In re Marriage of West

In In re Marriage of West (2007) 152 Cal.App.4th 240, the divorcing spouses entered into a marital settlement agreement that provided for the sale of a community business and the division of the proceeds; each party received a cash payment and a promissory note providing for payments of principal and interest over six years. (West, supra, 152 Cal.App.4th at pp. 242-243.) The parties also agreed that, irrespective of any other amounts received by the wife, the husband would pay support. (Id. at p. 243.) When the promissory notes were paid off, the wife did not seek an increase in spousal support. (Id. at p. 244.) Two years later, the husband moved for a reduction in spousal support; the trial court granted the motion, relying in part on the wife's receipt of a portion of the proceeds from the sale of the community business, which the court apparently believed the wife should have saved and invested to provide for her own support. (Id. at pp. 244-246, 249-251.) The Court reversed. As to the funds the wife received from the sale of the community business, we noted that the wife had stopped receiving any income from the sale and that the loss of this income could not justify a reduction in support. (Id. at p. 250.) The Court also noted that the trial court may have been imputing to the wife the interest income it believed she could have received if she had preserved the principal. (Ibid.) The Court found that this was inappropriate because the wife already was in effect imputing that income to herself by not seeking an increase in support after the promissory note was paid off. (Id. at pp. 250-251.) The Court then stated that "the promissory note and the payments thereon were the wife's fair share of the community property, and the marital settlement agreement and subsequent orders gave the wife spousal support in addition to that share." (Id. at p. 250.) The Court concluded that the wife's receipt of a portion of the proceeds from the sale of the community business, and her failure to invest the principal, did not provide a basis for reducing support. (Id. at pp. 250-251.) Finally, we noted that it would be unfair to penalize the wife for failing to invest the principal without having first warned her that she would be expected to invest it. (Id. at p. 251)