IN RE: MARRIAGE OF Maria W. and Thaddeus WYATT. Maria W. WYATT, Appellant, v. Thaddeus WYATT, Appellant.
This is an appeal and a cross-appeal from the trial court's order modifying spousal support. The parties to this lawsuit are appellant Thaddeus Wyatt (hereafter Thaddeus) and cross-appellant Maria Wyatt (hereafter Maria). The parties intermarried on August 11, 1942, in Warsaw, Poland, and were divorced on November 6, 1972, in Marin County, California. Community property belonging to the parties was divided by the court at the dissolution proceeding; Thaddeus received property valued at $199,916 (including his businesses, T. W. Wyatt Company, Inc., T. W. Wyatt Agency, Inc., and Occidental Shipping Enterprises); Maria received property valued at $204,416. The custody of their child Mark, a minor, was awarded to Maria. At the time of granting the interlocutory decree of dissolution the court asked for further documentation of Thaddeus' income from his shipbrokerage business before making a support order. A hearing thereon was had, and on March 8, 1973, the court ordered that Thaddeus pay spousal support of $900 per month to Maria. The court reserved jurisdiction to review the award in August of 1973, and at that time made its previous award permanent.
On October 21, 1974, Maria moved to increase spousal support to $2,500 per month. The motion was heard on March 25, 1975, and spousal support was increased to $2,000 per month by an order of the court dated April 9, 1975.
On September 3, 1975, Thaddeus filed a motion to terminate spousal support. The motion was heard on August 23 and 24, 1977.1 Upon conclusion of the evidence the trial court prepared findings of fact wherein it found that Thaddeus, contrary to his claim, had not retired from his business; that the success of his businesses had varied over the years since the divorce; and that for the period from September 1973 through August 1974, the businesses were highly, albeit atypically, profitable. There was undisputed expert testimony that the shipbrokerage business was subject to four-year cycles being profitable and losing money, but that despite fluctuations the businesses had survived several such cycles and showed a modest profit in the 11 month period preceding the hearing. The court also found that Thaddeus occupied a well-respected position in the shipping industry, that Maria was not employed, and that she had no present earning capacity. The court found that Thaddeus had the ability to pay $2,000 spousal support per month from October 17, 1975 through the end of 1975, and that after that time he had an ability to pay $750 per month. The court set spousal support in those amounts by an order dated December 1, 1977, and both sides appeal therefrom: Thaddeus asserting that the court abused its discretion in not terminating spousal support; and Maria claiming the court erred in modifying its earlier order.
Thaddeus argues that the trial court erred in basing spousal support on his ability to earn rather than on his actual income; that he was entitled to an express finding on his “actual disposable income”; and that the trial court abused its discretion in making the findings that it did. There is no merit in these contentions.
In support of his argument that the trial court erred in basing the award on his ability to earn, Thaddeus asserts that an award of spousal support may be based upon a husband's ability to earn as distinguished from his actual income only when it appears from the record that there is a deliberate attempt on his part to avoid his family financial responsibilities, and cites Philbin v. Philbin (1971) 19 Cal.App.3d 115, 96 Cal.Rptr. 408, and In re Marriage of Reese (1977) 73 Cal.App.3d 120, 140 Cal.Rptr. 589.
In Philbin, Justice Lillie wrote that “While it is true that an award of alimony and child support may be based upon the husband's ability to earn as distinguished from his actual income, 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 to avoid his financial family responsibilities ․ ․ ․ ” (p. 121, 96 Cal.Rptr. p. 411, emphasis added). In Reese, a statement of similar import is made.2 Those cases do not make it a requirement that the court must find that the husband had been deliberately avoiding his family financial responsibilities before it can base a support order on his ability to earn. Both of those cases acknowledge that the trial court has such power. It has been recognized for over a century that “There is no doubt that the Court, in granting a divorce, has authority to direct the defendant to pay the plaintiff alimony, and the allowance may be based upon his earnings or his ability to earn money.” (Eidenmuller v. Eidenmuller (1867) 37 Cal. 364, 366.)
This case is similar to Meagher v. Meagher (1961) 190 Cal.App.2d 62, 11 Cal.Rptr. 650. There the husband had changed jobs and his income in the second job was far less than in the first one. The court affirmed an award of support based upon the husband's ability to earn. At page 64, 11 Cal.Rptr. at page 651, Justice Tobriner, writing for the court, stated, “Yet the cases have frequently and uniformly held that the court may base its decision on the husband's ability to earn, rather than his current earnings. If the court were limited to the momentary current earnings of a husband, particularly one who was engaged in a seasonal industry or whose earnings had widely fluctuated, the court would get a distorted view of his financial potential.”
We think that this is a case where the trial court judge fairly used the “ability to earn” standard. Thaddeus' businesses were admittedly of a widely fluctuating nature with profits determined by a four- to five-year cycle in shipping rates. While Thaddeus did not change jobs as the husband did in Meagher, his supposed retirement is analogous to Meagher's changing jobs.
The trial court judge found himself confronted with a large number of figures for several business entities, and the determination of what was Thaddeus' income and what constituted capital replenishment of businesses that were losing money was a difficult matter. As Thaddeus himself admitted, there was at least one brokerage fee of about $889 per month which he chose to leave in the business, and while he might have had valid business reasons for doing so, the trial court was entitled to take those earnings into consideration in making its award. The trial court did not err in choosing Thaddeus' “ability to earn” as the standard for determining his obligation to pay spousal support. Neither does it appear that the amount of the award is an abuse of its discretion.
Thaddeus' second contention is that the trial court erred in failing to make requested findings of his disposable income for the years 1975 through 1977. He cites Millington v. Millington (1968) 259 Cal.App.2d 896, 67 Cal.Rptr. 128. There the court stated, at page 924, 67 Cal.Rptr. at page 146: “The findings are silent with respect to the husband's ability to pay. ․ ․ ․ The defendant, when he has so requested, is entitled to an express finding on this issue, and the case must be reversed for that purpose.”
Maria correctly points out that findings were made on Thaddeus' ability to pay, but Thaddeus contends that findings should have been made on his “disposable income.” The applicable rule of law is that if findings are made on issues that determine the case, other findings are immaterial and the trial court need not make them (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 278, 137 Cal.Rptr. 855). The fact that the trial court found an ability to pay is determinative of this issue and renders a finding on disposable income immaterial. Failure to make the requested narrower finding was nor reversible error.
In urging that the trial court abused its discretion in making the findings that it did, Thaddeus specifically claims that the court failed to give adequate consideration to Maria's separate estate, and also that, subtracting his obligations for support and taxes from his reported income, he will not be able to support himself. Thaddeus contends that because Maria received substantial property from the community at the time of the dissolution and has since maintained a lavish lifestyle by borrowing heavily against her separate property, the trial court must have given inadequate consideration to her separate estate. He further asserts that she is capable of working (although not challenging the finding that she has no present earning ability). In support cases, discretion is abused whenever, it its exercise, a court exceeds the bounds of reason—all circumstances before it being considered (Brawman v. Brawman (1962) 199 Cal.App.2d 876, 879–880, 19 Cal.Rptr. 106). The record establishes that the trial court considered the value of Maria's separate estate in making its award. The trial judge indicated that he would not expect Thaddeus to support her in a lavish lifestyle, and in his findings stated that he had taken into consideration the property which had been received by her in the interlocutory and her failure to make it productive. The current award for support is $150 per month less than the initial award made at the time she received her share in the community property. The court did not exceed the bounds of reason in making the award that it did.
Thaddeus also contends that, based on his current disposable income as reported to the Internal Revenue Service, the award was excessive. He includes calculations to support his position. However, he ignores the fact that the trial court did not base its award upon his actual current earnings, but rather upon his ability to earn. Thus, his calculations may be correct based upon the figure for disposable income that he used, but the court did not have to use that figure in making its award. We hold that the trial court did not exceed the bounds of reason (Brawman v. Brawman, supra, 199 Cal.App.2d 876, 19 Cal.Rptr. 106), and there was no abuse of discretion.
Without citation of any authority, Thaddeus asserts that the order appealed from in some manner violates Civil Code, section 4800, which requires an equal division of community property in the interlocutory decree dissolving a marriage. The interlocutory decree in this case, entered five years before the order which he here attacks, divided the community property equally between the parties. The contention is without merit.
Maria argues in her cross-appeal that Thaddeus' motion for termination did not allege, and the evidence did not establish, that there was a change in circumstances that would authorize the trial court in modifying its previous order. She claims the trial court had no jurisdiction to hear it, because the wording of Thaddeus' motion establishes it as one for reconsideration and not one based upon a change of circumstances. If the motion were one for reconsideration the trial court would not have jurisdiction to hear it; a trial court may not reconsider an order granting a motion (San Francisco Lathing, Inc. v. Superior Court (1969) 271 Cal.App.2d 78, 76 Cal.Rptr. 304). However, this is not such a case.
To warrant modification of spousal support provisions, there must be a material change of circumstances from the last support order (Philbin v. Philbin, supra, 19 Cal.App.3d 115, 119, 96 Cal.Rptr. 408, In re Marriage of Kuppinger (1975) 48 Cal.App.3d 628, 633, 120 Cal.Rptr. 654). A change of circumstances may be shown by a reduction or increase in one party's ability to pay or an increase or decrease in the other's needs (In re Marriage of Cobb (1977) 68 Cal.App.3d 855, 860–861, 137 Cal.Rptr. 670).
At the prior support hearing held on March 25, 1975, the court did not consider changes in Thaddeus' earnings subsequent to 1974. The businesses were beginning to lose money in early 1975, but the profits for 1974 were high. The continuation of a downward turn, the beginnings of which were evident at the prior hearing, is a material change of circumstances. Thaddeus alleged this material change of circumstances in his motion, and he introduced substantial evidence of the cyclical nature of his shipping brokerage business to prove it. Maria claims that Thaddeus failed to show a change in cycles and thereby failed to show an income shortage. Thus, she seems to be claiming that the prior support order of the court was also based upon the cyclical nature of the business. This is incorrect. The trial judge stated in his findings that he based his prior support order solely upon the exceptional earnings of 1974; and that he had not based the prior order on business cycles, but on an upturn in one. Maria's claim that a failure to show a change in earning cycles was a failure to show an income shortage is without merit.
The trial court's order of December 1, 1977, is affirmed. Each party bear his or her costs on appeal.
1. The same judge heard all of the above motions. He also presided at the dissolution trial.
2. “While an award of child or spousal support may be based on ability to earn as distinguished from actual income [citation], this rule is generally applied only when it appears from the record that there has been a deliberate attempt to avoid financial family responsibilities.” (73 Cal.App.3d at p. 125, 140 Cal.Rptr. at p. 592.)
BARBER,* Associate Justice. FN* Assigned by the Chairperson of the Judicial Council.
TAYLOR, P. J., and ROUSE, J., concur.