hours per week to earn $60,000 per year.   Husband ignores the fact that the record shows that at times, he is able to receive 4 hours pay for one hour's work.

Moreover, in Smith, there was evidence that the family was spending beyond its reasonable means in the years prior to separation—the parties had purchased a very large home that “ ‘was vastly more than a wage earner in [Mr. Smith's] position should have tackled’ ” and incurred home maintenance expenses that “ ‘were out of control.’ ”  (Id., at pp. 476–477, 274 Cal.Rptr. 911.)   Husband cites to no evidence in the record that shows that the parties here were living beyond their reasonable means.

Furthermore, Husband wanted the court to consider actual earnings based on current monthly income, which he appears to have earned in three months prior to trial.   The formula for determining income required using the annual gross income.  (Former § 4721, subd. (a)(1).)   The record shows that in the 12 months prior to the trial, Husband earned over $60,000.   Accordingly, we conclude that the court did not err in finding Husband's gross monthly income to be $5,000.

III. The court did not err in ordering that security be held for child support.

 Appellant contends that the court erred in ordering that $23,000 security for child support be held.   He argues that amount exceeds that permitted by section 4701.1.   Section 4701.1 provides for holding security in the amount of the lesser of $6,000 or a sum equal to one year of child support payments.  (§ 4701.1, subd. (c).)  Husband also argues that the order violated due process as it did not comply with the procedural requirements of section 4701.1.

However, section 4701.1 is not the exclusive repository of power of the family law court to provide for security for child support.  (Taylor v. Superior Court (1990) 218 Cal.App.3d 1185, 1190, 267 Cal.Rptr. 519.)   Pursuant to section 4700, subdivision (a)(1), a court may order that security be held for good cause.

 Unlike the provisions of section 4701.1, there is no limitation to the amount or duration under section 4700, subdivision (a)(1).5  The only limitation on the court's power is the requirement of reasonableness.   (See Hogoboom & King, Cal. Practice Guide:  Family Law I, supra, § 6:44.1, p. 6–117;  In re Marriage of Johnson (1982) 134 Cal.App.3d 148, 161–162, 184 Cal.Rptr. 444 [Lien imposed upon funds received from sale of community property until husband showed court that he solved personal problems was unreasonable because it was for an indefinite period of time and based upon contingencies uncertain ever to occur].)   In the instant case, the court not only provided for Husband to be able to come into court in June 1990 to apply for relief if he purchased a house, or if he did not apply for relief, then the court imposed a three-year termination for the security.

Although the court did not make a specific finding of good cause, since Husband did not request a statement of decision, all intendments favor the ruling, and we must assume that the trial court made whatever findings are necessary to sustain the judgment.  (Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 792–793, 218 Cal.Rptr. 39, 705 P.2d 362.)   We conclude that the court impliedly found that good cause existed based on Husband's past failure to make the court-ordered temporary child support payments and the facts that Husband received net proceeds of $176,000 from the sale of the family residence (though some of the funds were held in trust) and Heather was only seven years old at the time of trial.

IV. The court made a finding on the standard of living.

 Appellant contends that the court erred because it did not make specific factual findings with respect to the standard of living during the marriage as required by section 4801, subdivision (a).  (In re Marriage of Smith, supra, 225 Cal.App.3d 469, 489, 274 Cal.Rptr. 911.)

In Smith, the court concluded that:  “We believe that the Legislature intended the marital standard of living to be ․ reasonable needs commensurate with the parties' general station in life.  [Citation.]  It is a general description, not intended to specifically spell out or narrowly define a mathematical standard.   If the Legislature had intended something more specific, it could have prescribed a more specific measurement, such as the marital standard of living as measured by the gross annual family income․  It appears to us that the Legislature intended ‘marital standard of living’ to be a general description of the station in life the parties had achieved by the date of separation and this is satisfied by the everyday understanding of the term in its ordinary sense, i.e., upper, middle or lower income.”  (Id., at p. 491, 274 Cal.Rptr. 911.)

However, the court observed that:  “California's family law bench and bar have also been unable to determine what the Legislature intended to be contained in ‘specific factual findings' on the marital standard of living, that is, what is to be the mode of measuring or describing that standard.   The Legislature has provided no guidance.   Is this term limited to broad categories, such as lower income, middle income or upper income?   Is it more narrowly defined so that a description of the marital standard of living as lower middle income would be appropriate?   Is it intended to be even more specific, so that, for example, a finding of the gross annual family income before separation would be necessary?”  (Fn. omitted.)  (Id., at p. 489, 274 Cal.Rptr. 911.)

The court noted that the purpose of the standard was to serve as a reference point for the determination that the supported spouse's reasonable needs were met and that the Legislature did not require such a finding.   (Id., at pp. 482–483, 491–493, 274 Cal.Rptr. 911.)   The court suggested the parties should ask the court for a finding “as to whether the amount of support awarded is sufficient to satisfy the reasonable needs of the supported spouse under all applicable circumstances of section 4801, subdivision (a).”  (Id., at p. 493, 274 Cal.Rptr. 911.)

In the instant case, the court found, and the record shows, that Husband's gross annual income was $60,000.   Although the court did not make a finding that this income was lower, middle or upper class or that it met Wife's reasonable needs considering all the applicable factors, it is evident that the court was aware of the need to consider the parties' standard of living.   Given the uncertainty over the meaning of “marital standard of living” at the time of the trial in this case and the fact that Smith was decided a year after the trial, we conclude that at that time, that finding was a sufficient finding of standard of living to satisfy section 4801, subdivision (a).

DISPOSITION

The judgment is affirmed.   Wife to recover costs on appeal.

I concur in the result and rationale of that portion of the majority opinion which sustains the order requiring security in the amount of $23,000.   I respectfully dissent, however, from that portion of the opinion which, in effect, holds a person can be required to work substantial overtime hours in a designated position in order to provide a higher standard of living for a former spouse and their child than can be sustained if that person works only a regular 40–hour week in a related, but slightly less well compensated job in the very same occupation.

The majority upholds this ruling by referring to a trial court finding that in reducing his hours to mere full-time employment appellant “voluntarily reduced his ability to earn during the proceedings which was unjustified and a purposeful reduction in his income to support” his spouse and their child.   The majority construes this as a finding of “bad faith” which, in turn, justifies application of an “ability to earn” standard.1

Under well-settled principles, the “bad faith” of which the majority speaks allows application of an “ability to earn” standard instead of an actual earnings standard in only the most egregious situations.   The test for bad faith requires “a deliberate attempt on the part of the husband to avoid his family responsibilities by refusing to seek or accept gainful employment ․ [citations omitted].”  (Philbin v. Philbin (1971) 19 Cal.App.3d 115, 121, 96 Cal.Rptr. 408;  In re Marriage of Williams (1984) 155 Cal.App.3d 57, 62–63, 202 Cal.Rptr. 10, italics added.)

For purposes of this dissent I accept the majority's deference to the trial court's factual finding this was a “purposeful reduction in his income to support” his former spouse and their child.   I do so even though I am not as certain as my colleagues the finding is supported by any evidence in the record other than the timing of appellant's decision to return to “mere” full time employment.   Nonetheless, accepting the trial court's finding, two fundamental issues remain—both apparently of first impression.2

First, does a “purposeful reduction” of hours worked from extensive, continual overtime to “mere” full time establish “bad faith” in the sense of “a deliberate attempt ․ to avoid ․ family responsibilities by refusing to seek or accept gainful employment?”   It does so only if it can be said a husband has a legal responsibility to work overtime to support his family.   Otherwise a purposeful, even a mean-spirited, reduction in hours does not constitute an avoidance of financial responsibilities he owes his family.   Instead it only constitutes an avoidance of extra effort over and above the call of duty which, if he expended that extra effort, would inure to the benefit of his family members as well as himself.   Nor, to focus on another part of the Philbin test, does this elimination of overtime hours constitute a refusal “to seek or accept gainful employment.”   The only “gainful employment” appellant is refusing to accept is that over and above 40 hours a week.

None of the cases the majority cites—and none I have been able to locate—found the requisite “bad faith” when a supporting spouse continued to work full time in the same general occupational field as he or she had worked during the marriage.   Indeed in most cases where the courts found bad faith the supporting spouse had quit work entirely (e.g., In re Marriage of Regnery (1989) 214 Cal.App.3d 1367, 263 Cal.Rptr. 243 [husband quit $31,000 a year position as senior cost accountant after dissolution and two years later was still unemployed] ) or retired prematurely;  e.g., In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 251 Cal.Rptr. 379 [62–year–old man takes early retirement reducing his income from a $4300 per month salary to $816 per month pension payment and fails to produce evidence of good faith but unsuccessful attempts to gain new employment] ).   Even when the supporting spouse shifted from a well paying field to a much lower paying field (e.g., In re Marriage of Williams (1984) 155 Cal.App.3d 57, 202 Cal.Rptr. 10 [husband quits high paying job and leaves California for Nevada where he takes much lower paying job in an entirely different field] ) this court found the supporting spouse was justified in changing employment and refused to apply an “ability to earn” standard (e.g., id.)

In the instant case, on the other hand, the supporting spouse continued to work full time in the same occupation as he had during the marriage.   Yet the trial court order and the majority opinion rule this is not enough.   Unless the supporting spouse works substantial overtime on an ongoing basis he is deemed to be “avoiding his family responsibilities by refusing to seek or accept gainful employment” and thus to be guilty of bad faith.   This finding, in turn, allows the trial court to apply an “ability to earn” standard in fixing his support obligations.

In my opinion, this misconstrues the bad faith test or applies it erroneously.   The undisputed evidence demonstrates appellant not only sought and accepted but was engaged in gainful employment in the same field as he had been during the marriage.   Moreover, appellant was engaged in that employment on a full time basis.   Only by construing the test for bad faith—the refusal to accept gainful employment—as including the refusal to accept overtime employment can appellant's behavior be characterized as constituting bad faith.   In my opinion, this interpretation distorts the bad faith test beyond recognition—and far beyond any past precedent.

Not surprisingly, because it is so far outside the bounds of prior precedent, neither the majority nor myself have been able to locate any case addressing the issue of whether a refusal to work overtime constitutes bad faith.   However, in a related context, Justice King did have occasion to characterize overtime work as “more than the law would require.”  (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 493, fn. 15, 274 Cal.Rptr. 911 [spouse should be granted lower percentage from husband's overtime income than from income earned during regular hours as incentive to work those discretionary hours], italics added.)   In this, I strongly agree with Justice King.   And, since overtime is “more than the law would require” the refusal to work those hours cannot constitute a “refusal to accept gainful employment” for purposes of the bad faith test.   In the absence of a failure to accept gainful employment, there is no bad faith and without bad faith the “ability to earn” standard cannot be applied in setting appellant's support obligations.

The second fundamental issue is closely related to the first.   Indeed it may just be another way of conceptualizing the same difficulty I am having with the majority's analysis.   In any event, assume the truth of the court's factual finding appellant “purposefully reduced his income to support” his former wife and their child.   Further assume this factual finding supports the requisite legal finding of “bad faith” thus allowing the court to apply the “ability to earn” standard.   This merely brings us to the question posed in the first paragraph of this dissent.   Does a person's “ability to earn” properly include the money that could be earned during overtime hours he could work but does not want to work.   Just because a court decides it is appropriate to apply an “ability to earn” standard does not automatically mean it is legally proper to set a supporting spouse's “ability to earn” at the highest level of income he or she may have achieved in their career.   To do so is especially inappropriate when the supporting spouse only reached that income level by putting in extraordinary hours of overtime.

Obviously and inevitably overtime employment will increase the income available for child and spousal support as well as the earner's own support.   Furthermore, many employed people—if not most—have an “ability to earn” more income for spousal and child support if they will just put in more hours of overtime work.  (And if overtime is not available at their regular employment, they can earn additional income by moonlighting at a second job.)   But is that what is meant by “ability to earn” in the context of support orders?   Is it reasonable and lawful for a trial court to establish support levels which effectively compel the supporting spouse to work 60, 70, or 80 hours a week?   Or to take a second job?   If so, why not a third?

In my opinion, the trial court below abused its discretion in fixing appellant's support responsibilities at levels appellant could only sustain by working substantial hours of overtime.   The extent of appellant's “ability to earn” within the context of support orders should be limited to what the supporting spouse is actually earning or, where actual earnings may have been reduced from the level earned during the marriage, to what that spouse could be earning in a normal eight-hour work day.   After dissolution, a family may be entitled to be supported at “what would have been a reasonable standard of living ․ given what [the supporting spouse] would have earned had he worked at a reasonably human pace.”  (In re Marriage of Smith, supra, 225 Cal.App.3d at p. 493, 274 Cal.Rptr. 911.)   They are not entitled to continued guaranteed support at a standard of living which existed only because the supporting spouse “worked excessive hours during the marriage.”  (Id. at p. 485, 274 Cal.Rptr. 911.)

I recognize appellant not only reduced his hours to full time but shifted jobs within his occupation.   He moved from stage work which pays $18 an hour to television work which pays $13.26 an hour.   An entirely different question would be presented if the trial court had based appellant's support obligations on the basis of the income he could earn without overtime in his former higher paying job rather than his present lower paying position.   But that is not what the trial court did nor what the majority opinion approves.   The trial court based its decision on appellant's total earnings in his former position, including an increment of $25,000 to $35,000 a year earned from his overtime hours.  ($18 an hour would yield an annual gross income of approximately $36,000 for a year of full time employment.   Appellant's support obligations, however, were predicated on an assumption he had an “ability to earn” $60,000 to $70,000 a year.   Almost half that amount represents overtime pay.)

I further recognize it is entirely possible appellant stopped working overtime temporarily, just while this litigation was in progress, so the court would establish his support obligations on the basis of a reduced income level.   Then after the order was in effect he would resume working heavy overtime and restore his income to past levels, personally pocketing the entire difference.   Indeed this concern may well have motivated the trial court to fix appellant's support obligations on the basis of his past overtime-dependent income levels rather than his present income.

If this is the true reason for the trial court's order, it is unnecessary and unreasonable overkill.   The former spouse and the child can be adequately protected without this sort of draconian measure.   The court could set the basic level of support on the basis of the income the supporting spouse earns during regular hours of employment, but also assign the former spouse and the child a substantial percentage of any overtime income the supporting spouse might earn in the future.   This “escalator” provision would ensure the supporting spouse is not merely attempting to manipulate his support obligation by temporarily reducing his work hours and income while the dissolution action is under consideration in court.   Moreover, assuming appellant's decision to eliminate overtime was not motivated by a desire to manipulate his support obligations, this “escalator” approach also would ensure the former spouse and child full participation in the economic benefits of any future legitimate decision the supporting spouse might make to increase his hours of work.

Were I in the majority I would gladly endorse an order containing this sort of “escalator” clause.   Even then, as Justice King observes, the court might “find it necessary to [allocate] ․ a smaller percentage of the supporting spouse's overtime ․ pay than is ordered from the other's base pay, in order to provide the supporting spouse with the incentive to ․ work more than the law would require.”  (In re Marriage of Smith, supra, 225 Cal.App.3d at p. 493, fn. 15, 274 Cal.Rptr. 911, italics added.)   What I refuse to approve and what I consider an abuse of discretion is an order which calculates “ability to earn” as including overtime income one could but does not want to earn.   This sentences a person to work “more than the law would require” and, for certain, more than it should require.

Because of the vital importance of child and spousal support, the law confers enormous discretion on family court judges in setting support obligations.   The majority opinion relies heavily on this broad grant of discretion.   But there must be limits.   While I am as concerned as my colleagues with the need to provide adequate financial support for dependent spouses and children, family courts should not have the discretion to maximize that support by imposing unreasonable burdens and restrictions on supporting spouses.   This case represents a uniquely dangerous excursion far beyond the boundaries of past precedent and beyond the realm of reasonable impositions on personal freedom.   If this one does not qualify as an abuse of discretion, then it is difficult to imagine any burden or any interference with a supporting spouse's freedom which a court could not order.   For that reason I am compelled to dissent.

FOOTNOTES

1.   The rule is equally applicable if the wife is the payor.

2.   To retain eligibility for federal funding of aid for dependent children, states are required by federal law to establish uniform guidelines for child support awards.   Because California was warned that its child support guidelines did not comply with federal law and regulations, the Agnos Act has been suspended until 1993.   The statewide uniform guidelines for child support that comply with applicable federal regulations are now contained in California Rules of Court, rule 1274.   (Hogoboom & King, Cal. Practice Guide:  Family Law I, supra, § 5:9, pp. 5–8—5–9;  10 Witkin, Summary of Cal.Law (9th ed., 1991 supp.) Parent & Child, § 265, p. 28.)

3.   All statutory references are to the Civil Code.

4.   In view of the dissent filed in this matter, we deem it necessary to restate some common principles of appellate review.Judging of credibility by the trier of fact is particularly suitable in domestic relations matters for a number of reasons.   We discuss two of the most apparent reasons.   First, testimony in these matters commonly takes place in an emotional atmosphere in which assessing credibility requires careful and immediate observation of the witness (particularly a party witness) by even the most discerning of trial judges.   Second, the trial judge typically will have a “continuing relationship” with the case and the litigants, holding multiple hearings to determine the amount of spousal support or support for children or to resolve such matters as custody of children and reasonable visitation rights.   Accordingly, judging credibility in these cases is frequently a “historical” process and is not based upon testimony given at a single appearance.We appreciate the concerns expressed in the dissent.   However, after carefully weighing and studying the comments made in the dissent, we conclude that the dissent is essentially inviting us to retry the question of “credibility” with only an inanimate transcript to assist us.   We decline to do so.Our decision is supported by the fact that in domestic relations matters, the trial courts are immediately accessible to make modification orders upon a legitimate demonstration of a “change of circumstance.”   Such an order could help avert the injustice visualized in the dissent of requiring a person to work substantial overtime on a long term basis.   In our opinion, the proposed rigid rules of constraint suggested in the dissent would unnecessarily fetter the discretion of the domestic relations trial judge.

5.   In relevant part, section 4700, subdivision (a)(1), provides that:  “Upon a showing of good cause, the court may order the parent or parents required to make the payment of support to give reasonable security therefor.”

1.   In keeping with the majority opinion, I also apply the “bad faith” test to both the child support and spousal support orders.   I agree with the majority the parties did not raise or brief the issue whether “bad faith” is required before a court applies an “ability to earn” standard in fixing child support orders in this the post-Agnos era.  (See In re Marriage of Everett (1990) 220 Cal.App.3d 846, 859, 269 Cal.Rptr. 917.)   In any event, the “bad faith” test clearly continues to apply to spousal support.

2.   The majority indulges in an unnecessary lecture on the scope of appellate review.   A trial court finding of bad faith is a legal conclusion not just a credibility judgment—although it obviously will be based on evidence which, in turn, may involve an appraisal of witness credibility.   As a legal conclusion, the bad faith finding is fully subject to appellate review.   In this dissent I question whether the trial court employed the proper legal standard or, if so, whether it applied that standard correctly in making its finding of bad faith.   This inquiry has nothing to do with credibility nor do I purport to second guess the trial court's evaluation of the credibility of any party or other witness.

FRED WOODS, Associate Justice.

LILLIE, P.J., concurs.

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