Filed 4/25/18 Marriage of Moon and Ma CA1/5
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION FIVE


In re the Marriage of SUN YOUNG MOON and ALVIN KWONG MA.

SUN YOUNG MOON,
Respondent,
v.
ALVIN KWONG MA,
Appellant.


A148336

(Alameda County
Super. Ct. No. CH228431)


This appeal arises from the dissolution of the marriage between Alvin Kwong Ma and Sun Young Moon. Ma appeals from a judgment dividing certain community property assets and ordering him to pay child support to Moon. He contends: (1) the family court erroneously reversed a prior order and required him to refinance or sell certain real property in order to remove Moon from the mortgage on that property; (2) the child support order must be reversed because there was no substantial evidence his current income exceeded the amount set forth in his most recent income and expense declaration and the forensic accountant appointed by the court acted as Moon’s expert rather than a neutral advisor to the court; and (3) the court erred in excluding evidence showing he was entitled to reimbursement for separate property funds used to purchase community property assets. We affirm.

I. BACKGROUND
A. Pretrial Factual and Procedural History
Moon and Ma were married in 1998 and have two sons together. They obtained a status-only judgment of dissolution on August 14, 2003. Prior to the entry of the judgment of dissolution, the parties divided certain items of community property by executing a stipulation signed by both of them and their counsel of record on July 31, 2003.
The 2003 stipulation provided that Moon would waive any and all community property interest in the real property located at 5056 Wicks Lane in Castro Valley, in exchange for which Ma agreed “to assume all financial obligations concerning said real property.” The stipulation also provided that Ma would not pursue a claim against Moon for the withdrawal of $40,000 from a Charles Schwab account, that Ma would give Moon $106,000, representing her half of the proceeds from the sale of real property located on Anza Street in San Francisco, and that Moon would waive her interest in the sale proceeds of a Mercedes Benz. The stipulation did not cover real properties the couple owned in South Lake Tahoe, Newark and Hayward. However, in 2004 Ma quitclaimed his interest in the Newark property to Moon in exchange for her quitclaim of her interest in the South Lake Tahoe property to Ma.
Despite the judgment of dissolution, the parties continued to live together for several years with their children in the Wicks Lane home owned by Ma. They finally separated in 2011, when Moon moved out of the home. On January 23, 2012, Ma filed an order to show cause requesting that the court enter formal custody orders reflecting his sole physical custody of his two sons with Moon to have visitation rights; he also requested child support based on the representation that Moon earned “significantly more” than he did. In his accompanying income and expense declaration, he claimed an average gross monthly income of $2,500 in insurance sales commissions, with monthly expenses of $4,544.39. Moon filed an income and expense declaration on March 23, 2012, showing a gross monthly income of $6,287 and monthly expenses of $5,500.
On July 12, 2012, Ma filed a request for entry of judgment pursuant to Code of Civil Procedure 664.6, asking that the 2003 stipulation be adopted as an order of the court. Moon filed a responsive declaration opposing the motion on the ground that Ma had failed to comply with its terms by insisting she co-sign on a loan to purchase the Wicks Lane property (for which she was not on title) so that Ma would not lose that property. Moon sought an order requiring Ma to remove her from the loan. “At this point, I need to have my name removed from this obligation. Because of it I am unable to purchase a home of my own since my income to debt ratio is totally skewed by obligations to this mortgage. If this Stipulation is to be enforced, compelling [Ma] to assume sole financial responsibility pursuant to the Stipulation is necessary.” In a supplemental declaration filed November 2, 2012, Moon stated that she had received bank statements from Ma showing $152,536.35 had been deposited in his account during 2011, even though he had claimed a gross income of only $39,350 on his 2011 federal income tax return. Additionally, bank statements from March through December 2010 showed that Ma had deposited $111,256.11, while he had claimed a gross income of only $41,998 on his 2010 federal income tax return. Moon requested the appointment of a forensic accountant under Evidence Code section 730.
The parties appeared before the court on November 6, 2012, to discuss various issues to be resolved, including the entry of judgment on the 2003 stipulation, child custody and visitation, child support, the removal of Moon’s name from the mortgage on the Wicks Lane property, and attorney fees and costs. They discussed the appointment of a forensic accountant under Evidence Code section 730, in response to Moon’s allegation that Ma was understating his income. The court reserved jurisdiction over all these issues and directed the parties to “meet and confer on the selection of a forensic accountant. . . . Said accountant shall be appointed pursuant to Evidence Code [section] 730.”
On January 3, 2013, the court granted Ma’s motion for entry of judgment and ordered that the 2003 stipulation be adopted as an order of the court.
On March 14, 2013, Ma filed an income and expense declaration showing an average gross monthly income of $2,500 and monthly expenses of $5,332.15, with $3,200 of those expenses “paid by others.” A hearing was held on March 18, 2013, at which the court entered an interim order giving the parties joint legal and physical custody of their children and requiring Moon to pay Ma $874 a month in child support. The court continued the matter for a settlement conference regarding child support, attorney fees and costs, and a review of the custody issue.
A hearing was held on July 19, 2013, after which the court ordered that Moon “may proceed with Leslie Dawson, C.P.A., as a forensic accountant to analyze [Ma]’s earning history.” On March 13, 2014, Dawson provided the court and counsel with a report summarizing her findings, in which she concluded that when Ma’s income from a resale automobile business was included, his annual income from 2012 was $96,266 (rather than the $24,573 claimed on his federal income tax returns), and his average annual income from 2011-2012 was $108,857, rather than the $22,281 claimed on his tax returns. When money received by Ma from his friends and family during the same period was included, these figures rose to $117,866 and $130,417, respectively.
Following a hearing on April 25, 2014, the trial court reduced the child support order to zero and reserved jurisdiction to retroactively modify support back to March 18, 2013 (when Moon had been ordered to pay Ma $874 per month). On September 30, 2014, the court made various discovery orders and ruled that because the 2003 stipulation did not expressly require Ma to refinance the mortgage on the Wicks Lane property, Moon did “not have a contractual right to have her name removed from the mortgage or to have the house sold in order to enforce that right.”
Trial was set for April 2015, and Moon filed a trial brief arguing that Ma should be required to pay her child support based on his actual income and to remove her name from the Wicks Lane mortgage. Ma filed a trial brief arguing that Moon should be ordered to pay child support and that he was entitled to reimbursement of separate property funds used as down payments on real property purchased by the couple in San Francisco, Newark, Hayward and South Lake Tahoe, pursuant to Family Code section 2640, subdivision (b). The parties accepted the previous orders regarding custody and visitation and agreed to have the court terminate its jurisdiction over spousal support.
B. Trial on Reserved Issues
A trial was held over several dates in April and May 2015 on the issues of the division of community property and child support. As relevant here, Moon testified that when she signed the 2003 stipulation, there was no existing loan on the Wicks Lane home. Rather, Moon signed the stipulation relinquishing her interest in the property on the morning of July 31, 2003, and when she presented herself to the title company to sign a quitclaim deed that same afternoon, was told by Ma and the title officer that she needed to sign the mortgage papers if she did not want Ma to lose the property. Because she was attempting to reconcile with Ma (and in fact, they continued to live together for a number of years), she signed the mortgage papers.
As to the issue of child support, Leslie Dawson testified, consistent with the summary of her findings previously provided to counsel, that a lot more money had been deposited in Ma’s bank accounts than had been reported on his tax returns. She analyzed four sources of income: (1) his job as an insurance broker, which was reported on his tax returns, (2) his rental income from a duplex in South Lake Tahoe, (3) his income from car sales (28 such sales in 2012), which was not reported on his taxes; and (4) payments from friends and family.
Ma called several friends as witnesses to testify that they had made the payments as loans. One of these friends testified that he knew Ma as a car “hobbyist” who had been buying and selling “cool” cars for 25 years.
C. Statement of Decision
The trial court prepared a detailed statement of decision addressing the issues before it, the primary ones being Moon’s request that Ma remove her name from the mortgage on the Wicks Lane property and a determination of the appropriate amount of child support.
As to the mortgage issue, the court ruled that Ma could keep the Wicks Lane property as provided in the 2003 stipulation subject to the condition he have Moon’s name removed from the mortgage. The court noted that the stipulation required Ma “ ‘to assume all financial obligations concerning’ the property.’ ” There had been no mortgage on the property when the stipulation was executed; rather, Ma was under contract to purchase the property and Moon agreed to be placed on the mortgage after signing the stipulation, thus assuming a financial obligation she had not previously had. “When Mr. Ma arranged for Ms. Moon to ‘assume’ the ‘financial obligation’ of a new mortgage as co-signor alongside himself, he breached their agreement almost before the ink on it was dry.” Ma was ordered to cure this breach by arranging to remove Moon’s name from the mortgage and, if that was not possible, to sell the property so as to cure the breach by other means.
The court acknowledged that in its interlocutory order of September 30, 2014, it had ruled that Ma did not need to remove Moon from the mortgage, but it had done so under the assumption there had been an existing mortgage on the property when Moon signed the stipulation. “The court construed the stipulation’s silence [regarding the obligation to refinance] assuming the familiar context of divorcing parties with a pre-existing mortgage, and denied Ms. Moon the relief she sought because the stipulation does not expressly require Mr. Ma to secure refinancing. [¶] New evidence at trial leads the Court to a different conclusion now. The Court has the ‘inherent power to reconsider’ its prior rulings and may ‘correct a previous but clearly erroneous ruling’ made in an interlocutory order. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108 [(Le Francois)].) The crucial fact that the Court learned for the first time at trial, which renders its earlier decision regarding the mortgage clearly erroneous, is that when the parties negotiated and signed the stipulation there was no mortgage on the Wicks property. . . . Ms. Moon’s unrefuted testimony was that she signed the stipulation obligating Mr. Ma to ‘assume all financial obligations concerning’ the property on the morning of July 31, 2013, before she presented herself that afternoon at the title company to sign documents that included a quitclaim deed and a mortgage contract. [Citation] [¶] In the context of this timeline, the Court interprets very differently the silence of the stipulation on the subject of a mortgage, and the specific obligation that Mr. Ma undertook when he agreed to ‘assume all financial obligations concerning’ the Wicks property. (Id.) With this promise, Mr. [Ma] undertook in the stipulation sole responsibility for any future mortgage on the property.”
As to child support, the court credited the testimony and analysis of Leslie Dawson regarding Ma’s actual income and, based on the figures in her report, ordered him to pay $1,089 per month in baseline child support effective June 1, 2014, along with arrearages and reimbursements for child support Moon had paid to him. The court noted that it was not troubled that Dawson’s figures were taken from 2011 and 2012, because Ma had recently reported his income to the court in terms identical to the income and expense statements submitted in 2012, and the testimony by witnesses at trial regarding his car sales activity and the transfer of funds from family and friends supported the inference those income streams continued.
Judgment was entered and Ma appeals.
II. DISCUSSION
A. The Trial Court Did Not Err in Ordering Ma to Remove Moon from the Mortgage on his Property
Ma contends the trial court erred in ordering him to take the steps necessary to remove Moon from the mortgage on the Wicks Lane property. He argues the court did not have the power to reconsider its prior ruling, issued September 30, 2014, that Ma did not have to refinance or sell the property. We disagree.
A trial court has the inherent authority to correct an erroneous ruling on its own motion. (Le Francois, supra, 35 Cal.4th at pp. 1108–1109.) That is what happened here. When it made its prior ruling, the court had incorrectly assumed there was an existing mortgage on the Wicks Lane property at the time of the 2003 stipulation. This made it reasonable to conclude that if the parties had intended to require the refinancing of the note as a condition of allowing Ma to keep the property, they would have made that requirement explicit. The court’s realization that in fact there had been no mortgage on the property when the stipulation was signed meant that Ma’s agreement to “assume all financial obligations concerning” that property must be construed as requiring him to assume sole responsibility for any mortgage subsequently taken on the property. Ma does not challenge the substance of this order, only the fact that it differed from the prior ruling on this issue.
Ma argues that a trial court’s power to reconsider prior rulings under Le Francois extends only to interim or interlocutory orders. This argument was rejected in In re Marriage of Barthold (2008) 158 Cal.App.4th 1301, 1312–1314 & fn. 9 (Barthold), which held that a court had the inherent power to reconsider a final order, as well as an interim order, for the purpose of correcting an erroneous ruling. In any event, the court’s September 30, 2014 order was a “mere ruling on a bifurcated issue” and therefore interlocutory in nature. (In re Marriage of Lafkas (2007) 153 Cal.App.4th 1429, 1433.)
Next, Ma contends the court was not entitled to revisit its interpretation of the 2003 stipulation because it did so based on new evidence, and “in order to grant reconsideration on its own motion, the trial court must conclude that its earlier ruling was wrong, and change that ruling based on the evidence originally submitted.” (Barthold, supra, 158 Cal.App.4th at p. 1314.) We disagree. We are cognizant that a court’s inherent power to correct erroneous rulings is distinct from the power to grant reconsideration under Code of Civil Procedure section 1008, which requires a party to present new and different facts and explain why any new evidence was not presented with the original motion. (See In re Marriage of Herr (2009) 174 Cal.App.4th 1463, 1469.) Here, although the trial court indicated its ruling was based on “new evidence,” i.e., on the evidence that there was no mortgage on the property when Moon signed the stipulation, that evidence was not in fact “new.” Moon submitted a declaration in which she detailed the circumstances surrounding the execution of the stipulation, quitclaim deed and mortgage documents in much the same way as she did at trial. This was not a situation in which new evidence was presented to the court for the first time, but rather, one in which the court refocused on the relevant facts and changed its legal conclusion after realizing its prior assessment of the facts had been in error.
Moreover, even if the court made a procedural error in reconsidering the refinancing issue, “ ‘that error cannot be deemed reversible without reaching the merits of the . . . issue’ on which the court ruled. [Citation.] . . . . [S]ection 13 of article VI of the California Constitution precludes the reversal of a judgment ‘ “for any error as to any matter of procedure, unless, after an examination of the entire cause . . . the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” ’ . . . . In our view, the California Constitution requires that in any case in which a trial judge reconsiders an erroneous order, and enters a new order that is substantively correct, the resulting ruling must be affirmed regardless of any procedural error committed along the way.” (Barthold, supra, 158 Cal.App.4th at p. 1313; see also People v. Edward D. Jones & Co. (2007) 154 Cal.App.4th 627, 634.) Ma does not challenge the substance of the order requiring him to remove Moon from the mortgage on Wicks Lane, rendering harmless any procedural error by the court in changing its prior order to reach that result. For the same reason, we reject Ma’s argument that he did not receive adequate notice of the court’s intent to reconsider the issue.
B. Substantial Evidence Supports the Court’s Assessment of Ma’s Income
The court relied on the opinion of forensic accountant Leslie Dawson when determining Ma’s income for the purpose of calculating child support. Ma challenges the sufficiency of this evidence, arguing (1) the court relied on a report by Dawson that was not admitted into evidence; (2) Dawson examined Ma’s earnings in 2011 and 2012, which were not determinative of his earnings in 2015 when the trial took place; and (3) Dawson was not appointed as the court’s expert under Evidence Code section 730. None of these points has merit or requires reversal.
1. Admission of Exhibit 3
We first consider the claim that the court erroneously imputed income to Ma on the basis of Exhibit 3, an expert report that was not admitted into evidence. The contention is not supported by the record.
Dawson’s analysis of Ma’s income was set forth in a draft report prepared in January 2014 and in a more detailed final report dated March 13, 2014. When she testified at trial, Dawson identified both reports and they were marked as Exhibits 2 and 3. According to Dawson, the two reports contained an “identical” analysis, but the final report dated March 13 contained a more detailed explanation of Dawson’s conclusions. When Moon’s counsel moved to have both reports admitted into evidence (in addition to a tax return of Ma’s marked as Exhibit 11), the following exchange occurred: “THE COURT: Mr. Ma, do you have an objection to 2, 3 or 11 coming [into] evidence? [¶] MR. MA: I have an objection to – I guess number 3 is Miss Dawson’s report? [¶] [MS. DAWSON]: Yes. [¶] MR. MA: I do have an objection to that because it is not – it does not contain current information from 2012 and 2014. [¶] THE COURT: That sounds like a relevance objection and it’s overruled. So that’s Exhibit 3. Exhibit 2 is apparently an early draft of Exhibit 3. Are you objecting to Exhibit 2? [¶] MR. MA: Yes. [¶] THE COURT: On grounds other than relevance? [¶] MR. MA: No. [¶] THE COURT: Exhibit 2 will come in.”
From this exchange, it appears the trial court did admit the final report that was designated as Exhibit 3 into evidence when it overruled Ma’s objection to its admission and stated, “[s]o that’s Exhibit 3.” A copy of that report appears in the clerk’s transcript and was stamped “filed” on the first day of trial. In any event, the court expressly admitted Exhibit 2, which was a draft report containing the same conclusions as Exhibit 3, albeit in less detail. The court did not err in basing its child support order on the calculations of income offered by Dawson in her reports.
2. Use of “Historical Data” to Prove Current Income
We next consider Ma’s complaint that Dawson calculated his income as of 2011 and 2012, whereas the hearing was held in April 2015. He argues that such “historical data” could not be used to determine his current income level, and the court should have instead relied on his income and expense declaration filed on April 1, 2015, which reflected an average monthly income of $2,500, rental property income of $125, and total expenses of $4,542.03, $2,000 of which was paid by others. We disagree.
As the court observed in its statement of decision, Ma’s recent income and expense declaration was similar to one submitted in 2012. Having concluded that Ma had significantly understated his income on past declarations, the court could draw adverse factual inferences and determine the April 2015 declaration was similarly deficient. (See In re Marriage of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 31.) The court could reasonably infer that Ma continued to receive income from the car sales, rental property, and the transfers of funds from family and friends. (See In re Marriage of Alter (2009) 171 Cal.App.4th 718, 736–737 [regular gifts of cash may be considered when calculating child support].) Income may be imputed based on historical earnings, and while Ma was free to argue that his financial circumstances had changed, this went to the weight of the evidence and did not render it legally insufficient. (See In re Marriage of Berman (2017) 15 Cal.App.5th 914, 925, fn. 11 [approving use of historical income data when calculating support].)
3. Appointment of Dawson under Evidence Code section 730
Though not actually a challenge to the sufficiency of the evidence regarding his income, Ma complains that the trial court treated Dawson as a court’s expert appointed under Evidence Code section 730, whereas she actually functioned as an expert witness for Moon. He claims he was prejudiced because in characterizing Dawson as a court-appointed expert, the court “was giving Ma the direction that he could not obtain his own expert witness to attack the testimony of Moon’s expert.” Again we disagree. Dawson was appointed in response to Moon’s request for the appointment of an expert witness under Evidence Code section 730, which allows the court to appoint an expert when “expert evidence is or may be required by the court or by any party to the action.” (Italics added.) Dawson’s final report was available to the parties in March 2014, more than a year before the trial. Nothing prevented Ma from obtaining his own expert to rebut her testimony.
C. Reimbursement under Family Code section 2640
Family Code section 2640, subdivision (b), provides in relevant part, “In the absence of a written waiver, a spouse who contributes separate property to a community property acquisition is reimbursed upon dissolution of the marriage.” (In re Marriage of Walrath (1998) 17 Cal.4th 907, 910–911.) Ma contends the trial court abused its discretion in excluding his testimony and other evidence offered to show he used separate property funds used to purchase four pieces of real property for the community: one in Hayward, one in Newark, one in San Francisco, and one in South Lake Tahoe. We reject the claim.
Although Ma raised the issue of reimbursement in his trial brief filed on the day before testimony commenced, he did not disclose his reimbursement claim or provide any documentation supporting that claim to opposing counsel in advance of the trial. He indicated on May 8, 2015, that he had only found such documents “this weekend.” The court excluded the evidence of reimbursement, based on the representation of Moon’s counsel that Ma had been asked for such information during discovery and had not provided it. (See Code Civ. Proc., § 2024.020 [30-day discovery cut-off]; Fam. Code, § 210; In re Marriage of Boblitt (2014) 223 Cal.App.4th 1004, 1021–1023 [provisions of Civil Discovery Act apply to family law cases].)
Even if we assume the court should have allowed Ma to present evidence of his separate property contributions, Ma cannot demonstrate prejudice because he was not entitled to reimbursement for those contributions.
The San Francisco property had already been sold when the parties divorced, and the 2003 stipulation provided that Moon would receive one-half of the sales proceeds ($106,000). The trial court correctly determined in its statement of decision that by committing to share the sales proceeds equally, Ma waived in writing his right to reimbursement on that property.
While the South Lake Tahoe property was not covered by the 2003 stipulation, Moon had quitclaimed her interest in that property to Ma in 2004. The court awarded Ma the South Lake Tahoe property with no offset for Moon’s community property interest, and he was not entitled to a reimbursement for any separate property contribution he might have made to what became his separate property.
The Newark property had been quitclaimed by Ma to Moon without offset in approximately 2004 in exchange for Moon’s quitclaim deed on the South Lake Tahoe property. Although a quitclaim deed does not itself amount to a written waiver of the right to reimbursement under Family Code section 2640 (In re Marriage of Carpenter (2002) 100 Cal.App.4th 424, 427), the time for making a reimbursement claim was 2004, before that property was divided. (See In re Marriage of Walrath (1998) 17 Cal.4th 907, 913 [separate property contribution is reimbursed prior to the division of community property].) Moreover, the right to reimbursement “may not exceed the net value of the property at the time of the division” (Fam. Code, § 2640, subd. (b)), and there was no evidence concerning the net value of the Newark property at the time of division. Similarly, there was no evidence regarding the couple’s division of the Hayward property, or its value at the time of division.
Ma cannot establish on this record that he would have been entitled to reimbursement under Family Code section 2640, even if he had been allowed to present evidence of his separate property contributions.
III. DISPOSITION
The judgment is affirmed. Costs to respondent.
 

NEEDHAM, J.



We concur.




JONES, P.J.




BRUINIERS, J.









(A148336)