Marriage of Myers

Filed 3/24/06 Marriage of Myers CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, Jeffrey S. Bostwick, Judge. Affirmed.

This case deals with the division of property in a dissolution action. The appeal is from an order denying a request made pursuant to Family Code section 2556 for a division of what is claimed as four community assets not previously adjudicated.^[1]

FACTS AND BACKGROUND

Rosalind K. Myers (wife) and Paul H. Myers (husband) were married on January 31, 1981, and separated on April 25, 2001. A judgment of dissolution -- status only -- was entered on December 9, 2002.

A. Prenuptial Agreement

On January 27, 1981, husband and wife entered into a prenuptial agreement that in relevant part stated:

"4. [Husband] acknowledges and agrees that although [wife] owns no actual real property; she may acquire real or personal property either by gift, devise or bequeath and any such real or personal property acquired . . . shall remain her separate property and [husband] waives any right or interest in said properties despite the fact that payments against indebt ness may be made out of the earnings of either party, said payments shall not create a community property interest in that real or personal property acquired.

"5. [Wife] hereby acknowledges that a full and complete disclosure of all real and personal property owned by [husband] has been made to her, and a list of such property, with approximate encumbrances is attached hereto as Exhibit A and . . . incorporated herein.

". . . . It is further understood that payment on the encumbrances of the listed real properties in Exhibit A may be made from community earnings.

"It is understood and agreed by and between the parties that payment on the encumbrances of the properties listed in Exhibit A shall not give the community a proportional interest in said properties but shall be considered a loan on the properties.

"6. [Wife] also understands . . . that [husband] has, through his business with Union-Tribune Publishing Co. a bond account . . . held by the Union Tribune as and for security in payments to said company. The Bond Account balance as of the date of execution of this Agreement is $14,600.00. Any funds deposited after the marriage is consummated shall thereafter be deemed community property. . . . [¶] . . . [¶]

"8. Each party shall, at the request of the other, execute and deliver such instruments as may be required to carry out the intent of this Agreement."

Exhibit A to the agreement listed two properties on Mission Boulevard in San Diego appraised at $400,000, a property on Coronado Street in Spring Valley appraised at $95,000 and a Union Tribune Bond Account valued at $14,000. The exhibit also listed the encumbrances on the real property.

B. Temporary Orders

On June 6, 2002, after a hearing at which wife was represented by counsel, Judge Barton made findings concerning husband's income and investment assets. The court ordered the payment of spousal and child support and the appointment of an expert, Tony Yip, to evaluate the marital value of husband's business. The court ordered wife to advance the initial retainer for the evaluation out of her Merck stock. The court ordered husband to pay wife's attorney fees from assets other than the Merck account.

C. Yip Account Fees and Settlement Briefs

On October 1, 2002, wife, still represented by counsel, filed a declaration in support of her ex parte request for an order seeking funds from husband to release Yip's business appraisal. Wife stated the report was complete but would not be released until the $2,911.85 fee was paid. Wife stated she had no ability to make the payment and that it was needed for the settlement conference to be held on October 3, 2002. She asked the court order husband to make that payment.

The court ordered wife to pay the fee if there was over $6,000 in the Merck account.

On November 4, 2002, wife, through counsel, submitted her mandatory settlement conference brief. The brief stated several issues were to be litigated, including the characterization and distribution of assets and debts and wife's claim for reimbursement. As to reimbursement, wife requested reimbursement for a $40,000 gift she asserted was made her by husband's uncle. She claimed husband took the money and she did not know what happened to it. Wife also asked for reimbursement to the community, pursuant to the prenuptial agreement, of community funds loaned to husband for his separate real property. Wife claimed the rental properties had operated at a loss. Wife also sought attorney fees and costs.

D. Husband's Motion for Continuance of Trial

On March 11, 2003, husband sought an ex parte order continuing trial to be held that day because his attorney was out of the state. Wife was then represented by counsel. There was no objection to the continuance. Judge Bostwick granted the application.

E. Wife's Motion for Continuance of Trial

On June 5, 2003, wife, now representing herself, sought an ex parte order continuing the June 12, 2003, trial date. At a hearing on the motion, wife stated she required a continuance because the most recent financial statement supplied by husband misrepresented the community's financial situation and she needed time to review it and their finances. Wife, who within three weeks of the hearing had fired her second lawyer, also stated she might need counsel for trial. Husband opposed the motion, noting the case was two years old and had been the subject of considerable negotiations. Husband noted witnesses had been scheduled and the matter was ready for trial. Husband also noted he was paying spousal support, wife had refused to pay the mortgage on the home or make payments on her car. Husband made these payments to protect his credit.

The trial court, Judge Bostwick, stated that while it hoped wife would hire counsel, it would not continue the trial because doing so would cause irreparable damage to the estate.

F. Trial

Husband offered several witnesses concerning the value of assets and testified himself. Wife, representing herself, offered no witnesses and did not testify. Husband testified that in 1989 his uncle gave him an interest only loan in the amount of $50,000 to help him buy the house on Vuelta Court. He placed the money in a savings account under husband's name only. After the end of 1990, his uncle wanted no more interest payments. Husband gave two cashier's checks in the amount of $58,000 to close escrow on the property. At first, title was taken in the parties' names as joint tenants and later as tenants in common. There was a first mortgage on the property of $211,890 and a second mortgage of $19,875.22. Husband asked for a $50,000 reimbursement for his claimed separate property contribution.

During cross-examination, husband testified concerning a $40,000 gift from his uncle. Husband stated: "He gave each of us $10,000 apiece usually for several years. It totaled $40,000, [$]10,000 to each of us." When asked what happened to the money, husband stated he put it in various accounts and as the family needed money, he transferred the money to common accounts to pay bills.

Husband explained family members got monetary gifts from his uncle every couple of months. Whoever got the gift would endorse the check and it would be deposited to an account. The checks were for the family and were used to pay their expenses.

On June 16, 2003, the court made an oral statement of its findings. The court found the premarital agreement valid. Among other orders, the trial court awarded husband $50,000 in reimbursement on the Vuelta St. house and $116,828 as reimbursement on the Solana Beach condominium.

At the end of the hearing, wife noted the court's finding the prenuptial agreement was valid and stated that being the case, she was, based on a provision on the second page of the agreement, "due moneys for a loan on the rent." Husband objected that no evidence was presented on the issue. The court sustained the objection, saying it could not reopen the case to allow new evidence on the issue.

G. Motion for New Trial

On June 24, 2003, wife, still acting in propria persona, filed a motion for new trial. The motion raised numerous issues, e.g., the failure to grant wife a continuance of trial, there was insufficient evidence to support husband's reimbursement for money spent on the Vuelta residence and insufficient evidence concerning the forgiveness of a loan from husband's uncle. Among the issues, wife alleged the community was not credited for payments on loans for husband's separate real property as required by the prenuptial agreement.

H. Stipulation

On August 20, 2003, wife, now represented by attorney Patricia Gregory, and husband entered into a handwritten stipulation. The stipulation incorporated the trial court's proposed statement of decision filed August 7, 2003. Each party was awarded the assets pursuant to the statement of decision except, in relevant part, that husband agreed to waive any claim to an equalization payment in the approximate sum of $120,000. The court reserved jurisdiction to make any orders related to the division of property.

The stipulation also stated the parties waived both the right to move for new trial or to appeal. The pending motion for new trial was dismissed with prejudice.

A judgment on reserved issues incorporating the court's decision and stipulation was filed on September 26, 2003.

I. Motion to Disqualify Judge Bostwick

On May 6, 2004, counsel for wife, the same attorney who represented her at the time the stipulation was entered into, filed a statement of disqualification, stating Judge Bostwick was disqualified from hearing the matter pursuant to Code of Civil Procedure section 170.1, subdivision (a)(6), because a person aware of the facts might reasonably entertain a doubt that the judge would be impartial. As a basis for the claim, counsel cited the judge's grant of a continuance to husband and the later denial of a continuance to wife, the court's finding the prenuptial agreement was valid followed by its failure to enforce those parts of the agreement favorable to wife and the judge's erroneous entry of an amended judgment submitted by husband. Counsel acknowledged in her motion this error was corrected by the court.

On May 7, 2004, the court struck wife's statement of disqualification based on, among other grounds, the failure to serve the motion on the judge and the absence of legal grounds for disqualification. On May 21, 2004, wife's counsel filed a motion for reconsideration of that denial. The motion was denied on July 7, 2004.

J. Motion for Adjudication of Omitted Assets

On August 31, 2004, a year after the parties entered into their stipulation, wife, still represented by Patricia Gregory, sought an adjudication of omitted assets. By declaration, wife cited a $40,000 separate property gift from husband's uncle to her which she claimed husband had appropriated. She sought reimbursement for one-half the cost of the Yip appraisal. Wife sought one-half a commission for the assistance husband provided to his brother in buying or selling his brother's house. Wife claimed husband made a gift of the commission to his brother without her consent. Finally, wife sought "loan receivables," i.e., community funds used for husband's separate property and repayable to the community pursuant to the prenuptial agreement. Wife claimed husband failed to provide information concerning these " loan receivables assets" and she did not know their value.

On September 24, 2004, husband filed a response. By declaration, husband stated the claimed $40,000 gifts from husband's uncle to wife were gifts to the community and were used for community expenses. Husband stated the issue was raised numerous times by wife in the proceedings. With regard to the Yip report, husband stated wife was ordered to pay for the report. Wife eventually paid for the report. He also urged she had the opportunity to raise the issue at trial and failed to do so. Husband stated it was his understanding all temporary orders merged with the judgment. With regard to the claim of a real estate commission arising from his brother's purchase of a house, husband stated he assisted his brother and with wife's knowledge and consent he agreed to rebate the commission to his brother. Husband stated wife could have raised this issue at trial but did not do so. As to the loan receivable issue with regard to husband's separate real property, he stated this was an issue throughout the negotiations for a property settlement. Husband argued his Mission Beach property was self-sufficient and there was no need to use community assets to support it. Husband stated that during negotiations wife's counsel abandoned the claim. Husband noted that again wife could have raised the issue at trial but did not do so. As to his property on Coronado Avenue, husband asserted it was built for speculation, was sold and the profits were used by the community. This issue was raised in wife's settlement agreement.

A hearing was held on wife's motion on October 5, 2004. The court asked wife's counsel if she had any proof concerning the loan receivables on husband's separate real property. Counsel stated they had proof of the loan receivables but not the amount. She stated this was so because wife had been unable to get an accounting of the expended amounts from husband. The trial court characterized wife's claim under the prenuptial agreement as one for reimbursement, not for the consideration, of an asset. The court also noted there was no evidence any community assets were expended on the property.

Husband argued all of the issues raised by wife were raised either at trial or in wife's settlement briefs. They could have been presented at trial but were not. Husband argued in any case the issues were waived by the stipulation in which he made various concessions and wife agreed to withdraw her motion for new trial and her appeal. Husband argued in any case there was no evidence to support wife's claims concerning unadjudicated assets.

The trial court denied wife's motion to adjudicate omitted assets. The court found there was no evidence to support her claim for a $40,000 reimbursement for gifts made to her as separate property by husband's uncle. It also concluded wife's request for a reimbursement associated with the Yip report was previously decided by the court, no evidence was presented to support wife's claim of loan receivables under the prenuptial agreement and no evidence was presented supporting wife's claim to husband's real estate commission from his brother's house.

DISCUSSION

Wife argues (1) the trial court erred when in response to her motion to adjudicate omitted assets it failed to award her an interest in a $40,000 separate property gift from husband's uncle to her which she claimed husband had appropriated, (2) her payment of the entire Yip appraisal, (3) she is entitled to one-half of a real estate commission earned by husband in assisting his brother in buying a house, which husband made as a gift to his brother without wife's consent and (4) she is entitled to "receivables" for loans made to husband's separate real property payable to the community pursuant to the prenuptial agreement.^[2]

Family Code section 2556, gives the court in a dissolution proceeding continuing jurisdiction to award community assets or community liabilities to the parties not previously adjudicated by a judgment in the proceeding. Section 2556 applies whether or not the court has reserved jurisdiction. It applies even if the item was mentioned in the pleadings or the judgment, so long as it was not divided or otherwise dealt with by the judgment. (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2005) §§ 8:1520, 8:1521, citing Brunson v. Brunson (1985) 168 Cal.App.3d 786, 787-788; Bowman v. Bowman (1985) 171 Cal.App.3d 148, 156-157; Marriage of Miller (1981) 117 Cal.App.3d 366, 369-370.) Section 2556 relief is available even though the moving party knew about the asset at the time of the dissolution proceeding. The prior judgment cannot extinguish the parties' rights to assets that were not before the court. (Hogoboom & King, Cal. Practice Guide: Family Law, supra, § 8:1522, citing Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564, 1569.)

Family Code section 2556 ends by stating: "In these cases, the court shall equally divide the omitted or unadjudicated community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability."

A. Waiver and Estoppel

Husband argues wife waived any claim to and is estopped from seeking a division of omitted community assets. As to waiver, husband notes in the stipulation dividing their property "[e]ach party waived the right to move for a new trial or any appellate rights." Husband argues wife's agreement to waive her right to move for a new trial or appeal was, in effect, also a waiver of her right to seek division of community assets omitted from the judgment. As noted above, the right to seek a division of omitted assets is a broad and liberal one. The agreement to waive the right to seek a new trial or to appeal the judgment entered is not an agreement to waive the right to seek a division of omitted assets.

Husband argues in any case wife was estopped to bring her Family Code section 2556 motion. He notes in the stipulation he agreed to waive his right to an equalization payment of $120,000 in exchange for wife's agreement to waive her right to move for a new trial. Husband argues all of the claims raised in wife's section 2556 motion were directly or indirectly raised in wife's motion for new trial. He reasons that because the issues in the waived motion for new trial were the same as those advanced in the section 2556 motion and because he gave up his right to $120,000 in equalization payments, wife was estopped from seeking an adjudication of those claimed omitted assets.

A general agreement not to seek a new trial or appeal a particular judgment simply does not foreclose a party from seeking at some later time the adjudication of an omitted asset.

B. "Loan Receivables"

Wife contends the trial court erred in refusing to divide pursuant to Family Code section 2556 a loan receivable she claims was owed her pursuant to the parties' prenuptial agreement.

1. Background

In relevant part, the prenuptial agreement stated: "[Wife] hereby acknowledges that a full and complete disclosure of all real and personal property owned by [husband] has been made to her, and a list of such property, with approximate encumbrances is attached hereto as Exhibit A and . . . incorporated herein.

". . . . It is further understood that payments on encumbrances of the listed real properties in Exhibit A may be made from community earnings.

"It is understood and agreed by and between the parties that payment on the encumbrances of the properties listed in Exhibit A shall not give the community a proportional interest in said properties but shall be considered a loan on the properties."

In a declaration by wife appended to her motion for adjudication of omitted assets, wife noted the above provision of the prenuptial agreement and stated, without specifics, that loan receivables were created for community property expended on husband's separate real property. Wife asserted husband had not identified this asset.

By declaration in response, husband stated this question of loan receivables was an issue throughout the negotiations for a property settlement. Husband stated his Mission Beach property was self-sufficient and there was no need to use community assets to support it. Husband stated that during negotiations wife's counsel abandoned the claim. Husband noted wife could have raised the issue at trial but did not do so. As to his property on Coronado Avenue, husband asserted it was built for speculation, was sold and the profits were used by the community. Husband noted this issue was raised in wife's settlement agreement.

Attached as an exhibit to husband's declaration was a respondent's mandatory settlement conference brief prepared by wife's then-counsel and received by husband's counsel on November 4, 2002. The brief was not in the form of a declaration. It claimed community funds in the amount of $108,698 were expended on husband's two separate properties in one manner or another and wife sought reimbursement to the community in that amount.

A hearing was held on wife's motion on October 5, 2004. The court asked wife's counsel if she had any proof concerning the loan receivables on husband's separate real property. Counsel stated they had proof of the loan receivables but not the amount. She stated this was so because wife was unable to get an accounting of the expended amounts from husband. Counsel asked that husband be required to provide the needed information. The trial court characterized wife's claim under the prenuptial agreement as one for reimbursement, not for the consideration, of an asset. The court also noted there was no evidence any community assets were expended on the property.

The trial court denied wife's motion to adjudicate omitted assets. It found no evidence was presented and no attempt was made to present evidence in support of wife's claim of loan receivables under the prenuptial agreement.

2. Discussion

The trial court was correct. No evidence was presented to support the claim that a reimbursement was owed the community pursuant to the prenuptial agreement for community funds expended on husband's separate property. In the most general and conclusory terms, wife claimed such expenditures were made but did not support that claim with evidence or make any claim concerning the amount of community funds allegedly expended. Wife notes the respondent's mandatory settlement conference brief prepared by her then-attorney and attached to husband's response to her motion for adjudication of omitted assets. The document does contain figures and argument concerning the expenditure of community assets on husband's separate property but the document was not a declaration and in any case none of its assets are supported by admissible documentation or testimony.

C. $40,000 Gift

Wife argues the trial court erred in denying her reimbursement for a $40,000 separate property gift to her from husband's uncle.

1. Background

In her declaration in support of her motion for the adjudication of omitted assets, wife claimed husband's uncle on four occasions gave her gifts of $10,000. She stated she did not give husband permission to use the money and it was never returned by him to her.

In his responding declaration, husband stated the gifts were given by his uncle to him, were deposited into the parties' joint account and were used to pay community living expenses. Husband stated the matter was mentioned in wife's mandatory settlement conference brief. The brief claimed husband's uncle gave each party $10,000 a year as a gift for the years 1997 through 2000. Wife stated she did not know what became of those funds.

In her brief before this court, wife cites to her cross-examination of husband at trial concerning the gifts. Wife asked: "The checks that your uncle gave the family as gifts, did you insist that we endorse the checks?" Husband answered: "We needed to. I didn't insist, we needed to endorse the checks in order to deposit them." On redirect examination, husband confirmed the family received checks in the amount $40,000 from his uncle. He testified the money was for husband, wife and their children. The checks were endorsed and used for family expenses.

At the hearing on wife's motion, husband's counsel argued the gifts from husband's uncle were to the family and were not made as a gift of separate property to wife.

The court denied reimbursement to wife. It held wife failed to prove the property was given to her as her separate property.

2. Discussion

There was a factual issue concerning the nature of the money given by husband's uncle to various family members, including wife. Wife asserted the money was given as her separate property. Husband stated the money was given to the family as a whole and was used to pay community expenses. The trial court found the gifts were given to the community. The court could reasonably accept husband's testimony concerning the nature of the gifts. There is, thus, substantial evidence to support the court's finding and we accept it on appeal. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)

D. Yip Report

Wife argues the trial court erred when it refused to reimburse her for one-half the cost of the Yip report.

1. Background

At a hearing on April 8, 2002, Judge Barton granted wife's request for the appointment of an expert to evaluate the marital value of husband's business interests. Tony Yip was appointed to perform the evaluation. Wife was ordered to advance the initial retainer with funds from her Merck stock. The court reserved jurisdiction over the final allocation of the cost of the study until trial. The court stated if Yip's fee was burdensome to wife and exceeded the value of the Merck account, counsel could return to court for an evaluation of the parties' contributions to payment for the report.

In her mandatory settlement conference brief, wife stated the parties appeared ex parte concerning Yip's fee. The court ordered wife to pay the fee if there was at least $6,000 in the Merck account. There is no confirmation of this order. Wife did not ask for any reimbursement for payments made to Yip.

In the proposed statement of decision dated August 7, 2003, which was incorporated into the parties' stipulation and the judgment, wife was awarded the Merck stock valued at $13,000.

At a hearing on husband's motion for attorney fees and costs on July 8, 2003, wife, representing herself, asked that the $9,000 she paid for the Yip report be refunded to her. During the hearing, in presenting a case wife had delayed and obstructed the proceedings, husband's counsel represented that Judge Barton ordered the parties split Yip's fee. Counsel stated husband paid his portion immediately while wife delayed paying for a considerable period. The court agreed wife delayed in complying with the order to pay Yip's fees. It noted Yip was appointed in April 2002, and she did not pay her share of the fee until January 2003. The court denied husband's motion and ordered the parties to pay their own fees.

In her declaration in support of her motion for the adjudication of omitted assets, wife stated she paid Yip's entire fee. She also stated the court "reserved jurisdiction of the costs of the expense." She asked that husband reimburse her for one-half the cost of Yip's report. Attached to the declaration was a document wife alleged was a summary of Yip's billing showing payments made by her between June 2002 and February 2003 in the amount of $9,617.53.

In his responding declaration, husband stated the court ordered wife to pay for the Yip report from her Merck stock. He stated wife failed to comply with the court's order she do so and it was necessary to get second order with which wife eventually complied. Husband stated he believed all temporary orders were merged in the judgment. At any rate he noted wife could have raised the issue at an earlier time and had not done so.

The trial court found wife was ordered to pay for the Yip report out of community funds (the Merck stock). The judge concluded the matter was already ruled on first by Judge Barton and then by him and the request for reimbursement for money spent for the report was denied.

2. Discussion

Like much in this case, it is difficult to understand the specifics of wife's claim. Little evidence and in some cases no evidence was presented by her either at trial or at the hearing on the motion to adjudicate omitted assets on any of the matters she now raises on appeal. After reviewing the record, we agree with husband that wife was ordered to pay Yip's fee. She apparently did so. She is not entitled to reimbursement.

D. Real Estate Commission

In an argument of one paragraph containing seven lines, wife argues the trial court erred when it failed to reimburse her for the gift of a real estate commission made by husband to his brother.

1. Background

In her declaration attached to the motion for the adjudication of omitted assets, wife stated: "[Husband] helped his brother buy (or sell) his home. Without my permission, [husband] gave the entire commission to his brother." Wife asked for one-half the commission, stating the gift to husband's brother was unauthorized.

In his responding declaration, husband stated he obtained a real estate license before he was married. He stated that from time to time he used the license "passively" to help friends and family. Husband stated that six to seven years ago he helped his brother find a house. It was decided, with wife's knowledge and approval, any commission he realized from the purchase be rebated to his brother.

The trial court concluded there was no evidence supporting wife's claim that she was entitled to a reimbursement for the gift of husband's real estate commission to his brother.

2. Discussion

Wife claims she was entitled to reimbursement for the gift of husband's commission to his brother. She cites Family Code section 1100, subdivision (b). In its complete form, that section states: "A spouse may not make a gift of community personal property, or dispose of community property for less than fair and reasonable value, without the written consent of the other spouse. This subdivision does not apply to gifts mutually given by both spouses to third parties and to gifts by one spouse to the other spouse."

The evidence was in conflict. Wife said the commission was given to husband's brother without her permission. Husband argued wife approved the gift. The trial court apparently and reasonably concluded husband's statement was the more credible. The parties made a mutual gift to husband's brother. Wife was not entitled to a reimbursement.

The trial court's order denying the adjudication of omitted assets is affirmed. Wife to pay costs on appeal.

BENKE, Acting P. J.

WE CONCUR:

McINTYRE, J.

O'ROURKE, J.

Publication Courtesy of California attorney referral.

Analysis and review provided by Vista Apartment Manager Lawyers.

^[1] Wife's opening brief contains a heading Judicial Bias which comes before the headings Statement of Appeal[ability] and Legal Discussion. The Judicial Bias heading is followed by a definition of judicial bias and a list of acts by the judge that wife believes show bias. There is, however, no argument at any point in either the opening or reply brief arguing the case should be reversed because of bias itself. We therefore do not consider any claim of judicial bias.

^[2] In her reply brief wife also argues the trial court abused its discretion when it denied her request for a continuance of trial. This argument will not be considered for several reasons. First, an argument may not be raised for the first time in a reply brief. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 761, fn. 4.) Second, the present appeal is from the denial of wife's motion for the adjudication of omitted assets. The denial of a continuance about which wife complains occurred at trial. The time to appeal from that judgment has passed and in any event wife, while represented by counsel, waived her appellate rights with regard to that proceeding.