Calculating Child and Spousal Support in California

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Calculating Child | Spousal Support - Pleasanton | San Francisco | AlamedaAn unpublished opinion out of Santa Clara County helps us to understand that an 80% work schedule can be considered full-time employment when calculating child support and calculating spousal support.

Michael and Lily got married in 2003. They had two children. They separated in 2011. When they separated Michael was earning $9,156 per month as a college professor, and Lily was earning $27,237 per month as a lawyer. During the divorce Michael filed a request for child and spousal support. In responding to the request Lily argued that she had been on a medical leave of absence from her job and intended to return to work on October 31, 2011 “at 80% employment, to allow [her] to care for the children during this difficult transition.” Due to her 80 percent work schedule, Lily’s gross monthly income would be reduced from approximately $27,595.26, to $22,076.20 per month, and she would no longer be eligible for a bonus.

The sole issue before the trial court at the hearing is whether spousal support should be calculated with Lily earning $27,595.26 per month, or with the lower 80% number of $22,076.20. I suspect the case is unpublished because it deals with the unique world of law firm billing. As a big firm lawyer Lily’s compensation is based in part on the number of hours she bills each year. If she were to bill 100% of her expected hours she would be billing 2000 hours per year (or 40 hours per week). In court she argued that she would be billing at 1600 hours per year (or 32 hours per week).

The court accepted the 80% number as reasonable, and set support based on the lower income for Lily. The court determined that Lily was on pace to bill 1600 hours per year at her law firm. As the court did in making its decision, when you throw in office meetings, new business development, administrative chores, etc., Lily was at work at least 40 hours per week.

Michael’s chief contention on appeal was that the trial court erred in calculating temporary spousal support and child support on the basis of Lily’s actual income as of November 28, 2011, when she began working at the 80 percent schedule, rather than her greater earning capacity as a full-time law firm partner.

The appellate court presented the following legal overview:

‘It has long been the rule in this state that a parent’s earning capacity may be considered in determining spousal and child support. [Citations.]’ [Citation.] ‘[F]or purposes of determining support, “earning capacity” represents the income the spouse is reasonably capable of earning based upon the spouse’s age, health, education, marketable skills, employment history, and the availability of employment opportunities.’ [Citation.]” (Cheriton, supra, 92 Cal.App.4th at p. 301.) “By express statutory provision, trial courts have discretion to impute income to a parent based on earning capacity. (§ 4058, subd. (b).)”[1] (Cheriton, supra, at p. 301.) “But no authority permits a court to impute earning capacity to a parent unless doing so is in the best interest of the children. By explicit statutory direction, the court’s determination of earning capacity must be ‘consistent with the best interest of the children.’ (§ 4058, subd. (b); [citations].)” (Cheriton, supra, at p. 301; see also In re Marriage of LaBass & Munsee (1997) 56 Cal.App.4th 1331, 1340.)

The California Supreme Court has considered the issue of whether earning capacity “should, as a general matter, properly be measured by the work regimen engaged in by the supporting spouse during the marriage even if such regimen was extraordinary, requiring excessive hours or an onerous work schedule.” (In re Marriage of Simpson (1992) 4 Cal.4th 225, 234 (Simpson).) The court concluded “that earning capacity generally should not be based upon an extraordinary work regimen, but instead upon an objectively reasonable work regimen as it would exist at the time the determination of support is made. [Citation.]” (Id. at pp. 234-235.)

Our Supreme Court further determined that “[a] reasonable work regimen, as opposed to an extraordinary regimen, however, is not readily or precisely determined and is dependent upon all relevant circumstances, including the choice of jobs available within a particular occupation, working hours, and working conditions. Established employment norms, such as the standard 40-hour work week, are not controlling but are pertinent to this determination. In certain occupations a normal work week necessarily will require in excess of 40 hours or occasional overtime and thus perhaps an amount of time and effort which may be considered reasonable under the circumstances. A regimen requiring excessive hours or continuous, substantial overtime, however, generally should be considered extraordinary.” (Simpson, supra, 4 Cal.4th at pp. 235-236, fn. omitted; see also In re Marriage of Smith (1990) 225 Cal.App.3d 469, 476 [working 60 hours per week constitutes excessive hours].)

The appellate court affirmed the trial judge.

In the present case, the trial court declined to impute income to Lim based on her earning capacity as a full-time law firm partner. The court implicitly found that as a full-time law firm partner Lim worked excessive hours, and determined that an 80 percent schedule would require her to work at least 40 hours per week in order to meet her law firm’s billable hours requirement. The trial court further determined that an 80 percent schedule was in the children’s best interest, and therefore calculated guideline child support and temporary spousal support on the basis of Lim’s reduced income of $22,076 per month.

. . .

Moreover, we reiterate that this court has determined that “no authority permits a court to impute earning capacity to a parent unless doing so is in the best interest of the children. By explicit statutory direction, the court’s determination of earning capacity must be ‘consistent with the best interest of the children.’ (§ 4058, subd. (b); [citations].)” (Cheriton, supra, 92 Cal.App.4th at p. 301.) We determine that substantial evidence supports the trial court’s implicit finding that it was not in the children’s best interest to impute earning capacity to Lim based on her previous income as a full-time law partner.

I like this decision. It demonstrates the depth of analysis a court must perform in assessing support, and it also reflects the fact that there is more to working and parenting then the bottom line number on the paycheck.

Please click here to read the original Lim opinion.

Please be sure to visit www.hardinglaw.com, the website for the law firm of Harding & Associates, for more information on California family law and calculating child support and spousal support.

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