A California court has ordered a recalculation of child support payments in the divorce case of Katie and Peter Stern. The decision, made by the California Court of Appeal, addresses a significant error in the previous calculation of child support that excluded Peter's undisputed wages. This ruling impacts the financial responsibilities of both parents regarding their two children.

The court's ruling comes after Katie Stern appealed a postjudgment order that reduced the amount of child support her former husband, Peter Stern, was required to pay. The court found that the trial court had made a mistake by not including Peter's wages in the calculation of child support, which is determined based on each parent's income and custodial time with the children.

Background

Katie and Peter Stern were married in 2010 and separated in 2017. They have two children together. After their divorce, Katie was awarded primary physical custody of the children, while Peter received visitation rights. Initially, Peter's income was determined to be $158,244 per year, leading to a child support payment of $2,500 per month. This amount was set above the guideline child support.

In January 2023, Peter filed a request to increase his time with the children and decrease his child support payments. He claimed that his income had decreased due to changes in the solar energy market affecting his business. Katie, however, argued that Peter had not provided sufficient documentation to support his claims about his income.

During the evidentiary hearing, forensic accountant Karen Kaseno analyzed Peter's financial records and concluded that his income was significantly higher than he reported. Despite this, the trial court ultimately ruled in Peter's favor, reducing his child support obligations based on an incomplete assessment of his income.

The Ruling

The California Court of Appeal ruled that the trial court erred in calculating child support by failing to include Peter's wages. The court emphasized that income must be calculated based on both wages and business income. The opinion noted, "It is clear the court intended to use Kaseno’s figures but simply overlooked the wages." The court ordered the trial court to recalculate child support based on Peter's total available income.

The judges on the panel, including Acting Presiding Judge Dato, concluded that the child support order did not rest on a legitimate evidentiary basis. They stated, "While the court has discretion to deviate from the guideline under specifically defined circumstances, it does not have discretion to arbitrarily exclude a parent’s undisputed wages from the formula." The court's decision reversed the previous order and directed a recalculation of child support payments.

Impact

This ruling has significant implications for both parents. It reinforces the importance of accurately assessing all sources of income when determining child support obligations. By mandating the inclusion of undisputed wages, the court aims to ensure that child support payments reflect the true financial capabilities of both parents.

The decision may also set a precedent for future child support cases, emphasizing that trial courts must consider all income sources and cannot omit any undisputed figures. This ruling could lead to more equitable outcomes in similar divorce and custody cases, where financial transparency is critical for determining child support.

What's Next

The trial court will need to recalculate the child support payments based on Peter's total income, which includes both his wages and adjusted net income from his business. There is no indication that this ruling will be appealed further, and it remains to be seen how the recalculated support payments will affect the Stern family's financial arrangements.