Marriage of Bulik and Nordquist

Filed 7/30/07 Marriage of Bulik and Nordquist CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SIXTH APPELLATE DISTRICT

I. INTRODUCTION

Before their marriage in 1985, appellant Joan Bulik (Joan) and respondent Ronald Nordquist (Ronald) executed a premarital agreement concerning their separate property.[1] During their marital dissolution proceeding, an issue arose regarding the interpretation of the premarital agreement. Ronald argued that the premarital agreement should be interpreted to provide that Ronalds earnings during the marriage became his separate property when they were deposited into certain accounts expressly designated as his separate property by the terms of the premarital agreement. After the issue was bifurcated for trial, the trial court ruled in Ronalds favor.

On appeal, Joan contends that the trial court erred in determining that the premarital agreement effected a transmutation of Ronalds earnings during marriage because the premarital agreement is silent with respect to such earnings. For reasons that we will explain, we find that the premarital agreement is reasonably susceptible of the interpretation asserted by Ronald and that substantial evidence supports the trial courts factual findings. Therefore, we will affirm the judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The Premarital Agreement

Both Ronald and Joan were divorced from former spouses. They lived together for five years before their marriage on May 5, 1985. On May 4, 1985, the day before their wedding, Ronald and Joan executed a premarital agreement drafted by the attorney who represented Ronald in his previous divorce. Ronald and Joan separated on June 5, 2003, after 18 years of marriage.

In pertinent part, the premarital agreement states at paragraph (c), Both parties desire to continue their present personal relationship, even to the extent of marriage to each other; however, they do not (repeat DO NOT) desire that their present properties, monies or other assets be presently, or ever, construed to be other than their SEPARATE properties, monies or other assets. Both parties do not wish or desire that the other party have any right, title or interest in these properties, other than such as may be given by a formal writing, duly sworn to and attached to this Agreement, or by a duly executed Will. In other words, the parties do not wish or desire that any community or joint ownership of interest be applied to these properties, monies or other assets.

At paragraph (d), the premarital agreement further states, In order to make this previously stated intention firm, lasting and definite, both parties have prepared a list of these properties, monies and other assets, and have attached them hereto as Exhibit A and B and have established their validity with appropriate signatures.

Additionally, the premarital agreement states, NOW THEREFORE, RONALD and JOAN promise and agree as follows: [] 1. That the properties, monies and other assets listed in Exhibit A for RONALD and Exhibit B for JOAN are presently and shall always remain the separate property, separate monies and separate other assets of the respective party listing and acknowledging same, together with any increment, enhancement, alteration or change emanating therefrom. [] 2. Both parties, RONALD and JOAN, respectively renounce, disclaim and/or forfeit any right, title or interest in the properties, monies or other assets, together with any increment, enhancement, alteration or change, listed by the other party. Restated, for emphasis, RONALD hereby renounces, disclaims and/or forfeits any right, title or interest in any and all of the properties, monies and other assets, together with any increment, enhancement, alteration or change, listed by JOAN in Exhibit B. Likewise, JOAN hereby renounces, disclaims and/or forfeits any right, title or interest in any and all of the properties, monies and other assets, together with any increment, enhancement, alteration or change, listed by RONALD in Exhibit A. [] 3. Both RONALD and JOAN mutually promise and agree that they will not change or alter this Agreement at any time unless by a writing, duly acknowledged before a Notary Public and attached hereto; and that no change in the status of the properties, monies or other assets listed herein, or the increments, enhancements, alterations or changes emanating therefrom, shall be made as to each other, without a formal writing, duly acknowledged and attached hereto. [] 4. This Agreement contains the entire agreement of the parties on the matters it covers, and it supersedes any previous agreement between us, either oral or written.

Exhibit A to the premarital agreement lists Ronalds separate real and personal property, including ownership of a house in San Jose; four bank accounts; five vehicles; Social Security benefits; and his retirement plan. Exhibit A also includes documents indicating the balances in Ronalds four bank accounts and the value of his retirement plan. Exhibit B to the premarital agreement lists Joans separate real and personal property, including her one-half ownership interest in a house; four bank and credit union accounts; two savings bonds; Social Security benefits; and a vehicle.

B. The Trial on Bifurcated Issue

On October 3, 2005, a trial was held on the bifurcated issue of whether the increase in the value of Ronalds bank accounts and retirement accounts (which were listed as Ronalds separate property in Exhibit A to the premarital agreement), resulting from Ronalds deposit of some of his earnings during marriage into those accounts, was community property or Ronalds separate property.

In her trial brief, Joan argued that the premarital agreement did not satisfy the Family Code section 852 requirements for a valid transmutation agreement because it did not expressly provide that the parties earnings during marriage would be transmuted from community property to separate property. Ronald contended in his trial brief that the premarital agreement clearly provided that all money in his separate property accounts would remain his separate property, including deposits of his earnings during marriage into those accounts, and that the parties money management during their marriage was consistent with this interpretation.

Both Ronald and Joan testified at trial. A summary of their testimony follows.

Testimony of Joan

Joan acknowledged that she had signed the premarital agreement, which was introduced into evidence together with all exhibits to the agreement. She understood at the time she signed the premarital agreement that it provided that any interest earned on their separate accounts would be separate property. She also believed that the agreement was silent as to the parties earnings during marriage because that money would be community property. The premarital agreement was necessary because Ronald was very concerned about his home and what he had accumulated prior to their marriage.

At the time Joan signed the premarital agreement, she was self-supporting and had a one-half ownership interest in a home. After Joans marriage to Ronald, she sold her interest in the home and deposited some of the proceeds into an account in her own name. Joan also contributed to a retirement account during her marriage, which she eventually cashed out and deposited into an IRA account. She deposited her earnings during the marriage into her separate checking account and paid for various household expenses.

The parties did not have any jointly titled assets during their marriage other than a checking account that Ronald opened prior their separation. Joan prepared a preliminary disclosure during the present marital dissolution proceedings in which she indicated that certain personal property and a number of bank accounts, investment accounts, and retirement accounts were her separate property. However, she and Ronald filed joint tax returns during their marriage.

Joan bought a Cadillac with her own money during the marriage over Ronalds objection. She also signed a document waiving her joint and survivor benefit interest in Ronalds retirement plan, because she and Ronald mutually decided that a waiver would be advantageous to them. Joan was aware that Ronald was contributing to his retirement plan during their marriage.

Testimony of Ronald

Ronald wanted the premarital agreement and Joan suggested that his attorney draft it. Ronald intended that his earnings during the marriage would be his separate property. He was not concerned that the words earnings and income did not appear in the premarital agreement, because he understood that as a result of the agreement his income and investments would remain his separate property. Exhibit A to the premarital agreement was included to make a full disclosure of everything he had.

Ronald began contributing 5 percent of his gross income to his employers retirement plan when he was first employed in 1959, with an equal match by the company. This was indicated in Exhibit A to the premarital agreement, which provided that his separate property accounts would always be his separate property. During the marriage, Ronald deposited his earnings into his separate property checking account, from which he paid all the bills for household expenses. He also contributed some of his earnings during marriage to his separate property IRA account, and moved some money from his checking account to his separate property money market account. Joan signed a form to reject the joint survivor benefit from his retirement plan.

C. Judgment After Trial

On January 10, 2006, the trial court issued its judgment after trial. In its written decision, the trial court stated that its interpretation of the premarital agreement was based primarily on the language of the agreement. In particular, the trial court found significant the language at paragraph (c), which the court described as going on at some length about the emphatic intent of the parties to keep their properties, monies, and assets separate . . . . The court also stated that paragraphs 2 and 3 contained the operative terms of the Agreement about not having any community character in these properties, monies, or assets, together with any increment, enhancement, alteration or change.

The trial court also found that Ronalds interpretation of the premarital agreement was reasonable even thought the words earnings and income did not appear in the agreement. In addition to the language of the agreement, the court based its determination on page 5 to exhibit A of the agreement, which disclosed Ronalds ongoing contributions to the retirement plan. The court also found that the parties conduct was consistent with Ronalds interpretation, because they kept the assets listed in the exhibits to the premarital agreement separate, Joan admitted that the money in her bank account was her own money, and Joans Schedule of Assets and Debts listed her separate property.

The trial court concluded that Joans interpretation of the premarital agreement was not well taken and that she is not entitled to increments or enhancements resulting from contributions of [Ronalds] income earn[ed] during marriage.

Subsequently, this court granted Joans motion to appeal on the bifurcated issue and deemed the record on appeal augmented to include the stipulation and order for early and immediate certification filed on January 17, 2007.

III. DISCUSSION

On appeal, Joan contends that the trial court erred in its interpretation of the parties May 4, 1985, premarital agreement. We will begin our analysis with a review of the law governing a pre-1986 premarital agreement, the pertinent rules of contract interpretation, and the appropriate standard of review.

A. The Law Governing a Pre-1986 Premarital Agreement

The California Supreme Court addressed the history of premarital agreements in California in In re Marriage of Bonds (2000) 24 Cal.4th 1, 12-14 (Bonds). From the inception of its statehood, California has retained the community property law that predated its admission to the Union and consistently has provided as a general rule that property acquired by spouses during marriage, including earnings, is community property. [Citations.] [] At the same time, applicable statutes recognized the power of parties contemplating a marriage to reach an agreement containing terms at variance with community property law. (Id. at pp. 12-13.)

In 1985, the California Legislature adopted most of the provisions of the Uniform Premarital Agreement Act. (Fam. Code, 1600 et seq.; Bonds, supra, 24 Cal.4th at p. 14.) However, as one commentator has noted, pursuant to Family Code section 1503[2] the Uniform Premarital Agreement Act does not apply to or affect premarital agreements executed before January 1, 1986. Thus, the validity and effect of such agreements continues to be governed by the law in effect prior to January 1, 1986. (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2007) 9:195, p. 9-62.1.) For that reason, former Civil Code sections 5133 through 5137 (repealed by Stats. 1985, ch. 1315, 2) remain applicable to pre-1986 premarital agreements. (Ibid.)

Pursuant to former Civil Code sections 5133 through 5137, [p]arties contemplating marriage may validly contract as to their property rights, both as to property then owned by them and as to property, including earnings, which may be acquired by them after marriage. [Citations.] (In re Marriage of Dawley (1976) 17 Cal.3d 342, 349.) Thus, a premarital agreement may overcome the presumption that all property acquired by either spouse during the marriage is community property. (In re Marriage of Grinius (1985) 166 Cal.App.3d 1179, 1186.)

Both before and after the Legislature adopted the Uniform Premarital Agreement Act in 1985, California has had in place . . . a statute of frauds provision for prenuptial agreements. (In re Marriage of Shaban (2001) 88 Cal.App.4th 398, 405; see also Hall v. Hall (1990) 222 Cal.App.3d 578, 585.) In 1985, former Civil Code section 5134 provided, All contracts for marriage settlements^[[3]] must be in writing, and executed and acknowledged or proved in like manner as a grant of land is required to be executed and acknowledged or proved.

As we will further discuss, it is also well established that a premarital agreement is generally enforceable as a contract, although when there is proof of fraud, constructive fraud, duress or undue influence, the contract is not enforceable. [Citations.] (Bonds, supra, 24 Cal.4th at p. 13.)

B. Interpretation of a Premarital Agreement

The California Supreme Court has instructed that premarital contracts are not construed and enforced under the same standards as interspousal agreements. (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1161.) This is because prospective spouses negotiate at greater arms length than married persons. (Ibid.) Unlike married persons, who owe a fiduciary duty to each other pursuant to Family Code section 721, subdivision (b), persons entering into a premarital agreement are not presumed to be in a confidential relationship. (In re Marriage of Benson, supra, 36 Cal.4th at p. 1161; Bonds, supra, 24 Cal.4th at p. 27.) The policy of equal division of assets at the time of dissolution is also inapplicable to premarital agreements. (Bonds, supra, 24 Cal.4th at p. 30.)

The general rules of contract interpretation therefore apply to premarital agreements. (In re Marriage of Garrity and Bishton (1986) 181 Cal.App.3d 675, 683.) Under these rules, the source of contractual rights and duties is the intention of the parties as expressed in the contract. (Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co. (1968) 69 Cal.2d 33, 38.) A court must ascertain and give effect to this intention by determining what the parties meant by the words they used. (Ibid.)Accordingly, rational interpretation requires at least a preliminary consideration of all credible evidence offered to prove the intention of the parties. (Id. at p. 40, fn. omitted.)

The interpretation of a contract therefore involves a two-step process. First the court provisionally receives (without actually admitting) all credible evidence concerning the parties intentions to determine ambiguity, i.e., whether the language is reasonably susceptible to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is reasonably susceptible to the interpretation urged, the extrinsic evidence is then admitted to aid in the second stepinterpreting the contract. [Citation.] [Citations.]  (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351; Pacific Gas & E. Co. v. G.W. Thomas Drayage etc. Co., supra, 69 Cal.2d at p. 40.)

The extrinsic evidence that may be admitted to aid the courts interpretation of the contract includes evidence of the circumstances surrounding the parties at the time they contracted, as well as the preliminary negotiations between the parties and the events subsequent to the execution of the contract, particularly the practical construction given to the contract by the parties themselves, . . . (Lemm v. Stillwater Land & Cattle Co. (1933) 217 Cal.474, 480.) However, the court may not create a contractual arrangement that the parties did not make or insert language in the agreement that a party now wishes were there. (In re Marriage of Garrity and Bishton, supra, 181 Cal.App.3d at p. 683.)

C. The Standard of Review

The applicable standard of review also involves two steps. First, we independently review the trial courts determination of whether the language of the contract is reasonably susceptible of the interpretation urged by a party. (Wolf v. Superior Court, supra, 114 Cal.App.4th at p. 1350.) Second, [t]he trial courts resolution of an ambiguity is also a question of law if no parole evidence is admitted or if the parole evidence is not in conflict. However, where the parole evidence is in conflict, the trial courts resolution of that conflict is a question of fact and must be upheld if supported by substantial evidence. [Citation.] (Id. at p. 1351.)

Under the substantial evidence standard of review, the appellate court reviews the entire record in the light most favorable to the prevailing party to determine whether there is substantial evidence to support the trial courts findings. We resolve all conflicts in the evidence and draw all reasonable inferences in favor of the trial courts findings, keeping in mind that substantial evidence is evidence of ponderable legal significance. (In re Marriage of Duffy (2001) 91 Cal.App.4th 923, 931 -932.) However,  we have no power to judge . . . the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom.  (In re Marriage of Martin (1991) 229 Cal.App.3d 1196, 1200.)

D. Analysis

1. The Parties Contentions

On several grounds, Joan challenges the trial courts ruling that the premarital agreement provides, in accordance with Ronalds interpretation, that the increase in value in his separate property accounts due to the deposit of his earnings during marriage is his separate property.

First, Joan contends that the premarital agreement did not operate as a valid transmutation instrument under Family Code section 852[4] because there was no express writing exempting either partys earnings during the marriage from the presumption of community property.

Second, Joan argues that the trial court violated the parole evidence rule by admitting extrinsic evidence to revise the meaning of the premarital agreement and by inserting the missing words income and earnings into the agreement.

Third, Joan asserts that Ronald failed to rebut the presumption of undue influence that arises where a transmutation agreement advantages one spouse over the other,

pursuant to the fiduciary duty set forth in Family Code section 721, subdivision (b).[5]

Fourth, Joan emphasizes that the trial court erred in determining that the premarital agreement is ambiguous, since the agreement clearly provides that only each partys present properties, monies or other assets are separate property and is silent as to the characterization of their earnings during marriage.

Fifth, Joan maintains that Ronald failed to defeat the presumption under Family Code sections 2580[6] and 2581[7] that property acquired during the marriage in joint form is community property absent a clear statement that the property is separate property or proof of a written agreement that the property is separate property.

Sixth, Joan did not waive her right to community property and income and reimbursement of 50 percent of Ronalds community contributions to his separate property.

Finally, Joan contends that the trial court failed to adequately consider her trial brief before ruling from the bench because the court indicated that it had received the timely-filed brief on the morning of trial.

Ronald makes three procedural arguments in opposition to Joans contentions. First, he asserts that Joan waived her claims on appeal by failing to object to the admission of parole evidence at the time of trial. Second, Ronald requests that Joans opening brief be disregarded because she failed to provide sufficient citations to the record. Third, Joan waived any claim that the increase in the value of his retirement accounts was due to anything other than Ronalds contributions and employers matching contributions by failing to introduce evidence on that point.

As to the merits, Ronald argues that substantial evidence supports the trial courts factual findings that his testimony regarding his interpretation of the premarital agreement was credible and the parties actions were consistent with his interpretation. Ronald also points out that Family Code sections 2580 and 2581 do not apply to pre-1987 property settlement agreements and, in any event, he asserts that these sections are inapplicable since the accounts at issue in the present case were not held either jointly or as community property.

2. The Merits of the Trial Courts Ruling

Under the applicable standard of review, we first make an independent determination as to whether the language of the parties premarital agreement was reasonably susceptible of the interpretation urged by Ronald: that the parties intended the increase in the value of his separate property accounts resulting from the deposit of his earnings during marriage to be his separate property. (See Wolf v. Superior Court, supra, 14 Cal.App.4th at p. 1350.) We find that the language of the premarital agreement is reasonably susceptible of this interpretation.

Specifically, the premarital agreement states at paragraph 1, That the properties, monies and other assets listed in Exhibit A for RONALD and Exhibit B for JOAN are presently and shall always remain the separate property, separate monies and separate other assets of the respective party listing and acknowledging same, together with any increment, enhancement, alteration or change emanating therefrom . . . . (Italics added.) The plain meaning of increment is the action or process of increasing esp[ecially] in quantity or value. (Merriam-Websters Collegiate Dict. (10th ed. 1999) p. 590.) Emanating means to come out from a source. (Id. at p. 376.) Thus, this language in the premarital agreement may be interpreted to provide that any increase in the value of Ronalds separate accounts during the marriage would be his separate property. Alternatively, the same language is reasonably susceptible of Joans interpretation, that only the increase in value resulting from the interest on Ronalds separate property accounts would be his separate property. The trial court therefore did not err in determining that the premarital agreement was ambiguous and admitting extrinsic evidence to aid interpretation of the contract.

The second step in our review is to determine whether the trial courts resolution of the ambiguity in favor of Ronalds interpretation is supported by substantial evidence. Having reviewed the trial record in its entirety, we agree with the trial court that the evidence presented was consistent with Ronalds interpretation. Ronald testified that during the marriage he continued to make a contribution of 5 percent of his gross income to his employers retirement plan, with an equal match by the company, as he had done since 1959. Ronalds ongoing contribution was expressly indicated in Exhibit A to the premarital agreement, where he fully disclosed all of his separate property, including his real property, personal property, bank accounts, and retirement plan.

Additionally, Ronald testified that during the marriage he deposited his earnings into his separate property checking account, as well as his separate property IRA account, and moved some money from his checking account to his separate property money market account. The parties both testified that Joan had signed a form to reject the joint survivor benefit from his retirement plan.

Joan testified that she similarly maintained her own separate property accounts after their marriage. She deposited her earnings during the marriage into her separate checking account and, during the dissolution proceeding, prepared a preliminary disclosure in which she indicated that certain personal property plus a number of bank accounts, investment accounts, and retirement accounts were her separate property. Moreover, the parties did not have any jointly titled assets during their marriage other than a checking account that Ronald opened shortly before their separation.

Thus, the parties actions after their execution of the premarital agreement were consistent with Ronalds interpretation of the agreement: that all increases in their separate property accounts during their marriage were to be separate property, including increases resulting from the deposit of their earnings during the marriage. Although Joan testified that she did not share that intention when she entered into the premarital agreement, we may not reverse the trial courts ruling on that ground. Where there is a conflict in the extrinsic evidence regarding the parties intentions in entering into a contract, the appellate court must uphold the trial courts resolution of the conflict if it is supported by substantial evidence. (Ford v. Ford (1969) 276 Cal.App.2d 9, 11.) Here, as we have discussed, the trial court resolved the conflict in favor of Ronald and we must uphold that resolution in light of the substantial evidence supporting his intention in entering the parties premarital agreement.

We also find no merit in Joans arguments challenging the trial courts ruling. One of Joans chief contentions is that the premarital agreement did not operate as a valid transmutation instrument under Family Code section 852 because there was no express writing exempting either partys earnings during the marriage from the presumption of community property. However, Family Code section 852 expressly provides that it applies to interspousal agreements, as set forth in subdivision (a): A transmutation of real or personal property is not valid unless 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. (Italics added; see In re Marriage of Benson, supra, 36 Cal.4th at pp. 1110-1111.) Therefore, the parties premarital contract is not subject to the requirements of Family Code section 852.

Similarly unavailing is Joans assertion that Ronald failed to rebut the presumption of undue influence that arises where a transmutation agreement advantages one spouse over the other, pursuant to the fiduciary duty set forth in Family Code section 721, subdivision (b). As we have previously stated, it is well established that persons entering into a premarital agreement are not presumed to be in a confidential relationship and do not owe a fiduciary duty to each other pursuant to Family Code section 721, subdivision (b). (Bonds, supra, 24 Cal.4th at p. 27.)

Joans final statutory argument, that Ronald failed to defeat the presumption under Family Code sections 2580 and 2581 that property acquired during the marriage in joint form is community property absent a clear statement that the property is separate property or proof of a written agreement that the property is separate property, also relies on inapplicable statutes. Family Code sections 2580 and 2581 apply to property acquired during the marriage in joint title form. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 290.) In the present case, the record reflects the parties did not acquire any property in joint title form that is at issue in the present appeal.

Finally, we reject Joans claim that the judgment should be reversed on the ground that the trial court failed to properly consider her trial brief because the court did not receive the brief until the morning of trial. The record contains no indication that the trial court failed to consider Joans trial brief. Moreover, at oral argument Joans attorney conceded that Joan did not object to the trial going forward after the trial court advised the parties that the court had received Joans trial brief on the morning of trial. Joan has therefore waived this claim on appeal. An appellate court will not consider procedural defects or erroneous rulings where an objection could have been, but was not, raised in the court below. [Citation.] (Childrens Hospital & MedicalCenter v. Bonta (2002) 97 Cal.App.4th 740, 775.)

Having concluded that the judgment must be affirmed on the merits under the applicable standard of review, we need not address Ronalds procedural arguments.

IV. DISPOSITION

The judgment is affirmed.

_______________________________________________________

Bamattre-Manoukian, ACTING P.J.

WE CONCUR:

__________________________

Mcadams, J.

_________________________

duffy, J.

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Analysis and review provided by San Diego County Property line attorney.

[1] For ease of reference and not out of disrespect, we will refer to the parties by their first names as set forth in their premarital agreement.

[2] Family Code section 1503 provides, Nothing in this chapter affects the validity or effect of premarital agreements made before January 1, 1986, and the validity and effect of those agreements shall continue to be determined by the law applicable to agreements before January 1, 1986.

[3] A marriage settlement within the meaning of former Civil Code section 5134 is an agreement in contemplation of marriage in which each party agrees to release or modify the property rights which would otherwise arise from the marriage. (Marvin v. Marvin (1976) 18 Cal.3d 660, 673.)

[4] Family Code section 852 provides, (a) A transmutation of real or personal property is not valid unless 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. [] (b) A transmutation of real property is not effective as to third parties without notice thereof unless recorded. [] (c) This section does not apply to a gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage. [] (d) Nothing in this section affects the law governing characterization of property in which separate property and community property are commingled or otherwise combined. [] (e) This section does not apply to or affect a transmutation of property made before January 1, 1985, and the law that would otherwise be applicable to that transmutation shall continue to apply.

[5] Family Code section 721, subdivision (b), provides in pertinent part, Except as provided in Sections 143, 144, 146, 16040, and 16047 of the Probate Code, in transactions between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other. This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners, as provided in Sections 16403, 16404, and 16503 of the Corporations Code, . . .

[6] Family Code section 2580 provides, The Legislature hereby finds and declares as follows: [] (a) It is the public policy of this state to provide uniformly and consistently for the standard of proof in establishing the character of property acquired by spouses during marriage in joint title form, and for the allocation of community and separate interests in that property between the spouses. [] (b) The methods provided by case and statutory law have not resulted in consistency in the treatment of spouses interests in property they hold in joint title, but rather, have created confusion as to which law applies to property at a particular point in time, depending on the form of title, and, as a result, spouses cannot have reliable expectations as to the characterization of their property and the allocation of the interests therein, and attorneys cannot reliably advise their clients regarding applicable law. [] (c) Therefore, a compelling state interest exists to provide for uniform treatment of property. Thus, former Sections 4800.1 and 4800.2 of the Civil Code, as operative on January 1, 1987, and as continued in Sections 2581 and 2640 of this code, apply to all property held in joint title regardless of the date of acquisition of the property or the date of any agreement affecting the character of the property, and those sections apply in all proceedings commenced on or after January 1, 1984. However, those sections do not apply to property settlement agreements executed before January 1, 1987, or proceedings in which judgments were rendered before January 1, 1987, regardless of whether those judgments have become final.

[7] Family Code section 2581 provides, For the purpose of division of property on dissolution of marriage or legal separation of the parties, property acquired by the parties during marriage in joint form, including property held in tenancy in common, joint tenancy, or tenancy by the entirety, or as community property, is presumed to be community property. This presumption is a presumption affecting the burden of proof and may be rebutted by either of the following: [] (a) A clear statement in the deed or other documentary evidence of title by which the property is acquired that the property is separate property and not community property. [] (b) Proof that the parties have made a written agreement that the property is separate property.