Miller v. Cooper (In re Cooper)
203 Cal. Rptr. 3d 281
| Cal. Ct. App. 5th | 2016Background
- Married 1988; separated 1995; trial court found legal separation date June 1, 2004; husband filed a redundant dissolution in Hawaii (2005) which was dismissed and unsuccessfully appealed, delaying California proceedings until 2011–2012.
- Parties opened multiple investment accounts during marriage; four jointly titled accounts are at issue (Franklin Templeton 9961, 3412, 0768; Pioneer 2830).
- Wife hired a forensic accountant who traced those four accounts to proceeds from her pre‑marital separate property (sale of a house and a pre‑marriage Pioneer account).
- Wife claimed a $40,656.93 separate‑property down payment on the marital residence (purchased 1991); evidence was largely her oral testimony.
- Wife had exclusive possession of the marital residence after separation for ~8 years, paid taxes, insurance, repairs (~$45k), and claimed Epstein credits; husband sought Watts charges (fair rental value) for her exclusive use.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Characterization of four jointly held investment accounts | Tracing and forensic accounting show funds originated from wife’s separate‑property sale, so accounts should be wife’s separate property | Accounts opened during marriage in joint title; §2581 presumption makes them community property absent documentary writing | Accounts are community property under §2581, but wife is entitled to reimbursement for separate‑property contributions because tracing evidence was sufficient to show source of funds |
| Reimbursement for down payment on marital residence ($40,656.93) | Wife testified down payment came from her pre‑marriage savings/investments | Down payment occurred during marriage; husband contends community funds likely contributed | Reimbursement reversed — oral testimony alone and Exhibit P did not provide the required written tracing to establish separate‑property source |
| Watts charges (fair rental value for exclusive post‑separation possession) | Equitable defense: husband’s Hawaii litigation delayed resolution and caused expense; Watts charges should be denied or limited | Community entitled to Watts charges for entire exclusive possession period (large rental amounts claimed) | Trial court did not abuse discretion in denying Watts for period of Hawaii litigation (2005–July 2011). But Watts charges must be imposed for periods when no Hawaii litigation was pending (June 2004–2005 and July 2011–trial) |
| Epstein credits (reimbursement for taxes, insurance, repairs paid by wife) | Wife entitled to reimbursement for preservation/maintenance expenditures; these offset Watts charges | Community should not reimburse expenditures where community received no benefit while wife had exclusive use | Epstein credits allowed only for the periods when wife owes Watts charges; no Epstein credits for periods when community is not entitled to Watts charges (i.e., during Hawaii litigation period) |
Key Cases Cited
- In re Marriage of Epstein, 24 Cal.3d 76 (Cal. 1979) (spouse paying community debts or preserving community asset may be reimbursed)
- In re Marriage of Watts, 171 Cal.App.3d 366 (Cal. Ct. App. 1985) (exclusive use of community residence may give rise to fair rental charges)
- In re Marriage of Mix, 14 Cal.3d 604 (Cal. 1975) (methods of tracing separate property contributions)
- In re Marriage of Haines, 33 Cal.App.4th 277 (Cal. Ct. App. 1995) (tracing can rebut general community presumption; but §2581 joint‑title presumption requires documentary evidence)
- In re Marriage of Weaver, 127 Cal.App.4th 858 (Cal. Ct. App. 2005) (even if joint‑title presumption converts separate property to community, §2640 may provide reimbursement for separate contributions)