State of Oregon v. Vargas

. . . ; and (3) an opportunity to work which means an employer who is willing to hire. [Citations.]” (Id. at p. 1372, cited with approval in In re Marriage of Simpson (1992) 4 Cal.4th 225 , 234 [ 14 Cal.Rptr.2d 411 , 841 P.2d 931 ](Simpson).) This rule has been modified to include only the first and third prongs; thus, the definition of earning capacity is satisfied when the payer has both the ability and opportunity to work. (In re Marriage of Hinman (1997) 55 Cal.App.4th 988 , 995, fn. 6 [ 64 Cal.Rptr.2d 383 ].) In that instance the court may use earning capacity rather than actual income to determine child support payments. (Regnery, supra, 214 Cal.App.3d at p. 1372.)

Application of the earning capacity standard has experienced an evolving history. Earlier courts used it only in situations in which the payer deliberately avoided his financial responsibilities by refusing employment or otherwise depressing his income. (Philbin v. Philbin (1971) 19 Cal.App.3d 115 , 121 [ 96 Cal.Rptr. 408 ]; In re Marriage of Williams (1984) 155 Cal.App.3d 57 , 62 [ 202 Cal.Rptr. 10 ].) This limited application was subsequently expanded to better comport with the language of Family Code section 4058. “While deliberate avoidance of family responsibilities is a significant factor in the decision to consider earning capacity [citation], the statute explicitly authorizes consideration of earning capacity in all cases. [(Fam. Code, § 4058, subd. (b)).] Accordingly, the trial court’s consideration of earning capacity is not limited to cases in which a deliberate attempt to avoid support responsibilities is found.” (In re Marriage of Ilas (1993) 12 Cal.App.4th 1630 , 1638-1639 [ 16 Cal.Rptr.2d 345 ]; see also In re Marriage of Nolte (1987) 191 Cal.App.3d 966 , 972-973 [ 236 Cal.Rptr. 706 ]; In re Marriage of Padilla (1995) 38 Cal.App.4th 1212 , 1220 [ 45 Cal.Rptr.2d 555 ].)

As such, a child support order premised upon earning capacity rather than actual income will remain undisturbed on appeal absent an abuse of discretion. (In re Marriage of Paulin (1996) 46 Cal.App.4th 1378 , 1384 [ 54 Cal.Rptr.2d 314 ].) “‘[T]he only limitations against imputing income to an unemployed or underemployed parent, is where the parent in fact has no “earning capacity” ... or relying on earning capacity would not be consistent with the children’s best interest. . . .’” (In re Marriage of Hinman, supra, 55 Cal.App.4th at p. 998.) In other words, “[a]j long as ability and opportunity to earn exist, as defined by the test set forth in Regnery and approved in Simpson, supra, 4 Cal.4th at page 234, the court has the discretion to consider earning capacity when consistent with the child or children’s best interests. . . .” (In re Marriage of Hinman, supra, 55 Cal.App.4th at p. 999, italics added.)

With these principles in mind, we turn our attention to the case before us. Appellant contends that because he is without income or employment opportunities during incarceration, the court abused its discretion when it ordered him to pay child support.

In our opinion, Regnery and its progeny dictate that both elements of the earning capacity standard must be satisfied regardless of the situation in which it is applied. If either element is not established, earning capacity cannot be substituted for actual income. Thus, if appellant does not have an opportunity to work, whether in prison or not, the earning capacity test is not satisfied and cannot be used to determine his child support payments. In so holding, we are not unmindful of the policy arguments that can be made to support an opposite result for incarcerated parents. Nor are we unaware of jurisdictions that have found parents liable for child support despite their lack of earning capacity during incarceration. But unlike most courts, we are here confronted with a threshold test that clearly must be satisfied before earning capacity can be used. “[There is] a three-prong test before the capacity to earn standard may be applied.” (Regnery, supra, 214 Cal.App.3d at p. 1372.) Furthermore, we emphasize that our holding today in no way suggests that incarcerated parents are exempt from child support. Rather, we simply decline to carve an exception to the rule that before earning capacity can be applied, its definition must first be satisfied. As with any other parent, the court must determine whether an incarcerated parent has the ability and the opportunity to work before using earning capacity to assess child support payments.

While the People agree appellant does not currently have an opportunity to work, they argue the earning capacity definition is nonetheless satisfied because he had a job prior to incarceration and most likely will return to work upon his release. We are not persuaded. Our review of case law addressing this issue reveals that in every instance the earning capacity test was satisfied with current circumstances. For example, in In re Marriage of Ilas, supra, 12 Cal.App.4th 1630 , the noncustodial parent quit his job to attend medical school. Nevertheless, because he currently had both the ability and the opportunity to return to work, the court affirmed the use of earning capacity to assess his child support payments. Similarly, in In re Marriage of Hinman, supra, 55 Cal.App.4th 988 , the noncustodial parent quit her job to stay home and take care of children from a new marriage. The trial court applied the earning capacity standard to determine child support payments because the evidence established she had the current ability and opportunity to return to work. In affirming, the appellate court noted “[appellant’s] opposition rested solely on the fact that. . . she would not be able to reconcile working with her need to care for her children. [She] did not claim she was temporarily disabled from employment. . . .” (Id. at p. 1000, italics added.) In both examples, the court used earning capacity to determine child support because the parent had the current ability and opportunity to return to work. We find this reasoning sound.

Appellant argues here, as he did before the trial court, that he is without income or employment opportunities while incarcerated. However, our review of the record fails to reveal any express findings by the trial court on