Spousal support is an important issue in many California divorce proceedings. As California’s First District Court of Appeals’ recent ruling in In re Marriage of Cesana shows, the issue can become tricky when one or both former spouses’ situations change over the years.
Nelly and Amedeo Cesana were married for 24 years before divorcing in 1985. Under the terms of a settlement agreement between the former husband and wife, Amedeo agreed to pay monthly spousal support to Nelly at a rate of 30 percent of Amedeo’s income, capped at a maximum $9,000 per month. As the court explained, “Amedeo’s financial circumstances varied greatly” in the years following the couple’s divorce. As a result, the two agreed verbally that Amedeo would support Nelly to the best of his ability. He made varying payments until 2008.
Later, Amedeo experienced financial difficulty when the company that he founded went bankrupt shortly after the divorce. He subsequently started a second company with his new wife, Rhonda, and employed Nelly as an administrative assistant from 2004 to 2007. He did not pay marital support during this time, but began paying Nelly $1,500 a month after her employment with the company was terminated.
Amedeo (60 percent) and Rhonda (40 percent) owned the company jointly until 2007 when he transferred his ownership interest in the company to his wife, making Rhonda sole owner. A lawyer for Nelly contacted Amedeo by letter in January 2008, claiming that he owed Nelly a significant sum of money for missed spousal support payments over the years. Amedeo disputed the claim and shortly thereafter retired from the company, reducing his salary to $60,000 from $180,000. Rhonda, meanwhile, continued to work for the company at an annual salary of $140,000.
In the lawsuit that followed, a trial court ordered Amedeo to pay $1,500 per month in spousal support, as well as $15,000 for Nelly’s attorney fees, but denied Nelly’s request that he also be required to pay support arrears. In determining the monthly support sum, the court combined Amedeo and Rhonda’s current salaries ($200,000) and divided the figure in half to calculate what it called Amedeo’s annual income. The court explained that much of Rhonda’s income was owed to Amedeo’s efforts in starting and running the company. “[W]hile Rhonda has a significant management role in the company, and certainly performs more than just a clerical or administrative function,… it is inequitable and unreasonable to divide the collective income received by Amedeo and his wife in anything other than an equal manner,” the trial court explained.
The First District upheld the award on appeal, finding that the trial court did not abuse its discretion in calculating Amedeo’s income and the monthly support total. “The court imputed additional income to Amedeo based on what it concluded was a fair and reasonable allocation,” the appeals court ruled. The court noted that a trial court has broad discretion in considering income to order a support award it deems equitable.
The court also pointed out that Amedeo and Rhonda received a joint pay check from the company over the years prior to Nelly’s support demand. “[W]hile a reduction in salary may have been justified by Amedeo’s reduction in hours, in does not necessarily justify the reallocation of income between Rhonda and Amedeo,” the court explained.
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