Marriage of Vrcic

Filed 8/23/07 Marriage of Vrcic CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

APPEALS from judgments and an order of the Superior Court of Los Angeles County. Richard E. Denner, Judge and John A. Slawson, Commissioner. Affirmed.

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Robert S. Gerstein for Appellants Vedran Vrcic, Kristina Vrcic and Wilson Vrcic.

Casey A. Olsen and Neil A. Olsen for Respondent.

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Diane Vrcic petitioned for dissolution of her marriage to Vedran Vrcic. Vedran thereafter deeded his interest in several pieces of real property to his mother, Kristina Vrcic, and his brother, Wilson Vrcic, who were then joined as claimants in the dissolution action.^[1] In these consolidated appeals, Vedran, Kristina, and Wilson (hereafter appellants) challenge various decisions of the trial court concerning property characterization, the imposition of a real property lien, and the award of attorneys fees and sanctions. We affirm.

BACKGROUND

Diane and Vedran were married in 1992 and separated in April 2000. Diane filed her petition for dissolution of their marriage on May 3, 2000.

By stipulation and order entered on June 5, 2000, the parties (both of whom were represented by counsel) agreed that [a]ll properties shall be listed for sale with a mutually agreed upon [r]eal [e]state [a]gent/[b]roker for a mutually agreed upon price forthwith. The properties to be sold included an apartment building in Hawthorne and a single-family home in Torrance.

Thereafter, by stipulation and order entered on July 12, 2000, the parties agreed that they would cooperate in attempting to have a 1031 exchange accomplished as a result of the Hawthorne property sale, and should [illegible] exchange occur, providing [Vedran] with sole title and obligation on the new property, [Vedran] shall be credited with the profit from the sale, and same shall be used as a setoff when the Torrance residence held by the parties is sold so that there is an equal division of the community. On July 28, 2000, Diane executed a quitclaim deed on the Hawthorne property, conveying it to Vedran Vrcic, a married man as his sole and separate property[.]

Vedran sold the Hawthorne property and used all of the proceeds to purchase a property in Long Beach in August 2000. Vedran took title to the Long Beach property as a tenant in common with his mother, Kristina, who received a 1 percent interest.

Diane and Vedran reconciled in June 2001 but separated again on August 19, 2002, when Diane obtained a domestic violence temporary restraining order against Vedran. From August 21 to August 23, 2002, Vedran executed a series of deeds purporting to transfer his entire interest in the Long Beach property and two other properties to his brother (Wilson) and Kristina as joint tenants. The deeds stated that the transfers were gifts for which Vedran received nothing in return. Kristina and Wilson were later joined as claimants in Diane and Vedrans dissolution action.

The matter was set for trial in August 2003 before Commissioner John A. Slawson, whom Diane, Vedran, and Kristina stipulated could hear the case. Wilson, however, did not stipulate to Commissioner Slawson. Issues relating to Wilsons claims to the three properties that Vedran had transferred to Wilson and Kristina were consequently bifurcated.

Trial of the dissolution action before Commissioner Slawson began in early September 2003. Trial of the bifurcated issues relating to Wilsons claims took place on June 1 and 2, 2004, before Judge Richard E. Denner.

Diane and Vedran disputed the characterization of the Hawthorne property and the characterization of the Long Beach property that was bought with the proceeds from the sale of the Hawthorne property. Vedran contended that the July 12 stipulation and order and the July 28 quitclaim deed had transmuted the Hawthorne property from community property to Vedrans separate property, and that the Long Beach property was consequently Vedrans separate property as well.

Diane, however, contended that the Long Beach property was still community property, because Vedran had induced her to agree to the July 12 stipulation and the July 28 quitclaim deed by providing her with false information. According to Diane, Vedran had told her, through his attorney, that there was only $80,000 of equity in the Hawthorne property but at least $100,000 of equity in the Torrance property. Vedrans proposal, according to Diane, was that she should deed the Hawthorne property to him, in effect giving him the $80,000 in equity, but that she would receive the first $80,000 from the sale of the Torrance property, in equalization. Vedran had always managed the couples properties, and Diane relied upon him for information concerning their values. But in this instance Vedrans information was incorrect: As Vedran conceded in his own trial brief, the sale of the Hawthorne property netted $82,278, while the sale of the Torrance property netted only $50,000, not nearly enough to provide the planned equalization payment. In fact, Vedran testified at trial that the sale of the Torrance property actually netted only about $25,000 after the mortgage and all liens were paid offthe $50,000 figure in Vedrans trial brief apparently did not take into account a lien of roughly $28,000.

Diane contended that because she had agreed to the stipulation and quitclaimed the Hawthorne property to Vedran on the basis of false information, the property was not transmuted to Vedrans separate property but remained community property, and the Long Beach property was thus community property as well. Diane introduced a declaration from her former counsel to support her factual contentions concerning both the course of the negotiations and Vedrans representations about the values of the properties.

On June 2, 2004, after the parties had rested in the trial of the bifurcated issues, Judge Denner orally ruled that the Hawthorne property had not been transmuted to Vedrans separate property, and thus that when Wilson acquired his interest in the Long Beach property he did so subject to the community property claim. Judge Denner expressly declined to resolve all issues concerning the Long Beach property (e.g., valuation), deferring all remaining issues to a later determination by Commissioner Slawson. Vedran requested a statement of decision.

On September 30, 2004, Commissioner Slawson entered a judgment of dissolution. The judgment also determined child custody and visitation but expressly reserved jurisdiction over all other issues.

On December 10, 2004, Commissioner Slawson orally adopted Judge Denners ruling that there was no transmutation of the Hawthorne property, and that the Long Beach property was community property. The parties then agreed that Vedran, Kristina, or Wilson could buy out Dianes interest in the Long Beach property based on a gross value of $900,000; otherwise, the property would be listed for sale. Vedran elected to buy out Dianes interest.

On March 30, 2005, Judge Denner issued his statement of decision. It stated that neither the July 12 stipulation and order nor the July 28 quitclaim deed (nor the two of them combined) had transmuted either the Hawthorne property or the Long Beach property to Vedrans separate property, and that the Long Beach property was community property.

On April 14, 2005, Vedran filed an application for an order requiring Diane to remove the lis pendens she had previously recorded on the Long Beach property.

On or about May 10, 2005, Diane filed and served her opposition to Vedrans application concerning the lis pendens. She requested that the lis pendens remain in place to secure future child support payments as well as any award the court might grant on her claims for breach of fiduciary duty. She cited Family Code section 4012,^[2]which authorizes a court to require security for child support payments upon a showing of good cause, and she supported her request with authority that the required security may take the form of a lien on real or personal property. She also made a showing of good cause by introducing evidence that Vedran had never made his support payments in full, that he was refusing to seek work that would earn him enough to meet his support obligations, and that he had transferred title on all of his real property to other individuals, making it impossible for [Diane] to enforce a support order without a child support security pursuant to [section] 4012.

On June 1, 2005, Commissioner Slawson signed a document entitled Third Further Judgment on Reserved Issues. It provided that [b]ased upon all the evidence presented to this Court (Commissioner Slawson), the Court finds that the [Long Beach property] is a community property asset.

Also on June 1, 2005, Commissioner Slawson conducted a hearing concerning Vedrans application to remove the lis pendens. The court ruled orally that the lis pendens was to be removed provided that Vedran, Wilson, and Kristina cooperated with Diane in the recordation of a $200,000 lien against the Long Beach property.

On June 7, 2005, Judge Denner signed a document entitled Second Further Judgment on Reserved Issues. It too found that the Long Beach property was community property. Vedran, Kristina, and Wilson timely filed a notice of appeal from this judgment.

On June 15, 2005, Commissioner Slawson issued a written order granting Vedrans application to expunge the lis pendens on the Long Beach property but granting Diane a $200,000 lien on the property. Vedran timely filed a notice of appeal from this order.

On January 17, 2006, Commissioner Slawson filed the Fourth Further Partial Judgment on Reserved Issues. It resolved issues of spousal and child support and also required Vedran to pay $44,000 of Dianes attorneys fees (under section 2030) and $7,500 in sanctions (under section 271). It also required Kristina to pay $20,000 of Dianes attorneys fees. Vedran, Kristina, and Wilson timely filed a notice of appeal from this judgment.

We consolidated the three appeals.

DISCUSSION

I. Procedural Matters

Diane raises two procedural points. First, she argues that because appellants did not appeal from Commissioner Slawsons Third Further Judgment on Reserved Issues, they are barred from challenging his determination that the Long Beach property was community property. According to Diane, because appellants appealed from only Judge Denners Second Further Judgment on Reserved Issues, as well as Commissioner Slawsons order concerning the lis pendens and his further judgment concerning spousal and child support and fees, we cannot review Commissioner Slawsons determination of the transmutation issue. We disagree, because Commissioner Slawsons Third Further Judgment on Reserved Issues was not appealable.

The Third Further Judgment on Reserved Issues was not an appealable final judgment because it left numerous issues unresolved, including Wilsons claims concerning the Long Beach property, which Commissioner Slawson lacked authority to determine. (In re Marriage of Griffin (1993) 15 Cal.App.4th 685, 689.) Nor was it an appealable collateral final judgment with respect to the Long Beach property because, again, it did not and could not resolve Wilsons claims concerning that property. (In re Marriage of Skelley (1976) 18 Cal.3d 365, 368-369.) And for the same reasons, it was not an appealable bifurcated judgment on reserved issues. (In re Marriage of Fink (1976) 54 Cal.App.3d 357, 360; In re Marriage of Macfarlane & Lang (1992) 8 Cal.App.4th 247, 256, fn. 9.) Because the Third Further Judgment on Reserved Issues was not itself appealable, it can be challenged in an appeal from the final judgment. (See, e.g., In re Marriage of Loya (1987) 189 Cal.App.3d 1636, 1638-1639.)

Second, Diane argues that because of the agreement that gave appellants the right to buy out Dianes interest in the Long Beach property, and because Vedran did buy out her interest, the transmutation issue concerning the Long Beach property is moot. We disagree for two reasons. First, the buy-out was not a settlement, because the record contains no indication that in agreeing to the buy-out, Vedran intended to give up his right to challenge the trial courts ruling concerning transmutation. Second, an appeal is moot if the appellate court is incapable of granting effective relief. (Vernon v. State of California (2004) 116 Cal.App.4th 114, 120.) But were we to reverse the trial courts transmutation ruling, we could grant effective relief by requiring Diane to return to Vedran the funds she received in the buy-out. The appeal concerning the transmutation ruling is not moot.

II. The Purported Transmutation

Appellants argue that either the July 12 stipulation and order, the July 28 quitclaim deed, or both of them together were sufficient to satisfy the requirement under subdivision (a) of section 852 that a transmutation be made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected. (See generally Estate of MacDonald (1990) 51 Cal.3d 262, 272-273.) Assuming arguendo that the argument is sound, however, it does not establish that a transmutation occurred, because satisfaction of the formal requirements of section 852 is a necessary but not a sufficient condition for a valid transmutation. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 293.)

Rather, even a purported transmutation that is evidenced by the required writing is still presumed to be the result of undue influence (and hence invalid) if it advantages one spouse over the other.^[3] (In re Marriage of Haines, supra, 33 Cal.App.4th at p. 293.) To rebut the presumption, the advantaged spouse must prove by a preponderance of the evidence that the purported transmutation was freely and voluntarily made, and with a full knowledge of all the facts, and with a complete understanding of the effect of the transfer. (Id. at p. 296, quoting Brown v. Canadian Indus. Alcohol Co. (1930) 209 Cal. 596, 598; see also In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1520 [standard is preponderance of the evidence].) Thus, unless the record contains insufficient evidence to support a determination that Vedran failed to rebut the presumption of undue influence, appellants cannot show they were prejudiced by any error concerning the formal requirements of section 852, and we must affirm.^[4] (Century Surety Co. v. Polisso (2006) 139 Cal.App.4th 922, 963.)

Appellants do not attempt to carry their burden on appeal of establishing prejudice, nor could any such attempt succeed. The record contains a declaration from Dianes former counsel, stating that Diane was induced to agree to the July 12 stipulation and order and the July 28 quitclaim deed on the basis of Vedrans concededly false representations concerning the relative amounts of equity in the Hawthorne and Torrance properties. Vedran persuaded Diane to give up her interest in the Hawthorne property by telling her that she would be repaid from the sale of the Torrance property, which, he assured her, had more equity than the Hawthorne property. In fact, according to Vedrans own testimony, the Torrance property had less than one-third of the equity of the Hawthorne property. The record thus contains substantial evidence supporting Dianes argument that she did not enter into the transaction with a full knowledge of all the facts, or with a complete understanding of the effect of the transfer.

For these reasons, we affirm the trial courts determination that there was no transmutation.

III. The Lien on the Long Beach Property

Appellants present two arguments for the conclusion that the trial court improperly imposed the $200,000 lien on the Long Beach property. Neither is persuasive.

First, appellants argue that when Vedran applied for an order expunging the lis pendens on the Long Beach property, the lis pendens was invalid as a matter of law, so the trial court had no basis to condition removal of the lis pendens on imposition of the lien (or on anything else). Assuming arguendo that the argument is sound, appellants cannot establish prejudice, now that the lis pendens has been expunged and the lien imposed, unless they can show that the trial court lacked authority to impose the lien independently.

Second, appellants attempt to carry that burden by contending that there was no other legal basis for the trial courts imposition of the lien. Appellants acknowledge, however, that Diane argued in the trial court that the lien was justified under section 4012, which authorizes the trial court to require security for child support upon a showing of good cause. Appellants only argument against application of section 4012 is that the good cause requirement implies that a lien cannot be imposed without the moving party having made a showing of good cause which the opposing party had an opportunity to rebut[,] and that here the lien was imposed without prior notice, without any showing of good cause, and without giving Vedran the opportunity to be heard on the issue of good cause.

We disagree. In her written opposition to Vedrans application for an order expunging the lis pendens, Diane cited section 4012, requested security for child support, and supported her request with authority that section 4012 permits the imposition of a lien. She also made a showing of good cause. She introduced evidence that Vedran had never made his support payments in full, that he was refusing to seek work that would earn him enough to meet his support obligations, and that he had transferred title on all of his real property to other people, making it impossible for [Diane] to enforce a support order without a child support security pursuant to [section] 4012. Diane filed her written opposition in early May 2005, and Commissioner Slawson held the hearing on Vedrans application on June 1, 2005.

Thus, contrary to appellants conclusory assertions, Diane did make a showing of good cause under section 4012, and Vedran had notice and ample opportunity to be heard on the issue. We therefore affirm the trial courts imposition of the lien.^[5]

IV. Attorneys Fees and Sanctions

Appellants challenge the attorneys fees and sanctions awards on several grounds. None is persuasive.

First, appellants argue that if the transmutation decision is reversed, then the attorneys fees awards must be reversed as well. This argument fails, because we have affirmed the transmutation decision.

Second, appellants argue that the attorneys fees award against Vedran should be reversed because the trial court did not accord sufficient weight to Vedrans lack of liquid assets, which is a factor the trial court may consider in making such an award. (See, e.g., In re Marriage of Keech (1999) 75 Cal.App.4th 860, 868.) Appellants also argue that the award cannot be justified on the basis of Vedrans net worth ($601,000, in contrast to Dianes net worth of $200,000) because it consists largely of his interest in real property of which he is not the sole owner, and which he consequently cannot easily liquidate.

We are not persuaded. As appellants recognize, we review awards of attorneys fees under section 2030 for abuse of discretion. (In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.) The trial court has not abused its discretion as long as its decision is within the range of options available under governing legal criteria in light of the evidence before the tribunal. (Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1680.) The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479 [243 Cal.Rptr. 902, 749 P.2d 339].) (Walker v. Superior Court (1991) 53 Cal.3d 257, 272.) We perceive no abuse of discretion here. The trial court considered the relevant factors, including income, imputed income, and net worth, and the courts decision did not exceed the bounds of reason. For example, it would not have been unreasonable for the trial court to have been unpersuaded by Vedrans argument that he could not easily liquidate properties to which he did not hold sole title, given that the only reason for his lack of sole title was that he transferred the properties, for no consideration, to his brother and mother within days after he and Diane separated.

Third, appellants raise similar arguments concerning the attorneys fees award against Kristina. Again, we perceive no abuse of discretionthe trial court considered the relevant factors, and its decision did not exceed the bounds of reason.

Fourth, appellants argue that Dianes attorneys fee request was unreasonable because her fees exceeded Vedrans by tens of thousands of dollars. We disagree. Because Vedran transferred title on his real property to his mother and brother, Diane was forced to contend with three opposing parties rather than just one. According to a minute order entered by Commissioner Slawson on September 29, 2005, Dianes attorneys fees and costs totaled $175,639.03, whereas Vedrans and Kristinas came to a combined total of $206,500. (Commissioner Slawson made no finding as to the amount of fees incurred by Wilson.) We see no indication that Dianes fee request was unreasonable.

Fifth and finally, appellants argue that the award of $7,500 in sanctions against Vedran should be reversed because it is unduly burdensome for the same reasons that the attorneys fees award is unduly burdensome. We review an award of sanctions under section 271 for abuse of discretion. (In re Marriage of Burgard (1999) 72 Cal.App.4th 74, 82.) We have already determined that the $44,000 attorneys fees award against Vedran was not so burdensome as to constitute an abuse of discretion. A fortiori, the $7,500 sanctions award was not so burdensome as to constitute an abuse of discretion.

For all of the foregoing reasons, we affirm the awards of attorneys fees and sanctions.

DISPOSITION

The judgments and order are affirmed. Respondent shall recover her costs on appeal.

NOT TO BE PUBLISHED.

ROTHSCHILD, J.

We concur:

MALLANO, Acting P.J.

JACKSON, J.^*

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^[1] We will refer to the parties by their first names solely for the sake of clarity. No disrespect is intended. (See In re Marriage of Smith (1990) 225 Cal.App.3d 469, 475, fn. 1.)

^[2] Unless otherwise indicated, all subsequent statutory references are to the Family Code.

^[3] Vedran claims that the undue influence presumption does not apply here because the purported transmutation did not confer an unfair advantage on either spouse, and he cites In re Marriage of Burkle (2006) 139 Cal.App.4th 712, as support. We disagree. The purported transmutation gave Vedran the Hawthorne property, with an equity of roughly $80,000. Diane was to be compensated through the sale of the Torrance property, with an equity of only $25,000. That constitutes an unfair advantage for Vedran, regardless of whether there was adequate equity elsewhere in the estate to make up the difference, because Diane was induced to agree to the transaction by Vedrans representations that there was enough equity in the Torrance property alone. In re Marriage of Burkle, supra, is distinguishable because (1) it involved an agreement in which both spouses received advantages, (2) the wife was offered full access to the husbands business records relating to marital assets, and (3) both spouses expressly acknowledged in the agreement that neither had obtained an unfair advantage. (In re Marriage of Burkle, supra, 139 Cal.App.4th at p. 717.)

^[4] Although Diane argued in her trial brief that the purported transmutation was the result of undue influence, Judge Denners statement of decision contains no express findings concerning undue influence. Appellants never specifically objected to that omission, so we must presume the trial court found that the purported transmutation resulted from undue influence, as long as there is substantial evidence to support such a finding. (SFPP, L.P. v. Burlington Northern & Santa Fe Ry. Co. (2004) 121 Cal.App.4th 452, 462 [the doctrine of implied findings (1) directs the appellate court to presume that the trial court made all factual findings necessary to support the judgment so long as substantial evidence supports those findings and (2) applies unless the omissions and ambiguities in the statement of decision are brought to the attention of the superior court in a timely manner].)

^[5] In their supplementary brief concerning attorneys fees, appellants raise one additional argument on this point, namely, that because Wilson held an interest in the Long Beach property and did not consent to have his claims heard by Commissioner Slawson, Commissioner Slawson lacked authority to impose a lien on that property which burdened Wilsons interest along with those of Vedran and Kristina. Appellants cite no authority for that proposition, so we need not consider it. (Dabney v. Dabney (2002) 104 Cal.App.4th 379, 384 [We need not consider an argument for which no authority is furnished].)

^* (Judge of the L. A. Sup. Ct. assigned by the Chief Justice pursuant to art. VI,  6 of the Cal. Const.)