Filed 9/15/16 Welsh v. Welsh CA1/1
                         NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.


                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                           FIRST APPELLATE DISTRICT

                                                        DIVISION ONE


STACEY WELSH,
          Plaintiff and Appellant,
                                                                             A145155
v.
JOHN WELSH et al.,                                                           (Marin County
                                                                             Super. Ct. No. FL1304291)
          Defendants and Respondents.


          Stacey Welsh appeals from an order reducing the monthly amount of child support
that her former husband, John Welsh, is obligated to pay her. We reverse an erroneous
computation of Stacey’s gross income used in calculating child support as well as a ruling
regarding Stacey’s tax filing status, which the parties agree was mistaken, and we remand
to the trial court so that it can recalculate its support order in those two respects only. We
otherwise affirm the trial court’s order.
                                                         I.
                                               FACTUAL AND PROCEDURAL
                                                    BACKGROUND
          Stacey and John1 were married for 12 years, and they have three children, one of
whom apparently became emancipated during the pendency of these proceedings. After
the couple separated, they signed a marital settlement agreement, which was entered as a
judgment by the San Francisco Superior Court in 2009 (the San Francisco proceedings).


1
  We refer to the Welshes by their first names for purposes of clarity because they share
the same surname. (Rubenstein v. Rubenstein (2000) 8l Cal.App.4th 1131, 1136, fn. 1.)


                                                                    1
Among its terms, the agreement required each party to “continue to pay for childcare
costs incurred during his or her own custodial time with the children.”
       In early January 2011, John moved to New York and agreed to pay child support
to Stacey. Stacey subsequently asked the court to increase the amount of this support. A
written statement of decision was filed in September 2012 (the September 2012 order) in
the San Francisco proceedings, and the order was subsequently adopted with additional
written findings.
       In the September 2012 order, the San Francisco trial court found that John’s
“relocation to New York warrant[ed] a modification of the original . . . zero child support
agreement.” The court found that “both parties’ circumstances have changed
substantially,” and it concluded that the change justified a deviation from the application
of the uniform child support guideline established under Family Code section 4055.
       In determining John’s gross income, the San Francisco trial court included income
that John was receiving annually from two trusts, payments he was receiving from his
mother for him to pay his rent, and an annual recurring gift from his mother. In
determining Stacey’s gross income, the court considered assets related to four Hawaii
real estate partnerships. The court found that Stacey had “failed to produce information
related to her interest in [these] partnerships,” but it nonetheless declined to include
taxable income that Stacey had received in the amount of $40,656 from the partnerships
“for the purpose of calculating child support, because of the resulting tax liability. . . .
The fact that these distributions were used to pay taxes is relevant. The aggregate
distributions will not be treated as annualized income available for support.” Our
appellate record does not include a complete record of the San Francisco proceedings,
and we do not know the full extent of the information and documents before the trial
court at the time of its ruling. We do not know, for example, whether the court was
provided with a copy or summary of Stacey’s tax return. Ultimately, the court ordered
John to pay $4,500 per month in child support, which was an upward deviation from the
uniform guideline and based on John’s “substantial wealth.” No appeal was taken from
the September 2012 order.


                                               2
       John subsequently moved in the San Francisco proceedings for a reduction of his
child support obligation. In July 2013, when it continued the hearing on John’s motion,
the trial court ruled that “[f]or this court to consider a change of circumstance for
purposes of determining whether child support payments should be modified, [John]
needs to show that whatever factors [the court] took into consideration in making [its]
determination [in the September 2012 order] that [John] is a man of substantial wealth no
longer are there.” It summed up by stating, “The Court will be ruling on whether there
has been a change of circumstance such that the Court would consider a modification.”
The hearing, however, was never held because John withdrew his motion the following
month.
       In August 2013, John registered his child support obligation with the Department
of Child Support Services (DCSS) in San Francisco under Family Code section 17400,
which requires the DCSS to “take appropriate action . . . [to] enforce child support . . .
orders” when requested. (Fam. Code, § 17400, subd. (a).) Subsequently, Stacey and the
children living with her moved to Marin County, and the administrative responsibility to
enforce the parties’ child support obligations was accordingly transferred to the Marin
County DCSS.
       John then filed a declaration with the Marin County DCSS stating there had been a
significant change of circumstances since the September 2012 order warranting a
reduction of his child support obligation. (Cal. Code Regs., tit. 22 § 115535.) In
response, the Marin County DCSS in June 2014 filed a motion requesting a modification
of child support. The hearing, although delayed as a result of disputes over discovery and
requests for sanctions, was eventually heard on December 19, 2014. A 14-page statement
of decision was entered on March 11, 2015 (the March 2015 order), and it is this order
from which Stacey appeals. The order determined John’s monthly taxable gross income
to be $23,499. This was composed of $10,999 in monthly income from two trusts and
$12,500 attributed to John in monthly wages. The order determined Stacey’s monthly
taxable gross income to be $39,254. This was composed of $31,903 in monthly wages
and $7,351 that was attributed to Stacey as monthly investment income related to her


                                              3
partnerships. The $7,351 was one-twelfth of $88,212, which was the amount of
investment income reported in Stacey’s 2013 federal tax return. The order also
determined that the child support calculations should include a tax-filing status for Stacey
as “head of household with the children as exemptions.”
       In accordance with the March 2015 order, the DCSS calculated child support
under the uniform guideline, and this calculation reduced John’s monthly child support
payment to $2,478 (down from the $4,500 per month in the September 2012 order),
which was adopted by the trial court.
                                              II.
                                        DISCUSSION
       A.     The Standard of Review.
       We presume the correctness of trial court orders and indulge all intendments and
presumptions to support them on matters as to which the record is silent. (Denham v.
Superior Court (1970) 2 Cal.3d 557, 564.) The party appealing from an order has the
burden to affirmatively show error. (Ibid.)
       In considering the modification of a child support order, “[o]ur review is limited to
determining whether the court’s factual determinations are supported by substantial
evidence and whether the court acted reasonably in exercising its discretion. [Citation.]
We do not substitute our judgment for that of the trial court, but confine ourselves to
determining whether any judge could have reasonably made the challenged order.
[Citation.]” (In re Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1360
(de Guigne).) We exercise our independent judgment on “pure questions of law, such as
procedural matters or interpretations of rules or statutes. . . . [Citations.]” (Gordon’s
Cabinet Shop v. State Comp. Ins. Fund (1999) 74 Cal.App.4th 33, 38.)




                                              4
       B.     The Trial Court Was Not Estopped from Modifying the September 2012
              Order Regarding Stacey’s Partnership Assets.
       Stacey first argues that the trial court was collaterally estopped from including
investment income generated from her partnerships in her gross income available for
child support because the San Francisco Superior Court had excluded partnership-related
assets from her income in the September 2012 order. She contends that, as a result of the
September 2012 order, “all K-1 income, the respective tax liability, and cash distributions
[related to the partnerships] are to be excluded from income available for child support.”
We are not persuaded.
       Collateral estoppel, also known as issue preclusion, prohibits a party from
relitigating any issue litigated and finally decided in an earlier action or motion between
the same parties. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341 & fn. 3.) The
essential elements required for its application are threefold: “(1) A claim or issue raised
in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the
prior proceeding resulted in a final judgment on the merits; and (3) the party against
whom the doctrine is being asserted was a party or in privity with a party to the prior
proceeding. [Citations.]” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788,
797.) These elements were not satisfied here both because the September 2012 order was
not a final determination, and because Stacey failed to satisfy her burden of proving that
the issue of the treatment of the partnership-related assets was identical.2
       The September 2012 order was not final for purposes of the application of
collateral estoppel. For starters, the trial court’s statement that “aggregate distributions
[from these partnerships] will not be treated as annualized income available for support”
was made in the context of determining the amount of income that was then available to
Stacey for child support. We do not construe the statement to amount to a ruling, as


2
 In light of this conclusion, we need not and do not decide whether the DCSS and John
are in privity for purposes of collateral estoppel, but we observe that the DCSS, unlike
John, represents the public interest in matters of child support. (Fam. Code, § 17406,
subd. (a); Monterey County v. Cornejo (1991) 53 Cal.3d 1271, 1284.)


                                               5
Stacey insists, that taxable income generated by the partnerships was to be categorically
and forever excluded from future child support adjustments.
          But even if we were to give the statement such a construction, we would conclude
that the ruling was not binding. By statute, child support orders are generally modifiable
“at any time as the court determines to be necessary.” (Fam. Code, § 3651, subd. (a).) A
dissolution remains pending throughout a child’s minority for purposes of child support,
and domestic-relations judgments are typically not considered to be “final” adjudications
of the extent of the parents’ obligation to support their child. (In re Marriage of Armato
(2001) 88 Cal.App.4th 1030, 1040-1042.) Thus, as a matter of law, courts are free to
reconsider prior rulings regarding child support.
          Furthermore, Stacey has failed to prove that the issue of the treatment of the
partnership-related assets was identical for purposes of the two orders. (Conservatorship
of Buchenau (2011) 196 Cal.App.4th 1031, 1040-1041 [party failed to show identity of
issues or of parties because necessary evidence not included in record on appeal].) She
did not satisfy this burden because the information given to the San Francisco court for
the September 2012 ruling was incomplete, and our appellate record does not even
include all of that incomplete information.
          In the September 2012 order, the court noted that it was “unable, given the limited
information provided by [Stacey] concerning these partnerships, to determine the exact
value of these partnerships and whether [Stacey] is able to receive additional income
from these assets.” Based on this limited information, the court agreed with Stacey that
partnership distributions “should not be considered for the purpose of calculating child
support, because of the resulting tax liability . . . [, and it ordered that t]he aggregate
distributions will not be treated as annualized income available for child support.” But
the court’s reference to “these distributions” is ambiguous, especially in light of the
court’s corresponding references to “the exact value of these partnerships” and Stacey’s
ability “to receive additional income from these assets.” Our appellate record simply
does not reflect what information or material was provided to the court when it entered its
ruling.


                                                6
       Our record of the information provided to the Marin County trial court for
purposes of the March 2015 order is more complete. But while from the record we can
conclude that the parties’ overall economic circumstances changed, we cannot conclude
that the specific issue of the treatment of the partnership-related assets was identical.
Although Stacey was found to have underreported her income, the record shows that her
income “more than tripled” since the September 2012 order.3 (Italics in original.)
Ultimately, the court set Stacey’s monthly wages at $31,903 by relying on Stacey’s actual
wage stubs. This amount, which Stacey does not challenge on appeal, increased her
monthly wages from the $6,357 that the court set as her monthly wages in the September
2012 order. As the trial court succinctly put it, “[t]here can be no doubt this [Stacey’s
increased income] reflected a dramatic change in circumstances.”4
       Specifically as to Stacey’s partnership assets, the court similarly found “a problem
with disclosure . . . [Stacey] completely ignores these assets in her Income and Expense
declaration and at the hearing professed to not knowing the fair market value of the assets
or of her interest in these family run entities. Assuming a modest rate of return, the
$69,825 net rental income to [Stacey] reflects an interest of substantial value and should
have been properly disclosed. . . . [Stacey] cannot choose to shelter her assets [allowing
accumulation of her wealth] while vehemently asserting that John should not only be
attributed with a rate of return on his assets but also liquidate his assets. . . . Accordingly,
if this court is going to attribute John with actual passive earnings on his trust asset, it
will attribute [Stacey] with the actual passive earnings on her assets [] as well.”



3
 As to wages, the court found that “[t]he gross difference between [Stacey’s] wage stubs
and the Income and Expense Declaration submitted to this court represent a substantial
underreporting of income by [Stacey].”
4
  Furthermore, the record reflects a substantial change in the source of John’s income. In
November 2014, John’s mother died. Accordingly, he no longer received two of the
components of his gross income as determined by the trial court in the September 2012
order: monthly rent payments and an annual gift from his mother. Offsetting this loss of
income, John became the beneficiary of a new, $4.1 million trust.


                                               7
       Ultimately, the court set Stacey’s net monthly investment income based on the
exact amount of investment income that Stacey herself had reported in her 2013 tax
return. An attachment to Stacey’s tax return entitled “Net Investment Income Tax,
Individuals, Estates and Trusts” showed that Stacey reported total investment income of
$88,212. Dividing this total by 12 months, the court found that “[Stacey’s] 2013 tax
return reflects $7,351 per month in partnership and other investment income and the court
will use that figure as the presumptively correct amount.”
       Under these circumstances, and on the record before us, we cannot conclude that
Stacey satisfied her burden of proving that the issue of the treatment of her partnership
interests was identical for purposes of the two rulings. Accordingly, we reject her
argument that principles of collateral estoppel prevented the trial court from including in
its March 2015 order the investment income Stacey reported on her 2013 tax return as
part of her gross income.
       B.     The Trial Court Did Not Abuse Its Discretion by Including Stacey’s
              Reported Investment Income as Part of Stacey’s Gross Income Available
              for Child Support.
       Stacey next argues that the trial court abused its discretion by including the
investment income reported in her 2013 tax return as part of her gross income. She
argues that this income should have been excluded because more than half of it was
“phantom” (not actually distributed to her), and the other half, although distributed to her,
was used to pay tax liability. According to Stacey, “the net result . . . was that there was
no income available for child support related to [her] interests in the partnerships.”
Again, we are not persuaded.
              1.     The law governing the calculation of child support.
       California has a strong public policy in favor of adequate child support and that
policy is expressed in statutes establishing a uniform child support guideline. (In re
Marriage of Bodo (2011) 198 Cal.App.4th 373, 385; see Fam. Code, §§ 4050-4076.)
Under the guideline, courts are required to calculate child support by applying the




                                              8
mathematical formula contained in Family Code section 4055.5 The amount established
by the formula is presumptively correct, and the court cannot deviate from it unless there
are special circumstances. (Bodo, at pp. 385-386; de Guigne, supra, 97 Cal.App.4th at
p. 1359.)
       Income is “broadly defined” for the purpose of calculating child support under the
uniform guideline. (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 285.) But
while broad, it is not limitless. (In re Marriage of Pearlstein (2006) 137 Cal.App.4th
1361, 1372.) “Generally, the types of income specified in the statute consist of money
that the support obligor actually receives, and do not include unrealized increases in the
value of assets.” (Ibid.; see also In re Marriage of Henry (2005) 126 Cal.App.4th 111,
118 [increase in equity in residence does not constitute income or earning capacity]; In re
Marriage of Scheppers (2001) 86 Cal.App.4th 646, 651 [same regarding gift of life
insurance benefits].) At the same time, a court can reject a parent’s attempt to minimize
child support obligations by structuring income and personal-expense payments through a
business owned or controlled by the parent. (Hogoboom & King, Cal. Practice Guide:
Family Law (The Rutter Group 2014) ¶ 6:205.5.)
       The uniform guideline distinguishes between net and gross monthly income. The
calculation under the guideline “is predicated on each parent’s ‘net monthly disposable
income’ [citation], which has been characterized as the ‘key financial factor’ in the
formula. [Citation.]” (Hogoboom & King, supra, ¶ 6:195; see also Cal. Rules of Court,
rule 5.275(b).) “ ‘[N]et monthly disposable income’ is a product of each parent’s ‘annual
gross income’ [citation] adjusted by allowed ‘deductions’ to yield ‘annual net disposable
income’ [citation] and then divided by 12 [citation]. [Citations.]” (Hogoboom & King,
supra, ¶ 6:195.)
       The allowed deductions in determining the annual net disposable income include
“[t]he state and federal income tax liability resulting from the parties’ taxable income.

5
 In calculating spousal support, the trial court must consider each spouse’s earning
capacity, but the primary indicator of that capacity is income. (Fam. Code, § 4320,
subd. (c); In re Marriage of Cheriton, 92 Cal.App.4th 269, 301.)


                                             9
Federal and state income tax deductions shall bear an accurate relationship to the tax
status of the parties (that is, single, married, married filing separately, or head of
household) and number of dependents. State and federal income taxes shall be those
actually payable (not necessarily current withholding) after considering appropriate filing
status, all available exclusions, deductions, and credits.” (Fam. Code, § 4059, subd. (a);
see also In re Marriage of Carlton (2001) 91 Cal.App.4th 1213, 1218.) In other words,
although gross income does not account for tax consequences, net monthly disposable
income does.
               2.     The Trial Court’s Ruling.
       Applying this law to the trial court’s ruling, we are left unconvinced by Stacey’s
argument that it was an abuse of discretion for the court to include the investment income
reported in Stacey’s 2013 tax return as part of her gross income because some of the
income was allegedly phantom and the rest was allegedly used to pay tax liability.
       To begin with, we have little trouble rejecting Stacey’s argument as to the portion
of the investment income that was purportedly used to pay tax liability because, as we
have explained, under the uniform guideline tax considerations are immaterial for
computing gross monthly income; those considerations become material in computing net
monthly disposable income. Thus, the trial court did not abuse its discretion by including
Stacey’s reported taxable investment income as part of her gross income.
       We next consider and reject Stacey’s argument as to the portion of the investment
income that allegedly was phantom. Because this income was reported as investment
income on Stacey’s 2013 federal tax return, a presumption arose as a matter of law that it
should be includable as gross income available for child support. (See In re Marriage of
Scheppers, supra, 86 Cal.App.4th at p. 650 [“Although federal law is not conclusive on
the interpretation of section 4058, it is persuasive. . . .”].) Family Code section 4058
defines “gross income” with language that was “lifted straight from the definition of
income in section 61 of the Internal Revenue Code.” (In re Marriage of Schulze (1997)
60 Cal.App.4th 519, 529.) “[Tax r]eturns are, after all, ultimately enforced by federal and
state criminal penalties. Hence it is not surprising that tax returns are the core component


                                              10
of determinations under the guideline formula.” (In re Marriage of Loh (2001)
93 Cal.App.4th 325, 332.)6
       Although there is little case law governing the treatment of phantom income, what
exists supports the conclusion that income reported on tax returns may generally be
included as income for child support. For example, in In re Marriage of Riddle (2005)
125 Cal.App.4th 1075, a father argued that his reported taxable income based on a
“forgiveness of debt” should not be included as income available for child support
because it was phantom in the sense that it was not received and spendable. In rejecting
the argument, Riddle explained that “the child support laws (see Fam. Code, §§ 4058,
4059) are very exacting as to the definition of income . . . [and] the language was ‘lifted’
straight from the Internal Revenue Code. That means that if the tax laws say you have
income because of the forgiveness-of-debt, you have income, and that forgiveness-of-
debt income must go into the calculation of adjusted gross income under section 4058,
subdivision (a), which in turn is the basis for income under section 4059,
subdivision (a).” (Riddle, at p. 180.)
       Because Stacey’s reported investment income is presumed to be part of her gross
income, the question becomes whether the trial court abused its discretion in effectively
ruling that Stacey failed to rebut this presumption. We conclude that it did not. The
primary evidence explaining the nature of the investment income was Stacey’s testimony.
In our view, the court properly could have found this testimony to be unconvincing and
Stacey’s credibility to be weak.7
       Stacey’s testimony was unconvincing because it reflected a shallow understanding
of the partnership assets. Stacey did not know how many partners were in one real estate
partnership, had “no idea” of the value of the real estate this partnership owned, and had
6
 Stacey ignores this presumption for purposes of her investment income, but she relies
on it in arguing that the trial court was incorrect in ruling on her tax-filing status. (See
Section II.D., post.)
7
 On February 10, 2016, John filed an unopposed motion to augment the record with
sealed documents presented to the trial court that he argues are relevant to Stacey’s
credibility issues. The request is denied.


                                              11
“no idea” of the value of her partnership interest when she received it, which “[m]aybe”
was “in the 80’s.” The court dryly responded to this line of testimony by noting that
Stacey’s “qualifications as a financial expert are dropping.” Regarding another real
estate partnership, Stacey testified that she thought “this one has outside partners” and
owned real estate in Honolulu, but “maybe not,” and she did not know the actual value of
the real estate it owned. Regarding a third partnership, Stacey testified that she did not
know the type of business it was engaged in, but thought it “held real estate but is
closing,” possibly through a receivership. She testified that she had a $64,196 interest in
that partnership but had “no idea” if this figure was a book or actual value.
       The trial court also had reason to question Stacey’s credibility. In the March 2015
order, it found that Stacey’s “income is a bit of a moving target.” According to the court,
vagaries in Stacey’s representations about her monthly earnings provided to the court in
wage stubs, loan applications, and her income and expense and declaration were “only
partially explained,” and the differences between Stacey’s “wage stubs and the Income
and Expense Declaration . . . represent[] a substantial underreporting of income by
[Stacey].” The court found this to be “particularly troubling since [Stacey] sought
sanctions against John for his alleged failure to accurately report his earnings.” During
the hearing itself, the court alluded to credibility concerns. While testifying about the
discrepancies in her earnings, Stacey remarked that “it’s an issue of credibility,” to which
the court replied, “It certainly is, yes.”
       As to the partnerships’ assets specifically, the trial court recounted that Stacey had
testified that they “generate $69,825 in annual taxable income to [Stacey] per her
attachment. [Stacey] testified/argued that she does not receive any of that income and
that is all retained by the family business. [Stacey] . . . asks this court to not only
completely disregard that income, but to reduce her ‘income’ because she has to pay
taxes on the undistributed passive income and therefore does not actually have the
money.” The trial court continued, “There was also a problem with disclosure of this
asset. [Stacey] completely ignores these assets in her Income and Expense declaration



                                              12
and at the hearing professed to not knowing the fair market value of the assets or of her
interest in these family run entities.”
       In short, the court was perfectly within its rights to find Stacey’s testimony about
the nature of her investments unconvincing and her credibility dubious. Under such
circumstances, we cannot conclude that the trial court abused its discretion in effectively
finding that Stacey failed to rebut the presumption that her reported investment income is
part of her gross income available for child support.
       C.     Stacey’s Capital Gains Should Not Have Been Included in the Final Child
              Support Calculation Because the Trial Court Had Ordered Them to Be
              Excluded.
       Stacey next argues that her income from capital gains was wrongly included in the
final calculation of her gross income, and on this point we agree with her.
       In the March 2015 order, the court found that “[Stacey’s] 2013 tax return reflects
$7351 per month in partnership and other investment income and the court will use that
figure as the presumptively correct amount.” It later explained that Stacey has “enjoyed
recurring capital gains for 2010-2013 ranging from $110,000 to $17,800,” but it decided
that “[a]t this time the court will not include these recurring capital gains but they are
certainly noted.”
       In its final order setting child support, however, Stacey’s monthly investment
income was set at $7,351, reflecting one-twelfth the total investment income reflected on
Stacey’s 2013 tax return, which was $88,212. But this total investment income included
capital gains of $17,879, which the trial court had ruled were to be excluded. One-
twelfth of $17,879 is approximately $1,490, and $7,351 reduced by $1,490 is $5,861.
Thus, the correct amount of Stacey’s monthly investment income that should be used to
calculate child support obligations under the uniform guideline is $5,861, not $7,351.
We remand to the trial court for entry of an order implementing this correction. Nothing
in this remand, however, should be construed to be a constraint on the trial court’s
discretion whether to include or exclude capital gains in future child support calculations.




                                              13
       D.     The Parties Agree that the Court Mistakenly Ruled that the Calculation of
              Child Support Should Be Based on Stacey’s Tax Filing Status as Head of
              Household.
       Stacey’s 2013 tax return reflects a filing status as “Married, Filing Separately.”
The trial court acknowledged this status at the hearing on the motion giving rise to the
March 2015 order. But in an apparent oversight, the March 2015 order assigned Stacey a
tax-filing status of “head of household with the children as exemptions” for purposes of
calculating child support.
       As John and the Marin County DCSS recognize on appeal, this assignment was
incorrect. Accordingly, we remand to the trial court for entry of an order correcting
Stacey’s tax filing status and clarifying the proper number of exemptions.
       E.     Stacey’s Remaining Arguments Are Unavailing.
       Stacey asserts miscellaneous other arguments woven throughout her briefs, and we
reject them all. To begin with, she argues that proceeds from a real estate sale and certain
rental income should have been excluded from her gross income. But this argument is
inexplicable because these assets were never counted as part of her gross income. As we
have explained, the March 2015 order only ascribed to Stacey’s monthly gross income
her monthly wages and the investment income reported on her 2013 income tax return
(minus capital gains). We similarly reject Stacey’s argument that the court attributed to
her an imputed earning capacity under Family Code section 4058, subdivision (b),
because it did no such thing: only actual wages and investment income—i.e., no imputed
earnings—were attributed in determining Stacey’s gross income.
       We also reject Stacey’s argument that there was no change of circumstances for
purposes of the March 2015 order because prior orders had found that John had
“substantial wealth.” Stacey argues that “for John to prevail on a motion for a downward
modification [of child support], John must demonstrate a change to his substantial wealth
as was determined by the prior order.” The argument is specious. As we have discussed,
the parties’ economic circumstances changed significantly, and these changes justified a
modification of child support. Stacey’s argument is premised on the mistaken belief that
it makes no difference that after the entry of the prior orders, Stacey’s income

                                             14
dramatically increased and the source of John’s income changed. Regardless of John’s
wealth, Stacey’s increase in income alone was sufficient justification for a modification
of child support obligations. This point was understood and properly applied by the trial
court when it concluded in the March 2015 order that “[Stacey’s] wages and salary have
tripled if not quadrupled since the previous support order. This change alone is more
than enough to constitute a change of circumstances.”
       Finally, we reject Stacey’s argument that the trial court was required in the March
2015 order to impose child support payments on John higher than was calculated under
the uniform guideline because he became the beneficiary of the new, $4.1 million trust
after his mother died. Stacey claims that John’s wealth was “wholly disregarded” by the
trial court. She is flat wrong. In issuing the March 2015 order, the court was fully aware
of, and carefully considered, the new trust. The court noted that “John actually receives
$10,417 in monthly unearned income from this asset,” and it ordered the income to be
included as part of his gross income. This income was in fact included in the child
support calculation made under the uniform guideline. While it is true that the trial court
excluded the principal of this trust for purposes of calculating John’s gross income, the
court similarly excluded the principal of Stacey’s assets, including the value of her
partnership interests and her almost $1 million retirement account for purposes of
calculating her gross income. In our view, the court’s treatment of the parents’ assets
was reasonable and evenhanded, and it certainly did not constitute an abuse of discretion.
We cannot conclude that the court ignored the best interests of the children by approving
child support in an amount indicated by the uniform guidelines based on the income of
two parents who, as the court found, both “enjoy significant wealth.”
                                            III.
                                       DISPOSITION
       John’s motion to augment the record, filed on February 10, 2016, is denied.
       The trial court’s order is affirmed except we remand to the trial court solely for the
entry of an order to recalculate child support after reducing Stacey’s monthly gross
income by $1,490, which is one-twelfth of the amount of Stacey’s capital gains reported


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on her 2013 tax return, and after correcting Stacey’s tax filing status. The parties are not
to litigate issues on remand that were, or could have been, raised in this appeal.
       The parties shall bear their own costs on appeal.




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                                 _________________________
                                 Humes, P.J.


We concur:


_________________________
Dondero, J.


_________________________
Banke, J.




Welsh v. Welsh (A145155)




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