Marriage of Andary CA6
H051824A
| Cal. Ct. App. | May 1, 2025Background
- Sam and Vicki Andary married in 1998 and separated in 2017; Vicki filed for divorce shortly after.
- Sam, along with his brothers, co-owned several businesses related to gas stations, notably TABS, Inc. (formed before the marriage) and Andary Enterprise, Inc. (AEI, formed during the marriage).
- AEI was created to hold the real property on which certain gas stations operated, while TABS operated the stations.
- The characterization (community vs. separate property) and valuation of these businesses, as well as Sam’s interest in their post-separation profits, were central to the marital estate division.
- After a bifurcated trial, the court held parts of the businesses as community property, used the comparable sales approach for valuation, and issued a statement of decision. Sam appealed certain rulings.
Issues
| Issue | Andary's Argument | Vicki's Argument | Held |
|---|---|---|---|
| Whether AEI is community or separate property | AEI is a continuation of TABS, which predates marriage, or traceable to separate property | AEI was formed during marriage with different ownership and function | AEI is community property due to creation during marriage; tracing/separate property arguments rejected |
| Valuation method for AEI’s properties | Preferred income capitalization approach; comparable sales approach improper | Comparable sales approach is acceptable due to unreliable results from income approach | Court did not abuse discretion using comparable sales method due to reliability concerns |
| Minority discount for interest in TABS | A 20% minority discount should be applied since Sam only has 25% interest | No discount: family-owned business likely sold as a unit, not as separate minority interest | Minority discount inappropriate; TABS likely sold by family as whole and no evidence of contemplated minority sale |
| Community interest in TABS' post-separation profits | Court wrongly awarded community an interest in TABS' post-separation profits | Community entitled to a reasonable post-separation return rate | Award of post-separation community interest in TABS vacated; such increases are Sam's separate property |
Key Cases Cited
- In re Marriage of Lehman, 18 Cal.4th 169 (Cal. 1998) (sets standard for de novo review of legal rulings on property characterization)
- In re Marriage of Valli, 58 Cal.4th 1396 (Cal. 2014) (burden on spouse claiming separate property acquired during marriage)
- In re Marriage of Bonds, 24 Cal.4th 1 (Cal. 2000) (presumption of community property for assets acquired during marriage)
- Jessup Farms v. Baldwin, 33 Cal.3d 639 (Cal. 1983) (substantial evidence standard for review of trial court factual findings)
- In re Marriage of Cream, 13 Cal.App.4th 81 (Cal. Ct. App. 1993) (court may select valuation within range of evidence for asset division)
- Pereira v. Pereira, 156 Cal. 1 (Cal. 1909) (Pereira formula for apportioning community/separate interests in business)
- Van Camp v. Van Camp, 53 Cal.App. 17 (Cal. Ct. App. 1921) (alternative asset apportionment formula)
- In re Marriage of Brandes, 239 Cal.App.4th 1461 (Cal. Ct. App. 2015) (community interest in business profits based on pre-separation efforts only)