LYNN v. ROBERT

Filed 4/27/06

CERTIFIED FOR PARTIAL PUBLICATION^*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

Appellant Lynn A. Walker (Wife) appeals the judgment that distributed community assets following the dissolution of her marriage to respondent Robert A. Walker (Husband). She contends the trial court incorrectly valued the community real property and that there was insufficient evidence she breached her fiduciary duty to Husband.

BACKGROUND

The parties married on August 21, 1980. During the marriage and prior to his retirement, Husband contributed to a Keogh retirement fund he had opened approximately 20 years before the marriage. When he retired on February 28, 1989, he rolled the Keogh fund into an individual retirement account worth $105,000 at the time (the Morgan Stanley IRA^[1]).

In 1992 the parties bought a single family house in the Hidden Valley Lake development of Middletown, California (the Middletown house).

The parties separated on November 15, 2002, with Wife moving out of the Middletown house. When they separated the Morgan Stanley IRA was worth between $2,900 and $3,200.

On April 18, 2003, the Middletown house was appraised at $265,000.

On August 5, 2003, Husband petitioned for dissolution.

On December 30, 2003, the Middletown house was appraised at $303,000.

A judgment of dissolution as to status only dissolved the marriage effective July 30, 2004.

Following a trial that addressed issues of property distribution and allegations of Wife's breach of fiduciary duty, the court issued its statement of decision. Pertinent to this appeal, it assigned the Middletown house a value of $303,000, based on the expert's December 2003 appraisal and on Husband's opinion that corresponded with that appraisal. While the court found it likely the Middletown house had increased in value between December 2003 and trial, it did not find adequate evidence to support Wife's higher valuation. And while both parties testified that the Morgan Stanley IRA was Husband's separate property, the court rejected Wife's argument that as a consequence of its status as Husband's separate property it was not subject to Wife's fiduciary duty. It found that the Morgan Stanley IRA, although in Husband's name, was community property due to a commingling of community and separate property funds and an inability to trace the separate property contributions. It found that Wife, who was the family bookkeeper, breached her fiduciary duty to Husband by failing to inform him of the significant depletion over the years of the Morgan Stanley IRA and of the consequent tax penalties. It found she had withdrawn $69,000^[2] from the Morgan Stanley IRA without telling Husband, and that tax penalties of $2,066 had been incurred by these withdrawals.

The January 7, 2005 judgment on reserved issues awarded the Middletown house to Husband. Pursuant to Family Code section 1101, subdivision (g) it awarded Husband $71,066, the sum of Wife's withdrawals from the Morgan Stanley IRA and the tax penalties.^[3]

Wife timely appealed the judgment on the reserved issues.^[4]

DISCUSSION

I. Middletown House Valuation

Wife contends the court erred in valuing the Middletown house as of the December 2003 appraisal, rather than August 12, 2004, the final date of trial.

In dividing a community estate, the court is to value the assets and liabilities as near as practicable to the time of trial, unless, for good cause, it uses another date after separation and before trial to accomplish an equal division of the estate in an equitable manner. (Fam. Code, § 2552.) A court has broad discretion to determine the manner in which the community shall be divided, including the valuation date, and to fix the value of assets and liabilities. (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1431; In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 631.) Its determination of the value of an asset is factual and will be upheld on appeal if within the range of the evidence presented. (Duncan, supra, at p. 632.)

We find no abuse of discretion. Both parties agreed that the December 30, 2003 appraisal of $303,000 was accurate for that date. Less than four months after this appraisal, on April 21, 2004, the first day of trial, Husband testified that, in his opinion, the $303,000 figure was currently an accurate fair market value for the house. He further testified that he reached his opinion by reviewing the sale price of comparable houses in the Hidden Valley Lake neighborhood and from his experience as a purchaser of residential property. The Middletown house was the fourth house the parties purchased since their marriage, and he had owned seven houses before the marriage.

When asked her opinion as to the value of the Middletown house at the April 21 trial, Wife testified that she â€