Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the legal basis for imputing annual gross income of $340,000 to Respondent Rafael J. Medrano for purposes of the California guideline child support calculation in this matter. This analysis is intended to support the preparation of our client's position in connection with the pending Request for Order re Custody and Child Support, as well as in any med

II. Factual Background A. The Parties and Their Income Petitioner — Marguerite D. Fonseca. Ms. Fonseca is Senior Vice President, Original Content Development at Luminos Entertainment Group, Inc., a Delaware corporation headquartered at 3200 West Olive Avenue, Burbank, California 91505. Ms. Fonseca has been employed at Luminos since 2017, beginning as a Vice President before being promoted to her current role in 2020.

III. Legal Framework: Imputation of Income Under California Law A. California Family Code § 4058 — Definition of Income for Support Purposes The starting point for any child support calculation in California is the determination of each parent's gross income under Family Code § 4058. Subdivision (a) of § 4058 provides that "[t]he annual gross income of each parent means income from whatever source derived," and sets

IV. Case Law on Imputation of Income to Freelance and Variable-Income Earners A. Averaging of Variable Income California appellate authority broadly supports the use of a multi-year averaging methodology when a parent's income fluctuates significantly from year to year. The rationale for averaging is straightforward: where annual income is volatile, any single year may overstate or understate the parent's actual earn

V. Application to Mr. Medrano's Circumstances A. Mr. Medrano's Ability to Earn Mr. Medrano is an established cinematographer and director of photography with a professional career spanning more than a decade. He holds credits on feature films and episodic television productions, including both studio-level and independent projects. His skills are specialized, requiring expertise in camera operation, lighting design,

VI. Impact on the Guideline Child Support Calculation The imputed income figure feeds directly into the guideline child support calculation under Family Code § 4055, which establishes the algebraic formula for determining the presumptively correct amount of child support. The calculation is performed using the DissoMaster software program, which is the standard tool employed by California family courts and practition

VII. Anticipated Respondent Arguments and Counterpoints A. Argument: Income Should Be Based on Most Recent Year Rather Than Three-Year Average Mr. Medrano may argue that his most recent year's income — whether for tax year 2022 or, as data becomes available, for the current 2023 tax year — is a more accurate reflection of his current earning capacity than a three-year average. If the most recent year's income is lowe

VIII. Recommendations Based on the analysis set forth in this memorandum, the following recommendations are presented for consideration:

1. Proceed with the proposed imputed income figure. We recommend proceeding with the $340,000 annual / $28,333 monthly imputed gross income figure for Mr. Medrano in all child support calculations, DissoMaster runs, and negotiation positions. This figure is well-supported by the three-year average of his documented earnings, is consistent with California Family Code § 4058(b) and applicable appellate authority, and r

2. Await the YBL forensic income analysis report. The final delivery of the forensic income analysis report from Harold K. Yamamoto of Yamamoto Brace & Liu, LLP is expected in the coming weeks. Upon receipt, the report should be reviewed carefully to confirm the three-year average and to identify any adjustments to claimed business expenses that could affect the imputed income figure. If the YBL analysis produces a f

3. Prepare to present the imputation analysis at mediation or hearing. The first mediation session is expected to be scheduled following delivery of the custody evaluation report, which is anticipated in early October 2023. We should be fully prepared to present the imputation analysis and the YBL report at mediation. If the matter cannot be resolved through mediation and proceeds to a contested support hearing, Mr.

4. Pursue discovery or informal exchange if Mr. Medrano disputes the imputed figure. If Mr. Medrano or his counsel, Gwendolyn R. Kwan of Kwan, Delacroix & Samuels LLP, disputes the $340,000 imputed income figure, we should consider requesting updated tax returns, bank statements, and Medrano Visuals, LLC financial statements through formal discovery (interrogatories, requests for production of documents, and/or subpo

5. Coordinate with the guideline analysis memorandum. The income figures used in this memorandum should be cross-referenced with the California child support guideline analysis memorandum dated May 15, 2023 (Petrov to Archer) to ensure that consistent figures are used across all work product in this matter. Any adjustments resulting from the YBL report should be applied to both the imputation analysis and the guideli

IX. Conclusion Imputation of $340,000 in annual gross income to Respondent Rafael J. Medrano is well-grounded in California Family Code § 4058(b), supported by his documented three-year earnings history as reflected in individual and entity tax returns and financial records, and consistent with California appellate authority on the treatment of variable-income and freelance earners in family support proceedings. The