Marriage of Trevillian

Filed 6/26/08 Marriage of Trevillian CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

Joyce L. Trevillian (wife) appeals from the judgment entered after the trial court granted Marvin Trevillian's (husband) motion for summary adjudication. Wife contends that the court erred in ruling (1) that no community property interest arose from her management of husband's property; (2) that the prenuptial agreement bars wife from asserting a community property interest in husband's property; and (3) that there were no disputed material facts concerning whether husband was equitably estopped from asserting the terms of the prenuptial agreement or whether husband fraudulently induced wife to enter into that agreement. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Husband and wife married, for the second time, on February 21, 1991. Their first marriage ended after 30 years, on October 9, 1985, following bitter, hotly contested legal proceedings. The 1985 judgment awarded each of them separate property, including income-producing apartment complexes. Wife formed a management company called Kamunity Properties (Kamunity) to manage her apartment complexes.

The purpose of the parties' second marriage was to maintain husband's estate for the benefit of their daughters. To fulfill that purpose, husband and wife, with and through their attorneys, negotiated a prenuptial agreement and an agreement regarding disposition of estate at death (disposition agreement). For many months, their attorneys exchanged multiple drafts of the prenuptial agreement. Husband and wife signed the prenuptial agreement and the disposition agreement on February 20, 1991, the day before they married for the second time.

The disposition agreement provided that husband would create a qualified terminable interest property trust (QTIP trust), to be funded with 90 percent of his estate, and to furnish wife with income from the trust for life, with the remainder to pass to their adult children upon her death. (See 26 U.S.C.  2056(b)(7)(B)(ii)(I).) The disposition agreement provided expressly that it was "[c]onditioned only upon the parties being married to each other at the time of [husband's] death."

During their second marriage, husband and wife lived separately, never had sexual relations, and never traveled together. They held no joint checking, savings, or credit accounts, took no joint title to any property, did not commingle any assets, and never filed joint tax returns. They kept their marriage a closely guarded secret from everyone except their attorneys and their three daughters.

In 1993, husband and wife signed a management agreement whereby wife's company, Kamunity, would manage husband's apartment complexes. The management agreement provided that Kamunity would receive 5 percent of the gross receipts from husband's apartment complexes as compensation for its management services. Husband paid Kamunity over $1.4 million for management services provided from 1993 through 2000.

In 1999, husband and wife executed an amended disposition agreement. It amended the 1991 disposition agreement to provide that the QTIP trust would receive 75 percent (instead of 90 percent) of husband's estate.

On December 5, 2000, husband filed a petition for dissolution of marriage. He requested that the court confirm as separate assets and debts of each party "all of the assets and liabilities awarded to each in [their 1985 divorce action] together with the rents . . . ." He declared that there were no community and quasi-community assets and debts because, "There is a prenuptial agreement dated February 20, 1991 executed by the parties and their respective attorneys. The agreement specifically provides . . . that the parties agree that there shall be no community [property]."

Wife filed a response on January 5, 2001, alleging that there were nine years nine months between the date of their marriage and their December 5, 2000, separation. Her response claimed an interest in the "rents, profits, increases and appreciation of that separate property of [husband] awarded to him in [their 1985 divorce action] that have resulted from the management and effort of [wife] from January 5, 1993 through and including December 31, 2000, as is determined by this Court. The characterization of the rents, profits, increases and appreciation of [husband's] separate property resulting from [wife's] management and effort is not addressed by the parties' prenuptial agreement dated February 20, 1991. Alternatively, to the extent such characterization is found to have been addressed by the parties' prenuptial agreement, [husband] is estopped by his conduct to assert those provisions of the prenuptial agreement against [wife] with respect to the characterization of rents, profits, increases and appreciation as described above."[1]

Husband filed a motion for summary judgment or, in the alternative, for summary adjudication of issues with respect to wife's claimed community and quasi-community property interest in the "rents, profits, increases and appreciation of that separate property of [husband] awarded to him in [the legal action concerning their first marriage] that have resulted from the management and effort of [wife] from January 5, 1993 through and including December 31, 2000." The trial court ruled that wife had no legal interest in husband's separate property and granted his motion for summary adjudication.

DISCUSSION

In deciding and granting husband's motion for summary adjudication of wife's claim to a share of the rents, profits, increases and appreciation of husband's separate income property from 1993 through 2000, the court ruled that the prenuptial agreement precluded her claim. We reject wife's claim that the court erred in so ruling.

"We review the grant of summary judgment de novo. [Citation.] We make 'an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.' [Citation.] A defendant moving for summary judgment meets its burden of showing that there is no merit to a cause of action by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to that cause of action. [Citation.] Once the defendant has made such a showing, the burden shifts back to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or as to a defense to the cause of action." (Moser v. Ratinoff (2003) 105 Cal.App.4th 1211, 1216-1217.)

Absent a contrary agreement, when a spouse owns a business as his separate property and devotes his efforts to the enterprise, there must be an apportionment of the profits. (Pereira v. Pereira (1909) 156 Cal. 1, 7.) Similarly, when one spouse manages the other spouse's separate property, a community interest is created. (In reMarriage of Dekker (1993) 17 Cal.App.4th 843, 850-852.) Husband asserts that the prenuptial agreement precluded wife's Pereiraclaim for an apportionment of the profits, rents, and appreciation of his separate property.

Prenuptial agreements are enforceable contracts subject to the rules applicable to the interpretation of contracts. (In re Marriage of Bonds (2000) 24 Cal.4th 1, 13, superseded by statute on another ground (Fam. Code,  1615, subd. (c)(1).) "A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful." (Civ. Code,  1636.) "[T]he intention of the parties is to be ascertained from the writing alone, if possible." (Civ. Code,  1639.) The burden of proof is properly placed on the party contesting the validity or enforceability of a prenuptial agreement. (Evid. Code,  500; In re Marriage of Iverson (1992) 11 Cal.App.4th 1495, 1502; see also Fam. Code,  1615, subd. (a); Bonds, at pp. 24, 27.)

Here, paragraph 4 of the prenuptial agreement provides that "[Husband and wife] agree that all rents, issues, profits, increase, appreciation, and income from the separate property of [husband] shall remain his separate property," (4.1) and that "all rents, issues, profits, increase, appreciation, and income from the separate property of [wife] shall remain her separate property" ( 4.2)[2]. Paragraphs 4.3 and 4.4 contain specific, parallel waivers of any interest arising from each spouse's management of his or her own separate property.[3] Wife asserts that because the prenuptial agreement lacks comparable specific language regarding any interest that would arise from her management of husband's separate property (or his management of her property), it does not bar her Pereira claim. In so arguing, wife emphasizes two facts--when the parties entered into the prenuptial agreement, it was not contemplated that her company would manage any of husband's properties, and the parties did not then discuss that possibility. Husband does not dispute these facts. However, the strong explicit language of the prenuptial agreement, wife's deposition testimony, and other undisputed facts reflect the parties' clear intention to preclude the creation of any community property interest in the separate property of either party under any circumstances.

The prenuptial agreement, read as a whole, defeats wife's claim. Paragraph 4 repeatedly states that no community property interest will be created during the marriage. Paragraph 4.5 of the prenuptial agreement contains the following waiver of claims based upon Pereira and its progeny: "It is the intention of the parties, as set forth in paragraph 4.3 and 4.4, to foreclose the application of any principles of law (e.g., the holdings of Pereira v. Pereira, 156 Cal. 1 (1909), Van Camp v. Van Camp, 53 Cal.App. 17 (1921) or their progeny) which might create a mutual or community property interest by virtue of any such contribution of services, skills or efforts in the separate property of either of the parties." (Italics added.)

Moreover, husband and wife expressed their intention throughout the prenuptial agreement that "no community property [should] be created or acquired during their marriage." ( 7.1.) Wife testified that she understood that this was the general intention of the prenuptial agreement and that the entire agreement was to be interpreted in terms of that intent. She executed the prenuptial agreement with the understanding that its intent was that neither party had any right to acquire any interest in the other's property under any circumstances.

Many other provisions of the prenuptial agreement establish that the parties intended to preserve the separate character of their separate property and preclude the kind of claim that wife now asserts. For example, paragraph 4 begins by stating that "[Husband and wife] agree that all rents, issues, profits, increase, appreciation, and income from the separate property of [husband] shall remain his separate property," ( 4.1) and that "all rents, issues, profits, increase, appreciation and income from the separate property of [wife] shall remain her separate property" ( 4.2). Paragraph 4 concludes with two provisions reiterating that each party forever relinquishes any and all right or interest in the separate property of the other. Paragraph 4.6 states: "[Wife] hereby relinquishes, disclaims, releases and forever gives up any and all right, claim or interest in or to said separate property of [husband]." Paragraph 4.7 has identical language concerning husband's relinquishment of any interest in wife's separate property.

Still other provisions of the agreement reiterate its intention to preserve the separate character of each party's separate property. For example, paragraph 8.1 provides that the "transmutation of the character of any separate property now owned by the parties or hereinafter acquired by either of them can only be accomplished by modification of this Agreement in accordance with the provisions of Paragraph 12.1 [in writing]." Paragraph 12.2 establishes that although husband and wife "may make statements or take actions that are or appear to be inconsistent with the terms of this Agreement  . . . [husband and wife] agree that this Agreement may be altered, amended, or modified only [in writing]."

Wife also argues that the prenuptial agreement does not bar her Pereira claim because the trial court failed to apply the doctrines of expressio unius exclusion alterius and ejusdem generis. We disagree.

"Under the familiar rule of construction, expressio unius est exclusio alterius, where exceptions to a general rule are specified by statute, other exceptions are not to be implied or presumed." (Wildlife Alive v. Chickering (1976) 18 Cal.3d 190, 195.) Wife seeks to invoke this rule to defeat the obvious intention expressed throughout the agreementthat no community property would be created or acquired during the marriage. (See, e.g., 7.1.) During her deposition, as indicated above, wife testified that she executed the prenuptial agreement with the understanding that its intent was that neither party had any right to acquire any interest in the other's property under any circumstances. She further testified that the parties agreed that they would not make any claims in the separate property of the other. Courts do not apply the expressio unius rule to defeat the discernible and contrary intent of a document. (See People v. Anzalone (1999) 19 Cal.4th 1074, 1079; Estate of Banerjee (1978) 21 Cal.3d 527, 539, fn. 10.)[4]

"'The rule of construction [known as] the doctrine of ejusdem generis (also known as Lord Tenterden's rule) . . . states that where general words follow the enumeration of particular classes of persons or things, the general words will be construed as applicable only to persons or things of the same general nature or class as those enumerated. The rule is based on the obvious reason that if the [writer] had intended the general words to be used in their unrestricted sense, [he or she] would not have mentioned the particular things or classes of things which would in that event become mere surplusage. The words "other" or "any other" following an enumeration of particular classes should be read therefore as other such like and to include only others of likekind or character. [Citations.]' (Scally v. Pacific Gas & Electric Co. (1972) 23 Cal.App.3d 806, 819, italics in original; . . .)" (Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501, 1506.)

The ejusdem generis rule does not apply to paragraphs 4.1 through 4.5 of the prenuptial agreement. The relevant language of those paragraphs is not the kind that is usually subject to the ejusdem generis rule (e.g., a list, series or other enumeration of classes or items). (See, e.g., Lawrencev. Walzer & Gabrielson, supra, 207 Cal.App.3d 1501, 1506 [fees, costs or any other aspect of an attorney-client relationship]; Nygard, Inc. v. Uusi-Kerttula (2008) 159 Cal.App.4th 1027, 1045 [list of general things "information, knowledge or data" followed by description of specific things: "Such information includes, without limiting the generality of the foregoing: . . . financial data as to costs, revenues, prices, profits; . . . suppliers . . . telephone numbers"]; Estate of Douglass (1945) 70 Cal.App.2d 279, 280 [bequest of "'the rest of my personal effects of every kind and description, including all of the rest of my silver, and all of my linens and china'"].)[5]

Wife also opposed the summary judgment motion on the ground that husband should have been estopped by his conduct to rely on the prenuptial agreement. In her deposition testimony, she claimed that husband had promised to remain married to her so that she would receive his properties upon his death, but that she was free to marry. Husband contended he did not give up his right to divorce wife. The disposition agreement contains no provision supporting wife's claim that husband was unilaterally bound to remain married to wife. It is undisputed that the disposition agreement was conditioned upon the parties remaining married through the time of husband's death.

Wife's estoppel theory also rested on her claim that husband repeatedly told wife and their daughters that when he died the properties would go to them and made statements like, "this will all be yours." The court properly concluded that any reliance on such statements to support her Pereira claim was "unreasonable as a matter of law in view of the parties' agreement in section 12.2 of the Prenuptial Agreement that, '[husband and wife] . . . agree that they may make statements or take actions that are or appear inconsistent with the terms of this Agreement. [They also] agree that this Agreement may be altered, amended, or modified only as set forth in Paragraph 12.1 [in writing].'"

In addition, wife's estoppel theory rested on her claim that husband induced her to enter the management agreement to manage his properties and to perform management services at his personal residence that were not covered by that agreement, by making statements that his property would all be hers and their daughters' one day, and that but for such statements she would not have signed the management agreement or performed such services. The court correctly concluded that in view of the provisions of paragraphs 12.1 and 12.2 of the prenuptial agreement, "[t]o the extent Wife performed any services in reliance upon Husband's oral statements, without obtaining a written modification to the Prenuptial Agreement or the Disposition Agreement, her reliance was unreasonable as a matter of law."

Further, wife claimed that husband exerted undue influence to obtain her signature in 1999 on the amended disposition agreement that reduced the QTIP trust's share of his estate to 75 percent. The court reasonably concluded that such conduct had no bearing on wife's Pereira claim because it occurred several years after she waived her claim to any interest in husband's separate properties, rents, profits, increases and appreciation by signing the prenuptial agreement (in 1991).

The trial court properly concluded that "the evidence would not allow a reasonable trier of fact to find in [wife's] favor on her claim for an apportionment of the rents, profits, increases and appreciation of that separate property of Husband"; "Husband . . . conclusively negated her Pereira/Dekker claim through evidence of the parties' written agreements"; and "Wife [failed] to demonstrate the existence of any triable, material, factual issue." The court correctly granted husband's motion for summary adjudication of wife's Pereira claim.

The judgment is affirmed. Costs are awarded to respondent.

NOT TO BE PUBLISHED.

COFFEE, J.

We concur:

GILBERT, P.J.

YEGAN, J.

James W. Brown, Judge

Superior Court County of Santa Barbara

______________________________

Stein & Flugge, LLP, Valerie V. Flugge, Marc R. Stein, Dilan A. Esper for Appellant Joyce L. Trevillian.

Horvitz & Levy LLP, John A. Taylor, Jr., Kristopher S. Bahr; Arnold, Bleuel, Larochelle, Mathews & Zirbel LLP, Gary Arnold; Price, Postel & Parma LLP, Penny Clemmons for Respondent Terri Trevillian, Personal Representative of Marvin Trevillian.

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[1] Husband's December 5, 2000, petition also had alleged that the period between the marriage and separation was nine years nine months. Over wife's objection, the court allowed husband to file an amended petition in October 22, 2001, to show that the period of the marriage was zero years zero days.

[2] All paragraph references are to the prenuptial agreement.

[3] Paragraph 4.3 provides: "[Husband and wife] agree that [husband] may devote considerable time, skill and effort to the investment and management of his separate property and the income from it. [Husband and wife] agree that, notwithstanding that the expenditure of [husband's] time, skill and effort might constitute a community interest or asset in the absence of this Agreement, neither party shall acquire any community interest in [husband's] separate property or its proceeds from the expenditure of [husband's] time, skill and effort. Any rents, issues, profits, increase, appreciation and income from the separate property of [husband] shall remain the separate property of [husband]." The language of paragraph 4.4 concerns wife's separate property, investment, management, time, skill, and effort, etc., and otherwise mirrors paragraph 4.3.

[4] Despite the contrary suggestion in wife's reply brief, statutory interpretation cases involving the expressio unius rule constitute valid authority for deciding its application to contract language. (See, e.g., Stephenson v. Drever (1997) 16 Cal.4th 1167, 1175, citing Grupe Development Co. v. Superior Court (1993) 4 Cal.4th 911, 921.)

[5] Separate and apart from her estoppel claim, wife argues that there were disputed issues of material fact as to whether husband fraudulently induced her to enter into the prenuptial agreement. Because wife's fraud claims are outside the pleadings, husband was not required to refute them to obtain summary adjudication of her Pereiraclaim. (See FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382; Lockhart v. County of Los Angeles (2007) 155 Cal.App.4th 289, 304.) Wife argues that because this is a marital case, the issues are framed in mandatory judicial forms, that "[t]here is no opportunity to plead traditional civil claims and affirmative defenses on the mandatory forms," and she was not "required to plead such a defense in order to preserve it for trial." This argument is not persuasive. Wife had no difficulty using an attachment to raise her rather lengthy Pereira and estoppel claims on a mandatory judicial form.