Pearson v. Pearson (In re Pearson)

229 Cal. Rptr. 3d 916, 21 Cal. App. 5th 218
CourtCalifornia Court of Appeal, 5th District
DecidedMarch 12, 2018
DocketD070360
StatusPublished
Cited by8 cases

This text of 229 Cal. Rptr. 3d 916 (Pearson v. Pearson (In re Pearson)) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pearson v. Pearson (In re Pearson), 229 Cal. Rptr. 3d 916, 21 Cal. App. 5th 218 (Cal. Ct. App. 2018).

Opinion

DATO, J.

*221In August 2009, Tonya and Donald Pearson dissolved their marriage and entered into a Marital Settlement Agreement (MSA) in which they agreed to the division of their marital assets and that Donald would provide ongoing spousal support to Tonya. Despite this purported agreement, the parties engaged in extensive litigation, primarily initiated by Tonya, over the course of the next six years. Tonya now appeals from a postjudgment order of the superior court deciding various requests for orders to modify spousal support, adjudicate omitted assets, and award sanctions or attorney's fees.

Tonya asserts the court erred in its decision by: (1) concluding the term "bonus" in the MSA did not include certain restricted stock and relocation monies; (2) placing a cap on the amount of Donald's future bonuses available for support; (3) determining that she had the ability to work; (4) awarding Donald attorney's fees in the form of sanctions pursuant to Family Code section 2711 ; and (5) denying her request for additional needs-based attorney's fees pursuant to section 2030. With respect to most of these rulings, we conclude the court did not err. With respect to the orders modifying spousal support, we conclude the court correctly determined that Donald's increase in bonus pay constituted a change of circumstances sufficient to warrant a modification of spousal support, but that substantial evidence does not support *918certain of the court's findings regarding Tonya's ability to work. We therefore affirm in part, reverse in part, and remand the matter for limited further proceedings in accord with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

Donald and Tonya were married for over 30 years. During their marriage, Tonya primarily stayed home with their children while Donald supported the family financially and furthered his career in the banking industry. As a bank executive, Donald received a substantial salary, as well as cash bonuses and long-term incentives in the form of stock options and restricted stock.

*222The couple separated in January 2008. Donald's annual income at the time of the separation was approximately $300,000 per year, including his base salary and annual cash bonuses. Tonya was not working at the time of the separation but obtained a job as a receptionist shortly thereafter.

The couple began negotiating the terms of the divorce and, in May 2008, vocational expert Kathleen Young provided an opinion regarding Tonya's wage-earning capacity. Young noted that Tonya was earning $15 per hour but was only working 20 hours per week in her current position, and concluded Tonya had the potential to work a full 40 hours per week while earning approximately $15-16 per hour. She opined that Tonya's earning capacity would not increase significantly with further training, but suggested Tonya ask her employer about courses within the financial industry that might provide upward mobility in her current position.

Young identified a number of available full-time positions that Tonya was qualified for, but suggested she stay in her current position for the next six months with the goal of converting it to a full-time position, as the job market was competitive and Tonya might be subject to age discrimination. Tonya's job did not become full time and, instead, she was laid off just a few months later. Thereafter, she returned to a previous employer to work part time as a retail sales associate, making $10.85 per hour.

In August 2008, Donald accepted a new position with his employer, Wells Fargo, that required him to move to Oregon. He negotiated a significant increase in his base salary, along with an agreement that Wells Fargo would provide a substantial relocation package and pay his bonus for 2008 based on his performance in his current region, as the region he was to take over was not doing as well. Tonya learned of the relocation no later than November of that same year.

Marital Settlement Agreement

After stipulating to a temporary support order, Donald and Tonya attended a mandatory settlement conference and reached an agreement regarding the division of marital assets and ongoing spousal support. Tonya's attorney read the agreement into the record and also filed a written MSA delineating the terms of the agreement. The agreement required Donald to pay Tonya spousal support in the amount of $7,500 per month plus 35 percent of "any gross bonuses received by [Donald], commencing August 15, 2009, and continuing thereafter until the death of either party or the remarriage of [Tonya], whichever occurs first, subject to the jurisdiction of the Court to alter, modify, or terminate this provision upon a proper showing having first been made to the Court." The agreement noted the spousal support was premised on *223Donald's monthly income of approximately $25,000 per month, less expenses, and an imputation of 40 hours of work per week at an hourly rate of $16 for *919Tonya. The court incorporated the written agreement into a final judgment of dissolution entered on December 8, 2009.

Thereafter, and over the course of the next five years, Tonya and Donald engaged in extensive litigation related to the MSA. Although a full review of the litigation is not necessary, we summarize certain of the intermediate proceedings relevant to Tonya's arguments before turning to the details of the August 2016 postjudgment order at issue in the present appeal.

June 2010 Request for Modification

Less than a year after the court entered the MSA, Tonya filed her first request for orders (RFO) asking the court to modify the spousal support agreement. Donald's annual bonus for 2009 had been significantly lower than previous years2 and, although it was primarily due to the poor performance of the region he had recently taken over, Tonya read some articles discussing changes to the compensation of executives in the banking industry and believed Donald may have received additional shares of restricted stock or stock options in lieu of a portion of his typical cash bonus. In addition, Tonya asserted she was only working part time for less than $15 per hour, and had been unable to find another more lucrative position. She therefore asked the court to award her additional support, and also argued the court should interpret the bonus provision in the MSA to include 35 percent of any stock options that Donald received in lieu of a cash bonus. In response, Donald filed a motion for sanctions claiming that Tonya submitted her motion to modify support in bad faith.

Judge Pollack heard the RFO and questioned Tonya about her understanding of the bonus clause at the time she agreed to the MSA. Their exchange was as follows:

"The Court: Okay, let me ask you some questions, and I'm going to tell you in a moment why I think it might be significant. In your mind, did you see bonus different than stock options? Ms. Cleary says she sees them as different concepts.
"[Tonya]: Yes, definitely.
"The Court: Why 'definitely'? Why is that different?

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Cite This Page — Counsel Stack

Bluebook (online)
229 Cal. Rptr. 3d 916, 21 Cal. App. 5th 218, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pearson-v-pearson-in-re-pearson-calctapp5d-2018.