After a contentious divorce and “intense litigation” leading to a support agreement, an unemployed but financially secure Certified Public Accountant (CPA) filed for changes in his monthly obligations. The trial court found that the husband’s assets, professional degree, and experience make him capable of continuing the agreed-upon payments. The appellate court agreed, finding that unemployment alone did not “materially change his circumstances” or his ability to continue to contribute to the support of his family.

Writing for a unanimous three-judge panel of the Californian Court of Appeal for the Second Appellate District’s Division Six, Justice Steven Z. Perrin wrote an unpublished opinion on January 4. It found no abuse of discretion by the trial court and upheld the decision of an order by Los Angeles County Superior Court Judge Timothy M. Weiner that denied a modification to the husband’s monthly obligations.

This article, as well as the opinion of the appellate court, uses the first names of the parties to make it easier to identify them since they share a last name. As the appellate court opinion states, “no disrespect is intended.”

The 1997 marriage of Hilary and Prem Gayal lasted 22 years. The couple separated in 2016, and “intense litigation” about costs and responsibilities lasted until 2019. Finally that year, a marital settlement agreement (MSA) was agreed upon that required Prem to pay Hillary $3,250 per month.

Hilary had stopped working in a banking career in order to care for her children. During their marriage, steady employment often eluded husband Prem. A specialist in corporate finance, he did not have a steady job and often had to work as a temporary accountant. Nevertheless, the court found that he earned enough to support his family.

When the MSA was signed in 2019, Prem was making $40,700 per month as a consultant to LegalZoom, a company that provides legal help to “small businesses and families,” according to its website. Hilary worked as a development officer in a non-profit organization. Under the MSA, Prem’s spousal support was set at $3,250 per month, and child support for their son and daughter added $5,477 per month to that amount.

After outlining the current costs assigned to Prem under the MSA, Justice Perrin explained that under its provisions, the MSA could be modified “should an issue such as (Prem’s) unemployment or any subsequent work contracts arise in the future.” It also said that both Hillary and Prem should make “reasonable efforts” to call for a status conference before filing a request for a modification order.

In August 2019, Prem learned that LegalZoom did not intend to renew his contract, which ended in September. Hillary’s counsel promptly asked Prem to produce several financial documents before making a status conference call as required by the MSA. Prem soon filed a Request for an Order (RFO) that sought to preserve his right not only to modify the support agreements but to make any modifications retroactive. A dispute arose and the conference call did not take place. Instead, the trial court heard Prem’s RFO for retroactive modification on December 16, 2019.

At the hearing, Prem said he had used his “best efforts” to find a new position, but failed. Hilary said Prem’s unemployment gaps were “typical.” She expressed frustration. The trial court sided with her and Prem appealed.

In his discussion of the request for modification of the MSA, Justice Perrin explained the law and precedents that defined how to prove a “material change in circumstances” that occurs while a court’s prior order remains in effect. Case law in 1996 states that “an increase or reduction in the supporting spouse's ability to pay for supported spouse’s needs must be shown” and that the supporting parent bears the burden of showing that “changed circumstances warrant a downward adjustment in child support…”

To make its determination, Prem said the court should primarily consider his current cash flow and not his history. The Appeals Court countered by saying it was “not required to focus on any one factor, and that the court had “broad discretion” to consider factors such as earning ability, along with actual income. The court reviewed Prem’s earning capacity and found that the expiration of his LegalZoom contract was both “natural and anticipated.” It pointed out that this may change in the future if, for example, he gets a lower-paying job.

Perrin reviewed what he called the “uneven nature” of Prem’s employment and compensation, and decided that he had failed to meet his legal burdens. Although his employment was not steady, he was regularly hired as a CPA.

In addition, the concurring Associate Justices Kenneth R. Yegan and Martin J. Tangeman noted that “Prem’s net separate assets exceeded $1 million at the time he sought modification. This fact alone could have justified the trial court’s denial.”

The court ruled that it’s not just what you are making now that counts; it’s also a total of what you have that determines whether modifications in spousal and child support will be awarded.