Filed 1/23/18 Estate of Jackson CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

Patricia E. Jackson (Jackson) appeals from a judgment on her spousal property petition. During her marriage to Regginald R. Jackson (decedent), Jackson and decedent sought a reverse mortgage on their property held in joint tenancy to help pay living expenses. Because Jackson was not old enough to qualify for the reverse mortgage but decedent was, she quitclaimed the property to decedent as his separate property. Decedent died intestate. When Jackson petitioned the probate court for a determination that the property be distributed entirely to her as the surviving spouse, the trial court rejected her claim based on the lack of clear and convincing evidence of an agreement between decedent and Jackson that the property remained community property notwithstanding the form of title.

Jackson challenges that decision, arguing the trial court erred because (1) the record contains clear and convincing evidence she and decedent agreed the property was community property and (2) she did not make the purported transmutation freely and voluntarily. We affirm.

I. BACKGROUND

Jackson and decedent had been married for 36 years when decedent died in March 2016. Ten years prior, using funds she inherited from her parents, Jackson had purchased a home (the property) in Rio Vista, California, with title held by successor trustees of the family trust. Jackson and decedent lived together in the home, and maintained the property using community property funds. In 2011, the property was transferred from the successor trustees to Jackson and decedent as joint tenants.

Two years later, Jackson and decedent were struggling to pay their expenses and determined they would take out a reverse mortgage on the home. When they applied for the reverse mortgage, the lender advised Jackson’s name would need to be removed from title to the property because she was not yet 62 years old and thus, did not qualify. In order to obtain the reverse mortgage, Jackson signed an interspousal transfer grant deed, granting the property to decedent as his sole and separate property.

The couple did not seek legal counsel about the title change and Jackson states the
“reverse mortgage company did not provide guidance on this issue.” All funds from the reverse mortgage were deposited to the couple’s joint bank account, and all expenses related to maintaining the property, including property taxes, were paid from the same account.

In 2016, decedent died intestate. He was survived by Jackson and three adult children. Jackson petitioned the trial court to have the property distributed entirely to her as the surviving spouse. After continuing the hearing twice and accepting supplemental briefing and evidence from Jackson regarding her interest in the property, the trial court determined the property was decedent’s sole and separate property. The trial court ordered one-third interest in the property to Jackson as the surviving spouse.

II. DISCUSSION

A. Standard of Review

“In general, ‘[a]ppellate review of a trial court’s finding that a particular item is separate or community property is limited to a determination of whether any substantial evidence supports the finding.’ ” (In re Marriage of Bonvino (2015) 241 Cal.App.4th 1411, 1421.) We are required to presume the trial court’s judgment is correct and must draw all inferences in support of its decision. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133 (Arceneaux).)

B. Form of Title Presumption

Under Evidence Code section 662, there is a presumption, derived from common law, that record title reflects the beneficial ownership interests in property. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 291 (Haines).) The presumption is rebuttable, however, and can be overcome by clear and convincing evidence of a communicated intention, agreement, or common understanding between the spouses that the title does not reflect their ownership interests.[1] (Evid. Code, § 662; In re Marriage of Brooks (2008) 169 Cal.App.4th 176, 189 (Brooks), abrogated on another ground in In re Marriage of Valli, supra, 58 Cal.4th at p. 1405; In re Marriage of Fossum (2011) 192 Cal.App.4th 336, 344–345 (Fossum).) In its ruling on Jackson’s petition, the trial court concluded Jackson failed to present “clea[r] and convincing evidence of an agreement between [Jackson] and the Decedent that the property was community property notwithstanding the form of title.” (Italics omitted.)

Jackson argues the trial court erred because the form of title presumption was overcome in this case by clear and convincing evidence. Specifically, she contends the first page of the application for the reverse mortgage contained a box which she checked (and signed to acknowledge) stating: “Co-Borrower information must be provided for a person other than Borrower (including the Borrower’s spouse) who . . . has or could have community property rights pursuant to state law in the real property that will secure the loan.” Jackson also argues the funds received from the loan were deposited into a joint bank account and all expenses related to maintaining the property, including property taxes, were paid from the same joint account. According to Jackson, such facts show she and decedent intended to retain the community property characterization of the property, notwithstanding the form of title.

The problem with Jackson’s argument is that it ignores the applicable standard of review. Even assuming we can draw the inferences she suggests, we are not free to disturb the trial court’s findings unless they are unsupported by substantial evidence. (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1521; Toney v. Nolder (1985) 173 Cal.App.3d 791, 796–797 [whether evidence meets clear and convincing burden of proof is a question for the lower court to determine and is not subject to review].) Jackson concedes she executed the 2013 interspousal transfer grant deed, which expressly states the property is transferred from Jackson and decedent, “husband and wife, as joint tenants” to “Regginald R. Jackson, a married man, as his sole and separate property.” She also signed an “Ownership Interest Certification,” which noted applicable Housing and Urban Development restrictions “prohibit an individual from holding an ownership interest in the property if they are not an eligible borrower.” The certification warned “any non-eligible owners will be required to relinquish their ownership interest in the property,” explained that “By relinquishing your ownership interest, you are affecting your legal rights,” and stated the lender “strongly suggests that you consult with your financial and/or legal advisor(s) to determine if this reverse mortgage loan is in your best interest.” Jackson admits she and decedent did not seek legal advice to understand the title issue.

Further, the record reveals no evidence of an agreement between decedent and Jackson that the property would remain community property. Jackson’s declaration attests to her own belief that she retained ownership of the property. But such an unexpressed, subjective belief is not evidence of an agreement. (Brooks, supra, 169 Cal.App.4th at pp. 190–191 [husband’s “unilateral belief” property belonged to him and wife was “insufficient to establish the existence of an agreement or understanding between the spouses as to ownership of the Property”].) In addition, Jackson’s declaration emphasizes she only signed the interspousal transfer grant deed because she and decedent needed the money to pay bills and make ends meet. As the Brooks court observed, however, such evidence “merely explains why [husband] was willing to allow [wife] to have sole title to the Property. Having a reason for allowing title to be taken solely in [wife’s] name does not diminish the inference that the parties intended the Property to be [wife’s] separate property. Indeed, it supports the conclusion that the form of title was not inadvertent, but rather that the parties expressly intended such a result. Most significantly, the proffered reason does not constitute evidence of an agreement between the spouses that the Property be community property.” (Id. at p. 191.) Neither the fact Jackson and decedent signed a statement she “has or could have” a community property interest, nor the fact the couple used the funds to pay for property-related expenses reflects an agreement the property was community property.

In sum, the trial court’s finding the property was decedent’s separate property based on the form of title and the absence of an agreement to the contrary was supported by substantial evidence.

C. Undue Influence Presumption

Jackson next contends the trial court erred because it should have applied the undue influence presumption and concluded the purported transmutation was ineffective because Jackson did not enter the transaction freely and voluntarily with a full understanding of its legal effect.

In property transactions between husband and wife, the spouses owe one another a fiduciary duty. (Fam. Code, § 721, subd. (b).) When an interspousal transaction advantages one spouse over another, a presumption of undue influence arises. (In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 732 (Burkle); Haines, supra, 33 Cal.App.4th at p. 287.) The presumption arises only if the advantage obtained is unfair. (Fam. Code, § 721, subd. (b) [neither spouse “shall take any unfair advantage of the other”]; Burkle, at p. 732 [“in a contractual exchange between spouses, a presumption of undue influence arises only if one of the spouses has obtained an unfair advantage over the other”].) “When a presumption of undue influence applies to a transaction, the spouse who was advantaged by the transaction must establish that the disadvantaged spouse’s action ‘was freely and voluntarily made, with full knowledge of all the facts, and with a complete understanding of the effect of’ the transaction.” (Burkle, at pp. 738–739.) Whether a transaction was the result of undue influence “ ‘ “ ‘is a question for the trier of fact, whose decision will not be reversed on appeal if supported by substantial evidence.’ ” ’ ” (Fossum, supra, 192 Cal.App.4th at p. 344; In re Marriage of Lund (2009) 174 Cal.App.4th 40, 55.)

We note the trial court did not expressly rule on this issue, though it was raised in Jackson’s supplemental brief below. Nonetheless, we must imply all findings in support of the judgment and construe the record in the light most favorable to those findings. (Arceneaux, supra, 51 Cal.3d at pp. 1133–1134; In re Marriage of Bonvino, supra, 241 Cal.App.4th at p. 1424.) Here, the trial court’s implied finding decedent did not exercise undue influence was supported by substantial evidence. Jackson’s own declaration attests the spouses were “struggling financially” and sought the reverse mortgage together to be able to pay their bills. They were both informed Jackson’s name would have to be removed from title in order to qualify for the loan, and she signed the interspousal transfer grant deed removing her name from the title because they could not obtain the reverse mortgage otherwise. Her declaration states the proceeds of the reverse mortgage were deposited in a joint bank account and used to pay expenses, showing the loan funds were used as anticipated. There are no facts showing decedent took advantage of Jackson, failed to fulfill a promise to her, or exercised any undue influence at the time of the transaction. Indeed, according to Jackson, decedent did not intend to deprive her of her interest in the property. Moreover, the lender, not decedent, advised the title change was necessary to obtain the loan, and there is no evidence anyone pressured Jackson to quitclaim the property to decedent.

Relying on Haines, supra, 33 Cal.App.4th 277 and In re Marriage of Delaney (2003) 111 Cal.App.4th 991, Jackson argues the presumption of undue influence must prevail over the form of title presumption in this case and she should be granted the entire property because she did not freely and voluntarily agree to the transaction with full knowledge of its effect. Haines and Delaney, however, are inapposite. In both cases, the evidence showed one spouse took advantage of the other in obtaining consent to an interspousal property conveyance. (Haines, at pp. 283–285; Delaney, at p. 1000.) Nothing in Haines or Delaney requires a court to ignore uncontradicted evidence demonstrating there was no undue influence, even if the disadvantaged spouse claims he or she did not understand the legal effect of the transaction. As discussed above, the trial court’s implied finding of no undue influence is supported by substantial evidence based on Jackson’s own declaration.

Moreover, even assuming the statutory presumption of undue influence arose from the fact decedent obtained the property as separate property (see, e.g., Burkle, supra, 139 Cal.App.4th at pp. 730 [statutory presumption of undue influence regularly arises when one spouse deeds property to the other]), the trial court could have reasonably concluded Jackson entered the transaction voluntarily and fully understood the ramifications of signing the interspousal transfer grant deed. (See, e.g., In re Marriage of Mathews (2005) 133 Cal.App.4th 624, 631–632.) In Mathews, a wife claimed her husband had failed to rebut the presumption of undue influence that arose when she signed a quitclaim deed, transferring her interest in their community property residence to husband as his separate property. (Id. at pp. 628, 630.) The evidence showed the couple had agreed wife would sign the quitclaim deed to obtain a lower interest rate on a loan. (Id. at p. 631.) Wife claimed her English skills limited her ability to comprehend the transaction, but among other things, she admitted signing the quitclaim deed was a conscious decision on her part and she knew her name was not on title. (Id. at p. 632.) Although the trial court had erred in refusing to apply a presumption of undue influence, the Court of Appeal nonetheless affirmed because substantial evidence supported the conclusion the quitclaim deed was a voluntary and deliberate act by wife, taken with full knowledge of its legal effect. (Ibid.)

Here, Jackson signed (and attested to having read) an ownership interest certification acknowledging any non-eligible borrowers would have to relinquish their ownership interest in the property and that a change in ownership would impact their legal rights. She admits the lender informed her that her name would have to be removed from title to the property to obtain the mortgage and she signed the interspousal transfer grant deed to obtain the loan. Although Jackson claims she believed she retained ownership of the property, the trial court may not have credited her declaration, and that credibility determination is not subject to review. (In re Marriage of Balcof, supra, 141 Cal.App.4th at p. 1531 [“Appellate courts ‘do not reweigh evidence or reassess the credibility of witnesses.’ ”].)

We are not unsympathetic to Jackson’s plight, but our task on review is limited. Because substantial evidence supports the trial court’s decision, we are compelled to uphold it.[2]

III. DISPOSITION

The judgment is affirmed.

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Margulies, J.

We concur:

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Humes, P.J.

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Dondero, J.