California determines child support by an algebraic formula that looks at essentially four things: the payor’s income; the custodial parent’s income; the number of children; and the amount of time each parent spends with a child.
But what if the custodial parent, who is usually the parent who receives child support, is not working but instead gets about $30,000.00 of her expenses paid each month from a “friend” who lives with her. This was the issue presented to the California Court of Appeal in the case of Anna M. v. Jeffrey E., which was decided yesterday.
Ruling 3-0, the panel, led by Justice Tricia Bigelow, affirmed a decision by the trial court (the Hon. Mark Juhas from Los Angeles County) to disregard the contributions from the friend and to instead treat the mother as if she had no income at all. As a result of Judge Juhas’ decision, the father, who makes about $400,000.00 a year, was forced to pay $2,505.00 per month in child support.
The strange thing about this case is that the mother had a friend named Davis, whom she had met in 2004. Although the parties’ daughter is Davis’ goddaughter, Davis has no romantic involvement with the mother but he pays the rent of $10,000.00 a month for the mom’s house and has a room there for himself, where he stays about half of each month. Davis also pays a person to take care of the house, and he further pays for the food and all other bills, and he pays for a nanny. He provides the mom with two cars. He also has a credit card in his name that the mom gets to use and which she makes charges on averaging out to $12,000.00 a month.
On top of all of this, Davis has loaned Mother over $1 million for attorney fees.
Mother, by the way, has not been employed since 2008.
Relying on existing case law allowing courts to treat recurring gifts as income for purposes of determining support, the father’s attorney argued that Davis’ payments should be imputed to the mother as her income and that child support by the dad should accordingly be zero.
But the court found that it was not appropriate to use the recurring gift doctrine here. First, unlike other cases where the doctrine may have been applied, the one providing the gifts in this case is basically a total stranger — not a relative like a parent or grandparent. This distinction may be important because a total stranger is more likely to completely cut off the beneficiary at any time.
The court also made another distinction. It noted that unlike the groundbreaking case of Marriage of Alter, which was decided in 2009, Davis has not paid these expenses for “years”. Indeed, at the time of the child’s birth in 2006, Davis did not have the same arrangement he has with the mom in place at the present time.
The Court of Appeal noted that while “gifts” are not mentioned as being part of income in the statute that defines child support income (Family Code section 4058), courts have still “considered gifts and other financial benefits not identified in the statute in the factual contexts in which they arise to determine whether they may be included or excluded as ‘income’ in a child support guideline calculation”. That’s because section 4058’s list of types of income is not supposed to be exclusive. On the other hand, “while regular gifts of cash may fairly represent income, that might not always be so”.
The bottom line is simply that a “trial court has discretion to consider gifts as income when they are a regular, recurrent monetary benefit to the parent”. But in this case, the judge did not abuse his discretion. This means the trial court could have considered the “cash gifts to the mother as her income, but it was not required to do so if it concluded those gifts do not fairly represent income and are not funds available for child support”.
Justice Bigelow was joined in her opinion by the Hon. Madeleine Flier and the Hon. Elizabeth Grimes.
Although this case arose out of Los Angeles County, the case was certified for publication, which means it is binding on all trial courts throughout California and may be cited as precedent by lawyers.
This is the second published decision issued by the California Court of appeal on the issue of family law in 2017. The first decision, Marriage of McClain, had to do with spousal support; this case is about child support.
Of course, the Court of Appeal’s decision is binding in California only. The Law Offices of Andy Cook does not practice in any other state.