Opinion
E051295
12-20-2011
In re the Marriage of CAROLYN SUE and CHARLES RAY DAMASKE. CAROLYN SUE DAMASKE, Appellant, v. CHARLES RAY DAMASKE, Respondent.
Haslam & Perri, Donald G. Haslam and Shannon R. Thomas for Appellant. Tuckerman & Thompson, Richard J. Tuckerman and Jeffrey S. Valladolid for Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super.Ct.No. RFL041552)
OPINION
APPEAL from the Superior Court of San Bernardino County. Dennis Grant Cole, Judge. (Retired judge of the San Bernardino Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed.
Haslam & Perri, Donald G. Haslam and Shannon R. Thomas for Appellant.
Tuckerman & Thompson, Richard J. Tuckerman and Jeffrey S. Valladolid for Respondent.
I. INTRODUCTION
Appellant Carolyn Sue Damaske (Sue) appeals from a judgment dissolving her marriage to respondent Charles Ray Damaske (Charles). The parties separated in June 1995, and Sue petitioned for dissolution in 2004. At the time of their separation, the parties owned several real properties, including their principal residence and four rental properties. A five-day court trial began in March 2009. The court issued a decision resolving the parties' various reimbursement claims and dividing the community estate. In order to effect an equal division of the community estate, Charles was ordered to pay Sue $98,429.50.
Sue claims the court abused its discretion in denying her rent reimbursement claims against Charles, namely, her Watts usage claim attributable to Charles's rent-free use of a community rental property, and an additional rent reimbursement claim for the amount Charles allegedly undercharged his parents for living in another rental property. We find no abuse of discretion. Substantial evidence shows that Sue's Watts usage and additional rent reimbursement claim against Charles were more than offset by the value of Charles's Watts usage claim against Sue.
In re Marriage of Watts (1985) 171 Cal.App.3d 366 (Watts).
Sue also claims the court erroneously refused to characterize a $70,000 sum the parties received from Sue's parents in 1984 as her separate property (Fam. Code, § 2640), rather than as a gift to the community. Lastly, Sue claims the court erroneously refused to characterize a $9,072.21 down payment Charles made in March 1995 on a condominium as community funds, rather than as a separate property gift to Charles from his parents. We conclude the court properly characterized both of these sums, and affirm the judgment in all respects.
All further statutory references are to the Family Code unless otherwise indicated.
II. ADDITIONAL BACKGROUND
A. Trial and Judgment
The parties were married in November 1965 and separated in June 1995 after 29 years of marriage. Sue petitioned for dissolution in April 2004 and Charles filed a response in October 2004. Pursuant to the parties' stipulation, a five-day court trial was held at IVAMS Arbitration & Mediation Services on March 2 and 3, April 14 and 15, and May 7, 2009, before the Honorable Dennis G. Cole, Judge Pro Tem. The parties disputed the value of the community estate and how it should be divided. Sue and Charles testified and presented documentary evidence.
The March 2 and 3 and April 14 and 15 proceedings were reported, and copies of the transcripts are included in the augmented record on appeal. The May 7 proceedings were not reported.
On July 24, 2009, the court issued a statement of decision resolving the parties' claims and dividing the community estate. Among other things, the court determined that Charles owed Sue an "equalization payment" of $98,429.50. The court asked the parties to submit proposals on how the equalization payment should be made, and the parties submitted proposals. On September 4, 2009, the court issued a further ruling ordering Charles to make the equalization payment within 120 days of September 1, 2009. Charles made the payment on December 29, 2009. The judgment of dissolution was entered in May 2010. B. The Parties' Real Properties
Sue has requested that the record be augmented with five letters written to and from Judge Cole following his July 24, 2009, statement of decision. The request is granted. (Cal. Rules of Court, rule 8.155.) The letters have previously been numbered and are added to appellant's appendix as volume 7, pages 1140 to 1146. Two of the letters were from the parties' counsel to Judge Cole and concerned the manner and timing of Charles's equalization payment.
Another letter from Sue's counsel to Judge Cole, dated August 10, 2009, told the court it had not ruled on Sue's $70,000 separate property claim (§ 2640) in its statement of decision, and requested a ruling on the claim. In an August 14 letter, Judge Cole clarified that he intended to deny the claim, and found that the $70,000 sum "was a gift to the community and not to [Sue] alone." Lastly, Sue wrote a letter to Judge Cole on January 9, 2010, questioning many of the court's rulings and calling them unfair to her.
The disputed issues at trial principally concerned the parties' acquisition, use, and disposition of their real properties, both before and after their June 1995 separation. In June 1995, the parties owned their principal residence at 420 West H Street, Ontario, purchased in 1984. They also owned four rental properties, namely, 374 East 9th Street, Upland, purchased in 1980; 8990 Rosecrest Avenue, Fontana, purchased in 1989; and 808 and 816 North Vine Street, Ontario, built in 1985 to 1987 on land split from and adjoining the parties' 420 West H Street residence.
Sue lived in the Ontario residence following the parties' June 1995 separation until March 1996, when the property was sold. Sue kept the entire $131,265 in net proceeds from the sale, and used most of it to purchase and renovate a new home at 214 East 4th Street, Ontario. In March 1995, Charles purchased a condominium at 904 West Arrow Highway #A, Upland to use as his new home, and made a down payment of $9,072.21 toward its $82,000 purchase price. The parties signed quitclaim deeds to each other, acknowledging their new homes were their separate properties.
The net sales proceeds from the sale consisted of $113,764.72 in cash and a $17,500 promissory note, which was paid within three to four years of the sale.
The parties sold their rental properties at 8990 Rosecrest Avenue, Fontana and at 374 East 9th Street, Upland, in 2000 and 2005, respectively. They evenly split the net proceeds from these sales, with each receiving $19,194.70 from the 2000 sale of the Fontana property and $140,723.70 from the 2005 sale of the Upland property. At the time of trial in March 2009, the parties still owned the 808 and 816 North Vine Street properties, though Charles and his parents had occupied these properties since January 2004 and 1996, respectively.
Following the parties' separation, Charles managed the parties' four rental properties. He paid the mortgages, maintenance and repair expenses, received the rental income, and reported the income and expenses on his separate tax returns. The court found that Charles's net income on the four rental properties, not including depreciation expenses, totaled $10,450 after 1995. This $10,450 item was included in the community estate, and factored into the equalization payment that Charles made to Sue.
Charles claimed that in 1995, he and Sue orally agreed that she would keep the $131,265 in net proceeds from the sale of the parties' Ontario residence, and in exchange he would keep the four rental properties. He split the proceeds from the 2000 and 2005 sales with Sue, because she would not sign the deeds to the buyers if he did not, and he felt he had no choice. Charles claimed that in 1995, the equity in the Ontario residence was approximately equal to the equity in the four rental properties. Charles maintained that the oral transmutation agreement was enforceable, because it was "fully executed." In his written closing argument, Charles pointed out that Sue "did not want anything to do with" the rental properties after 1995, despite her insistence on receiving half the net proceeds from the 2000 and 2005 sales of the Fontana and Upland rental properties.
Sue denied that she and Charles ever entered into an oral agreement to transmute the rental properties to Charles's separate property. She acknowledged that Charles proposed the agreement to her, but claimed she had rejected it as unfair. In her written closing argument, she argued that any oral transmutation agreement would be void in any event. (§ 852, subd. (a); In re Marriage of Benson (2005) 36 Cal.4th 1096; Estate of MacDonald (1990) 51 Cal.3d 262.) In its statement of decision, the court found, "based on the law and the facts," that the parties had not entered into any oral transmutation agreement "under any theory."
Additional evidence is discussed below in connection with Sue's claims on appeal.
III. DISCUSSION
A. Sue's Watts Usage and Additional Rent Reimbursement Claim for Charles's and His Parents' Use of the 808 and 816 North Vine Street Properties Were Properly Denied 1. Relevant Background
By the time of trial in March 2009, Charles had lived in the 808 North Vine Street property "rent-free" since January 2004. Charles's parents had lived in the 816 North Vine Street property since 1996, but they paid Charles rent of around $750 per month from 1996 through the time of trial. Sue claimed Charles's parents had paid below market rent.
More specifically, Sue claimed the community estate was entitled to be reimbursed for two items, namely, Watts usage charges attributable to Charles's rent-free use of the 808 North Vine Street property, and an additional sum for the rent Charles's parents did not pay to live in the 818 North Vine street property. Charles also claimed Watts usage charges against Sue for her rent-free use of her 214 East 4th Street residence after 1996, which was purchased with community funds received from the parties' 1996 sale of their Ontario residence, plus interest on the $131,265 sum she received from that sale.
The court denied both parties' rent reimbursement claims. In its statement of decision, the court explained that, "for various reasons, the parties delayed pursuing the divorce proceeding from 1995 to 2009, causing many of these problems. [Charles] thought he had a verbal agreement [that Sue would retain the proceeds from the parties' 1996 sale of the 420 West H Street property and he would keep the parties' rental properties] and [Sue] for whatever reason did not proceed. [¶] The court exercising its discretion denies [Charles's] request to charge [Sue] with use and interest on money received [from] the sale of the property at 420 West H Street . . . . [¶] The court exercising its discretion denies [Sue's] request to charge to [Charles] the fair rental value of the Vine [Street] property he currently occupies. The court also finds the rental value of the property occupied by his parents, not to be undervalued under the circumstances of this case. [¶] The court also denies [Charles's] request to charge [Sue] with the fair rental value of [her] current residence based on the court's previous findings."
Apart from its findings concerning the parties' respective Watts usage, interest, and additional rent reimbursement claims, the court's previous findings were that there was no oral transmutation agreement.
2. Analysis
Sue contends the court abused its discretion in denying her Watts usage and other rent reimbursement claim against Charles for his rent-free use of the 808 North Vine Street property and his parents' alleged below market rental of the 816 North Vine Street property. We find no abuse of discretion. Substantial evidence supports the court's implicit determination that the parties' Watts usage and other rent reimbursement claims offset each other.
Sue's Watts usage claim for Charles's rent-free use of the 808 North Vine Street property is based on the principal that a community estate is entitled to be reimbursed for the value of the exclusive use of a community asset by one spouse following separation. (In re Marriage of Elfmont (1995) 9 Cal.4th 1026, 1039.) This type of reimbursement to the community estate is known as a Watts charge or Watts usage charge, based on the rule articulated in Watts, supra, 171 Cal.App.3d at page 374. (See In re Marriage of Bell (1996) 49 Cal.App.4th 300, 311 [Fourth Dist., Div. Two].)
Spouses also owe each other fiduciary duties in managing community assets, until the assets have been divided by the parties or a court. (In re Marriage of Feldman (2007) 153 Cal.App.4th 1470, 1475-1476; §§ 721, subd. (b), 1100, subd. (e).) Thus one spouse may not make a gift of a community asset without the written consent of the other spouse. (§ 1100, subd. (b).) Sue maintains that Charles breached his fiduciary duties to her and made an unauthorized gift to his parents in renting the 816 North Vine Street property to them for less than its fair market value.
In dissolution proceedings, the court has "broad discretion to determine the manner in which community property is divided and the responsibility to fix the value of assets and liabilities in order to accomplish an equal division." (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 631-632.) This discretion is "strictly circumscribed," however, by the statutory requirement that all community property is to be divided equally between the parties. (In re Marriage of Gillmore (1981) 29 Cal.3d 418, 423; § 2550.) Because the court's determination of the value of a particular asset is a factual one, it will be upheld on appeal as long as it is "within the range of the evidence presented." (In re Marriage of Duncan, supra, at p. 632.) In other words, it will be upheld on appeal if substantial evidence supports it. (In re Marriage of Hewitson (1993) 142 Cal.App.3d 874, 885.)
Citing In re Marriage of Priddis (1982) 132 Cal.App.3d 349, Sue argues the court erroneously relied on the parties' lengthy, 14-year period of separation before trial as "the sole reason" for denying her Watts usage and additional rent reimbursement claims. This argument misconstrues the court's reasons for denying Sue's rent reimbursement claims, as explained in the court's statement of decision.
Priddis pointed out that the mere passage of time between separation and trial "is an insufficient basis" for not valuing an asset "„as near as practicable to the time of trial.'" (In re Marriage of Priddis, supra, 132 Cal.App.3d at pp. 357-358, fn. omitted; § 2552.) Here, the court did not set any alternative valuation dates. Nor did it rely on the parties' lengthy separation as the "sole reason" for denying Sue's rent reimbursement claims.
Instead, the court simply commented that the parties' 14-year separation and delay in pursuing the divorce proceedings had "caus[ed] many" of their current "problems" and disputes, including their dispute concerning the reasonable rental value of the 214 East 4th Street and 808 and 816 North Vine Street properties, and whether the community estate should be reimbursed for the parties' rent-free and below market rentals of each of these properties. As indicated, the court also wrote that both parties' rent reimbursement claims were "discretionary . . . and after a thorough review of all the facts . . . are denied." This plainly indicates that the court denied both parties' rent reimbursement claims based on the entire record, and did not deny Sue's claims based solely on the lengthy period of the parties' pretrial separation.
Sue further argues the court's statement that it "thoroughly reviewed all of the facts" does not explain "which facts" it relied on in denying her reimbursement claims, and for this reason the court's statement of decision is "insufficient." Not so. After the court issued its July 24, 2009, statement of decision, Sue never asked the court to clarify its reasons for denying her Watts usage and additional rent reimbursement claims, at any time. (Code Civ. Proc., § 634; In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134.)
As indicated, in her January 9, 2010, letter to Judge Cole (see fn. 4, ante), Sue questioned many of the court's rulings. She mentioned Charles's and his parents' uses of the 808 and 816 North Vine Street properties, and questioned why the court did not rule in her favor on her rent reimbursement claims. She did not, however, ask the court to further clarify its reasons for denying her rent reimbursement claims.
The August 10, 2009, letter to Judge Cole from Sue's attorneys asked for a ruling on Sue's $70,000 separate property claim (§ 2640), but did not ask the court to clarify its reasons for denying Sue's Watts usage and additional rent reimbursement claims.
Accordingly, Sue has waived her claim that the statement was deficient in this respect, and we are required to imply findings in favor of the judgment denying her rent reimbursement claims. (In re Marriage of Arceneaux, supra, 51 Cal.3d at pp. 1133-1134; In re Marriage of Cohn (1998) 65 Cal.App.4th 923, 928.) Here, the court reasonably could have found, and substantial evidence shows, that the value of Charles's rent reimbursement claims against Sue completely offset Sue's rent reimbursement claims against Charles.
In her closing argument brief and proposed statement of decision, Sue argued that Charles should be required to reimburse the community estate the total sum of $104,100 for his and his parents' uses of the 808 and 816 North Vine Street properties for 66 months, from January 1, 2004 through June 30, 2009. The $104,100 figure consisted of $76,800 for Charles's rent-free use of the 808 North Vine Street property, plus $27,300 for the amount his parents allegedly paid less than fair market rents during the same 66-month period. In terms of an equalization payment, Sue claimed Charles owed her one-half of the $104,100 sum, or $52,050.
In her opening brief on appeal, Sue claims Charles owed the community estate $62,632 in underpaid rents attributable to his parents' use of the 818 North Vine Street property. Sue does not explain how she calculated the $62,632 sum, but it appears to be based on an assertion that the parents paid below market rents during the entire 13-year period they lived in the 816 North Vine Street property, from 1996 to 2009. In any event, Sue asserted the $27,300 claim in her closing argument brief and proposed statement of decision. She has therefore forfeited her $62,632 claim on appeal. (In re Marriage of Guo & Sun (2010) 186 Cal.App.4th 1491, 1495, fn. 3; In re Zeth S. (2003) 31 Cal.4th 396, 405 ["It has long been the general rule and understanding that 'an appeal reviews the correctness of a judgment as of the time of its rendition, upon a record of matters which were before the trial court for its consideration.'"].)
The $76,800 and $27,300 sums were based on appraisals of the rental value of the 808 North Vine Street property that Sue adduced at trial. Because the properties were virtually identical, their rental values were substantially the same. Sue's appraisals indicated that the rental value of each property was $1,050 per month from January 1, 2004 to June 30, 2005; $1,200 per month from July 1, 2005 to June 30, 2007; $1,150 per month from July 1, 2007 through December 31, 2008; and $1,400 from January 1, 2009 to June 30, 2009.
The court was not required to accept Sue's appraisals, however. (In re Marriage of Bergman (1985) 168 Cal.App.3d 742, 753.) The increased rental value of $1,400 during 2009 appeared to be particularly excessive, given that other appraisals showed the fair market value of the two properties had fallen from around $400,000 in December 2008 to $330,000 in April 2009.
The court also had to assess the value of Charles's Watts usage or rent reimbursement claim against Sue. In his closing argument and proposed statement of decision, Charles claims Sue owed the community $116,250 for her rent-free use of the 214 East 4th Street property from April 1996 to the time of trial. The $116,250 figure was based on an alleged rental value of $750 per month from April 1996 through December 2008, and $1,200 per month from January to May 2009. In terms of an equalization payment, Charles claimed Sue owed him one-half of the $116,250 sum, or $58,125. In addition, Charles claimed Sue also owed the community estate $19,065.94 in interest on the $131,265 sum she received from the parties' 1996 sale of their Ontario residence.
Setting aside Charles's interest claim, which was largely duplicative of his Watts usage claim, the $116,250 value of his Watts usage claim alone more than offset the $104,100 maximum value of Sue's rent reimbursement claims. Indeed, even if the court accepted Sue's appraisals and agreed her claims were worth $104,100, substantial evidence supports its determination that the value of Charles's Watts usage claim more than offset this amount. Sue's 214 East 4th Street property certainly had some rental value, and Charles's claim for $750 per month over 13 years was not excessive. Thus the court did not abuse its discretion in denying Sue's rent reimbursement claims. B. The Court Properly Refused to Characterize a $70,000 Sum the Parties Received from Sue's Parents in 1985 as Sue's Separate Property (§ 2640)
Sue claims the court legally erred in refusing to characterize a $70,000 sum the parties received from her parents in 1985 as her separate property. (§ 2640.) Instead, the court found the sum was a gift to the community from Sue's parents and not a gift to Sue alone. We find no error, because substantial evidence supports the court's determination.
1. Relevant Background
At trial, Charles acknowledged that Sue's parents had contributed $70,000 toward the parties' 1984 purchase of their principal residence at 420 West H Street, Ontario. Sue claimed the $70,000 sum was intended to be her inheritance, and she received no other monies after both her parents died in 1985. She asked the court to characterize the $70,000 sum as her separate property under section 2640.
Charles claimed that he and Sue repaid the entire $70,000 sum to Sue's parents with monies they received from the 1985 sale of their home in Upland, several months after the parties purchased their Ontario residence. The parties received around $91,000 from their 1985 sale of their Upland home, and used those funds to repay the $70,000 sum to Sue' parents.
Charles also testified, however, that Sue's parents contributed $34,000 to $50,000 toward the construction of the 808 North Vine Street property in 1985; he did not believe they contributed as much as $70,000, because it only cost around $50,000 to build the property. Sue testified that her parents gave "us" (meaning her and Charles) $70,000 "to build them a property that they could live in." The 808 North Vine Street property was to be the home of Sue's parents, but both of Sue's parents died shortly before construction was completed in 1985.
In its July 24, 2009, statement of decision, the court did not address Sue's $70,000 separate property claim. In an August 10 letter, Sue's attorneys asked the court to rule on the issue. In an August 14 letter to the parties' attorneys, the court apologized for its omission and denied the claim. The court found that, "based on the testimony of the parties," the $70,000 sum "was a gift to the community and not to [Sue] alone." The court also found "the testimony of [Charles] to be credible on this issue plus the use of the money was for a community purpose and went into a community account."
2. Analysis
Under section 2640, a party has a "vested property right" to be reimbursed at the time of dissolution for separate property contributions he or she made toward the acquisition or improvement of community property, if the party can trace the contribution to a separate property source and has not waived the right to reimbursement in writing. (In re Marriage of Walrath (1998) 17 Cal.4th 907, 919; In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1056-1057 [Fourth Dist., Div. Two].) Similarly, under section 707, any property acquired by either spouse by gift or inheritance during marriage is that spouse's separate property. (In re Marriage of Weaver (2005) 127 Cal.App.4th 858, 864 [Fourth Dist., Div. Two].)
Sue's reliance on section 2640 is misplaced, because the statute required her to show that she made a separate property contribution toward the purchase or improvement of a community asset. (§ 2640, subd. (b) ["the party shall be reimbursed for the party's contributions to the acquisition of property of the community property estate . . . ."].) It was undisputed that Sue made no separate property contributions toward the parties' 1984 purchase of their Ontario residence or their 1985 construction of the 808 North Vine Street residence. Thus, section 2640 is inapplicable to Sue's separate property claim.
The question before the court was whether Sue's parents intended their $70,000 contribution to be a gift to Sue or an advance on her inheritance. Substantial evidence supports the court's determination that Sue's parents intended the sum to be a gift to the community and not to Sue alone. Charles's testified that the $70,000 sum the parties received from Sue's parents in 1984 was used to purchase the parties' Ontario residence, and was repaid in 1985 with funds the parties received from the sale of their Upland residence. Charles further testified that the parties received additional monies from Sue's parents in 1985, between $34,000 and $70,000, and these funds were used to construct the 808 North Vine Street property, a community asset.
Other than her own testimony, Sue produced no evidence, including a will or any other writings, indicating her parents intended the $70,000 sum to be a gift to her alone, or an advance on her inheritance, rather than a gift to the community. Charles and Sue consistently held title to the 808 North Vine Street property. Additionally, Charles was very much involved in overseeing the construction of the 808 North Vine Street property, and without his assistance the property may not have been built.
Thus, substantial evidence supports the court's determination that Sue's parents intended their $70,000 contribution toward the construction of the 808 North Vine Street property to be a gift to the community, and not a gift to Sue alone. The court thus properly refused to characterize the $70,000 sum as Sue's separate property. C. The Court Properly Ruled That the $9,072.21 Down Payment on Charles's March 1995 Purchase of an Upland Condominium Was Charles's Separate Property
Lastly, Sue claims the court erroneously refused to characterize, as community funds, a $9,072.21 down payment Charles made in February and March 1995 to purchase an Upland condominium. On February 23, 1995, Sue signed a quitclaim deed acknowledging that the condominium was Charles's separate property, and divesting the community of all interest in and to the property "for no consideration." Escrow on the purchase apparently closed on March 2, 1995.
The family court did not rule on Sue's $9,072.21 community property claim in its statement of decision. Nor did either party request a ruling on the issue before the judgment was entered in May 2010. (Code Civ. Proc., § 634.) The court thus implicitly denied the claim. The question here is whether substantial evidence supports the court's implied finding that either (1) the $9,072.21 payment was made with Charles's separate property funds, (2) the community had no interest in the condominium, or (3) Sue's claim for one-half the $9,072.21 amount or $4,536.11 was more than offset by Charles's claims against Sue. We conclude that substantial evidence supports the latter finding, but not the first two.
Apart from her claim that the $9,072.21 payment was made with community funds, Sue did not claim a pro tanto community property interest in the condominium. (See In re Marriage of Allen (2002) 96 Cal.App.4th 497, 501-502.)
See footnote 4, ante. Sue's January 9, 2010 letter to Judge Cole did not request a ruling on her $9,072.21 community property claim. Instead, Sue indicated she understood the claim had been denied, and took issue with the court's implied findings in support of the ruling.
--------
When community funds are used to purchase or improve a separate property asset, the community estate is entitled to be reimbursed for its contribution. (In re Marriage of Allen, supra, 96 Cal.App.4th at p. 501.) Sue claimed that Charles made his $9,072.21 down payment with community funds, and Charles could not trace the funds to a separate property source. For his part, Charles claimed his mother loaned, and later gave him, the funds he used to make the payment. Property gifted to one spouse during marriage is, of course, the separate property of that spouse. (§ 770; In re Marriage of Weaver, supra, 127 Cal.App.4th at p. 864.)
Charles did not fully substantiate his claim that his mother gave him the $9,072.21 sum. Receipts from the escrow company showed that Charles deposited $5,000 into the escrow on January 19, and $2,072.21 on February 24, 1995. The source of the $2,000 balance was unclear. Charles produced a copy of a check for $5,000 from his mother to him, dated March 3, 1995, the day after escrow closed on his purchase of the condominium. The check was denoted a "loan." Charles acknowledged he could have used his mother's funds to renovate the condominium, because it was a "HUD repo" and needed renovations to make it "habitable." Charles did not move into the condominium until April 1995, a month after he purchased it. Sue also testified that Charles told her he used his mother's $5,000 to renovate the condominium.
Nevertheless, substantial evidence supports an implied finding that Sue was not entitled to $4,536.11, or one-half the $9,072.21 sum, in addition to her $98,429.50 equalization payment.
Though the court expressly rejected Charles's claim that he and Sue had entered into a legally enforceable verbal transmutation agreement that she would keep the $131,265 in net sales proceeds from the Ontario residence, which Sue used to purchase the Fourth Street property, and he would keep the parties' four rental properties, the court also expressly found that Charles "thought" he and Sue had such a verbal agreement. Consistent with these findings, the court could have reasonably concluded that Charles quitclaimed the Fourth Street residence to Sue pursuant to what he thought was a legally enforceable transmutation agreement. Accordingly, the court could have reasonably disregarded both parties' quitclaim deeds—namely, Sue's quitclaim deed to Charles of the Upland condominium and Charles's quitclaim deed to Sue of the Fourth Street residence—in order to effect an equal division of the community estate.
This, apparently, is exactly what the court did in denying the parties' Watts usage claims, Sue's additional rent reimbursement claims, and Sue's additional claim for one-half of the $9,072.21 sum. As discussed, the court reasonably rejected Sue's $104,100 Watts usage and rent reimbursement claims, because Charles's $116,250 Watts usage claim against Sue for her exclusive use of the Fourth Street property more than offset Sue's Watts usage and rent reimbursement claims against Charles—by the net amount of $12,150 ($116,250 minus $104,100 equals $12,150). The court's implied finding that Charles's Watts usage claim against Sue more than offset Sue's Watts usage and additional rent reimbursement claims against Charles was consistent with a finding— indeed it required a finding—that Charles had a community interest in the Fourth Street property or the $131,265 in sales proceeds Sue used to purchase the Fourth Street property—notwithstanding his quitclaim of the Fourth Street property to Sue.
And if the court disregarded Charles's quitclaim deed to Sue, it should have disregarded Sue's quitclaim deed of the Upland condominium to Charles. Thus, assuming that the $9,072.21 downpayment on the condominium was made with community funds and Sue did not divest herself of her interest in those funds by quitclaiming the condominium to Charles, Sue would have been entitled to one-half of that amount, or $4,536.11, in addition to her $98,429.50 equalization payment. But this $4,536.11 sum was more than offset by the $6,075 net sum ($12,150 divided by two) that Sue owed Charles on his Watts reimbursement claims, after they were offset by the maximum value of Sue's Watts usage and additional rent reimbursement claims against Charles. For these reasons, substantial evidence supports an implied finding that Sue was not entitled to an additional equalization payment of $4,536.11, or one-half of the $9,072.21 down payment on the condominium, in addition to her $98,429.50 equalization payment.
IV. DISPOSITION
The judgment is affirmed. Charles shall recover his costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
King
J.
We concur:
Ramirez
P.J.
McKinster
J.