Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County, No. 06D007896 Walter D. Posey, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.)
Law Office of Paul D. Stucki and Paul D. Stucki for Appellant.
Smith, Smith, Blonska & Strunk and Richard K. Faulkner for Respondent.
OPINION
RYLAARSDAM, J.
Rebeca Isensee (wife) appeals from a judgment in a dissolution of marriage case where the court determined she had not rebutted a presumption of undue influence in transfer of a separate property interest in real property by Henry Isensee (husband) to the two of them as community property. She contends husband’s testimony was inadmissible because, due to his failing memory, he had insufficient personal knowledge about the subject matter of that testimony, grant deeds validly transmuted husband’s separate property interest in the real estate, the court erred in applying a presumption of undue influence in connection with the transfer, and even if the presumption of undue influence was correct, there was sufficient evidence to rebut it. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
When husband and wife married in December 1998 he was 85 and she was 56 years old. Wife was the niece of husband’s deceased wife, Sophia, who had been married to husband for more than 50 years before her death a year earlier. Sophia and husband, who had two children, Albert and Rosemary, had created a living trust (first trust). After Sophia’s death, husband disclaimed his interest in Sophia’s portion of the estate and distributed it to his two children; Albert received between $250,000 to $260,000 in cash and some interests in real property.
About six months after Sophia died, in June 1998 husband contacted wife, who lived in Mexico, and asked her to marry him. Before the marriage the parties met with Robert Hales, an attorney Albert had procured for husband, to draft a premarital agreement. Kathryn Terry was retained to represent wife. The agreement, signed in November 1998, provided that the separate property of each would remain separate, including husband’s assets in the first trust. Husband’s assets totaled just over $875,000 and included his residence; the value of wife’s assets was about $17,000. (We grant wife’s request to augment the record with copies of the trial exhibits.)
An amendment to the first trust, executed by husband, was incorporated by reference into the premarital agreement. It provided that after the marriage, on the occurrence of the earlier of husband’s death or marriage for 10 years, husband’s interest in his residence would be distributed to wife on her request.
Six weeks after the marriage, in January 1999, husband executed a grant deed conveying his interest in his residence from the first trust to wife and him as community property. In July husband and wife executed a grant deed conveying the property to the Isensee Family Trust dated July 23, 1999 (second trust), which the two of them had created.
In 2002 the parties executed a restated trust agreement for the second trust, prepared by attorney Charles Mills, who represented both. The restated agreement disinherited husband’s children because they had already received substantial amounts from him.
In 2006 the parties sold the residence, netting almost $483,000. From the proceeds, they purchased a $450,000 annuity, with wife the primary owner and husband the primary beneficiary. A few weeks thereafter husband and Albert contacted the annuity company demanding return of the funds. Ultimately, after the annuity company filed an interpleader action, the funds were deposited in the parties’ lawyers’ trust accounts.
Husband filed a petition for dissolution in September 2006. Before trial began wife’s counsel made a motion for a determination of husband’s competency to testify. After hearing testimony the court ruled husband was competent, finding he understood the property issue before the court and knew the difference between right and wrong.
At the conclusion of a multi-day trial, the court found the parties voluntarily entered into premarital agreement and that it was valid and binding. It also found that because husband did not have the requisite intent, his execution of the grant deeds of the residence did not transmute the property into community property.
In addition, the court ruled that under Family Code section 721, there is a rebuttable presumption of undue influence where a spouse secures an unfair advantage over the other or acquires property for which there is no or insufficient consideration. It found wife obtained a community property interest in husband’s residence and sole ownership of the bulk of the proceeds of sale of the residence without consideration. Therefore, wife had the burden to rebut the presumption of undue influence, which, the court determined, she did not do.
The court noted husband’s testimony that wife had pressured him into transferring the property by threatening to return to Mexico if he did not. The court found husband made the transfers because he feared being alone, the reason he had married wife in the first place. This, and the age disparity between the parties, gave wife an unfair advantage. Despite wife’s testimony that she did not pressure husband and that he made the transfers voluntarily, the court found husband more credible. It also found that husband “did not have full knowledge of the legal consequences of the effect of the” first grant deed of the residence to the parties as community property and that both deeds gave wife an unfair advantage.
The fact that Hales, husband’s attorney, notarized one of the grant deeds was not sufficient to overcome the finding of undue influence. There was no evidence Hales knew of all conversation between the parties and “the pressures that were brought to bear against [husband] very probably were not in the presence of any attorney or any third party.”
Therefore, the court confirmed that all proceeds of the sale of the residence were to go to husband.
DISCUSSION
1. Husband’s Personal Knowledge of Matters About Which He Testified
Wife challenges husband’s testimony on the grounds he did not have sufficient personal knowledge of the matters because he could not remember many details of the property and transactions at issue. Relying on Evidence Code section 702, subdivision (a), she claims the testimony should not have been admitted. We disagree.
Evidence Code section 702, subdivision (a) provides that testimony is inadmissible if the witness does not have personal knowledge of the facts. Personal knowledge is the ability “to perceive and recollect.” (People v. Montoya (2007) 149 Cal.App.4th 1139, 1150.)
In support of her argument, wife sets out several pages summarizing part of husband’s testimony at an OSC, at the voir dire hearing, and at trial, which she argues shows he had no personal knowledge. The examples include husband’s testimony he was 92 when he was almost 94, and his failure to remember the relationship between Sophia and wife and who were members of his family. Wife also points to husband’s failure to remember the extent of his assets, including what, if anything, he transferred to wife, and the details of the annuity. On the other hand, husband testified that he had owned a residence and had purchased an annuity.
At trial, husband testified he remembered that he wanted the premarital agreement so he could keep his own property separate. He also testified as to the undue influence: “Q. . . . During the marriage, did [wife] ever [make] any threats to you? [¶] A. I don’t know. I cannot even understand what you mean by threats. [¶] Q. Did she ever pressure you to do anything that you didn’t want to do during marriage? [¶] A. Well, she made some strong requests, but I’m not sure whether to call them pressure. [¶] Q. Okay, What strong request did she make during marriage to you? [¶] A. Well, she wanted me to think more clearly about what part of our property was mine and which part was hers. [¶] Q. Okay. Does she ever ask you to put property into her name? [¶] A. No, she did not. [¶] Q. Did she ever ask you to put property into joint names so that both of you would own it? [¶] A. No she did not. [¶] Q. Okay. Do you ever remember putting any property in joint names? [¶] A. Yes, I did. [¶] Q. And why did you put that property in joint name[s]? [¶] A. Because I felt that for her benefit it is important that she can also have access to the property especially in the event of my demise. [¶] Q. Okay. And did she ever tell you that she would go away if you didn’t do that? [¶] A. Yes. [¶] Q. And what do you believe she meant when she said, ‘go away’?” [¶] A. She meant she would just leave the United States and go back to Mexico. [¶] Q. How did that make you feel? [¶] A. It made me feel terrible and I was afraid she might do that. [¶] Q. And when you were afraid that she would do that, what did you do to keep that from happening? [¶] A. Well, I agreed to some of the things that she was requesting from me. [¶] Q. Did [you] feel if you didn’t do those things that she would leave you? [¶] A. Yes, I was afraid. [¶] Q. . . . [D]id her saying that she would go away happen more than once during the marriage? [¶] A. I am not sure. I don’t think it happened more than once. [¶] Q. Okay. What do you think would have happened if you didn’t do what [wife] asked you to do during marriage? [¶] A. At that time I thought either she would legally try to pressure me into signing certain documents [related to the property] over to her or that she would actually leave as she hinted.”
Husband also testified: “Q. . . . Do you remember when, if ever, [wife] told you she was going to go? [¶] A. . . . If I did not give her certain amounts that were necessary for our well-being or if I did not let her share in some of these larger amounts that we were dealing with, then she might consider leaving. [¶] Q. And do you remember when she ever said that to you? [¶] . . . [¶] A. . . . I would say at the earliest it was closer to about two years after we married.”
In its statement of decision, the court noted it had “had an opportunity to watch witnesses, to listen to the parties, to hear the inflections and see their reactions to evidence as it was presented, and form conclusions regarding their credibility.” Concerning husband’s competency the court found that “he remember[ed] sufficiently about his property to be able to testify concerning it.” Further, the court “consider[ed husband’s] difficulty in recalling people and events when judging his credibility as a witness.”
“[A] witness challenged for lack of personal knowledge must . . . be allowed to testify if there is evidence from which a rational trier of fact could find that the witness accurately perceived and recollected the testimonial events.” (People v. Anderson (2001) 25 Cal.4th 543, 574, italics omitted.) A determination of a witness’s ability to perceive and recall is left to the discretion of the trial judge and that “determination will be upheld in the absence of a clear abuse of discretion. [Citations.]” (Id. at p. 573.)
Here, although husband had difficulty remembering certain things, he was able to recall other critical information, importantly the events of the “strong requests” from wife to transfer property. Wife argues that husband’s testimony about undue influence was contradictory, because he would not characterize the “strong requests” as actual “pressure.” But this is a semantical difference, not one of legal substance, and the court was within its discretion to interpret “strong requests” as being undue influence, whether or not husband agreed they were pressure and even though he did not “even understand what [was meant] by threats.”
Wife also relies on husband’s testimony that he did not believe she threatened to leave “more than once” and even more heavily on his statement that he did not remember when she made the statement but “at the earliest it was closer to about two years after [they] married.” The deeds in question were executed two months and seven months, respectively, after the marriage. But the other testimony, specifically that wife made “strong requests” that he transfer property, is sufficient to support a finding of undue influence. The court specifically stated he had considered husband’s poor memory in evaluating his testimony and thus it took his contradictory statements into account.
Additionally, as husband points out, his testimony about the details of the property transfers was unnecessary because the documents show that the transfers occurred and when. There was evidence that husband understood and recalled events sufficiently to allow him to testify and we see no abuse of discretion in the court’s ruling.
2. Transmutation of Residence
Wife contends the court erred in deciding the two grant deeds of the residence were not a valid transmutation from husband’s separate property to community property because the requirements of Family Code section 852, subdivision (a) were not met. We agree.
Family Code section 852, subdivision (a) states that “[a] transmutation of real . . . property is not valid unless made in writing by an express declaration that is made . . . by the spouse whose interest in the property is adversely affected.” In Estate of Bibb (2001) 87 Cal.App.4th 461, the court considered section 852, subdivision (a), as construed in Estate of MacDonald (1990) 51 Cal.3d 262, which held that the “‘express declaration’” requirement meant that there had to be “language which expressly states that the characterization or ownership of the property is being changed.” (Id. at p. 272.) Bibb stated that “since ‘grant’ is the historically operative word for transferring interests in real property,” “use of the word ‘grant’ to convey the real property into joint tenancy satisfied the express declaration requirement of section 852, subdivision (a)” and there was a valid transmutation. (Estate of Bibb, supra, 87 Cal.App.4th at pp. 468-469.)
Whether there has been a transmutation is determined by our interpretation of the deeds without consideration of extrinsic evidence and without regard to the trial court’s interpretation. (In re Marriage of Starkman (2005) 129 Cal.App.4th 659, 664.) Here, both deeds contained the term “grant” in the transfer of the residence from husband’s separate property to community property and from community property into the second trust. This was a valid transmutation.
Husband points to the fact that the first deed was executed only two months after signing of the premarital agreement and to his advanced years, arguing there was substantial evidence to support the trial court’s finding. But we review this question independently and without resort to extrinsic evidence, and his claim must fail. Nonetheless, our reversal on this issue does not change affirmance of the judgment.
3. Presumption of Undue Influence Regarding Transfer of Residence
Family Code section 721, subdivision (b) provides that “in transactions between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.” “[I]n a contractual exchange between spouses, a presumption of undue influence arises only if one of the spouses has obtained an unfair advantage over the other.” (In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 732.) The presumption is applied where “one spouse deeds his or her interest in community property to the other spouse, for no consideration or for clearly inadequate consideration. [Citation.]” (Id. at p. 731.)
Here the court found wife obtained a community property interest in the residence and in the proceeds of its sale without consideration, giving rise to the presumption of undue influence. Wife contends she received no unfair advantage. She maintains husband received a benefit for the transfer because in exchange for his intent and promise to take care of her, wife moved from Mexico to marry him and provide care and companionship to him.
As evidence of husband’s intent wife relies heavily on the premarital agreement. She highlights testimony of the lawyer representing her in connection with that agreement, that “there was a big discussion about the fact that they were going to be purchasing a community home.” Wife also points to language in the premarital agreement that “[a]ny property titled in the name of both parties shall be presumed to be the community property of the marriage.” She concludes husband intended, before the marriage, “to establish some community property.” Based on those facts, she contends “that the mere effectuation of the preexisting plan, agreement and intent of [husband] cannot be said to be ‘unfair’ or ‘unreasonable.’”
Had the events played out in that fashion, wife might be correct and this case might not be here. But that is not what happened. Instead, the parties did not purchase a new residence titled in both of their names. Rather, just a few months after the premarital agreement, which provided husband’s separate property would remain separate, his residence was transmuted to community property. Moreover, testimony by both wife and her lawyer to the effect that wife was concerned about being secure if husband died lends no support to the claim husband was not pressured into transmuting the residence.
In addition, any advantage received by husband, i.e., wife coming from Mexico to marry and care for him, occurred before the transfer of the residence. At the time of the transfer, husband and wife were already married and she had already performed those acts.
Wife also focuses on husband’s amendment to the first trust, which stated that the residence would be for her sole benefit upon the earlier of husband’s death or after 10 years of marriage. She emphasizes that had husband died a week after marriage, the property would have been hers. But husband did not die, and the amendment shows that husband did not want to transfer the property during his lifetime unless he and wife had been married for 10 years, again, not what transpired here.
Wife seeks to distinguish cases dealing with undue influence in connection with real property transactions on the ground they involved transfers of community property interests to separate property, not the case here. She maintains this difference should be part of the analysis of whether or not the transaction is fair and reasonable based on several factors. But, as husband points out, wife cites no law to support this argument, and even if it were the law, it would not change our conclusion when considered with the evidence.
4. Rebuttal of Presumption of Undue Influence
Wife contends that even if the presumption of undue influence was properly applied, the court erred in finding she had not rebutted it. We are not persuaded.
On appeal, our only role is to decide if, “on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, [we are] without power to substitute [our] deductions for those of the trial court.” (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874, italics omitted.) We must accept all evidence supporting the successful party, disregard the conflicting evidence, and draw all reasonable inferences to uphold the judgment. (Minelian v. Manzella (1989) 215 Cal.App.3d 457, 463.) It is not our role to reweigh or resolve conflicts in the evidence or redetermine the credibility of the witnesses, and we will not disturb the judgment if there is evidence to support it. (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 766.)
The evidence does support the judgment. Husband testified wife made “strong requests” that he change the property ownership and that she would leave if he did not. He also testified that made him afraid. The court found this testimony more credible than wife’s testimony that she had not exerted any pressure. It also relied on the fact that the first deed changing title from husband’s separate property to community property occurred just two months after the parties had executed the premarital agreement, which stated the parties intended their separate property remain separate.
Wife points out husband testified he did not think the “strong requests” “happened more than once” and he believed it occurred about two years after the marriage. She argues that this demonstrates there was no undue influence at the time the two deeds were executed within the first year of marriage. But the court did not rely solely on husband’s testimony. It was particularly concerned the transfers occurred so soon after the premarital agreement. Based on the evidence the court could reasonably infer there was undue influence prompting those deeds. The court was not required to believe husband’s testimony that wife pressured husband only once. (See In re Jessica C. (2001) 93 Cal.App.4th 1027, 1043 [court “‘not required to believe everything that a witness says even if uncontradicted’”].)
Wife also notes what she describes as two inconsistent findings by the court, that husband would not have transmuted the property without wife’s undue influence but that he “did not recall the circumstances surrounding the preparation and execution of the” deeds. But these are not necessarily inconsistent. Husband’s failure to recall the details of the transactions does not mean there was no evidence of undue influence.
Likewise, the finding husband “acknowledge[d] his full and complete understanding of the premarital agreement” does not conflict with the findings he “did not have full knowledge of the legal consequences of the effect of the [first deed]” and that he did not understand that property held in both of their names would be presumed to be owned by the community.
In an effort to overturn the judgment wife summarizes all the evidence she contends shows she met her burden to rebut the presumption of undue influence. She relies on testimony of one of the parties’ attorneys and the real estate agent who helped sell the residence, both of whom in one form or another testified they saw no undue influence and that husband on many occasions expressed his desire to protect wife. She notes the court found them credible. But our review is limited to whether there is substantial evidence in the record to support the judgment, which we presume to be correct, and not whether there is evidence to support the opposite result, even if we would have come to a different conclusion. (Bowers v. Bernards, supra, 150 Cal.App.3d at pp. 873-874.)
DISPOSITION
The judgment is affirmed. The motion to augment the record is granted. Respondent is entitled to costs on appeal.
WE CONCUR: SILLS, P. J., ARONSON, J.