Opinion
A144044
03-14-2018
In re the Marriage of LINDA M. and JOHN A. KAVALARIS. LINDA M. ROCK, Respondent, v. JOHN A. KAVALARIS, Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Mateo County Super. Ct. No. FAM081572)
Before this court are an appeal and cross-appeal in dissolution of marriage proceedings involving respondent Linda M. Rock (hereinafter, wife) and appellant John A. Kavalaris (hereinafter, husband). A judgment of dissolution was entered in 2010. Husband appealed this judgment, and we affirmed in a nonpublished decision on March 19, 2013.
We refer to the parties on appeal as "wife" and "husband" for ease of reference, intending no disrespect.
In 2013, this court affirmed the judgment of $29,000 in damages to husband (plus $200,000 in attorney fees) for wife's breach of fiduciary duty. (In re Marriage of Rock & Kavalaris (Mar. 19, 2013, A130093) [nonpub. opn.].)
Husband now appeals from the trial court's postjudgment order awarding wife $28,437 in damages, representing 10-percent-per-annum interest on $89,132.94, the amount husband would have owed wife for her share of the family residence had he consummated the sale of this residence within a reasonable period of time following entry of the August 4, 2010 judgment rather than filed an appeal. Husband further appeals from the court's contemporaneous orders denying his requests to offset this damages award by the amount he paid during his appeal toward the principal owed on their mortgage (to wit, $8,012.09); to recover half of the amount he paid in interest on a loan taken out for the purpose of paying off a community debt; and for an award of interest at a 10-percent-per-annum rate on the $229,000 in damages he was awarded under the judgment for wife's breach of fiduciary duty.
Wife, in turn, cross-appeals from the trial court's postjudgment orders setting the price at which husband could purchase the family residence at $1 million; denying her request for an award of half the fair rental value of the residence during the period husband enjoyed exclusive possession of it while his appeal was pending; and refusing to require husband to pay her an additional amount based upon the increased value of the NASDAQ composite index to compensate her for having to wait to be paid for her share of the residence while he appealed.
For reasons stated below, we reverse in part and remand to the trial court for further proceedings in accordance with the opinions set forth below.
FACTUAL AND PROCEDURAL BACKGROUND
Following a lengthy marriage, the parties obtained a final judgment of dissolution after a four-day bench trial under which, among other things, husband was granted the option to purchase the parties' former community property home on Lassen Way in Burlingame (hereinafter, family residence) at an unspecified date and price, and was awarded $29,000 in damages for wife's breach of fiduciary duties, as well as $200,000 to cover his associated legal expenses. Husband thereafter challenged the trial court's resolution of his breach of fiduciary duty claim against wife and, to that end, posted an undertaking in the trial court in the amount of $20,000 to stay enforcement of the judgment during his appeal. In the interim, husband continued to live in the family residence and, as required by the judgment, to maintain its upkeep and to make all necessary payments toward the mortgage, taxes and insurance.
On March 19, 2013, this court affirmed the judgment in an unpublished decision.
See footnote 2, ante, page 1.
After the stay of enforcement of the judgment was lifted, further proceedings were held regarding the fair market value of the family residence for the purpose of husband's option to purchase it. On July 25, 2014, relying upon a certified house appraisal accepted by both parties during the 2010 trial, the trial court set husband's option to purchase the family residence at a price of $1 million, to wit, the real property's fair market value at the time of trial. The court gave husband 30 days to close escrow on the sale of the house.
In accordance with the trial court's order, on August 28, 2014, husband had delivered to wife a cashier's check in the amount of $111,999.12, representing her share of the proceeds from his purchase of the family residence based on the outstanding mortgage as of August 27, 2014, after deductions were made for the following sums awarded husband per the August 4, 2010 judgment: $29,000 for wife's breach of fiduciary duty plus $200,000 in associated legal fees; $25,000 for husband's separate property contribution toward the family residence; and various reimbursements for his expenditures toward home maintenance and community property debt.
In the interim, proceedings were held with regard to wife's motion to determine fair rental value and waste with respect to the family residence for the time period following entry of the August 4, 2010 judgment until December 12, 2013, the date husband tendered his initial buyout offer (which wife refused). Among other things, wife argued that she was entitled to recover an amount for her loss of use of her share of the proceeds from the sale of the family residence calculated based on the increased market value of the NASDAQ composite index while he appealed the judgment. A hearing was held on October 22, 2014, on wife's motion, as well as husband's requests to recover interest on his money judgment for wife's breach of fiduciary duty and for attorney fees as sanctions.
Following this contested hearing, the trial court ordered, among other things, that wife was entitled to an award of "interest damages" in the amount of $28,437, representing interest at a rate of 10 percent per annum on the $89,132.94 she would have received had husband purchased the family residence at the $1 million price by October 4, 2010, a reasonable time following the August 4, 2010 judgment. In addition, the trial court declined husband's requests, first, for an award of interest on the money judgment he was awarded under the judgment for wife's breach of fiduciary duty; second, to reduce wife's $28,437 award by the sum by which he had increased her equity in the family residence by paying down the mortgage principal with his separate property from the entry of judgment until his buyout of her interest in the family residence; and third, for reimbursement for half of his interest payments during this period of time on a loan taken out to pay off a community debt. This appeal and cross-appeal followed.
The amount husband paid wife on August 28, 2014, to buy out her interest in the family residence was based on the outstanding mortgage as of August 27, 2014, and, due to his payments toward principal, was $22,866.18 more than the $89,132.94 amount she would have received if he had bought out her interest by October 4, 2010.
DISCUSSION
Each party raises several issues for our review. Husband first contends the trial court committed reversible error by awarding wife $28,437 in interest (calculated at a 10-percent-per-annum rate) as "damages" for delaying his buyout of wife's interest in the family residence pending his appeal of the August 4, 2010 judgment. Second, husband contends that, if an award of interest based upon the delayed buyout was appropriate, the interest rate applied by the court should have been seven percent per annum rather than 10 percent, and should have been offset by the amount he paid towards principal on the mortgage, which had increased both parties' home equity. In so arguing, husband insists wife is not, as a matter of law, entitled to recover both interest "damages" as well as half the increase in their home equity resulting from his mortgage payments. Additionally, husband contends that, to counteract this improper windfall to wife, he is entitled to interest at a rate of 10 percent per annum on the $229,000 money judgment he was awarded for her breach of fiduciary duty, as well as an award to offset half the total amount he paid in interest on a community property debt, which totaled $1,251.54 per year.
Wife, in turn, contends the trial court acted in excess of jurisdiction by "modifying" the August 4, 2010 judgment to set husband's right to purchase the family residence at $1 million years after this judgment had become final, without prior notice or an opportunity to litigate. She additionally contends the court erred by denying her motion to recover her share (50 percent) of the differential between the fair market rental value of the family residence and the mortgage payments made by husband. And, finally, she claims the court erred by failing to adjust her damages award to include an amount reflecting the increase in market value of the NASDAQ composite index from October 4, 2010, to July 21, 2014, to wit, the time period during which she was precluded from using the money she was owed for husband's purchase of the family residence.
As the parties note, we apply the de novo standard of review to purely legal questions based upon undisputed facts. (Herbst v. Swan (2002) 102 Cal.App.4th 813, 816.) A trial court's division of community property in a marital dissolution case is, in turn, reviewed for abuse of discretion. (In r e Marriage of Schleich (2017) 8 Cal.App.5th 267, 276.) And the trial court's factual determinations, including valuation of a family residence, are accepted as true so long as they are supported by substantial evidence. (In re Marriage of Campi (2013) 212 Cal.App.4th 1565, 1572.)
"A judgment or order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness." (In r e Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.)
I. Husband's Appeal.
A. Did the Trial Court Err by Awarding Wife "Interest Damages"?
On December 11, 2014, the court ordered husband to pay wife $28,437 in damages, reflecting an award of "interest" at a rate of 10 percent per annum on $89,132.94, the amount husband would have paid to buy out her community interest in the family residence at the $1 million purchase price and based on the outstanding mortgage as of October 4, 2010 (a reasonable period of time following entry of the August 4, 2010 judgment). The court reasoned that wife suffered a monetary loss of $28,437 (representing 10 percent interest on the $89,132.94 sum) because husband did not exercise his option to purchase the family residence until December 12, 2013. Husband counters that he waited to exercise his option to purchase the home until December 12, 2013, because he was appealing the judgment. To that end, he posted a bond pursuant to Code of Civil Procedure section 917.1 in the amount of $20,000 (covering $10,000 for waste/home maintenance and $10,000 for loss of use/fair rental value) to stay enforcement of the judgment. According to husband, California law does not permit a spouse to be awarded "interest damages" based on a delay by the other spouse in exercising an option to purchase the family home while the other spouse appeals from the judgment. The following general legal principles guide our consideration of husband's argument.
The Family Code requires an equal division of community property when a marriage is dissolved. (Fam. Code, § 2550; see also In re Marriage of Juick (1971) 21 Cal.App.3d 421, 427 ["Under the Family Law Act clearly the ideal is a mathematically equal division"].) "When a trial court concludes that property contains both separate and community interests, the court has broad discretion to fashion an apportionment of interests that is equitable under the circumstances of the case. [Citation.] '[T]he disposition of marital property is within the trial court's discretion, by whatever method or formula will "achieve substantial justice between the parties." ' (In r e Marriage of Hug (1984) 154 Cal.App.3d 780, 791-792 . . . ['[N]o single rule or formula is applicable to every dissolution case involving employee stock options. Trial courts should be vested with broad discretion to fashion approaches which will achieve the most equitable results under the facts of each case']; [citation].) Consequently, we review the trial court's [methodology] under an abuse of discretion standard." (In r e Marriage of Steinberger (2001) 91 Cal.App.4th 1449, 1459.)
Unless otherwise stated, all statutory citations herein are to the Family Code.
Although "the Legislature repealed the Family Law Act and enacted the Family Code" in 1992 (Ceja v. Rudolph & Sletten, Inc. (2013) 56 Cal.4th 1113, 1121, fn. 5), section 2550 continues the equal division requirement in former Civil Code section 4800 without substantive change. (Cal. Law Revision Com. com., 29D West's Ann. Fam. Code (2004 ed.) foll. § 2550, p. 407.)
"Section 2552, subdivision (a) addresses the date of valuation of community assets, requiring the trial court to 'value the assets and liabilities as near as practicable to the time of trial.' " (In r e Marriage of Honer (2015) 236 Cal.App.4th 687, 693.) Courts also recognize "[e]xact equality might not be achievable using existing community assets. When monies to be acquired by one's spouse in the future are injected as an element, there is no reason why the effort should not be made to reach mathematical equality where a variance in time of enjoyment creates an economic differentiation between the value of a single tangible asset and its money equivalent, by way of requiring the payment of interest at a proper rate." (In re Marriage of Juick, supra, 21 Cal.App.3d at pp. 428-429, fn. omitted.) As husband's authority, In re Marriage of Teichmann (1984) 157 Cal.App.3d 302, 306, explains: "In a . . . line of cases involving the custodial parent's exclusive possession of the family home together with an order for future sale and division of the proceeds, the courts have generally approved such conditional awards and delayed payments provided that the trial courts retain jurisdiction to assure equitable division upon such future sale. [Citations.] These cases suggest that in order to effect an equal division, the payee spouse should be compensated for the loss of use of the deferred payment when the payor spouse has enjoyed the exclusive use of the asset prior to sale."
Here, the trial court cited Code of Civil Procedure section 917.1 (hereinafter, section 917.1) when awarding wife "interest damages" totaling $28,437. "Section 917.1, subdivision (a)(1), provides that the perfecting of an appeal shall not stay enforcement of a judgment for the payment of money unless an undertaking is given. And section 917.4 provides that the perfecting of an appeal shall not stay enforcement of a judgment directing the conveyance of real property unless an undertaking is given." (In r e Marriage of Falcone & Fyke (2012) 203 Cal.App.4th 964, 988.) The latter statute, in particular, provides in relevant part: "The perfecting of an appeal shall not stay enforcement of the judgment or order in the trial court if the judgment or order appealed from directs the sale . . . of real property which is in the possession or control of the appellant . . . , unless an undertaking in a sum fixed by the trial court is given that the appellant . . . will not commit or suffer to be committed any waste thereon and that if the judgment or order appealed from is affirmed . . . , the appellant shall pay the damage suffered by the waste and the value of the use and occupancy of the property . . . from the time of the taking of the appeal until the delivery of the possession of the property. . . ." (Code Civ. Proc., § 917.4 (hereinafter, section 917.4); see also Estate of Murphy (1971) 16 Cal.App.3d 564, 568 [section 917.4 "requires an undertaking to insure that 'the appellant or the party ordered to sell, convey or deliver possession of such property' will not commit waste"].)
In accordance with these statutes, husband filed an undertaking to stay enforcement of the August 4, 2010 judgment that, among other things, granted him the option to purchase wife's interest in the family residence at a price not specified therein. On his motion, a bond posted in the amount of $20,000, which covered $10,000 for waste/house maintenance and $10,000 for loss of use/fair rental value. Thereafter, while his appeal was pending, husband continued to reside in the home and to make all payments owed on it with his separate property and without seeking reimbursement from wife, as provided for under the judgment. Then, after the judgment was affirmed by this court, on August 28, 2014, husband consummated his purchase of the family residence by having a cashier's check delivered to wife in the amount of $111,999.12, which covered her interest in the family residence based upon the outstanding mortgage as of August 27, 2014, with sums deducted for various amounts she owed husband per the judgment.
Following an October 22, 2014 hearing, the trial court awarded wife "damages" under section 917.1, in an amount representing "10% interest per annum on the $89,132.94 to which [wife] would have been entitled had [husband] purchased the property within a reasonable time following the August 4, 2010 Judgment, based upon the balance of the mortgage as of that date." This award, totaling $28,437, was in addition to the $111,999.12 wife received from husband on August 28, 2014, as the buyout amount based upon their then-current equity in the family residence. At the same time, the court rejected husband's request that the amount by which their home equity had increased during the appeal due to his individual payments toward mortgage principal be applied to offset wife's $28,437 damages award. According to husband, these rulings were inconsistent and legally invalid. We agree.
To explain, we first look more closely at the language of the statutory framework underlying the trial court's ruling. (Murphy v. Padilla (1996) 42 Cal.App.4th 707, 711 [where facts are undisputed, appellate court independently reviews the construction and application of the disputed statute]; Burden v. Snowden (1992) 2 Cal.4th 556, 562 [" 'In determining intent, we look first to the language of the statute, giving effect to its "plain meaning." ' . . . Where the words of the statute are clear, we may not add to or alter them to accomplish a purpose that does not appear on the face of the statute or from its legislative history"].)
Section 917.1, the statute relied upon by the trial court, states in relevant part that if an appellant files an undertaking when appealing from a judgment requiring the payment of money and the judgment is thereafter affirmed, "the party ordered to pay shall pay the amount of the judgment or order . . . , together with any interest which may have accrued pending the appeal and entry of the remittitur, and costs which may be awarded against the appellant on appeal." (Code Civ. Proc., § 917.1, subds. (a), (b).)
Section 917.1 further provides: "The undertaking shall be for double the amount of the judgment or order unless given by an admitted surety insurer in which event it shall be for one and one-half times the amount of the judgment or order. The liability on the undertaking may be enforced if the party ordered to pay does not make the payment within 30 days after the filing of the remittitur from the reviewing court." (Code Civ. Proc., § 917.1, subd. (b).)
Section 917.4, in turn, states that if an appellant files an undertaking when appealing from a judgment requiring—like this one—the sale or transfer of real property and the judgment is thereafter affirmed, "the appellant shall pay the damage suffered by the waste and the value of the use and occupancy of the property . . . from the time of the taking of the appeal until the delivery of the possession of the property." (Code Civ. Proc., § 917.4.) This language "indicate[s] the Legislature's recognition that injury to the respondent can result from a stay . . . . Where the value of the property in question is subject to diminution during appeal, the respondent may need protection. Equity demands that, as between respondent and appellant, the appellant who seeks the stay should assume the risk. (See Comment, California Stay Law — Supersedeas and Statutory, 40 Cal.L.Rev. 249, 273-275.)" (Estate of Murphy, supra, 16 Cal.App.3d at p. 568; see also Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2017) ¶ 7:96, p. 7-35 [an appeal bond operates in most cases to maintain the status quo to ensure the party prevailing on appeal will not receive real property of lesser value than it was at the time of judgment].)
A Second District, Division Five, decision, Hein v. Highlands Ins. Co. (1976) 64 Cal.App.3d 627 (Hein), illustrates how this statutory scheme operates in marital dissolution proceedings, like ours, in light of the Family Code mandate of equal division of community property when a marriage is dissolved. (See § 2550; see also In re Marriage of Juick, supra, 21 Cal.App.3d at p. 427 ["Under the Family Law Act clearly the ideal is a mathematically equal division"].) In Hein, an interlocutory judgment of marital dissolution directed the wife to transfer to the husband shares of corporate stock with a then-current market value of $14,561. The wife unsuccessfully challenged the interlocutory judgment. Thereafter, the husband challenged on appeal a court order denying his request to recover as damages under Code of Civil Procedure section 917.2 an amount representing the decline in market value of the stock that wife was directed to transfer him under the judgment while her appeal was pending. (Hein, at pp. 629-630.) Our appellate colleagues agreed the trial court had erred in so ruling: "Granting that [husband] might not have disposed of the property in time to avoid the loss, the fact remains that solely because of the appeal and the stay of enforcement pending the appeal, [husband] was deprived of any power to attempt to protect his economic interests in that manner. The affirmance of the interlocutory judgment on appeal shows that [husband] was entitled to delivery of the property at the time of the interlocutory judgment. The stay of enforcement inherently involved a risk of a decline in value of the property pending appeal. That risk should be borne by the party who appealed and her sureties, not by [husband], who was wronged by the stay." (Id. at pp. 632-633.)
See footnote 6, ante, pages 6-7.
Applying these same principles here, we accept the trial court's basic decision to compensate wife for losses sustained as a result of husband's delayed exercise of his right to purchase the family residence during his appeal. At the same time, we agree with husband that the court's actual award to wife constitutes legal error. As an initial matter, the losses underlying the court's award arise from wife's delayed receipt of husband's payment for her share of the family residence, which, under the August 4, 2010 judgment, husband was granted the option to purchase. To this end, husband's undertaking was set by the court in the amount of $20,000, to cover $10,000 in waste/home maintenance and $10,000 in loss of use/fair rental value. This record demonstrates that the operative statute for compensating wife for her losses is section 917.4, which covers judgments (like this one) directing the sale of real property, not section 917.1, which covers money judgments. In effect, and as the hearing transcript reflects, the trial court decided to treat the August 4, 2010 judgment granting husband the right to purchase the house as a money judgment in the amount that he was ultimately ordered to pay to exercise that right, even though the judgment did not specify a purchase price but reserved the issue for a later date. Thus, years after husband paid the bond and his appeal was denied, the trial court effectively retroactively inserted into the judgment a term setting the purchase price of the family residence at $1 million in order to then characterize the judgment as one awarding wife money payable by husband in order to award her "interest damages" at the 10-percent legal rate.
We know of no legal authority authorizing the trial court's treatment of this statutory law. Nor can we accept it. First, husband's undertaking was not intended, and did not serve, to stay enforcement of a judgment or order for "[m]oney or the payment of money . . . payable by [husband]" to wife. (Code Civ. Proc., § 917.1, subd. (a)(1).) At the same time, section 917.4, the statute that does apply to husband's undertaking, does not authorize a general award of damages for a nonappealing party's loss of use of the real property. Rather, the statute limits recovery to "damage suffered by the waste and the value of the use and occupancy of the property" by the appealing party with exclusive possession of the property. (Code Civ. Proc., § 917. 4; accord, Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2017) ¶ 7:96, p. 7-35 [section 917.4 is "intended to provide monetary protection to a prevailing respondent: i.e., appellant's security is essentially the 'quid pro quo' for respondent's giving up the right to enforce the judgment. Through a bond or undertaking, a third person (surety) basically promises in writing to pay a sum of money to respondent on appellant's behalf should respondent prevail on appeal and appellant fail to comply with the affirmed judgment or order"].) The trial court's order is, thus, not valid under section 917.1 or 917.4.
Nor can the trial court's order be affirmed based on general rules of equity. As noted, the court's postjudgment award of "damages" requires husband to pay wife interest at a 10-percent annual rate on the amount he would have paid for her share of the $1 million family residence within a reasonable time after entry of the August 4, 2010 judgment on the theory that she suffered monetary damage from having to wait during his appeal to receive this payout. Yet the court's award is in disregard of the fact that wife was compensated for this delay when she received, per court order, half the increase in home equity resulting from husband's monthly mortgage payments with separate property money during the same time period. As the record reflects, after the judgment was affirmed, husband paid wife by cashier's check $111,999.12, an amount that reflected her share of the family residence based on the court-set purchase price of $1 million and the property's outstanding mortgage as of August 27, 2014, rather than $89,132.94, the amount she would have received absent the appeal based on the outstanding mortgage as of October 4, 2010. This result is not equitable. While a stay of enforcement of a judgment directing the sale of real property inherently involves a risk of a change in the property's value that is properly borne by the appealing party (Hein, supra, 64 Cal.App.3d at pp. 632-633), nothing in the statutory law suggests the Legislature intended for the appealing party to bear more than this risk, or to be subject to a penalty for exercising the legal right to challenge an adverse judgment. (See In re Marriage of Teichmann, supra, 157 Cal.App.3d at p. 307 ["it cannot be said that the delay in payment resulted in an unequal division justifying an award of interest" where "the terms of the judgment granted wife exclusive enjoyment of the home during the 19-month interval with equal participation in any appreciation in value at the time of sale," such that "at the time of actual distribution of the sales proceeds, wife received $89,000 in value plus a proportionate share of the increased equity"].)
It is undisputed that husband, consistent with the terms of the August 4, 2010 judgment, continued to live in the family residence and make all payments towards the house during the time of his appeal, with his separate funds and without reimbursement from wife.
Moreover, as husband notes, while it is true money judgments earn interest at the legal rate of 10 percent from date of entry (Cal. Const., art. XV, § 1; Code Civ. Proc., § 683.010), we are aware of no statute (including section 917.1) authorizing an award of "interest damages" to a spouse under circumstances, like ours, where the appealed-from judgment anticipates the future sale of an asset and distribution of the proceeds, but does not order the appealing spouse to pay the nonappealing spouse a particular sum on a particular date. (See In re Marriage of Teichmann, supra, 157 Cal.App.3d at pp. 307, 308 [rejecting wife's claim for interest on her award of $89,000 that was "neither due nor payable by husband [at the time of judgment] but was to be distributed to her from the net proceeds of the eventual sale [of the family home]," because, as a matter of law, "there exists neither a money judgment nor judgment debtor"].)
The court's award thus cannot be affirmed. While trial courts in family law matters have broad discretion to dispose of marital property "by whatever method or formula will 'achieve substantial justice between the parties' " (In r e Marriage of Hug, supra, 154 Cal.App.3d at p. 791), the trial court in this case acted in excess of this discretion. Accordingly, we remand this matter to the trial court to recalculate the damage award to wife under section 917.4 in a manner consistent with section 2550 and in accordance with the legal opinions reached herein. (See In re Marriage of Pollard (1988) 204 Cal.App.3d 1380, 1386 [remanding to the trial court to reassess the equalizing payment owed husband by wife for the period during which she remained in the family home prior to its sale where the record on appeal contained insufficient facts for the reviewing court to make the assessment in the first instance].)
The court acknowledged at the August 27, 2014 hearing that it did not know, and was making no finding as to, the then-current value of the family residence.
Husband makes a contingent argument that, if we affirm wife's award of "interest damages," he is entitled to recover interest at the same rate (10 percent per annum) on the $229,000 money judgment he was awarded for her breach of fiduciary duty. Because we reverse rather than affirm her award, we need not address this alternative contention.
B. Is Husband Entitled to Recover 50 Percent of the Amount He Has Paid Toward a Community Debt?
Husband's final contention is that he is entitled to reimbursement from wife for half of the amount he personally paid in postjudgment interest on a loan he took out in order to pay off the community 401(k) loan in accordance with the August 4, 2010 judgment. According to husband, his interest payment on this loan totals "$1,251.54 per annum." Husband also refers us to the August 4, 2010 judgment, which notes that his interest payments on this loan had totaled $11,889.78 "and continues," and orders wife to pay him half that sum "plus interest accruing from date of judgment."
In denying husband's request for reimbursement for half his interest payments from the date of judgment forward, the trial court offers no explanation, simply stating that he was not entitled to it "despite the language of the judgment itself."
On appeal, wife does not respond to his contention, indicating to husband that she concedes the issue. Whether or not she has conceded this point, we accept husband's unopposed claim for reimbursement for half his interest payments on the loan taken out to pay off the community 401(k) loan based on the general rule requiring equal division of community property and debt (§ 2550) and the language of the August 4, 2010 judgment itself. Accordingly, on remand, the trial court is instructed to order this reimbursement.
II. Wife's Cross-Appeal.
A. Did the Court Err in Setting the Home's Purchase Price at $1 Million?
Wife first challenges the trial court's July 25, 2014 order setting the price at which husband could exercise his option to purchase the family residence at $1 million based, she contends, on a purported agreement by the parties regarding the home's fair market value. According to wife, this purported agreement, not made by the individual parties in open court, was legally unenforceable under Code of Civil Procedure section 664.6 (hereinafter, section 664.6). She also characterizes the court's ruling as a void attempt to modify the final judgment after its jurisdiction to reconsider the judgment had expired. Wife's arguments are misplaced.
As noted above, the August 4, 2010 judgment grants husband the option to purchase the family residence without specifying a price. After his appeal of this judgment was rejected by this court, the trial court revisited the issue of purchase price, holding a hearing on July 25, 2014, with respect to the home's value. Evidence considered by the court consisted of a certified appraisal valuing the family residence at the time of trial at $1 million based upon market conditions as well as the home's physical condition. Neither party challenged this evidence at this hearing. Indeed, there is no evidence in our record submitted by wife regarding any market increases in property values since the August 4, 2010 judgment. Consequently, following the July 2014 hearing, the court ruled that the price at which husband could exercise his option to purchase the family residence was $1 million. In doing so, the court noted there was no other evidence before it regarding the home's value other than the $1 million dollar appraisal.
At oral argument, wife's attorney stated that wife had moved below to submit an updated appraisal. However, no such motion is included in our record.
Under these circumstances, wife is mistaken in arguing that the $1 million purchase price was based upon a procedurally flawed stipulation by husband and her attorney in violation of section 664.6. As explained above, the $1 million price was in fact based on substantial evidence in the record regarding the fair market value of the family residence at the time of trial. As such, it must be upheld. (See § 2552, subd. (a) ["For the purpose of division of the community estate upon dissolution of marriage . . . , the court shall value the assets and liabilities as near as practicable to the time of trial"].)
Nor would the court's failure to flesh out information or assumptions underlying the appraisal, without more, warrant reversal. (In r e Marriage of Zaentz (1990) 218 Cal.App.3d 154, 162-163 [trial court's failure to specify exact calculations does not constitute reversible error].) --------
Thus, under " 'established principles of substantial evidence,' " and viewing the evidence most favorably to the judgment, we conclude the trial court's decision is not subject to reversal on appeal. (In r e Marriage of Honer, supra, 236 Cal.App.4th at p. 697; see also In re Marriage of Hewitson (1983) 142 Cal.App.3d 874, 885 [a trial court's determination of the value of a particular asset is a factual decision upheld on appeal so long as there is substantial evidence in the record to support it]; In re Marriage of Campi, supra, 212 Cal.App.4th at p. 1572 ["Section 2552 concerns the method the court should use to value the property. As long as the court exercises its discretion in a legal manner, its decision will be affirmed on appeal if there is substantial evidence to support it"].)
In so concluding, we reject wife's attempt to paint the court's order as an untimely and legally void attempt to modify a final judgment. Although the August 4, 2010 judgment granting husband the option to purchase the family residence was a final judgment, as section 2556 aptly explains: "In a proceeding for dissolution of marriage . . . , the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. 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." Accordingly, wife's argument that the court lacked jurisdiction fails.
B. Did the Court Err in Denying Wife's Motion for Fair Rental Value?
Wife next challenges the trial court's August 27, 2014 order denying her motion to recover half the differential between the fair rental value of the family residence and husband's house payments for the period of time following entry of the judgment when he resided there without exercising his option to purchase it. We again disagree.
As previously stated, husband's undertaking amounted to $20,000, including $10,000 for waste/house maintenance and $10,000 for loss of use/fair rental value. During his appeal, husband continued to reside in the family residence and to make all payments toward the mortgage, insurance and property taxes (totaling $2,232.98/month) with his separate property, without reimbursement from wife per the terms of the judgment. Following the appeal, wife moved to recover fair rental value, submitting evidence that, for the period from December 2010 to May 2014, the fair market rental value of the family residence was $3,525 to $4,400 per month. The court denied her motion, explaining there was no need for her to recover this money because "[s]he wasn't damaged by him staying in the house because she got this huge increase in the principle [sic]."
The trial court properly rejected this motion. The terms of the August 4, 2010 judgment provided with no uncertainty that husband had exclusive possession of the family residence and was responsible for all payments toward the property's mortgage, taxes and insurance, with no right of reimbursement for wife. Wife never challenged this term of the judgment, which was affirmed by this court on appeal. At the same time, she has accepted many of the judgment's benefits, including the money husband paid to buy out her interest in the family residence. Under these circumstances, there is no basis to reverse this ruling. (A.L.L. Roofing & Bldg. Materials Corp. v. Community Bank (1986) 182 Cal.App.3d 356, 359 ["a party who voluntarily complies with the terms of a judgment impliedly waives the right to appeal"]; Ketchum v. Moses (2001) 24 Cal.4th 1122, 1140-1141 [party challenging a trial court ruling on appeal must affirmatively prove error].)
C. Did the Court Err in Failing to Compensate Wife for the Increased Market Value of the NASDAQ Composite Index?
Finally, wife challenges the court's October 22, 2014 order for failing to require husband to make a payment compensating her for the increased value of the NASDAQ composite index from 2010 to 2014 which, according to wife, "the court indicated . . . would essentially increase the amount by 70-80% . . . ." In so arguing, wife claims that, during the July 25, 2014 hearing, the trial court indicated an award of damages based on the increased value of the NASDAQ composite index during husband's appeal would be an "integral" part of its order. However, as husband points out, the court's written order after hearing nowhere mentions NASDAQ, much less orders damages based on it. Rather, it merely states, "Any additional sums that may be due and owing to [wife] are to be determined by this Court in a separate order . . . ." And at the next hearing, on August 27, 2014, the court warned wife she had failed to provide any legal authority authorizing an award of damages based on the NASDAQ's increased value during the time husband's anticipated buyout of her share of the family residence was delayed pending his appeal. Nor has she provided this court with any such legal authority.
On this record, we cannot conclude any error by the trial court has been affirmatively demonstrated by wife. Accordingly, her ultimate challenge fails. (Ketchum v. Moses, supra, 24 Cal.4th at pp. 1140-1141.)
DISPOSITION
The portions of the December 11, 2014 order awarding wife $28,437.00 in damages, in addition to permitting her to receive half the increase in equity ($22,866.12 total) on the family residence from October 4, 2010, to August 28, 2014, and denying husband's request for reimbursement for half of the amount he has paid toward a community debt ($1,251.54 per annum) are reversed, and the matter is remanded for further proceedings consistent with the opinions herein. In all other respects, the orders are affirmed. Wife shall bear costs on appeal.
/s/_________
Jenkins, J. We concur: /s/_________
Pollak, Acting P.J. /s/_________
Siggins, J.