Husband now argues the trial court erred in making these rulings. We hold that the trial court properly exercised its discretion to order the appraisal and sale of the real properties, and to deny Husband's request for Epstein credits. Husband did not object in the trial court to the court's characterization of the $ 600,000 payment as being from a community source, and thus forfeited that argument on appeal. However, we agree the trial court erred in characterizing La Madrona as partially Husband's separate property given the parties' stipulation to the contrary, and thus will reverse the Judgment on that limited basis.
I. FACTUAL AND PROCEDURAL HISTORY
In our opinion in the first appeal, we described the background of this dissolution action: "The parties were married in 1993 and separated in January 2007. Wife filed the petition for dissolution of marriage on January 19, 2007, and since then, the divorce proceedings have been 'contentious' and 'highly litigated' by the parties. At least five different judicial officers have made rulings in the underlying proceedings. Each party has been self-represented at various times. Additionally, wife has been represented by two different attorneys and husband has been represented by six different attorneys." ( Oliverez , supra ,
A. Properties In Dispute
Although the parties' disputes in the proceedings encompassed numerous issues, the instant appeal concerns the characterization and/or disposition of three real
During the marriage, 131 Silverwood Drive, Scotts Valley (Silverwood) was the family residence. Following the commencement of the dissolution
The parties also owned a four-unit rental property at 112 University Avenue, Los Gatos (University), which had a fifth, unpermitted unit. At the time of trial, Wife's appraiser valued University at $ 1,175,000; Husband's appraiser valued it at $ 920,000. The total secured debt on the property at the time of trial was $ 320,450.79. Husband sought Epstein credits of $ 89,814.45 for University.
The third property at issue in this is appeal is an undeveloped, 20-acre lot in Santa Cruz, referred to as the La Madrona property, which the parties purchased as joint tenants during the marriage. The parties stipulated that Husband contributed $ 668,577.91 of his separate property to purchase La Madrona. At trial, Husband's appraiser valued the property at $ 400,000. Wife's appraiser valued the property at $ 750,000, while Wife herself opined that it was worth only $ 700,000. In August 2012, a third party offered to purchase the lot for $ 550,000. Husband claimed $ 35,708 in Epstein credits for La Madrona.
B. Marital Settlement Agreement, First Trial, First Appeal and Remand
In April 2008, the parties entered into the Agreement, in which they agreed, amongst other things, to confirm the Silverwood property to Husband
Husband sought to enter judgment based on the Agreement, pursuant to Code of Civil Procedure section 664.6. In December 2010, the trial court denied Husband's motion, ruling, "that there was never a 'meeting of the minds' in regards to the purported marital settlement agreement such that it is thus unenforceable."
The case proceeded to trial beginning in August 2012; it lasted 15 trial days over a period of more than nine months. A different judicial officer presided over the trial than heard the motion to enforce the judgment. At the end of the trial in October 2013, the court issued a tentative ruling stating its intent to reconsider the prior order denying the motion to enforce the Agreement. ( Oliverez, supra ,
Wife timely appealed the March 2014 judgment. In a published opinion, we determined there are limited circumstances in which one judge can reconsider the ruling of another judge, none of which were present in the instant case, finding, "[m]ere disagreement, as here, with the prior trial judge's ruling, however, is not enough to overturn that ruling. [Citation.]" ( Oliverez , supra ,
1. Post Remand Hearings
The trial court conducted several hearings after receiving the remittitur from the first appeal, most notably on January 8, 2016, and April 18, 2016.
2. Proposed Statement of Decision
The trial court issued a proposed statement of decision and final judgment on October 3, 2016, confirming the Silverwood and University properties as community property. The court stated, "the parties appear to agree that some portion of the [La Madrona property] is [Husband's] separate property"; the court found the remainder to be community property, without making any findings as to what percentage was separate versus community. The court determined all three properties should be appraised and sold, with the net proceeds to be split evenly between the parties, except for La Madrona, the proceeds from which would be divided based on the relative separate and community interests. The court did not address Husband's request for reimbursement of his separate property contribution to La Madrona in the proposed statement of decision. The court determined Husband's payment to Wife of $ 600,000 pursuant to the Agreement was "made from what were presumptively community property assets," and ordered Wife to reimburse Husband $ 300,000 upon the sale of the Green Tree property, which the court determined to be partly Wife's separate property.
Husband filed written objections to the court's proposed statement of decision.
Husband also objected to the court denying his requests for Epstein credits, arguing he provided uncontroverted testimony and evidence at the trial showing he maintained the real property assets for an eight-year period
Regarding the $ 600,000 payment to Wife, Husband asserted that he made the payment pursuant to the Agreement, which Wife used towards the down payment of a home. However, he did so in conjunction with his arguments about his requests for reimbursements and Epstein credits; Husband did not raise a specific objection regarding the court's ruling that the payment came from a presumptively community source.
3. Final Statement of Decision and Judgment
When it issued the Judgment, the court indicated it received and considered Husband's written objections, making modifications, clarifications and findings as appropriate. The trial court adopted its previous ruling that the Silverwood and University properties should be appraised once the Judgment became final and sold, with the proceeds divided equally between the parties. While the court did not provide any further description as to the basis for its decision, i.e., why the court rejected Husband's request to value the properties at the time of the 2012/2013 trial, or why it ordered them sold versus awarding them to Husband per his request, the court did address Husband's argument that the order selling the properties and dividing the proceeds failed to account for Husband's alleged pay down of the mortgage with separate property, stating, "This court finds that [Husband's] testimony and his documentation are not worthy of belief. He bears the burden to establish his right to Fam. Code section 2640(b) reimbursement. He has failed to present credible evidence in support of his claim."
Regarding La Madrona, the court adopted its previous findings that some portion of the property was Husband's separate property and that the property should be appraised and sold. The court
The court did not make any modifications to its orders regarding the Green Tree property or the $ 600,000 equalization payment; it adopted the proposed order finding the payment came from presumptively community sources, such that Husband was entitled to reimbursement of $ 300,000.
As for Husband's claim that he was entitled to Epstein credits for monies he expended on the properties after the parties separated, the court solidified its finding that Husband's evidence lacked credibility. The court stated it was "unable [to] accept the legitimacy of [the notes Husband provided at trial], being convinced that some if not all of them were prepared and/or executed on some date well after the transactions they describe." The court further found Husband "deliberately presented these documents in an attempt to deceive this Court into believing that the notes were prepared and executed on the dates indicated on the notes, knowing that they were in fact prepared well after the dates indicated on the notes." In response to Husband's assertion that he provided uncontroverted evidence that he was required to borrow money from his family to maintain the community properties after separation, the court found, "[Husband] confuses the notion of uncontroverted, consistent and/or supporting evidence with the concept of credible evidence. The test is not whether the evidence was uncontroverted or consistent. The test is whether or not the evidence or the witness was credible. If the Court finds a witness to be not credible regarding one subject, the Court is entitled to reject that witness's testimony (and evidence proffered by him or her) regarding other subjects. This Court finds that [Husband] failed to sustain his burden to present credible evidence to support his claim." In specific reference to Husband's request that the court provide explanation for the order denying his request for Epstein credits, the court reiterated its finding regarding Husband's credibility: "Again, if the Court finds a witness to be not credible regarding one subject, the Court is entitled to reject that witness's testimony and proffered evidence regarding other subjects. [Husband] has failed to present credible evidence that would sustain his burden to establish he is entitled to Epstein credits." As it did in the proposed statement, in the Judgment the court denied each party's "remaining claims," finding neither party to be credible.
A. The Trial Court Did Not Err in Valuing and Disposing of the Properties
Husband argues the trial court erred in ordering the appraisal and sale of the Silverwood, University, and La Madrona properties, rather than valuing the properties based on the evidence presented during the 2012/2013 trial and dividing the properties accordingly. We are required to review the trial court's orders dividing the community property for abuse of discretion. ( In re Marriage of Sivyer-Foley & Foley (2010)
1. The Court Had Discretion to Value the Properties at Remand
Husband argues the trial court abused its discretion in ordering the appraisal and sale of the three subject properties following remand on the first appeal, because it "acted outside the law," which he contends required valuation of assets at the time of the 2012/2013 trial. Husband correctly asserts Family Code
Subsequently, some appellate courts have interpreted Hayden to require a demonstration that the parties acted unfairly in order to value the properties on remand versus at the date of trial. (See Priddis , supra ,
Here, however, as in Hayden , we face an additional challenge. Husband provided limited information about the trial court's proceedings following remand to the trial court after the first appeal. Husband, who proceeded by appendix under California Rules of Court, rule 8.124, did not provide any minute orders or other written orders from the hearings held in the trial court in January and April 2016; nor did he designate transcripts from those proceedings as part of the record. We do not know whether the trial court heard any evidence or argument at these hearings, which are pertinent because they potentially included evidence of what occurred between the parties during the period from the first trial to the remand to the trial court after appeal, i.e. the time relevant under Hayden's analysis. The absence of a record capable of evaluation caused the Court of Appeal in Hayden to remand the matter to the trial court to determine what facts considered under principles of equity compelled a particular valuation date. However, we conclude under the circumstances of this case that the trial court's decision to set the valuation date at the date of remand did not constitute an abuse of discretion.
Husband was on notice that providing information about what occurred between the time of the original trial and the remand of the case was necessary to this appeal. The issue of the valuation date was squarely before the trial court on remand because the parties placed it at issue. Husband asked the trial court to rule based on the evidence heard at the 2012/2013 trial and adopt the property values as stated during that trial; Wife moved the court to reopen discovery on the issue of valuation of the properties and hold a new trial. At the hearing in April 2016, the court denied Wife's motion; in the Judgment, it explained its reason for doing so: "Given the reasons for the reversal and remand, this
As the trial court conducted post remand hearings in January and April 2016, there is additional information Husband could have provided to us, but did not, despite having the burden to do so. "[A] judgment or order of the
However, we are also persuaded the record before us provides sufficient support for the trial court's choice of valuation date. We first observe that in the Judgment, the trial court implicitly rejected Husband's argument against valuing the properties at the date of trial rather than the date of remand and judgment. At the 2012/2013 trial, Husband presented evidence that he should be entitled to reimbursements from Wife for approximately $ 1.3 million in alleged payments made for the properties post separation, and that he took loans from family members for that purpose. He asserted in his proposed statement of decision that dividing the properties at the current market value post remand would result in an "unjust financial windfall" to Wife if he was not reimbursed for those loan payments or other monies he alleged he paid. But the trial court found Husband's testimony that he was entitled to such reimbursements not credible, and in fact indicated that Husband's presentation of documents supporting his claims was deceitful. "This court finds that [Husband's] testimony and his documentation are not worthy of belief. He bears the burden to establish his right to Fam. Code section 2640(b) reimbursement. He has failed to present credible evidence in support of his claim." The trial court thus rejected the evidence underlying Husband's equitable argument that Wife would unfairly benefit if the trial court set the property valuation date at the time of remand. (See section II(D), post. )
We are also persuaded that there is separate support for the trial court's decision
Drawing every inference in favor of the trial court's decision as we are required to do, we agree that once the trial court determined that Husband's reimbursement claims were not credible, the age of the case, the well-known appreciation of real property that occurred over the years while the litigation was pending in the trial court and on appeal, and the obsolescence of the 2012/2013 property valuation, provided a sufficient basis for the trial court to decide that it was equitable to set the date for valuation of the properties in dispute at the date of remand and Judgment, not the date of the 2012/2013 trial. We observe that as a result of the trial court's ruling, the property is being divided equally between the parties, as required by section 2550. For these reasons, our sense of equity and fairness is not offended by the trial court's decision, and we hold that the trial court did not abuse its discretion when it chose the property valuation date.
3. The Trial Court Did Not Abuse Its Discretion in Ordering the Sale of the Properties
Husband asserts the trial court erred in ordering the sale of the properties, rather than awarding them to him in equalization for the reimbursements and credits he believes Wife owes him, arguing the sale of the properties is not necessary in order to accomplish an equal division of the community estate. We are not persuaded. The trial court has broad discretion to determine the manner in which to divide community property, keeping in mind the requirement of section 2550 that the community estate be equally divided between the parties. ( Connolly , supra ,
In Connolly , the Supreme Court confirmed, "[t]he exercise of a trial court's sound discretion [to divide property] is best preserved by maintaining a maximum degree of allowable flexibility." ( Connolly , supra ,
Citing In re Marriage of Holmgren (1976)
Holmgren does not explicitly limit the trial court's power to order the sale of assets only where one party cannot purchase the share or interest of another, and appellate courts have upheld the sale of community assets in other circumstances. In In re Marriage of Davis , also cited by Husband, the Court of Appeal determined the provision granting the trial court power to make any orders necessary to carry out the requirement that it equally divide the community estate, "is sufficient to give the court jurisdiction to order a sale of the community property including community real property when, in the exercise of a sound judicial discretion, the court concludes that it should do so in order to accomplish an equal division of the community property." ( In re Marriage of Davis (1977)
We also observe that in his objections to the court's proposed statement of decision, Husband did not argue that the trial court failed to show the sale of the properties was otherwise necessary to effect an equal division, or that Husband could not buy out Wife's interest in the properties. By failing to object to the trial court's judgment on this basis, Husband forfeited these arguments on appeal. "[A]n appellate court will ordinarily not
Husband also argues the court's order results in an unjust windfall to Wife, as it orders the properties sold at their current values, without consideration of the fact Husband claims to have paid the expenses on the properties since separation. As we have already mentioned and will discuss further below, the trial court determined the testimony and evidence Husband presented regarding his claims for reimbursements and credits related to these alleged payments was not credible. (See section II(D), post .) As we will find the trial court did not err in that regard, we do not consider the court's alleged failure to constitute an abuse of discretion vis-à-vis its orders disposing of the properties. Based on the above, we uphold the trial court's orders requiring the appraisal and sale of Silverwood, University, and La Madrona.
B. The Trial Court Erred in Characterizing the La Madrona Property
In ruling the La Madrona property was partially Husband's separate property, the trial court stated, "the parties appear to agree that some portion of a 20 acre parcel of land on La Madrona Road, Santa Cruz CA is [Husband's] separate property." The court then ordered the property appraised and sold, denying in part Husband's request for reimbursement of his separate property contribution to the purchase of La Madrona based on its finding that some portion of the 20 acres was Husband's separate property. Instead of a full reimbursement, the court found Husband was "only entitled to be reimbursed for the proportion of that contribution attributable to the purchase of the community property portion of the parcel." On appeal, Husband argues the parties stipulated the La Madrona property was 100 percent community property. Therefore, he contends the trial court abused its discretion in ruling otherwise.
As discussed in section II(A)(3), ante , by failing to object to the trial court's finding that the property was partially Husband's separate property, Husband arguably forfeited that argument on appeal. ( Falcone & Fyke , supra ,
The parties clearly stipulated on the record at the 2012/2013 trial to characterize La Madrona as community property, subject to Husband's right to reimbursement of his separate property contribution. In the proposed statement of decision Wife submitted in June 2016, Wife confirmed the parties' stipulation during the trial and referred to the property as community property that should be divided equally. In his July 2016 supplement to his proposed statement of decision and closing argument, Husband asked the trial court to treat La Madrona as his sole and separate property, because he purchased the property "with equity from a sole and separate property." Husband also filed a proposed statement of decision in July 2013, in which he asked the court to award him the property because it did not have sufficient value to reimburse him his separate property contribution. However, at no point did Husband argue the property was partially his separate property and it is not clear how the trial court determined the parties agreed some portion
Reviewing the record de novo, based on the parties' stipulation, we find the La Madrona property to be wholly community property. There is not substantial evidence supporting the trial court's finding to the contrary. Aside from the parties' clear stipulation, the record indicates the parties purchased the La Madrona property during the marriage, as husband and wife as joint tenants. Section 2581 creates a rebuttable presumption that property acquired during marriage in joint form, including joint tenancy, is community property. This presumption is one affecting the burden of proof, and can be rebutted by: "(a) A clear statement in the deed or other documentary evidence of title by which the property is acquired that the property is separate property and not community property. [¶] (b) Proof that the parties have made a written agreement that the property is separate property." (§ 2581.) The record indicates neither of these exceptions apply in this case; the deed specifies the parties took the property as tenants in common, and there is no clear evidence of a written, valid agreement that the property is Husband's separate property. While the Agreement may have contained a provision acknowledging a portion of La Madrona to be Husband's separate property, the trial court found the Agreement to be unenforceable. More importantly, the parties stipulated to characterizing the property as community property after they entered into the Agreement.
Based on the above, we find the trial court erred in characterizing La Madrona as part Husband's separate property and part community property. We further find this error to be prejudicial to Husband, as there is insufficient information to know how the mischaracterization affected the determination of Husband's share of the proceeds from the sale of the property and his
C. Husband Forfeited His Argument re: Characterization of Equalization Payment
The trial court found the $ 600,000 Husband paid Wife as an equalization payment under the Agreement to be presumptively from community funds, such that it ordered Wife to reimburse Husband only half of the payment. Husband argues the trial court incorrectly applied the presumption, as Husband made the payment after separation. Even if the presumption applied, Husband contends he overcame the presumption with evidence the $ 600,000 came from a separate property source.
Although the trial court characterized the $ 600,000 payment as presumptively community property in its October 2016 proposed statement of decision, Husband did not object on that basis in his written objections to the proposed statement. As we have previously explained, the appellate court "will ordinarily not consider procedural defects or erroneous rulings where an objection could have been, but was not raised below." ( Falcone & Fyke , supra ,
Husband argues the trial court abused its discretion in denying his request for Epstein credits related to the parties' various real properties, contending he presented uncontroverted evidence supporting his claim. " 'Where, as here, the trial court is vested with discretionary powers, we review its ruling for an abuse of discretion. [Citation.] As long as the court exercised its discretion
In arguing the trial court abused its discretion, Husband focuses on the belief he presented sufficient evidence to prove he made payments on community property debts with separate property funds after the date of separation, claiming Wife did not provide any contradictory evidence. Husband does not include significant discussion of the trial court's basis for ruling as it did; in its Judgment, the court makes it clear it denied Husband's request based on its finding that he lacked credibility and failed to produce credible evidence in support of his claims. This finding significantly impacts how we review the matter on appeal.
"The trial court sits as trier of fact and it is called upon to determine that a witness is to be believed or not believed. This is the nature of fact finding. 'The trier of fact is the sole judge of the credibility and weight of the evidence ....' [Citation.]" ( In re Marriage of Greenberg (2011)
In reviewing the trial court's decision, we do not replace the court's exercise of discretion with our own by accepting evidence the court rejected; we are required to uphold the judgment if any substantial evidence supports the court's decision, without consideration of whether there also exists substantial evidence to support Husband's position. The credibility of Husband's testimony and evidence was part of the court's decision and thus not for us to judge in the first instance. ( In re Marriage of Calcaterra and Badakhsh (2005)
In particular, the court determined Husband presented untrustworthy documentary evidence to the court, in the form of the notes offered to support his claim that his family loaned him money to maintain the community assets after separation. The court found that the form used to prepare the notes was not in print until after the date the notes were purportedly signed. Not only did the trial court find it could not accept the "legitimacy" of the notes, it determined Husband "deliberately presented these documents in an attempt to
Whether we might have reached a different conclusion is not material, as we are not permitted to reweigh the evidence. It is the family court in the first instance which "sits as trier of fact and ... is called upon to determine that a witness is to be believed or not believed. This is the nature of fact finding." ( Greenberg , supra ,
III. DISPOSITION
We reverse the Judgment and remand the matter to the trial court to vacate the finding that the La Madrona property is partially Husband's separate property. The court shall enter a new order designating the La Madrona property as wholly community property and shall calculate the reimbursement owed to Husband for his separate property contribution to the purchase of that property based on that characterization.
WE CONCUR:
Grover, J.
Danner, J.
Notes
Under the ruling of In re Marriage of Epstein (1979)
We note that Wife did not file a respondent's brief, any documentation, and did not designate any record in connection with this appeal. We thus decide the appeal on the record identified by Husband, Husband's opening brief, and his oral argument. (Cal. Rules of Court, rule 8.220(a)(2).)
At trial, Husband asked the court to order reimbursement for interest he allegedly incurred on money loaned to him by his family, as well as principal. On appeal, Husband does not challenge the denial of interest. As such, we list only the principal amounts Husband claimed as Epstein credits.
The Agreement also included a provision requiring Husband to arrange a loan to Wife from his mother and/or brother for $ 375,000 to complete the purchase of Green Tree; the loan bore interest of 5.5 percent, compounding quarterly.
Husband's appendix does not include any of the court's minute orders or other written orders issued after remand from the first appeal, aside from the proposed statement of decision filed October 3, 2016 and the Judgment filed December 30, 2016. Husband did not designate any of the transcripts from subsequent hearings as part of the record. In the Judgment, the trial court provided some information about the hearings it held after receiving the remittitur.
The trial court's register of actions does not show Wife filed any objections.
The court cited these provisions as general support for its order denying each party's remaining claims, not specifically as support for denying Husband's request for Epstein credits.
The court did not include citations to Family Code sections 2623 and 2626 in the Judgment. (See fn. 7, ante .)
In the Judgment, the trial court ordered Husband to "prepare and file a Judgment packet to which this Statement of Decision and Final Judgment is to be attached." It does not appear from the register of actions provided in Husband's appendix that he complied with this order. The Judgment was signed and filed; its wording indicates the court's clear intent that the Judgment serve as its final decision on the merits. We therefore treat the Judgment as a final judgment under Code of Civil Procedure section 904.1, subdivision (a)(1). (See Pangilinan v. Palisoc (2014)
All future statutory references are to the Family Code unless otherwise noted.
In Cream , the Court of Appeal determined the trial court erred in ordering an "interspousal auction" of a community asset, a parcel of land and the business the parties operated on the land, over one spouse's objection, as doing so abdicated the court's duty to value and divide the community estate. (Cream , supra ,
The provisions of former Civil Code section 4800 at issue in Holmgren became sections 2550, requiring the equal division of the community estate, and 2553 ["The court may make any orders the court considers necessary to carry out the purposes of this division (§ 2500 et seq.)."].
Wife did not address Husband's reimbursement request in her June 2016 proposed statement of decision. We do not believe this evidences a rescission of her previous stipulation on this issue.