Ostler/Smith Bonus Support on Appeal

Ostler/Smith Bonus Support on Appeal: How I Approach These Complex Cases
By Dennis Temko, Appellate Attorney

In my family law appellate practice, I frequently encounter appeals involving Ostler/Smith bonus support provisions. These cases often arise years after judgment, when a party disputes the interpretation or enforcement of a support order that includes a percentage-based formula for future variable income. While Ostler/Smith orders are intended to adapt to fluctuating compensation, they can become a source of prolonged litigation when they are vaguely drafted or the obligor’s income structure changes post-judgment.

When a case involving an Ostler/Smith provision comes to me on appeal, my approach is rooted in a deep understanding of how appellate courts interpret family law judgments, particularly those incorporating settlement agreements or stipulated language.

Understanding the Framework: Ostler/Smith Basics

Ostler/Smith orders, originating from In re Marriage of Ostler & Smith (1990) 223 Cal.App.3d 33, allow trial courts to order a base monthly support amount, plus a percentage of future bonuses, commissions, or other forms of contingent income. This structure can work well when the obligor’s income fluctuates significantly. However, problems arise when:

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The percentage is not clearly tied to gross vs. net income.
The timing of payments is ambiguous.
Certain compensation sources (e.g., RSUs, performance bonuses, profit-sharing) are not explicitly addressed.
The order references a now-obsolete compensation structure or uses vague terms like “bonus income.”

My Role on Appeal: Clarifying and Framing the Legal Issue

When retained as appellate counsel, my first step is to isolate the interpretive issue. Most Ostler/Smith disputes on appeal hinge on contract interpretation—whether the judgment or marital settlement agreement (MSA) defines bonus income clearly, and how the trial court interpreted or enforced that language.

If the MSA or judgment is ambiguous, I will argue that the issue should be reviewed de novo, not for abuse of discretion. This is a key distinction. While support orders are generally reviewed for abuse of discretion, interpretation of contract terms—especially in stipulated judgments—is a legal question subject to independent review.

What I Look for in the Record

Successful appeals are built on a solid appellate record. When reviewing an Ostler/Smith case, I examine:

Whether the judgment or MSA defines the categories of income to which the percentage applies.
If the trial court made specific findings explaining how it applied the percentage to the disputed income.
Whether the obligor or payee raised timely objections to the interpretation or calculation method.
Whether extrinsic evidence was admitted and how the court weighed it, if at all.

For example, if the trial court included RSUs or deferred compensation in the bonus calculation without specific language in the MSA authorizing that inclusion, I may argue that the court improperly expanded the scope of the support order.

Framing the Appeal: Strategic Considerations

Every Ostler/Smith appeal is different, but certain strategic themes guide my analysis:

Ambiguity Supports De Novo Review
If the bonus formula is unclear—e.g., “10% of any bonus income” without defining “bonus”—I argue for de novo review, emphasizing that vague contract language cannot be enforced in a way that materially alters obligations without clear mutual intent.
Judicial Construction Cannot Rewrite the Agreement
Trial courts may attempt to “fill in the blanks,” but on appeal, I emphasize that courts cannot create new obligations by implication. Ambiguities must be construed against the drafter, especially if the MSA was professionally prepared.
Preservation of Error Matters
If I represent the respondent, I’ll focus on waiver or forfeiture—was the objection raised below? Did the appellant invite the error? Conversely, for appellants, I ensure the record shows efforts to clarify or object to misinterpretation at the trial court level.
Child vs. Spousal Support Distinctions
Bonus orders tied to child support involve different statutory considerations than those tied only to spousal support. For child support, I address Family Code §§ 4053 and 4058 to show whether the order aligns with guidelines and the parties’ net disposable income.

Appellate Outcomes: What I Seek

My goal on appeal is either:

Reversal and Remand for clarification or re-calculation consistent with the language of the judgment or agreement, or
Modification or Vacatur of a support order that improperly included (or excluded) income not contemplated by the original terms.

In some cases, I also seek a published opinion if the issue involves a recurring question of law that lacks clear guidance—such as whether vesting RSUs constitute “bonus income” under a broadly worded Ostler/Smith clause.

Final Thoughts

Ostler/Smith bonus provisions serve an important function in family law, but on appeal, they often expose gaps in drafting or enforcement that can materially affect both parties’ rights. As an appellate attorney, my job is to ensure that these provisions are interpreted according to legal principles—not merely judicial convenience—and that any ambiguities are resolved based on the law, the record, and the parties’ intent.

If you are dealing with an appeal involving a percentage-based bonus support order, I offer focused, strategic advocacy grounded in the realities of appellate review.