New Mate Income

In the recent case of Romero v. Romero, [2002 DJDAR 7773, July 11,2002], the Fourth Appellate District has given the strongest statement to date regarding the application of Family Code Section 4323(b) with regards to a trial court’s ability to consider directly or indirectly a subsequent spouse’s or non-marital partner’s income in determining or modifying spousal support.

Husband, Paul Romero, had been married for 28 years. Upon his dissolution, a court ordered Mr. Romero to pay $1,200.00 per month in spousal support. At the time of the divorce, Mr. Romero was employed. Mr. Romero subsequently remarried and enjoyed a higher standard of living with his new spouse, who earned approximately $6,500.00 per month. Mr. Romero’s new spouse had two children who where receiving voluntary or court-ordered support from the father. Mr. Romero lived with his new spouse in her home, (which the court noted was on a golf course) and had a membership at a country club. Mr. Romero’s reported expenses on his Income and Expense Declaration were $5,000.00 per month, including $1,600.00 for the home and $700.00 for country club fees and charges. Mrs. Romero, Mr. Romero’s ex-wife, after divorce was experiencing a lower standard of living, having declared bankruptcy and losing the family home.

Approximately five years after the Judgment, Mr,. Robero was diagnosed with Parkinson’s Disease, and as a result took early retirement. Mr. Romero’s sought to reduce his spousal support obligation. At the time of filing his gross income was 3,000.00 a month, down from the $5,000.00 per month when the order was first made. The trial court found that while the husband’s reduction in his income did constitute a material change in circumstances, such a change did not require a reduction in spousal support based on other factors to be considered as enumerated in Family Code Section 4320. The court made the following comments:

“I don’t see any way to avoid considering (new spouse’s) income if we are going to consider (husband’s) income and expense declaration. Her income is set forth on the form. Her income is by implication at least partially responsible for paying (the husband’s) monthly debt. There’s no way he could pay his monthly debt simply on his ($2,000.00) a month net income.”

The trial court, notwithstanding Section 4323(b) of the Family Code which prohibits the consideration of a subsequent spouse’s or cohabitant’s income when determining or modifying spousal support, then stated:

“I am simply without any option. I don’t see any other way to proceed other than to consider the family (husband’s) current total family circumstances because those circumstances are intertwined inextricably with our analysis of (Section) 4320, specifically in the area of standard of living”.

The trial court denied the Defendant’s request for modification.

The Court of Appeals reversed.

The specific question addressed by this case is whether, notwithstanding Family Code Section 4323(b)’s prohibitions, may a court account for the indirect effects of the additional incime of the new spouse or new cohabitant on other statutory enumerated factors, including the payor’s ability to pay and the standard of living of the parties as found in Family Code Section 4320(c)?

The court first reviewed pre-Family Code Section 4323(b) cases to reach an analysis. In the Gammell v. Gammell case, 90 Cal.App.3d 90, the Appellate Court held that a husband’s remarriage does not alone justify reduction of support payments to his former wife. “Since a remarriage with its additional burdens is a factor to be considered in modifying support payments, it appears fair and equitable that a remarriage with its additional benefits also ought to be considered”. Gammell, at Page 93.

The Court also reviewed In re Marriage of Ramer, 187 Cal.App.3d 263. In Ramer, the Appellate Court stated that the payor’s new wife’s income is to be considered available to defray the shared expenses and, therefore, increases the amount available for support payments. (Ramer, at Page 272.)

Lastly, the Court referenced a third pre-Family Code Section 4323(b) case, In re Marriage of Tapia, 211 Cal.App.3d 628. Again, relying on Gammell and Ramer the Court in Tapia held that regardless of the relationship between the housemates, the fact that they are sharing expenses logically effects each persons ability to pay other obligations (Tapia at Page 631).

Based on these cases the pre-Family Code Section 4323(b) approach was that a trial court could consider the income of a new spouse or non-spousal partner for the purpose of determining the parties’ expenses and ability to pay support. However, in 1993 the legislature rejected this approach when it passed Senate Bill 145 which added subdivision (b) to Family Code Section 4323. That provision, which became effective in 1994, consists of the following limitations:

“The income of a supporting spouse’s subsequent spouse or non-marital partner shall not be considered when determining or modifying spousal support”.

The Romero court continued to look at the legislative history of Family Code Section 4323, with a view to “promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences”. (See Estate of Griswald, 2001 25 Cal.App.4th 904, (910-911), dealing with examining statutory language).

The Romero court noted that the only exception to the concept of considering new-mate income is with regards to child support, in that new-mate income may be considered to avoid extreme and/or severe hardship to the effected children, as noted in Family Code Section 4057.5, subdivision (a)(1) and (2). This exception relates to and depends entirely on the needs of the children rather than the needs of their parents. The court noted that by contrast, spousal support is designed to meet the needs of the supported spouse, rather than any children. The Romero court concluded that the legislature intended to completely exclude such new spousal income from the decision-making process. The Romero court reviewed another child support case, In re Marriage of Wood, 37 Cal.App.4th 1059. In Wood the Appellate Court stated that:

“(a)lthough the trial court’s claimed only to take into account (the new husband’s) income as it related to the (the wife’s) standard of living, this was tantamount to considering new-mate income”. Wood at Page 1066.

The court also referenced In re Marriage of Loh, 2001, 93 Cal.App.4th 323. Although again dealing with child support, in agreement with the Wood analysis, the Loh court noted that the legislature’s use of the phrase “determining or modifying” were intended to encompass more than merely factoring into the support equation. The court explained…”determining or modifying” are broad words in this statutory context. That is, they go beyond mere calculation of the guideline amount”. If the legislature had wanted to exclude new spouse or non-marital partner income from merely the calculation of the guideline amount, it would have used the word “compute”. Loh at Page 337.

The child support cases cited in Romero indicate that in passing the amendments to Family Code Section 4057.5 dealing with the non-consideration of new spouse income in child support cases, the legislature intended to exclude both direct and indirect consideration of new-mate income even as it relates to other factors, including the supporting spouse’s standard of living. The statutory prohibition therefore applies with equal or greater force in the spousal support context, where the legislature left no room for any exceptions.

The Romero court was then confronted with the Judicial Council Form 1285.50 (Income and Expense Declaration). This form specifically inquires of expenses that are being shared (Form 1285.50, Section 10) and Form 1285.50(b) Section 1(a)). How is a trial court to interpret this data if it is the legislature’s intent to clearly exclude new-mate income in spousal support matters?

To effectuate this legislative purpose a trial court must not only exclude new spouse’s income but also the additional expenses resulting from the remarriage. In other words, the expenses represented by Mr. Romero on his Income and Expense Declaration to be his and his new wife’s expenses should be excised out, or apportioned by a trial court. By way of example, certain expenses such as a large mortgage payment may not even exist but for the remarriage. In this particular case, the court noted it would have been impossible for Mr. Romero to be paying the $1,600.00 for the house expense he claimed on his Income and Expense Declaration and other expenses for a total of $5,000.00 of expenses, with a net monthly income of only $2,000.00.

In order to comply with this statutory prohibition against “considering” new-mate income the Romero court suggested that these expenses must be eliminated from consideration, along with the other additional expenses “resulting from the remarriage”. Are the expenses to be proportionalized between the payor and payor’s new spouse in relationship to their respective incomes, or divided 50-50, or is it to be ignored in its entirety? The Romero decision concludes by stating that current law fails to provide a more predicable allocation of the shared expenses which should be left “to the legislature”.

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