Opinion
NOT TO BE PUBLISHED
Superior Court Ventura County No. SC046452, Henry J. Walsh, Judge
Brewer & Brewer and Templeton Briggs for Plaintiff and Appellant.
The Law Offices of Ronald P. Slates, Ronald P. Slates, Haven Law and Peter T. Haven for Defendants and Respondents.
GILBERT, P.J.
This action arises from an attempt to enforce a judgment on the debtor's alleged community property interest in real property. The debtor's wife holds title to the property as her sole and separate property. The trial court found the judgment creditor failed to rebut the presumption raised by the form of the title. The creditor appeals. We affirm.
FACTS
On January 10, 1991, Union Bank obtained a judgment against Kurtis George Borg for over $300,000. An abstract of judgment was recorded in Ventura County on May 31, 1991. The abstract was renewed in October 2003.
Kurtis George Borg is married to Stephanie F. Borg. In December 2000, Stephanie purchased a home on Yurok Court in Simi Valley. The grant deed shows Stephanie took title as her sole and separate property. Kurtis also executed a quitclaim deed to Stephanie as her sole and separate property.
Respondents are referred to by their first names for ease of reference, and not out of disrespect. At times, they are also referred to as the Borgs.
A down payment for the Simi property of $56,000 was paid directly into escrow by checks issued by Southern California Roofing. At the time the payment was deposited, Kurtis was employed by Southern California Roofing. Stephanie was employed by a health club earning $2,000 to $2,500 per month.
Union Bank sold its judgment to The Cadle Company II, Inc. (Cadle). Cadle is in the business of purchasing and collecting debt.
On May 9, 2006, Cadle filed the instant complaint to quiet title against the Borgs. The complaint seeks Kurtis's community property interest in the Simi home. The complaint alleges that the Borgs entered into a secret trust agreement. Under the alleged agreement, Stephanie would hold legal title to the home as her separate property with the equitable interest retained by the Borgs as community property.
The trial was originally set for April 16, 2007. The trial date was continued a number of times and finally set for May 12, 2008. On May 7, 2008, Cadle served on the Borgs notice for them to appear at trial. The Borgs obtained an ex parte order quashing the notice as untimely. The Borgs did not personally appear at trial.
After trial, the court found: "Plaintiff has proven that the Yurok property was acquired from funds originating with So. California Roofing. This raises suspicions. The trail, however, goes no further than that. Without some further proof as to the nature and extent of the relationship between So. California Roofing and at least Kurt Borg, the funds used to purchase the Yurok property remain an unanswered mystery. There was no testimony from either Kurt Borg or Stephanie Borg to explain anything regarding the Yurok purchase. There was no testimony from anyone at So. California Roofing to explain the circumstances of the $56,000[] provided as the down payment. There were no subpoenaed business records from So. California Roofing to provide any explanation or clarification regarding their payments. Both individually and collectively, these are critical evidential absences. The discovery responses by defendants cited by plaintiff are simply not enough."
DISCUSSION
Cadle appears to contend that the judgment is not supported by the evidence.
"The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof." (Evid. Code, § 662.) The form of the title presumption prevails over the presumption stated in Family Code, section 760 that property acquired during marriage is community property. (In re Marriage of Brooks (2008) 169 Cal.App.4th 176, 186.)
The parties do not dispute that had Stephanie taken title to community property as her sole and separate property for the purpose of defeating Kurtis's creditors, the creditors could reach Kurtis's community interest. (Civ. Code, § 3439.04.) Because, however, Stephanie holds legal title as her sole and separate property, Cadle has the burden of proof of such fraudulent intent by clear and convincing evidence. (Evid. Code, § 662.)
Where, as here, the judgment is against the party who has the burden of proof, it is almost impossible for it to prevail on appeal by arguing the evidence compels a judgment in its favor. Unless the trial court makes specific findings of fact in favor of the losing plaintiff, we presume the trial court found plaintiff's evidence lacks sufficient weight and credibility to carry the burden of proof. (See Rodney F. v. Karen M. (1998) 61 Cal.App.4th 233, 241; Kunzler v. Karde (1980) 109 Cal.App.3d 683, 688 [judgment appealed from is presumed correct].) We have no power on appeal to judge the credibility of witnesses or to reweigh the evidence. (Kimble v. Bd. of Education (1987) 192 Cal.App.3d 1423, 1427.)
Cadle relies principally on evidence that the down payment for the property came from Kurtis's employer, and that Stephanie lacked substantial income. Cadle also claims the trial court should have considered the Borgs' failure to testify as evidence of their fraudulent intent. But Cadle points to nothing in the record to show the trial court failed to consider all the evidence on which Cadle now relies. Cadle's argument amounts to nothing more than a plea that we reweigh the evidence. We have no power to reweigh the evidence on appeal. (Kimble v. Bd. of Education, supra, 192 Cal.App.3d at p. 1427.)
Cadle argues that even if the down payment was Stephanie's separate property, the trial court failed to address the increase in equity attributable to community property funds used to pay the mortgage.
Cadle points to evidence that Stephanie paid $445,000 for the property in 2002. An appraisal in 2005 valued the property at $860,000. Cadle assumes that all funds used to make the loan payments were from community property. It posits that 100 percent of the increase in equity is community property. Thus, it concludes, $207,500 of the equity in the property is subject to the judgment lien.
A 2005 appraisal does not constitute credible evidence of the value of the house at the time of trial in May 2008. Cadle argues without citation to authority that in the absence of another appraisal produced by the Borgs, the trial court is bound by the 2005 appraisal. But the trial court is entitled to reject even uncontradicted evidence as not sufficiently credible. (See Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1028.)
In any event, even if 100 percent of the mortgage payments were made with community funds, 100 percent of the increase in equity is not community property. Instead, the community's portion of the increase in value is based on the amount by which community payments reduced the principal on the loan used to purchase the property. (In re Marriage of Moore (1980) 28 Cal.3d 366, 373-374.) Because payments for interest, taxes and insurance do not contribute to the increase in the value of the property, they are not included in the calculation. (Id. at p. 372.)
Here Cadle fails to point to any evidence whatsoever of the amount by which the community payments reduced the principal on the loan. There is simply no substantial evidence to support an award based on mortgage payments allegedly made with community funds.
The judgment is affirmed. Costs on appeal are awarded to respondents.
We concur: COFFEE, J., PERREN, J.