Marriage of Andrea and Jeffrey Barth
An appeal from a decision by Orange County Judge, James L. Waltz
Marriage of Barth (2012, Orange County)
The appellate case of Marriage of Andrew and Jeffrey Barth was a fascinating read.
The appellate decision was handed down by the Fourth Appellate District, Division three. That is Orange County's appellate court division. The trial court judge that handled the case is one of the finest family law judges we have on Orange County - James L. Waltz. Jeffrey Barth filed the appeal. He didn't care for Judge Waltz's ruling against him on child support.
Here is a summary of the case. The facts and law stated is taken directly from the appellate decision.
Jeffrey and Andrea Barth married in 1989. They had two children. They used to live in Ohio. Jeffrey Barth was a CPA. She worked in a pharmaceutical company. Jeffrey then accepted a job in California and moved to Orange County. Andrea stayed behind with the kids at first but eventually moved to California.
Andrea and the kids moved back after Jeffrey Barth allegedly admitted to cheating on her. You can just guess what happens next, right? Jeffrey files in Orange County (not a smart move by the way, given California's child support laws) while Andrea files in Ohio. Jeffrey also wanted the kids back in California so he filed requests here for that.
The Orange County family law court put the California case on hold. Jeffrey battled it out in Ohio. The Ohio court didn't agree with his argument the children were wrongfully taken. Jeff eventually lost his job, got a severance and started his own business. He set up shop in both California and Ohio. He maintained a residence in both places. He formed a partnership by the name of Channels & Barth, LLP and later JA Barth, LLC. He also started businesses in Ohio. He went back and forth from California to Ohio for business and family.
Eventually, the Ohio court made child support orders - the most recent order being $1,600 per month. The Ohio support orders were never registered in California. Incredibly, Jeff appealed and the case went to the Supreme Court of that State. He won or so he thought. The Ohio Supreme Court applied Ohio's strict residency laws. The judgment was reversed and the Ohio trial court dismissed Andrea‟s complaint. It also vacated the previous judgments and orders.
In April of 2007, Jeffrey filed an OSC (order to show cause, which is a written request to the court) in Orange County. He wanted to remove the hold that was in place in the California case. Commissioner Thomas Schulte lifted the hold. Andrea then went on the offensive and filed her own request for child support. Eventually, the court established a parenting plan and ordered a child custody psychological evaluation. The Orange County local child support agency then intervened.
On May 5, 2009, Commissioner Craig Arthur (the sitting commissioner who hears some of the Department of Child Support Services Case) issued his ruling. Judge Arthur's ruling was:
- Retroactive child support was appropriate
- Guideline support ranging from $2,253 per month to $7,239 per month from October 2004 to December 2007
- Jeffrey timeshare ranged from 10 percent in 2004 to 30 percent in 2007
- Jeffrey's income was less than $36,000 in 2007, with $32,000 to $42,000 estimated in 2008 and $45,000 to $60,000 projected for 2009. This was apparently based on Jeffrey's testimony
- Commissioner Arthur did not impute income to Jeffrey. Effective January of 2008, he set support at zero
Jeffrey filed an objection and Judge James Waltz got the case. Judge Waltz found that setting the child support retroactive to the date of Jeffrey‟s initial petition was appropriate (from professional experience, I can tell you that doesn't happen too often, although it is within the court's discretion to do so) and the court actually imputed income to Jeffrey for 2008 and 2009 at a whopping $10,000 per month.
Judge Waltz did not believe much of what Jeffrey said about his income. To quote Judge Waltz, "the court carefully watched and listened to Petitioner‟s trial testimony on direct examination, cross-examination and when responding to the court‟s questions. Over time the court lost confidence in Petitioner‟s ability or willingness to tell the truth."
The court believed Jeffrey was "being purposefully vague and evasive."
It gets worse.
Regarding Jeffrey Barth's filing in 2007 where he tried to waive court costs, the Judge wrote Jeffrey "egregiously misrepresented material facts and information."
To again quote the court, Jeffrey "claimed a de minimus amount of money in the bank (compare: 2006 earnings were over $773,000) and no recurring income compared to monthly living expenses between $7,165 and $9,200 per month. Compare: between 2004 and through 2007 Petitioner earned wages and salaries of $1,599,164. In 2006 alone Petitioner earned $773,463."
Judge Waltz also held that Jeffrey had failed to disclose both his "substantial severance package" with his former employer or "recurring rental income from his Newport Coast townhouse."
According to Judge Waltz's ruling, in 2007, the same year he filed the self represented paperwork asking for a fee waiver, he "earned taxable income of $316,271."
Judge Waltz also did not buy into Jeffrey Barth's claims about his expenses. He called Jeffrey's statements "false" and which contained "material omissions". The Court held that he purposefully understated his living expenses "to match his professed modest monthly self-employment income of $1,250 per month." The Court estimated his living expenses at between $7,000 and $9,000. These included representing the rental expense of his Newport Coast townhome as $1,100 per month, when in fact it was $3,100 per month.
Judge Waltz continued that Jeffrey also "falsely declared that no one was contributing to the payment of his monthly living expenses when in fact Petitioner engaged in a regular practice of sub-renting the townhouse and not reporting that income, estimated to be $1,500 per month."
The Court ruling stated that in 2009, Jeffrey failed to disclose $31,500 in income he received from his former employer.
The court concluded that Jeffrey‟s tax returns also failed to reflect this income (which is kind of a big deal since he is a CPA)
Judge Waltz concluded that he had no confidence in any of Jeffrey Barth's reporting of his income and expenses on and off the tax returns.
The court then looked at a report from vocational evaluator, Michael Bonneau (our firm knows Michael's work well).
Per the court:
"Mr. Bonneau evaluated Petitioner and stated he has both an ability to earn and the opportunity to earn based on his age, education and work experience. Mr. Bonneau testified that there is substantial evidence of a reasonable likelihood that Petitioner could, with reasonable effort, apply his education, skills and training to produce income. Mr. Bonneau's opinions were not challenged. In addition, Mr. Bonneau quantified Petitioner's earning capacity in the range of $120,000 to $150,000 annually plus bonus. Mr. Bonneau's opinions were not rebutted."
The court then retroactively (under Family Code section 2009) calculated the support. For 2008 and 2009, the court used "by imputation of income at $10,000 per month (low side of income range) plus $31,500 (other nontaxable income) from Kerr Corporation never reported on his tax return plus $18,000 rental income (other nontaxable income) never reported on his tax return."
This played out as follows:
- $3,125 per month for September to December 2004
- $2,762 per month for the first half of 2005
- $2,742.00 per month for the second half of 2005
- $7,645 per month for 2006
- $3,343 per month for 2007
- $1,748 per month for 2008,
- $1,921 per month for 2009,
- $1,058 per month for 2010.
The court gave credit for $58,384 that Jeffrey had paid. His arrears were calculated at $171,358. His arrears were ordered paid at $1,000 per month.
Jeffrey Barth appealed.
I knew what the decision was going to be before I even read about it. I am very familiar with Judge James Waltz. Our lawyers at Farzad & Ochoa have had hearings (including trials) in front of him. He is not only an experienced and intelligent Orange County family law judge, but he takes great care in evaluating cases in front of him and the decisions he makes. Judge James Waltz is, in our opinion, a model family law judge.
The appellate court agreed with Judge Waltz's ruling.
Family Code 4009 states:
"An original order for child support may be made retroactive to the date of filing the petition, complaint, or other initial pleading. If the parent ordered to pay support was not served with the petition, complaint, or other initial pleading within 90 days after filing and the court finds that the parent was not intentionally evading service, the child support order shall be effective no earlier than the date of service."
In short, the initial child support order can be made retroactive to the date of the filing of the petition.
The appellate court did not believe this was a difficult decision. It held:
"Jeffrey is not similarly situated to someone who was subject to a temporary support order in California for the simple reason that such an order bears no legal or factual relationship to a permanent support order in Ohio. Further, because the Ohio orders were entered without jurisdiction, as determined by the Ohio Supreme Court, they were void. (See County of San Diego v. Gorham (2010) 186 Cal.App.4th 1215, 1225.) From a legal standpoint, the Ohio orders never existed."
The court did not find any abuse of discretion by Judge Waltz. The court held:
"Indeed, the court's order was in line with exactly what Jeffrey had sought since the inception of this case - jurisdiction in California, the application of California law, and the treatment of the Ohio orders as utterly void."
Regarding Jeffrey's income, the court held that "the evidence showed that he was self-employed and was either substantially understating his income…Jeffrey does not claim these findings were unsupported by substantial evidence, and we would find any such claim without merit if he had."
The appellate court held that:
"the amounts imputed to Jeffrey were fair and within the court's discretion. The court took the low amount suggested by Bonneau, of $10,000 a month, as well as other miscellaneous income. The court's decision was in the context of its determination that it had "lost confidence in [Jeffrey's] ability or willingness to tell the truth." The court concluded Jeffrey had falsely underrepresented his living expenses for 2008 and 2009, failed to disclose rental and other income, falsely claimed no one was contributing toward his living expenses, and underreported income on his tax returns."
What does this case tell us?
First, it brings us back to what Abraham Lincoln said many years ago - "a man that represents himself has a fool for a client." Jeffrey Barth could have used some sound legal advice. I am not certain he would have listened to it but I am pretty sure an experienced Orange County divorce lawyer with knowledge of child custody and support matters could have helped him avoid this entire destructive path he underwent. I can say with confidence that if our law firm represented Jeffrey Barth and he listened to our advice, this result would not have occurred.
Second, it highlights California's public policy regarding child support. California is the wrong State to play games with child support orders. Those who do play with fire. While the appellate record did not speak to the issue of lawyer's fees and whether either side requested it and whether any was awarded, I imagine, after this appeal, Jeffrey may be facing a pretty hefty attorney fee claim by his wife.
In the end, this was a case where the result could have been avoided by diligence and transparency. It is very feasible that Jeffrey Barth is paying more in child support than he should have as a result of the imputed income but, by his handling of the case, he brought those results onto himself.