(Overtime Pay Case)
COUNTY OF PLACER, Plaintiff and Appellant, v. MICHAEL ANTHONY ANDRADE, Defendant and Respondent.
COURT OF APPEAL OF CALIFORNIA, THIRD APPELLATE DISTRICT
55 Cal. App. 4th 1393; 1997 Cal. App. LEXIS 511; 64 Cal. Rptr. 2d 739; 97 Cal. Daily Op. Service 4976; 97 Daily Journal DAR 8086
June 24, 1997, Filed
PRIOR HISTORY: APPEAL from a judgment of the Superior Court of Placer
County. Super. Ct. No. SFS-1527. Colleen M. Nichols, Court Commissioner.
DISPOSITION: Reversed with directions.
COUNSEL: Daniel E. Lungren, Attorney General, Roderick E. Walston, Chief
Assistant Attorney General, Carol Ann White, Statewide Support Coordinator and M. J.
Hamilton, Deputy Attorney General, for Plaintiff and Appellant.
Michael Anthony Andrade, in pro per., for Defendant and Respondent.
JUDGES: BLEASE, J. We concur: PUGLIA, P. J., RAYE, J.
OPINIONBY: BLEASE
OPINION: [*1394] Appellant Placer County appeals from a child
support order which excluded respondent Michael Andrade's bonus and overtime pay from his
"annual gross income " for purposes of calculating his support obligation.
We shall reverse the judgment and remand the case for reconsideration consistent with this
opinion.
FACTUAL AND PROCEDURAL HISTORY
On July 13, 1993, Placer County filed a complaint against Michael Andrade (Andrade), to
establish paternity and child support. Andrade stipulated to a judgment that he was the
father of Candace Jade Booth. He [*1395] submitted an Income [**2]
and Expense Declaration stating that his average gross monthly income for the past 12
months had been $ 1,700. At the support hearing, Andrade indicated that he had just
received a raise, and that his gross monthly income was $ 1,837.
Placer County argued that in 1994 and 1995, Andrade's gross monthly income, including
overtime and bonuses, had been $ 2,287 and $ 2,318, respectively, and that in the first
six months of 1996, his average gross income was $ 2,617 per month. Andrade's counsel
argued that "the overtime is speculative and, in fact, he's been cut back almost to
nothing due to a merger which his employer's currently going through, the overtime
shouldn't be calculated into his earnings for the purposes of this support order. "
The court determined that Andrade's gross annual income was $ 1,924 per month, stating,
"I'm not going to force overtime. . . . based on the case of Simpson ,[ n1
] I do not include overtime. And especially in the situation where it varies from
month-to-month. " When pressed by Placer County, the court responded, "based on
a full time, with regular work regimen, I don't think under Simpson we're allowed
to force a person to work overtime [**3] unless they are in a job situation
where they are the manager of a restaurant and their regular work schedule is 55 hours a
week. That, pursuant to this pay stub, is not Mr. Andrade's regular work schedule. He
works a regular -- full time work period. Occasionally he has overtime. He has
occasionally, double time. He occasionally gets bonuses. So, it just varies from paycheck
to paycheck. I'm not going to force him to work overtime. It's like we don't force people
to work second jobs. " Based on a gross monthly income of $ 1,924, the court ordered
Andrade to pay ongoing child support in the amount of $ 254.
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n1 In re Marriage of Simpson (1992) 4 Cal. 4th 225, 841 P.2d 931.
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Placer County claims the court erred in excluding Andrade's bonus and overtime earnings
from his income for the purpose of determining his child support obligation.
DISCUSSION
Family Code section 4055 n2 provides a formula for determining the amount
of child support based on the net disposable incomes of the parents. The court must
calculate [**4] the "annual gross income " of the parent, defined in
[*1396] section 4058 n3 as "income from whatever source
derived, " except as specified, including "but not limited to " wages and
bonuses. n4 From this is derived the parent's monthly net disposable
income. n5 Overtime is not excluded from the definition of "annual
gross income " and the definition is broad enough to include overtime either under
the term "wages " or within the inclusive "income from whatever source . .
. . " Bonuses are specifically included in the definition of "annual gross
income. "
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n2 A reference to an undesignated section is to the Family Code.
n3 Section 4058 provides in pertinent part:
"(a) The annual gross income of each parent means income from whatever source
derived, except as specified in subdivision (c) and includes, but is not limited to, the
following:
(1) Income such as commissions, salaries, royalties, wages, bonuses, rents, dividends,
pensions, interest, trust income, annuities, workers' compensation benefits, unemployment
insurance benefits, disability insurance benefits, social security benefits, and spousal
support actually received from a person not a party to the proceeding to establish a child
support order under this article.
" . . . . . . . . . . . . . . . . . . . . . . . . . .
"(c) Annual gross income does not include any income derived from child support
payments actually received, and income derived from any public assistance program,
eligibility for which is based on a determination of need. Child support received by a
party for children from another relationship shall not be included as part of that party's
gross or net income. " [**5]
n4 A statement of the annual gross income of each parent must be submitted to the court on
an Income and Expense Declaration. (Jud. Council form 1285.50.) The form requires the
parents to disclose the average monthly income for the preceding 12 months by dividing the
annual gross income for that period by 12.
n5 The "annual net disposable income " is derived by deducting specified amounts
from the "annual gross income " ( § 4059), which is then divided by 12 to
arrive at an average "monthly net disposable income. " ( § 4060.)
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The assumption underlying these calculations is that past income is a good measure of the
future income from which the parent must pay support. However, the law recognizes that is
not always the case. Thus, the court is given discretion to adjust the "the monthly
net disposable income figure [if it] does not accurately reflect the . . . prospective
earnings of the parties at the time the determination of support is made . . . .
" ( § 4060, emphasis added.) The "court may [also], in its discretion, consider
the earning capacity of a parent in lieu of the parent's [**6] income,
consistent with the best interests of the children. " ( § 4058, subd. (b).)
At issue is whether Andrade's past earnings accurately reflect his prospective earnings.
Andrade had earned bonus and overtime pay for the two and one-half year period preceding
the support hearing. The trial court was unwilling to include this in calculating
Andrade's income because the amount varied from month to month, and because it refused to
"force " Andrade to work overtime.
The court cannot deduct predictable overtime and bonuses in determining Andrade's
prospective earnings merely because they occur sporadically. The [*1397]
mechanism for calculating Andrade's net disposable income is a monthly average. ( §
4060.) The question is whether the bonuses and overtime are likely to reoccur. Absent a
determination that "the monthly net disposable income figure does not accurately
reflect [Andrade's] . . . prospective earnings " it was error for the court to
exclude overtime and bonuses in its calculation.
The court can disregard past bonus and overtime payments from the calculation only if it
determines that Andrade is unlikely to receive them in the future. That might occur
because of changed employment [**7] conditions, as suggested by Andrade's
counsel. However, such a change should be shown by admissible evidence. A showing that a
parent is unlikely to receive overtime might also be based upon evidence that the parent
is no longer willing to accept voluntary overtime. The record indicates Andrade has been
voluntarily working overtime for the previous two and one half years. If he continues to
do so there is no ground to exclude the overtime payments. If he voluntarily ceases to
work overtime the trial court may then decide "in its discretion, [whether to]
consider [Andrade's overtime] earning capacity " ( § 4058, subd. (b)) pursuant to
the criteria set forth in In re Marriage of Simpson, supra.
On the record before us there is no substantial evidence of either basis to disregard
Andrade's past bonus and pay overtime in calculating his support obligation.
DISPOSITION
The judgment is reversed and remanded for a determination whether Andrade's past monthly
net disposable income, including his overtime and bonus income, accurately reflects his
prospective earnings. The parties shall bear their own costs on appeal. (.)
BLEASE , J.
We concur:
PUGLIA , P. J. [**8]
RAYE , J.