1035-00002 · Calderwood & Harkness LLP · Internal Memoranda & Analyses

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

TO: Devon Archer, Lead Associate

FROM: Nadia Petrov, Associate

DATE: November 1, 2023

RE: Fonseca v. Medrano — Legal Basis for Deviation from Guideline Child Support (C&H Matter No. 1035-00002; Case No. 22STFL09847, Superior Court of California, County of Los Angeles)

CLIENT: Marguerite D. Fonseca

I. Introduction and Purpose

This memorandum analyzes the legal basis under California Family Code § 4057(b) for deviating downward from the guideline child support amount in the Fonseca v. Medrano custody and support matter. The purpose of this analysis is to evaluate whether the negotiated support figure is legally defensible and to identify the specific statutory grounds and evidentiary considerations that will support a stipulated deviation, should the parties finalize the terms currently under discussion.

The DissoMaster guideline calculation, based on two minor children, Ms. Fonseca's gross monthly income of $72,500, and Mr. Medrano's imputed gross monthly income of $28,333 (yielding a combined gross monthly income of $100,833), together with a proposed timeshare split of approximately 63.6% to Ms. Fonseca and 36.4% to Mr. Medrano (232 overnights and 133 overnights annually, respectively), yields a guideline child support obligation of $1,274 per month payable by Ms. Fonseca to Mr. Medrano. This amount reflects the application of the algebraic formula set forth in Family Code § 4055, as implemented in the DissoMaster software program, and constitutes the presumptively correct amount of child support under California law.

The parties are currently in negotiations to agree on a child support amount of $1,100 per month, representing a downward deviation of $174 per month, or approximately 13.7% below the guideline figure. This proposed deviation is not a bare reduction; rather, it is inextricably linked to a restructured extracurricular cost-sharing arrangement under which Mr. Medrano would assume 60% of the children's extracurricular and enrichment activity costs (subject to a cap of $1,500 per child per quarter), compared to the typical proportional allocation that would otherwise be determined by reference to the parties' respective income shares. The restructured arrangement shifts a materially greater share of these direct child-related expenditures to Mr. Medrano and, as discussed in detail below, produces an offsetting financial benefit to the children that exceeds the dollar amount of the proposed support reduction.

This memorandum assesses whether the proposed deviation is legally supportable under the applicable provisions of the California Family Code and relevant appellate authority, identifies the procedural requirements for court approval of a stipulated below-guideline support order, and evaluates the risk profile associated with the proposed deviation. This analysis is intended to inform the team's approach to finalizing the settlement terms and preparing the stipulation for court submission.

II. Summary of Guideline Calculation Inputs

The following section sets forth the factual inputs used in the DissoMaster guideline calculation for reference and to provide context for the deviation analysis.

A. Income Figures

Ms. Fonseca's Income. Ms. Fonseca's total annual compensation, as documented in the compensation records of Luminos Entertainment Group, Inc. (her current employer), is $870,000. This figure is comprised of the following components:

• Base salary: $485,000 per year

• Average annual bonus (three-year trailing average): $210,000 per year

• Annual restricted stock unit (RSU) vesting: $175,000 per year

For purposes of the guideline calculation, Ms. Fonseca's gross monthly income is computed as $870,000 ÷ 12 = $72,500 per month. The inclusion of RSU vesting income is consistent with California law treating all forms of compensation, including equity-based compensation, as income available for support. See Marriage of Cheriton (2001) 92 Cal.App.4th 269, 285 (holding that stock options and similar equity instruments constitute income for purposes of guideline support calculations). Both parties have agreed, for purposes of these negotiations, not to contest the inclusion of RSU income in the calculation.

Mr. Medrano's Imputed Income. Mr. Medrano's income has been imputed based on a three-year average of his freelance earnings through Medrano Visuals, LLC, the professional services entity through which he conducts his freelance commercial photography and videography work. The forensic income analysis prepared by Harold K. Yamamoto, CPA/ABV/CFF, of Yamamoto Brace & Liu, LLP, concludes that Mr. Medrano's three-year average gross earnings through Medrano Visuals, LLC are approximately $340,000 per year. The imputation of income at this level reflects adjustments for personal expenses run through the business entity and the normalization of irregular income streams across the three-year measurement period. Mr. Medrano's imputed gross monthly income is therefore computed as $340,000 ÷ 12 ≈ $28,333 per month.

Combined Gross Monthly Income. The parties' combined gross monthly income for guideline calculation purposes is $72,500 + $28,333 = $100,833 per month, or approximately $1,210,000 per year. This combined income figure places the family squarely in the high-income category, a factor that is relevant to the deviation analysis under Family Code § 4057(b)(4) and (b)(6), as discussed in Section IV below.

B. Timeshare and Children

The parties have two minor children:

• Isabela Luz Fonseca-Medrano, date of birth February 11, 2017 (age 6 at the time of this memorandum)

• Mateo Elías Fonseca-Medrano, date of birth August 29, 2019 (age 4 at the time of this memorandum)

Under the proposed custody arrangement, the annual overnight split is 232 overnights with Ms. Fonseca (63.6%) and 133 overnights with Mr. Medrano (36.4%). This timeshare reflects the parties' negotiated custodial schedule, which provides for a primary residence with Ms. Fonseca during the school year and a substantially equal division of time during school breaks. Specifically, during the 10-week (70-day) summer break, the children's time is split 50/50, with 35 overnights allocated to each parent. The remaining time is distributed throughout the school year, with Ms. Fonseca serving as the primary custodial parent during the academic calendar.

The timeshare percentage is a critical input to the guideline formula, as it directly affects the allocation of custodial costs between the parties. Ms. Fonseca's majority timeshare means that she bears the larger share of direct custodial costs — food, clothing, household supplies, utilities, and other day-to-day expenses — which operates to moderate the guideline support amount notwithstanding the significant income disparity between the parties.

C. Guideline Output

The DissoMaster calculation, using the income figures and timeshare percentages set forth above, produces a guideline child support obligation of $1,274 per month payable by Ms. Fonseca to Mr. Medrano. It is worth noting that, despite Ms. Fonseca's significantly higher income (approximately 71.9% of combined gross income), the guideline amount is substantially moderated by her majority timeshare. Because Ms. Fonseca has the children for approximately 63.6% of the year, she directly incurs the majority of custodial expenses, and the guideline formula accounts for this by reducing the cash transfer to the lower-earning, lower-timeshare parent. A full copy of the DissoMaster printout is maintained in the file and can be appended to the stipulation as required by Local Rule 5.30.

III. Legal Framework: California Guideline Child Support

A. Presumption of Correctness — Family Code § 4057(a)

Under California Family Code § 4057(a), the amount of child support established by the statewide uniform guideline formula set forth in Section 4055 is presumed to be the correct amount of child support to be ordered. This presumption is a foundational principle of California's child support statutory scheme and reflects the Legislature's intent to promote consistency, predictability, and adequacy in child support orders across the state's family courts. The guideline formula is designed to ensure that children share in the standard of living of both parents and that the economic consequences of separation or divorce do not fall disproportionately on the children.

However, the presumption of correctness is rebuttable. Under Section 4057(a), the presumption may be rebutted by admissible evidence showing that application of the guideline formula would be unjust or inappropriate in the particular case. The party seeking the deviation bears the burden of producing sufficient evidence to rebut the presumption and must demonstrate that the proposed deviation is consistent with the best interests of the children. As the Court of Appeal has noted, "the guideline creates a rebuttable presumption that the guideline amount is correct," but the court retains the authority to deviate from the guideline when the evidence warrants. See Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1360.

B. Statutory Grounds for Deviation — Family Code § 4057(b)

Section 4057(b) enumerates specific factors that the court may consider in determining whether the presumption established by subdivision (a) has been rebutted. The enumerated factors provide a structured framework for the court's analysis, although the list is not exhaustive, and the court retains discretion to consider additional circumstances relevant to the particular case. The following factors are relevant to the present matter:

(b)(1): One or both parents have or will have the sale of a principal residence, the equity from which will allow that parent to have sufficient funds to provide adequate housing for the children without the need for an increase in child support. This factor is not directly applicable to the present case.

(b)(2): The parent receiving the support has a much lower or higher percentage of time with the children than the default timeshare percentage used in the guideline formula. This factor may be tangentially relevant here, as Mr. Medrano's 36.4% timeshare is somewhat below the 50% threshold but is not dramatically lower. It does not serve as a primary basis for the proposed deviation.

(b)(3): Each parent's net disposable income is substantially equal, and one parent has primary physical custody of the children, such that application of the guideline formula would result in a child support order that is inappropriate. This factor is not applicable given the significant income disparity between the parties.

(b)(4): One parent has an extraordinarily low income or, conversely, an extraordinarily high income, such that strict application of the guideline formula would lead to an unreasonable result. This factor is relevant to the present case, as the parties' combined gross monthly income of $100,833 places this family well above the income levels at which the guideline formula is most reliably calibrated. At high income levels, the guideline formula may produce amounts that do not precisely track the children's actual reasonable needs.

(b)(5): A party is not contributing to the needs of the children at a level commensurate with that party's custodial time. This factor is relevant here in an indirect sense: the restructured extracurricular cost-sharing arrangement requires Mr. Medrano to contribute at a level that exceeds what his income share would otherwise dictate, thereby ensuring that his financial contributions are more than commensurate with his custodial time.

(b)(6): Application of the guideline would be unjust or inappropriate due to special circumstances in the particular case, including but not limited to: the children's special needs, the high income of the parents relative to the needs of the children, and cases in which both parents have high incomes and the amount of child support computed under the guideline exceeds the children's reasonable needs. This is the broadest of the enumerated factors and serves as a catch-all provision permitting the court to consider the totality of the circumstances. It is directly applicable here.

C. The Court's Discretion

The court retains broad discretion in setting child support, and its determination will not be disturbed on appeal absent a clear abuse of that discretion. See Marriage of Cheriton, supra, 92 Cal.App.4th at 283; Marriage of Hubner (2001) 94 Cal.App.4th 175, 187. This discretion extends to the determination of whether the statutory presumption has been rebutted and whether a deviation from the guideline amount is warranted under the circumstances of a particular case.

Where the parties stipulate to a support amount that deviates from the guideline, the court's discretion is exercised in the context of reviewing the stipulation for compliance with the requirements of Family Code § 4065. Under that section, the court must make specific findings on the record or in writing before approving a stipulated below-guideline support order, including findings that the stipulation is in the best interests of the children and that the children's needs will be adequately met. The court retains the authority to reject a stipulated amount if it concludes that the proposed deviation would not serve the children's best interests, even where both parties have agreed to the deviation. However, as a practical matter, courts generally accord substantial deference to the parties' negotiated agreements where those agreements are supported by adequate factual findings and where the deviation is modest in scope.

IV. Analysis: Grounds Supporting a $174/Month Downward Deviation

A. Section 4057(b)(5) and (b)(6) — Restructured Extracurricular Cost-Sharing as Special Circumstance

The primary statutory basis for the proposed deviation is the parties' agreement to restructure the allocation of extracurricular and enrichment activity costs in a manner that constitutes a "special circumstance" within the meaning of Family Code § 4057(b)(6), and that also implicates the principles underlying § 4057(b)(5) by ensuring that Mr. Medrano's financial contributions to the children's needs are more than commensurate with his custodial time and income share.

Under the proposed arrangement, Mr. Medrano will bear 60% of all extracurricular and enrichment activity costs per child per quarter, subject to a cap of $1,500 per child per quarter, with Ms. Fonseca responsible for the remaining 40%. This allocation represents a significant departure from the proportional income-share methodology that would ordinarily be applied. Under a proportional allocation based on the parties' respective shares of combined gross income, Ms. Fonseca's income share would be approximately 71.9% ($72,500 ÷ $100,833) and Mr. Medrano's income share would be approximately 28.1% ($28,333 ÷ $100,833). Accordingly, a proportional split would assign approximately 72% of extracurricular costs to Ms. Fonseca and only 28% to Mr. Medrano. The proposed 60/40 split in Mr. Medrano's favor therefore requires Mr. Medrano to contribute at a rate that is more than double what his income share would otherwise dictate.

The financial significance of this restructured allocation is substantial and quantifiable. Estimated annual extracurricular costs for two children at full cap utilization total up to $12,000 per year ($1,500 × 4 quarters × 2 children). Under the proposed 60/40 split, Mr. Medrano's annual share would be $7,200 per year ($600 per month). Under a proportional income-share split (28%), Mr. Medrano would pay approximately $3,360 per year ($280 per month). The difference between these two figures — $3,840 per year, or $320 per month — substantially exceeds the annual support deviation of $2,088 per year ($174 × 12 months).

In other words, the enhanced extracurricular cost-sharing obligation assumed by Mr. Medrano is worth approximately $320 per month more than what he would otherwise contribute under a proportional split, while the deviation reduces his cash support receipts by only $174 per month. The net economic effect of the restructured arrangement is therefore favorable to the children by approximately $146 per month ($320 − $174), as it channels additional financial resources directly toward the children's enrichment and developmental activities.

This arrangement also serves the important non-financial objective of incentivizing Mr. Medrano's active involvement in the children's extracurricular lives. By tying Mr. Medrano's enhanced financial responsibility to specific categories of child-related expenditures — rather than merely increasing the undifferentiated cash transfer — the proposed arrangement ensures that additional funds are directed toward activities that directly benefit the children's educational, athletic, and creative development. Both Isabela and Mateo are currently enrolled in extracurricular activities (Isabela participates in competitive gymnastics and Suzuki violin lessons; Mateo is enrolled in a structured swimming program and a bilingual early learning enrichment class), and the costs of these activities are expected to increase as the children grow. The restructured cost-sharing arrangement is designed to accommodate this anticipated growth in extracurricular expenses.

For these reasons, the restructured extracurricular cost-sharing arrangement constitutes a "special circumstance" within the meaning of Family Code § 4057(b)(6) that justifies a downward deviation from the guideline support amount. It also ensures that Mr. Medrano's overall financial contributions to the children's needs exceed what would be commensurate with his custodial time, satisfying the policy objectives underlying § 4057(b)(5).

B. Section 4057(b)(4) — High Combined Income Relative to Children's Needs

The parties' combined gross monthly income of $100,833 (approximately $1,210,000 annually) places this family in the high-income category where the guideline formula's accuracy in estimating the children's actual reasonable needs is diminished. California appellate courts have long recognized that the guideline formula, while generally reliable at moderate income levels, may produce results at higher income levels that do not precisely track the children's actual needs. As the Court of Appeal observed in Marriage of Ostler & Smith (1990) 223 Cal.App.3d 33, and as subsequent decisions have reinforced, at very high income levels the marginal cost of maintaining the children's standard of living does not increase proportionally with parental income. See also Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327 (noting that at high income levels, the guideline formula may overstate the amount necessary to meet the children's reasonable needs).

At the combined income level in this case, both parents have substantial means to provide for the children's needs, and the deviation does not impair either household's ability to maintain an appropriate standard of living for the children. The proposed deviation of $174 per month represents only approximately 13.7% of the guideline amount — a modest reduction in relative terms — and the absolute dollar amount is a negligible fraction of either parent's monthly income ($174 represents approximately 0.24% of Ms. Fonseca's gross monthly income and approximately 0.61% of Mr. Medrano's imputed gross monthly income). The deviation does not meaningfully diminish the financial resources available to Mr. Medrano's household for the children's care during his custodial time.

Moreover, the children's actual reasonable needs are being met through a comprehensive financial architecture that includes not only the base support payment but also substantial direct cost allocations for tuition, healthcare, and extracurricular activities, as discussed in Section IV.C below. In this context, a $174 per month reduction in the undifferentiated cash transfer to Mr. Medrano does not compromise the children's welfare.

C. Education and Healthcare Cost-Sharing as Additional Context

In addition to the base support payment and the restructured extracurricular cost-sharing arrangement, the parties have agreed to a series of direct cost allocations that provide further assurance that the children's needs will be fully met. These additional arrangements, while not themselves the basis for the deviation, provide important context for the court's assessment of whether the deviation is appropriate under the totality of the circumstances.

Tuition. Both children attend Ridgeview Academy, a private school in the Los Angeles area. The parties have agreed that Ms. Fonseca will pay 70% and Mr. Medrano will pay 30% of the annual tuition for each child. Current annual tuition is $32,400 for Isabela and $26,800 for Mateo, totaling $59,200 per year. Under the agreed allocation:

• Ms. Fonseca's annual tuition share: $41,440 ($3,453/month)

• Mr. Medrano's annual tuition share: $17,760 ($1,480/month)

These tuition obligations are borne directly by each parent and are not captured in the guideline formula's cash support calculation. Ms. Fonseca's tuition contribution alone ($41,440/year) is more than 2.7 times the annual guideline support amount ($1,274 × 12 = $15,288), underscoring the extent to which the guideline cash transfer represents only a small fraction of the total financial resources devoted to the children's welfare.

Healthcare. The children will remain on Ms. Fonseca's employer-sponsored health insurance plan through Veridian Health Insurance Co. (provided via Luminos Entertainment Group, Inc.'s benefits program). The cost of adding the children to Ms. Fonseca's employer-sponsored plan is borne entirely by Ms. Fonseca and is not reflected in the guideline calculation. In addition, unreimbursed medical, dental, orthodontic, and mental health expenses are to be split 70% Ms. Fonseca / 30% Mr. Medrano, consistent with the proportional income-share allocation used for tuition.

These substantial direct cost obligations borne by Ms. Fonseca — totaling tens of thousands of dollars annually beyond the base support payment — provide additional justification for a modest downward deviation in the cash support transfer to Mr. Medrano. When the court considers the totality of the financial arrangements between the parties, including the base support payment, tuition contributions, healthcare coverage, and the restructured extracurricular cost-sharing arrangement, the aggregate financial resources devoted to the children's welfare substantially exceed what the guideline formula alone would produce.

V. Requirements for Court Approval of a Stipulated Deviation

A. Family Code § 4065 — Stipulated Agreements Below Guideline

Under Family Code § 4065(a), the parties may stipulate to a child support amount that differs from the guideline amount, provided that the court makes specific findings before approving such a stipulation. This section imposes procedural safeguards designed to ensure that stipulated below-guideline support orders are entered knowingly and voluntarily and that the children's interests are protected.

Specifically, under § 4065(a), before approving a stipulated child support amount that is below the guideline, the court must find all of the following:

(1) The parties have been fully informed of their rights regarding child support, including the right to have support determined under the guideline formula.

(2) The order is being agreed to without coercion or duress.

(3) The agreement is in the best interests of the children involved.

(4) The needs of the children will be adequately met by the stipulated amount, taking into account the totality of the circumstances, including any additional financial commitments made by the parties for the children's benefit.

Under § 4065(b), if the stipulated amount is below the guideline, the court must additionally state its reasons for approving the deviation, either on the record in open court or in a written statement of decision. This requirement ensures that there is an adequate appellate record supporting the deviation and provides transparency regarding the factual basis for the court's determination.

Compliance with these procedural requirements is essential to the enforceability and durability of the stipulated support order. An order entered without the required findings may be vulnerable to a subsequent motion to set aside or modify the order, or to a challenge on appeal. Accordingly, careful attention must be paid to ensuring that the stipulation includes the necessary recitals and that the required findings are made at the time the court approves the stipulation.

B. Recommended Approach for Stipulation Drafting

To ensure compliance with Family Code § 4065 and to create a robust record supporting the deviation, the stipulation should include express recitals addressing each of the required findings. Specifically, the stipulation should recite the following:

• Both parties have been fully advised of the guideline child support amount ($1,274 per month, as calculated by DissoMaster based on the income and timeshare inputs set forth in the stipulation), and both parties voluntarily and knowingly agree to the reduced amount of $1,100 per month.

• The deviation is justified by the restructured extracurricular cost-sharing arrangement described in the stipulation, the parties' high combined gross monthly income of $100,833, and the substantial direct cost allocations for tuition (totaling $59,200 per year) and healthcare (children covered on Ms. Fonseca's employer-sponsored plan through Veridian Health Insurance Co.; unreimbursed expenses shared 70/30).

• The children's reasonable needs will be fully met, taking into account the totality of the financial arrangements between the parties, including base support, tuition, healthcare coverage, and the extracurricular cost-sharing arrangement.

• Neither party has been coerced, unduly pressured, or otherwise improperly influenced into accepting the deviation.

• A DissoMaster printout reflecting the guideline calculation is attached to the stipulation as an exhibit.

In addition to the recitals within the four corners of the stipulation itself, the parties should ensure that counsel for both sides makes an appropriate statement on the record at the time the stipulation is presented to the court, confirming the voluntariness of the agreement and the parties' understanding of the deviation and its basis. This oral record, in conjunction with the written recitals, will provide the court with the evidentiary foundation necessary to make the required findings under § 4065.

Minor's Counsel. Tessa L. Brannigan, Esq., was appointed as Minor's Counsel on June 22, 2023, pursuant to Family Code § 3150, to represent the interests of Isabela and Mateo in these proceedings. Ms. Brannigan's role provides an independent check on the parties' negotiated arrangements and ensures that the children's interests are independently represented. We recommend that Ms. Brannigan be consulted regarding the proposed deviation prior to the finalization of the stipulation, and that she be invited to affirmatively state — either on the record or in a written declaration appended to the stipulation — that the deviation is consistent with the children's best interests. Ms. Brannigan's concurrence will significantly bolster the evidentiary record and reduce the likelihood that the court will express concerns about the adequacy of the stipulated support amount.

C. Annual Review Provision

To provide the court with additional assurance that the children's needs will continue to be monitored and addressed over time, the parties should include a provision in the stipulation for annual review of the support amount. The recommended provision would trigger a review:

• On the anniversary date of the entry of the support order, or

• Upon a material change in circumstances, defined as either (i) a change in either party's gross annual income exceeding 15% (up or down) from the income figures used in the guideline calculation, or (ii) a change in the custodial timeshare exceeding 10% (i.e., a shift of more than approximately 36 overnights per year).

This annual review provision serves as a structural safeguard that mitigates any concern the court might have about the long-term adequacy of the below-guideline support amount. By building in a mechanism for periodic reassessment, the parties demonstrate their commitment to ensuring that the support amount remains appropriate as the children's needs evolve and as the parties' financial circumstances change. Courts have viewed such provisions favorably in approving stipulated deviations, as they reduce the risk that a below-guideline order will become stale or inadequate over time.

VI. Case Law Support

A. Relevant California Appellate Authority

The proposed deviation is consistent with the principles articulated in the leading California appellate decisions addressing guideline deviations in high-income families and in cases involving restructured cost-sharing arrangements.

High-Income Deviation Cases. California appellate courts have repeatedly recognized the trial court's broad discretion to deviate from the guideline support amount in cases involving high-income parents. In Marriage of de Guigne (2002) 97 Cal.App.4th 1353, the Court of Appeal upheld a below-guideline support order in a case involving a very high-income payor, reasoning that at such income levels the guideline formula may produce a support amount that exceeds the children's reasonable needs, and that the trial court is entitled to consider the totality of the circumstances in setting an appropriate support level. The court emphasized that the guideline formula is a starting point, not an absolute mandate, and that deviation is permissible where supported by an adequate record. See id. at 1360–61.

Similarly, in Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, the Court of Appeal acknowledged that at very high combined income levels, the marginal cost of maintaining the children's standard of living does not increase linearly with parental income, and that the trial court may exercise its discretion to set support at an amount below the guideline where the evidence establishes that the guideline amount exceeds the children's actual reasonable needs. See id. at 1327–28. The court further noted that the guideline formula, while presumptively correct, was not designed to function as a precise calculator of children's needs at extreme income levels, and that the court's discretion under § 4057(b)(4) and (b)(6) provides the necessary flexibility to achieve an appropriate result.

Direct Obligation Offset Cases. Courts have also approved downward deviations from guideline support where the paying parent assumes additional direct financial obligations — such as tuition, extracurricular costs, or housing-related expenses — that are not fully captured in the guideline formula. The rationale underlying these decisions is that the guideline formula calculates a cash transfer amount based on the parties' incomes and timeshare, but does not account for the full range of direct expenditures that a parent may make on behalf of the children outside the cash transfer framework. Where a parent makes substantial direct contributions that supplement the cash support payment, the court may appropriately consider those contributions in assessing whether the guideline amount should be adjusted.

In Marriage of Catalano (1988) 204 Cal.App.3d 543, the Court of Appeal recognized the principle that a parent's direct payment of child-related expenses, such as private school tuition or health insurance premiums, may be considered as part of the overall support arrangement and may justify a deviation from the formulaic cash transfer amount. More recently, in Marriage of Hubner (2001) 94 Cal.App.4th 175, the court confirmed that the trial court's assessment of child support is not limited to the mechanical application of the guideline formula but must take into account the totality of the parties' financial arrangements, including direct cost-sharing agreements and other supplemental financial commitments. See id. at 187–88.

Totality-of-Arrangements Approach. The appellate decisions collectively support the principle that the court may — and should — consider the totality of the parties' financial arrangements, not merely the cash transfer amount, in assessing whether the children's needs are met. This holistic approach is particularly appropriate in high-income cases where the parties have negotiated comprehensive financial arrangements that include base support, tuition contributions, healthcare coverage, and activity cost-sharing. The proposed arrangement in the present case reflects precisely this type of comprehensive financial architecture, and the modest deviation in the cash support component is amply justified by the totality of the financial commitments made by both parties.

Modest Percentage Deviations. Finally, it bears noting that courts have consistently approved modest percentage deviations from the guideline — in the range of 10% to 15% below guideline — where supported by an adequate factual record and where the deviation is accompanied by offsetting financial commitments that ensure the children's needs are met. The proposed deviation of approximately 13.7% falls squarely within this range and is well within the bounds of deviations that have been upheld on appellate review. Larger deviations have been approved in appropriate cases, and the relatively modest scope of the deviation proposed here further reduces the risk of judicial disapproval.

VII. Risk Assessment

Based on the foregoing analysis, the risk profile for the proposed deviation is assessed as follows:

Low risk of court rejection. The proposed deviation of $174 per month (13.7% below guideline) is modest in both absolute and relative terms. It falls well within the range of deviations routinely approved by courts in high-income cases, and it is supported by a clear statutory basis under Family Code § 4057(b)(4), (b)(5), and (b)(6). The Los Angeles County Superior Court Family Law Division is experienced in adjudicating support matters involving high-income families and is unlikely to view a 13.7% deviation as raising significant concerns, particularly where the deviation is accompanied by offsetting financial commitments.

Strong factual basis. The restructured extracurricular cost-sharing arrangement provides a concrete, quantifiable offset that exceeds the deviation amount. As demonstrated in Section IV.A above, Mr. Medrano's enhanced extracurricular contribution exceeds the support reduction by approximately $146 per month ($320/month additional contribution versus $174/month support reduction). This arithmetic favorability creates a persuasive evidentiary record that the deviation is not only reasonable but is affirmatively beneficial to the children.

Minor's Counsel support. If Minor's Counsel Tessa L. Brannigan concurs that the proposed arrangement serves the children's best interests, this will substantially reduce any risk that the court will reject the stipulation. Minor's Counsel's independent assessment of the children's interests carries significant weight with the court, and an affirmative endorsement of the deviation would likely be dispositive of any concerns the court might otherwise raise. We recommend proactively engaging Ms. Brannigan in discussions regarding the proposed arrangement and soliciting her written concurrence prior to presenting the stipulation to the court.

Potential concern regarding extracurricular cost cap. The court may inquire about whether the extracurricular cost cap of $1,500 per child per quarter ($6,000 per child per year) is adequate to cover the children's actual enrichment activity costs. We should be prepared to demonstrate that this cap is sufficient to cover the typical range of enrichment activities for children of Isabela's and Mateo's ages and socioeconomic background. Current extracurricular costs for the two children are approximately $1,100 to $1,300 per child per quarter, well within the $1,500 cap. The stipulation should also include a provision stating that costs exceeding the quarterly cap require mutual written consent of both parents, thereby ensuring that neither parent is forced to bear unexpected or excessive expenses unilaterally and that both parents retain input into decisions regarding activities that exceed the anticipated cost range.

Annual review provision as safety valve. The inclusion of an annual review provision, as discussed in Section V.C above, serves as an important structural safeguard that mitigates any concern the court might have about the long-term adequacy of the below-guideline support amount. By ensuring that the support amount will be reassessed periodically and in the event of material changes in circumstances, the annual review provision provides the court with confidence that the deviation will not result in the children's needs going unmet over time.

VIII. Conclusion and Recommendation

Based on the analysis set forth in this memorandum, the proposed downward deviation from the guideline child support amount of $1,274 per month to a stipulated amount of $1,100 per month — a deviation of $174 per month, or approximately 13.7% below guideline — is legally supportable under California Family Code § 4057(b)(4), (b)(5), and (b)(6), as well as under the court's broad discretion to consider the totality of the parties' financial arrangements in setting child support.

The deviation is more than offset by Mr. Medrano's enhanced extracurricular cost-sharing obligation, which requires him to bear 60% of extracurricular costs per child per quarter (up to $1,500 per child per quarter), at an annual cost to Mr. Medrano that exceeds the annual support deviation by approximately $1,752 ($3,840 − $2,088). The children's needs will continue to be fully met through the combined effect of:

• Base child support of $1,100 per month ($13,200 per year);

• Tuition allocation at Ridgeview Academy ($59,200 per year total; 70/30 split with Ms. Fonseca contributing $41,440 and Mr. Medrano contributing $17,760);

• Healthcare coverage through Veridian Health Insurance Co. via Ms. Fonseca's employer-sponsored plan, with unreimbursed expenses shared 70/30; and

• Restructured extracurricular cost-sharing at 60% Mr. Medrano / 40% Ms. Fonseca (up to $1,500 per child per quarter).

Recommendations:

1. Proceed to incorporate the $1,100/month support amount into the stipulated agreement, with the required recitals addressing the findings mandated by Family Code § 4065(a) and the annual review provision described in Section V.C above.

2. Coordinate with Minor's Counsel Tessa L. Brannigan to confirm her support for the deviation prior to the mediation session and court filing. Ms. Brannigan's affirmative concurrence will significantly strengthen the evidentiary record and reduce the likelihood of judicial scrutiny.

3. Include detailed recitals in the stipulation documenting the guideline amount, the deviation amount, the basis for the deviation, and the totality of the financial arrangements between the parties, as outlined in Section V.B above.

4. Prepare a supporting declaration from Ms. Fonseca, if necessary, addressing the adequacy of the extracurricular cost cap and the parties' shared expectation that the cap will cover the children's anticipated enrichment activity costs through at least the next review period.

5. This analysis should be reviewed by Devon Archer and, as appropriate, by Priya Anand prior to finalization of the settlement terms to ensure that all strategic and legal considerations have been fully addressed.

CONFIDENTIALITY NOTICE: This memorandum is protected attorney work product prepared in anticipation of litigation and is privileged and confidential. It reflects the mental impressions, conclusions, and legal theories of the attorney preparing it. This memorandum is intended solely for use by the engagement team assigned to C&H Matter No. 1035-00002 (Fonseca v. Medrano) and should not be distributed, copied, or disclosed to any person outside the engagement team without the prior written authorization of the supervising partner. Unauthorized disclosure may result in waiver of applicable privileges.

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
TO: Devon Archer, Lead Associate
FROM: Nadia Petrov, Associate
DATE: November 1, 2023
RE: Fonseca v. Medrano — Legal Basis for Deviation from Guideline Child Support (C&H Matter No. 1035-00002; Case No. 22STFL09847, Superior Court of California, County of Los Angeles)
CLIENT: Marguerite D. Fonseca
I. Introduction and Purpose
This memorandum analyzes the legal basis under California Family Code § 4057(b) for deviating downward from the guideline child support amount in the Fonseca v. Medrano custody and support matter. The purpose of this analysis is to evaluate whether the negotiated support figure is legally defensible and to identify the specific statutory grounds and evidentiary considerations that will support a stipulated deviation, should the parties finalize the terms currently under discussion.
The DissoMaster guideline calculation, based on two minor children, Ms. Fonseca's gross monthly income of $72,500, and Mr. Medrano's imputed gross monthly income of $28,333 (yielding a combined gross monthly income of $100,833), together with a proposed timeshare split of approximately 63.6% to Ms. Fonseca and 36.4% to Mr. Medrano (232 overnights and 133 overnights annually, respectively), yields a guideline child support obligation of $1,274 per month payable by Ms. Fonseca to Mr. Medrano. This amount reflects the application of the algebraic formula set forth in Family Code § 4055, as implemented in the DissoMaster software program, and constitutes the presumptively correct amount of child support under California law.
The parties are currently in negotiations to agree on a child support amount of $1,100 per month, representing a downward deviation of $174 per month, or approximately 13.7% below the guideline figure. This proposed deviation is not a bare reduction; rather, it is inextricably linked to a restructured extracurricular cost-sharing arrangement under which Mr. Medrano would assume 60% of the children's extracurricular and enrichment activity costs (subject to a cap of $1,500 per child per quarter), compared to the typical proportional allocation that would otherwise be determined by reference to the parties' respective income shares. The restructured arrangement shifts a materially greater share of these direct child-related expenditures to Mr. Medrano and, as discussed in detail below, produces an offsetting financial benefit to the children that exceeds the dollar amount of the proposed support reduction.
This memorandum assesses whether the proposed deviation is legally supportable under the applicable provisions of the California Family Code and relevant appellate authority, identifies the procedural requirements for court approval of a stipulated below-guideline support order, and evaluates the risk profile associated with the proposed deviation. This analysis is intended to inform the team's approach to finalizing the settlement terms and preparing the stipulation for court submission.
II. Summary of Guideline Calculation Inputs
The following section sets forth the factual inputs used in the DissoMaster guideline calculation for reference and to provide context for the deviation analysis.
A. Income Figures
Ms. Fonseca's Income. Ms. Fonseca's total annual compensation, as documented in the compensation records of Luminos Entertainment Group, Inc. (her current employer), is $870,000. This figure is comprised of the following components:
• Base salary: $485,000 per year
• Average annual bonus (three-year trailing average): $210,000 per year
• Annual restricted stock unit (RSU) vesting: $175,000 per year
For purposes of the guideline calculation, Ms. Fonseca's gross monthly income is computed as $870,000 ÷ 12 = $72,500 per month. The inclusion of RSU vesting income is consistent with California law treating all forms of compensation, including equity-based compensation, as income available for support. See Marriage of Cheriton (2001) 92 Cal.App.4th 269, 285 (holding that stock options and similar equity instruments constitute income for purposes of guideline support calculations). Both parties have agreed, for purposes of these negotiations, not to contest the inclusion of RSU income in the calculation.
Mr. Medrano's Imputed Income. Mr. Medrano's income has been imputed based on a three-year average of his freelance earnings through Medrano Visuals, LLC, the professional services entity through which he conducts his freelance commercial photography and videography work. The forensic income analysis prepared by Harold K. Yamamoto, CPA/ABV/CFF, of Yamamoto Brace & Liu, LLP, concludes that Mr. Medrano's three-year average gross earnings through Medrano Visuals, LLC are approximately $340,000 per year. The imputation of income at this level reflects adjustments for personal expenses run through the business entity and the normalization of irregular income streams across the three-year measurement period. Mr. Medrano's imputed gross monthly income is therefore computed as $340,000 ÷ 12 ≈ $28,333 per month.
Combined Gross Monthly Income. The parties' combined gross monthly income for guideline calculation purposes is $72,500 + $28,333 = $100,833 per month, or approximately $1,210,000 per year. This combined income figure places the family squarely in the high-income category, a factor that is relevant to the deviation analysis under Family Code § 4057(b)(4) and (b)(6), as discussed in Section IV below.
B. Timeshare and Children
The parties have two minor children:
• Isabela Luz Fonseca-Medrano, date of birth February 11, 2017 (age 6 at the time of this memorandum)
• Mateo Elías Fonseca-Medrano, date of birth August 29, 2019 (age 4 at the time of this memorandum)
Under the proposed custody arrangement, the annual overnight split is 232 overnights with Ms. Fonseca (63.6%) and 133 overnights with Mr. Medrano (36.4%). This timeshare reflects the parties' negotiated custodial schedule, which provides for a primary residence with Ms. Fonseca during the school year and a substantially equal division of time during school breaks. Specifically, during the 10-week (70-day) summer break, the children's time is split 50/50, with 35 overnights allocated to each parent. The remaining time is distributed throughout the school year, with Ms. Fonseca serving as the primary custodial parent during the academic calendar.
The timeshare percentage is a critical input to the guideline formula, as it directly affects the allocation of custodial costs between the parties. Ms. Fonseca's majority timeshare means that she bears the larger share of direct custodial costs — food, clothing, household supplies, utilities, and other day-to-day expenses — which operates to moderate the guideline support amount notwithstanding the significant income disparity between the parties.
C. Guideline Output
The DissoMaster calculation, using the income figures and timeshare percentages set forth above, produces a guideline child support obligation of $1,274 per month payable by Ms. Fonseca to Mr. Medrano. It is worth noting that, despite Ms. Fonseca's significantly higher income (approximately 71.9% of combined gross income), the guideline amount is substantially moderated by her majority timeshare. Because Ms. Fonseca has the children for approximately 63.6% of the year, she directly incurs the majority of custodial expenses, and the guideline formula accounts for this by reducing the cash transfer to the lower-earning, lower-timeshare parent. A full copy of the DissoMaster printout is maintained in the file and can be appended to the stipulation as required by Local Rule 5.30.
III. Legal Framework: California Guideline Child Support
A. Presumption of Correctness — Family Code § 4057(a)
Under California Family Code § 4057(a), the amount of child support established by the statewide uniform guideline formula set forth in Section 4055 is presumed to be the correct amount of child support to be ordered. This presumption is a foundational principle of California's child support statutory scheme and reflects the Legislature's intent to promote consistency, predictability, and adequacy in child support orders across the state's family courts. The guideline formula is designed to ensure that children share in the standard of living of both parents and that the economic consequences of separation or divorce do not fall disproportionately on the children.
However, the presumption of correctness is rebuttable. Under Section 4057(a), the presumption may be rebutted by admissible evidence showing that application of the guideline formula would be unjust or inappropriate in the particular case. The party seeking the deviation bears the burden of producing sufficient evidence to rebut the presumption and must demonstrate that the proposed deviation is consistent with the best interests of the children. As the Court of Appeal has noted, "the guideline creates a rebuttable presumption that the guideline amount is correct," but the court retains the authority to deviate from the guideline when the evidence warrants. See Marriage of de Guigne (2002) 97 Cal.App.4th 1353, 1360.
B. Statutory Grounds for Deviation — Family Code § 4057(b)
Section 4057(b) enumerates specific factors that the court may consider in determining whether the presumption established by subdivision (a) has been rebutted. The enumerated factors provide a structured framework for the court's analysis, although the list is not exhaustive, and the court retains discretion to consider additional circumstances relevant to the particular case. The following factors are relevant to the present matter:
(b)(1): One or both parents have or will have the sale of a principal residence, the equity from which will allow that parent to have sufficient funds to provide adequate housing for the children without the need for an increase in child support. This factor is not directly applicable to the present case.
(b)(2): The parent receiving the support has a much lower or higher percentage of time with the children than the default timeshare percentage used in the guideline formula. This factor may be tangentially relevant here, as Mr. Medrano's 36.4% timeshare is somewhat below the 50% threshold but is not dramatically lower. It does not serve as a primary basis for the proposed deviation.
(b)(3): Each parent's net disposable income is substantially equal, and one parent has primary physical custody of the children, such that application of the guideline formula would result in a child support order that is inappropriate. This factor is not applicable given the significant income disparity between the parties.
(b)(4): One parent has an extraordinarily low income or, conversely, an extraordinarily high income, such that strict application of the guideline formula would lead to an unreasonable result. This factor is relevant to the present case, as the parties' combined gross monthly income of $100,833 places this family well above the income levels at which the guideline formula is most reliably calibrated. At high income levels, the guideline formula may produce amounts that do not precisely track the children's actual reasonable needs.
(b)(5): A party is not contributing to the needs of the children at a level commensurate with that party's custodial time. This factor is relevant here in an indirect sense: the restructured extracurricular cost-sharing arrangement requires Mr. Medrano to contribute at a level that exceeds what his income share would otherwise dictate, thereby ensuring that his financial contributions are more than commensurate with his custodial time.
(b)(6): Application of the guideline would be unjust or inappropriate due to special circumstances in the particular case, including but not limited to: the children's special needs, the high income of the parents relative to the needs of the children, and cases in which both parents have high incomes and the amount of child support computed under the guideline exceeds the children's reasonable needs. This is the broadest of the enumerated factors and serves as a catch-all provision permitting the court to consider the totality of the circumstances. It is directly applicable here.
C. The Court's Discretion
The court retains broad discretion in setting child support, and its determination will not be disturbed on appeal absent a clear abuse of that discretion. See Marriage of Cheriton, supra, 92 Cal.App.4th at 283; Marriage of Hubner (2001) 94 Cal.App.4th 175, 187. This discretion extends to the determination of whether the statutory presumption has been rebutted and whether a deviation from the guideline amount is warranted under the circumstances of a particular case.
Where the parties stipulate to a support amount that deviates from the guideline, the court's discretion is exercised in the context of reviewing the stipulation for compliance with the requirements of Family Code § 4065. Under that section, the court must make specific findings on the record or in writing before approving a stipulated below-guideline support order, including findings that the stipulation is in the best interests of the children and that the children's needs will be adequately met. The court retains the authority to reject a stipulated amount if it concludes that the proposed deviation would not serve the children's best interests, even where both parties have agreed to the deviation. However, as a practical matter, courts generally accord substantial deference to the parties' negotiated agreements where those agreements are supported by adequate factual findings and where the deviation is modest in scope.
IV. Analysis: Grounds Supporting a $174/Month Downward Deviation
A. Section 4057(b)(5) and (b)(6) — Restructured Extracurricular Cost-Sharing as Special Circumstance
The primary statutory basis for the proposed deviation is the parties' agreement to restructure the allocation of extracurricular and enrichment activity costs in a manner that constitutes a "special circumstance" within the meaning of Family Code § 4057(b)(6), and that also implicates the principles underlying § 4057(b)(5) by ensuring that Mr. Medrano's financial contributions to the children's needs are more than commensurate with his custodial time and income share.
Under the proposed arrangement, Mr. Medrano will bear 60% of all extracurricular and enrichment activity costs per child per quarter, subject to a cap of $1,500 per child per quarter, with Ms. Fonseca responsible for the remaining 40%. This allocation represents a significant departure from the proportional income-share methodology that would ordinarily be applied. Under a proportional allocation based on the parties' respective shares of combined gross income, Ms. Fonseca's income share would be approximately 71.9% ($72,500 ÷ $100,833) and Mr. Medrano's income share would be approximately 28.1% ($28,333 ÷ $100,833). Accordingly, a proportional split would assign approximately 72% of extracurricular costs to Ms. Fonseca and only 28% to Mr. Medrano. The proposed 60/40 split in Mr. Medrano's favor therefore requires Mr. Medrano to contribute at a rate that is more than double what his income share would otherwise dictate.
The financial significance of this restructured allocation is substantial and quantifiable. Estimated annual extracurricular costs for two children at full cap utilization total up to $12,000 per year ($1,500 × 4 quarters × 2 children). Under the proposed 60/40 split, Mr. Medrano's annual share would be $7,200 per year ($600 per month). Under a proportional income-share split (28%), Mr. Medrano would pay approximately $3,360 per year ($280 per month). The difference between these two figures — $3,840 per year, or $320 per month — substantially exceeds the annual support deviation of $2,088 per year ($174 × 12 months).
In other words, the enhanced extracurricular cost-sharing obligation assumed by Mr. Medrano is worth approximately $320 per month more than what he would otherwise contribute under a proportional split, while the deviation reduces his cash support receipts by only $174 per month. The net economic effect of the restructured arrangement is therefore favorable to the children by approximately $146 per month ($320 − $174), as it channels additional financial resources directly toward the children's enrichment and developmental activities.
This arrangement also serves the important non-financial objective of incentivizing Mr. Medrano's active involvement in the children's extracurricular lives. By tying Mr. Medrano's enhanced financial responsibility to specific categories of child-related expenditures — rather than merely increasing the undifferentiated cash transfer — the proposed arrangement ensures that additional funds are directed toward activities that directly benefit the children's educational, athletic, and creative development. Both Isabela and Mateo are currently enrolled in extracurricular activities (Isabela participates in competitive gymnastics and Suzuki violin lessons; Mateo is enrolled in a structured swimming program and a bilingual early learning enrichment class), and the costs of these activities are expected to increase as the children grow. The restructured cost-sharing arrangement is designed to accommodate this anticipated growth in extracurricular expenses.
For these reasons, the restructured extracurricular cost-sharing arrangement constitutes a "special circumstance" within the meaning of Family Code § 4057(b)(6) that justifies a downward deviation from the guideline support amount. It also ensures that Mr. Medrano's overall financial contributions to the children's needs exceed what would be commensurate with his custodial time, satisfying the policy objectives underlying § 4057(b)(5).
B. Section 4057(b)(4) — High Combined Income Relative to Children's Needs
The parties' combined gross monthly income of $100,833 (approximately $1,210,000 annually) places this family in the high-income category where the guideline formula's accuracy in estimating the children's actual reasonable needs is diminished. California appellate courts have long recognized that the guideline formula, while generally reliable at moderate income levels, may produce results at higher income levels that do not precisely track the children's actual needs. As the Court of Appeal observed in Marriage of Ostler & Smith (1990) 223 Cal.App.3d 33, and as subsequent decisions have reinforced, at very high income levels the marginal cost of maintaining the children's standard of living does not increase proportionally with parental income. See also Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327 (noting that at high income levels, the guideline formula may overstate the amount necessary to meet the children's reasonable needs).
At the combined income level in this case, both parents have substantial means to provide for the children's needs, and the deviation does not impair either household's ability to maintain an appropriate standard of living for the children. The proposed deviation of $174 per month represents only approximately 13.7% of the guideline amount — a modest reduction in relative terms — and the absolute dollar amount is a negligible fraction of either parent's monthly income ($174 represents approximately 0.24% of Ms. Fonseca's gross monthly income and approximately 0.61% of Mr. Medrano's imputed gross monthly income). The deviation does not meaningfully diminish the financial resources available to Mr. Medrano's household for the children's care during his custodial time.
Moreover, the children's actual reasonable needs are being met through a comprehensive financial architecture that includes not only the base support payment but also substantial direct cost allocations for tuition, healthcare, and extracurricular activities, as discussed in Section IV.C below. In this context, a $174 per month reduction in the undifferentiated cash transfer to Mr. Medrano does not compromise the children's welfare.
C. Education and Healthcare Cost-Sharing as Additional Context
In addition to the base support payment and the restructured extracurricular cost-sharing arrangement, the parties have agreed to a series of direct cost allocations that provide further assurance that the children's needs will be fully met. These additional arrangements, while not themselves the basis for the deviation, provide important context for the court's assessment of whether the deviation is appropriate under the totality of the circumstances.
Tuition. Both children attend Ridgeview Academy, a private school in the Los Angeles area. The parties have agreed that Ms. Fonseca will pay 70% and Mr. Medrano will pay 30% of the annual tuition for each child. Current annual tuition is $32,400 for Isabela and $26,800 for Mateo, totaling $59,200 per year. Under the agreed allocation:
• Ms. Fonseca's annual tuition share: $41,440 ($3,453/month)
• Mr. Medrano's annual tuition share: $17,760 ($1,480/month)
These tuition obligations are borne directly by each parent and are not captured in the guideline formula's cash support calculation. Ms. Fonseca's tuition contribution alone ($41,440/year) is more than 2.7 times the annual guideline support amount ($1,274 × 12 = $15,288), underscoring the extent to which the guideline cash transfer represents only a small fraction of the total financial resources devoted to the children's welfare.
Healthcare. The children will remain on Ms. Fonseca's employer-sponsored health insurance plan through Veridian Health Insurance Co. (provided via Luminos Entertainment Group, Inc.'s benefits program). The cost of adding the children to Ms. Fonseca's employer-sponsored plan is borne entirely by Ms. Fonseca and is not reflected in the guideline calculation. In addition, unreimbursed medical, dental, orthodontic, and mental health expenses are to be split 70% Ms. Fonseca / 30% Mr. Medrano, consistent with the proportional income-share allocation used for tuition.
These substantial direct cost obligations borne by Ms. Fonseca — totaling tens of thousands of dollars annually beyond the base support payment — provide additional justification for a modest downward deviation in the cash support transfer to Mr. Medrano. When the court considers the totality of the financial arrangements between the parties, including the base support payment, tuition contributions, healthcare coverage, and the restructured extracurricular cost-sharing arrangement, the aggregate financial resources devoted to the children's welfare substantially exceed what the guideline formula alone would produce.
V. Requirements for Court Approval of a Stipulated Deviation
A. Family Code § 4065 — Stipulated Agreements Below Guideline
Under Family Code § 4065(a), the parties may stipulate to a child support amount that differs from the guideline amount, provided that the court makes specific findings before approving such a stipulation. This section imposes procedural safeguards designed to ensure that stipulated below-guideline support orders are entered knowingly and voluntarily and that the children's interests are protected.
Specifically, under § 4065(a), before approving a stipulated child support amount that is below the guideline, the court must find all of the following:
(1) The parties have been fully informed of their rights regarding child support, including the right to have support determined under the guideline formula.
(2) The order is being agreed to without coercion or duress.
(3) The agreement is in the best interests of the children involved.
(4) The needs of the children will be adequately met by the stipulated amount, taking into account the totality of the circumstances, including any additional financial commitments made by the parties for the children's benefit.
Under § 4065(b), if the stipulated amount is below the guideline, the court must additionally state its reasons for approving the deviation, either on the record in open court or in a written statement of decision. This requirement ensures that there is an adequate appellate record supporting the deviation and provides transparency regarding the factual basis for the court's determination.
Compliance with these procedural requirements is essential to the enforceability and durability of the stipulated support order. An order entered without the required findings may be vulnerable to a subsequent motion to set aside or modify the order, or to a challenge on appeal. Accordingly, careful attention must be paid to ensuring that the stipulation includes the necessary recitals and that the required findings are made at the time the court approves the stipulation.
B. Recommended Approach for Stipulation Drafting
To ensure compliance with Family Code § 4065 and to create a robust record supporting the deviation, the stipulation should include express recitals addressing each of the required findings. Specifically, the stipulation should recite the following:
• Both parties have been fully advised of the guideline child support amount ($1,274 per month, as calculated by DissoMaster based on the income and timeshare inputs set forth in the stipulation), and both parties voluntarily and knowingly agree to the reduced amount of $1,100 per month.
• The deviation is justified by the restructured extracurricular cost-sharing arrangement described in the stipulation, the parties' high combined gross monthly income of $100,833, and the substantial direct cost allocations for tuition (totaling $59,200 per year) and healthcare (children covered on Ms. Fonseca's employer-sponsored plan through Veridian Health Insurance Co.; unreimbursed expenses shared 70/30).
• The children's reasonable needs will be fully met, taking into account the totality of the financial arrangements between the parties, including base support, tuition, healthcare coverage, and the extracurricular cost-sharing arrangement.
• Neither party has been coerced, unduly pressured, or otherwise improperly influenced into accepting the deviation.
• A DissoMaster printout reflecting the guideline calculation is attached to the stipulation as an exhibit.
In addition to the recitals within the four corners of the stipulation itself, the parties should ensure that counsel for both sides makes an appropriate statement on the record at the time the stipulation is presented to the court, confirming the voluntariness of the agreement and the parties' understanding of the deviation and its basis. This oral record, in conjunction with the written recitals, will provide the court with the evidentiary foundation necessary to make the required findings under § 4065.
Minor's Counsel. Tessa L. Brannigan, Esq., was appointed as Minor's Counsel on June 22, 2023, pursuant to Family Code § 3150, to represent the interests of Isabela and Mateo in these proceedings. Ms. Brannigan's role provides an independent check on the parties' negotiated arrangements and ensures that the children's interests are independently represented. We recommend that Ms. Brannigan be consulted regarding the proposed deviation prior to the finalization of the stipulation, and that she be invited to affirmatively state — either on the record or in a written declaration appended to the stipulation — that the deviation is consistent with the children's best interests. Ms. Brannigan's concurrence will significantly bolster the evidentiary record and reduce the likelihood that the court will express concerns about the adequacy of the stipulated support amount.
C. Annual Review Provision
To provide the court with additional assurance that the children's needs will continue to be monitored and addressed over time, the parties should include a provision in the stipulation for annual review of the support amount. The recommended provision would trigger a review:
• On the anniversary date of the entry of the support order, or
• Upon a material change in circumstances, defined as either (i) a change in either party's gross annual income exceeding 15% (up or down) from the income figures used in the guideline calculation, or (ii) a change in the custodial timeshare exceeding 10% (i.e., a shift of more than approximately 36 overnights per year).
This annual review provision serves as a structural safeguard that mitigates any concern the court might have about the long-term adequacy of the below-guideline support amount. By building in a mechanism for periodic reassessment, the parties demonstrate their commitment to ensuring that the support amount remains appropriate as the children's needs evolve and as the parties' financial circumstances change. Courts have viewed such provisions favorably in approving stipulated deviations, as they reduce the risk that a below-guideline order will become stale or inadequate over time.
VI. Case Law Support
A. Relevant California Appellate Authority
The proposed deviation is consistent with the principles articulated in the leading California appellate decisions addressing guideline deviations in high-income families and in cases involving restructured cost-sharing arrangements.
High-Income Deviation Cases. California appellate courts have repeatedly recognized the trial court's broad discretion to deviate from the guideline support amount in cases involving high-income parents. In Marriage of de Guigne (2002) 97 Cal.App.4th 1353, the Court of Appeal upheld a below-guideline support order in a case involving a very high-income payor, reasoning that at such income levels the guideline formula may produce a support amount that exceeds the children's reasonable needs, and that the trial court is entitled to consider the totality of the circumstances in setting an appropriate support level. The court emphasized that the guideline formula is a starting point, not an absolute mandate, and that deviation is permissible where supported by an adequate record. See id. at 1360–61.
Similarly, in Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, the Court of Appeal acknowledged that at very high combined income levels, the marginal cost of maintaining the children's standard of living does not increase linearly with parental income, and that the trial court may exercise its discretion to set support at an amount below the guideline where the evidence establishes that the guideline amount exceeds the children's actual reasonable needs. See id. at 1327–28. The court further noted that the guideline formula, while presumptively correct, was not designed to function as a precise calculator of children's needs at extreme income levels, and that the court's discretion under § 4057(b)(4) and (b)(6) provides the necessary flexibility to achieve an appropriate result.
Direct Obligation Offset Cases. Courts have also approved downward deviations from guideline support where the paying parent assumes additional direct financial obligations — such as tuition, extracurricular costs, or housing-related expenses — that are not fully captured in the guideline formula. The rationale underlying these decisions is that the guideline formula calculates a cash transfer amount based on the parties' incomes and timeshare, but does not account for the full range of direct expenditures that a parent may make on behalf of the children outside the cash transfer framework. Where a parent makes substantial direct contributions that supplement the cash support payment, the court may appropriately consider those contributions in assessing whether the guideline amount should be adjusted.
In Marriage of Catalano (1988) 204 Cal.App.3d 543, the Court of Appeal recognized the principle that a parent's direct payment of child-related expenses, such as private school tuition or health insurance premiums, may be considered as part of the overall support arrangement and may justify a deviation from the formulaic cash transfer amount. More recently, in Marriage of Hubner (2001) 94 Cal.App.4th 175, the court confirmed that the trial court's assessment of child support is not limited to the mechanical application of the guideline formula but must take into account the totality of the parties' financial arrangements, including direct cost-sharing agreements and other supplemental financial commitments. See id. at 187–88.
Totality-of-Arrangements Approach. The appellate decisions collectively support the principle that the court may — and should — consider the totality of the parties' financial arrangements, not merely the cash transfer amount, in assessing whether the children's needs are met. This holistic approach is particularly appropriate in high-income cases where the parties have negotiated comprehensive financial arrangements that include base support, tuition contributions, healthcare coverage, and activity cost-sharing. The proposed arrangement in the present case reflects precisely this type of comprehensive financial architecture, and the modest deviation in the cash support component is amply justified by the totality of the financial commitments made by both parties.
Modest Percentage Deviations. Finally, it bears noting that courts have consistently approved modest percentage deviations from the guideline — in the range of 10% to 15% below guideline — where supported by an adequate factual record and where the deviation is accompanied by offsetting financial commitments that ensure the children's needs are met. The proposed deviation of approximately 13.7% falls squarely within this range and is well within the bounds of deviations that have been upheld on appellate review. Larger deviations have been approved in appropriate cases, and the relatively modest scope of the deviation proposed here further reduces the risk of judicial disapproval.
VII. Risk Assessment
Based on the foregoing analysis, the risk profile for the proposed deviation is assessed as follows:
Low risk of court rejection. The proposed deviation of $174 per month (13.7% below guideline) is modest in both absolute and relative terms. It falls well within the range of deviations routinely approved by courts in high-income cases, and it is supported by a clear statutory basis under Family Code § 4057(b)(4), (b)(5), and (b)(6). The Los Angeles County Superior Court Family Law Division is experienced in adjudicating support matters involving high-income families and is unlikely to view a 13.7% deviation as raising significant concerns, particularly where the deviation is accompanied by offsetting financial commitments.
Strong factual basis. The restructured extracurricular cost-sharing arrangement provides a concrete, quantifiable offset that exceeds the deviation amount. As demonstrated in Section IV.A above, Mr. Medrano's enhanced extracurricular contribution exceeds the support reduction by approximately $146 per month ($320/month additional contribution versus $174/month support reduction). This arithmetic favorability creates a persuasive evidentiary record that the deviation is not only reasonable but is affirmatively beneficial to the children.
Minor's Counsel support. If Minor's Counsel Tessa L. Brannigan concurs that the proposed arrangement serves the children's best interests, this will substantially reduce any risk that the court will reject the stipulation. Minor's Counsel's independent assessment of the children's interests carries significant weight with the court, and an affirmative endorsement of the deviation would likely be dispositive of any concerns the court might otherwise raise. We recommend proactively engaging Ms. Brannigan in discussions regarding the proposed arrangement and soliciting her written concurrence prior to presenting the stipulation to the court.
Potential concern regarding extracurricular cost cap. The court may inquire about whether the extracurricular cost cap of $1,500 per child per quarter ($6,000 per child per year) is adequate to cover the children's actual enrichment activity costs. We should be prepared to demonstrate that this cap is sufficient to cover the typical range of enrichment activities for children of Isabela's and Mateo's ages and socioeconomic background. Current extracurricular costs for the two children are approximately $1,100 to $1,300 per child per quarter, well within the $1,500 cap. The stipulation should also include a provision stating that costs exceeding the quarterly cap require mutual written consent of both parents, thereby ensuring that neither parent is forced to bear unexpected or excessive expenses unilaterally and that both parents retain input into decisions regarding activities that exceed the anticipated cost range.
Annual review provision as safety valve. The inclusion of an annual review provision, as discussed in Section V.C above, serves as an important structural safeguard that mitigates any concern the court might have about the long-term adequacy of the below-guideline support amount. By ensuring that the support amount will be reassessed periodically and in the event of material changes in circumstances, the annual review provision provides the court with confidence that the deviation will not result in the children's needs going unmet over time.
VIII. Conclusion and Recommendation
Based on the analysis set forth in this memorandum, the proposed downward deviation from the guideline child support amount of $1,274 per month to a stipulated amount of $1,100 per month — a deviation of $174 per month, or approximately 13.7% below guideline — is legally supportable under California Family Code § 4057(b)(4), (b)(5), and (b)(6), as well as under the court's broad discretion to consider the totality of the parties' financial arrangements in setting child support.
The deviation is more than offset by Mr. Medrano's enhanced extracurricular cost-sharing obligation, which requires him to bear 60% of extracurricular costs per child per quarter (up to $1,500 per child per quarter), at an annual cost to Mr. Medrano that exceeds the annual support deviation by approximately $1,752 ($3,840 − $2,088). The children's needs will continue to be fully met through the combined effect of:
• Base child support of $1,100 per month ($13,200 per year);
• Tuition allocation at Ridgeview Academy ($59,200 per year total; 70/30 split with Ms. Fonseca contributing $41,440 and Mr. Medrano contributing $17,760);
• Healthcare coverage through Veridian Health Insurance Co. via Ms. Fonseca's employer-sponsored plan, with unreimbursed expenses shared 70/30; and
• Restructured extracurricular cost-sharing at 60% Mr. Medrano / 40% Ms. Fonseca (up to $1,500 per child per quarter).
Recommendations:
1. Proceed to incorporate the $1,100/month support amount into the stipulated agreement, with the required recitals addressing the findings mandated by Family Code § 4065(a) and the annual review provision described in Section V.C above.
2. Coordinate with Minor's Counsel Tessa L. Brannigan to confirm her support for the deviation prior to the mediation session and court filing. Ms. Brannigan's affirmative concurrence will significantly strengthen the evidentiary record and reduce the likelihood of judicial scrutiny.
3. Include detailed recitals in the stipulation documenting the guideline amount, the deviation amount, the basis for the deviation, and the totality of the financial arrangements between the parties, as outlined in Section V.B above.
4. Prepare a supporting declaration from Ms. Fonseca, if necessary, addressing the adequacy of the extracurricular cost cap and the parties' shared expectation that the cap will cover the children's anticipated enrichment activity costs through at least the next review period.
5. This analysis should be reviewed by Devon Archer and, as appropriate, by Priya Anand prior to finalization of the settlement terms to ensure that all strategic and legal considerations have been fully addressed.
CONFIDENTIALITY NOTICE: This memorandum is protected attorney work product prepared in anticipation of litigation and is privileged and confidential. It reflects the mental impressions, conclusions, and legal theories of the attorney preparing it. This memorandum is intended solely for use by the engagement team assigned to C&H Matter No. 1035-00002 (Fonseca v. Medrano) and should not be distributed, copied, or disclosed to any person outside the engagement team without the prior written authorization of the supervising partner. Unauthorized disclosure may result in waiver of applicable privileges.

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