Page 1
Child’s ‘Need’ for Support Corresponds to Parent’s Wealth
Opinion Rejects Contention That Father’s Extremely High Income Justified Departure From Support Formula, Set Forth in a Statute, Where the Discernible ‘Needs’ of Offspring Did Not Justify Unusually Hefty Award
By a MetNews Staff Writer
The Sixth District Court of Appeal has rejected the contention of an “extraordinarily wealthy” father that a judge robotically ordered payment of child support in accordance with a formula without considering, as required by a statute, the actual needs of the two children, with the opinion declaring that a child’s “need” and the parent’s income are interrelated.
Both of the former spouses’ sons—one born in 2001 and the other in 2004—are now adults. At stake is whether child support arrearages of about $3.5 million are to be paid to the ex-wife to compensate her for the support she provided.
The ex-husband, Doug Merritt—chairman, CEO and president of Aviatrix, a cloud networking company—argued that Santa Clara Superior Court Judge Thang Barrett failed to exercise discretion under Family Code §4057(b)(3). That provision authorizes deviation from the statewide uniform guideline formula, contained in §4055, where “[t]he parent being ordered to pay child support has an extraordinarily high income and the amount determined under the formula would exceed the needs of the children.”
Merritt’s Contention
The father asserted in his opening brief that Barrett “refused to make a determination as to the reasonable needs of the children, resulting in absurd orders, which were 50% higher than Mother’s most audacious support request and were totally untethered to anything related to the boys’ and their needs, reasonable or otherwise.”
He queried:
“How can widely divergent child support amounts such as these all be in the children’s best interests?
“• $74,608 per month from July 19, 2017 through December 31, 2017;
“• $153,094 per month for 2018;
“• $180,184 per month from January 1, 2019 through June 30, 2019.
“• From July 1, 2019 forward it would be pursuant to the DissoMaster bonus tables….
“A child support order which increases by $78,486 in one day with no change of circumstances related to the children cannot be within the bounds of a trial court’s discretion.”
DissoMaster is a computerized support calculation program.
Justice’s Response
In her unpublished opinion, filed Thursday, Acting Presiding Justice Adrienne Grover said that a child’s “need” is generally commensurate with the supporting parent’s current income. She wrote:
“We…reject appellant’s contention that the amount of child support ordered could not possibly reflect the reasonable needs of the children due to its fluctuation from $74,608 per month in 2017 to $153,094 per month in 2018. That fluctuation, though substantial, is the product of appellant’s income increasing from $8,844,542 in 2017 to $17,971,990 in 2018.”
She continued:
“[C]hildren’s needs are treated as primarily a function of parental income even when that income is extraordinarily high. The trial court reasonably concluded that appellant—whose evidence focused largely on other, less relevant factors not fully reflecting his standard of living—failed to meet his burden of proving that the guideline amount would exceed the needs of the children. We see no legal basis to disturb its determination.”
Merritt asserted that the trial judge failed to take into account the wealth of his ex-wife, Rani Hublou, who has held various executive positions and is currently at Go To Market Strategy & Operations in New York City, a management consulting firm. He pointed out:
“What no reported decision has discussed is the relevance and weight to place on historical expenses when the children are being raised by two wealthy parents such that their standard of living is not constrained by the child support being paid. That was certainly the situation in this family. Mother is independently wealthy. She lives in an affluent community in a 5-bedroom house worth almost $5 million. Her net worth has always exceeded $5 million. Her income from employment was as high as $857,000 a year.”
His brief comments:
“So, what we have here is a blatant transfer of wealth from the high earning parent to the very wealthy, albeit less wealthy, custodial parent. Is that the purpose of guideline child support? Doesn’t a trial court have a duty to exercise some discretion when dealing with exceptionally high earning parents?”
Hablou’s Position
Hublou countered in her brief that “the children here deserve access to Father’s $20 million income—whether Mother earns $40,000 or $400,000,” insisting:
“Because section 4057 construes needs in relation to parental income, children of extraordinarily wealthy parents have greater legal-needs than other children.”
The brief says:
“Father is not the first decamillionaire to face these provisions—and seek to avoid paying the statutorily-prescribed amount. Courts have repeatedly recognized that a child’s needs can vary depending on whether the high earning parent earns around $1 million per year-or per month…. A fortiori, although Father equates himself and Mother economically by describing them as ‘two wealthy parents,’ the law recognizes the fundamental difference between a parent who earns six figures and another who earns eight.”
Disparity in Income
Addressing Merritt’s contention, Grover said:
“[W]hile respondent’s annual income reached a maximum of $856,667 in 2018, appellant’s lowest annual income during the relevant time period was more than ten times that amount. The disparity is significant….[Respondent appears to have been able to provide the children with a comfortable life on her income, but appellant could have provided significantly more.
The justice said that Barrett did take note of evidence as to Hublou’s expenses but found that the proffered evidence of extravagance to be unconvincing.
Learning Work Ethic
The father’s brief sets forth:
“Father testified guideline child support would not be in their sons’ best interests and he would be very concerned were that the award. Neither boy had ever had a paying job. Father started working at age 13 and he believes early exposure to work, earning your own money, and having your own bank account is a good healthy thing. He believes you learn certain positive values by working so as to understand the value of money, what things cost, and that you must work to acquire them. He doesn’t believe excessive child support would encourage this behavior.”
Merritt had suggested in 2021 to his older son that he get a job while his classes at Cornell were not in session and was told by the son that he would rather take the summer off, it is recited.
The ex-wife’s brief says:
“Assuming arguendo that children can be harmed by great wealth, the law does not presume it. To the contrary, section 4055 provides that support should increase in accordance with the parental income.”
Grover’s Reaction
Grover did not directly address the point that excessive child support can engender indolence in the offspring. She said:
“[T]he trial court correctly determined that the statute allows deviation from the guideline only if a preponderance of the evidence shows both that the supporting parent has an extraordinarily high income and that ‘the amount determined under the formula would exceed the needs of the children.’…Otherwise, adherence to the guideline is mandatory.
“….Read in context, the language relied on by appellant actually proscribes a deviation from guideline support solely due to the guideline amount exceeding the custodial household’s current expenses.”
The case is Merritt v. Hublou, H048545.
‘Net Worth’
Merritt’s “net worth,” according to his opening brief, filed Feb. 18, 2022, is $11 million. One published source, Wallmine, lists it as “at least $107 Million…as of 16 September 2021.”
The father’s opening brief notes:
“Although Father described his lifestyle as extravagant, he doesn’t have a butler, private chef, personal trainer, security’ details, chauffeurs, a personal shopper, event planner, or a nanny for his young twins. When his family travels on airlines, they fly coach.”
Merritt and his current wife have twins, born in 2012.
Copyright 2023, Metropolitan News Company