Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County. Ramona G. See, Judge, Los Angeles County Super. Ct. No. YC050539
Stolpman, Krissman, Elber & Silver and Dennis M. Elber for Plaintiff and Appellant.
Friedman & Friedman, Ira M. Friedman and Gail S. Green for Defendant and Respondent.
Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
An unmarried couple lived together for over 11 years. When they broke up the man claimed half the condominium the woman purchased during this time. The title was in the woman’s name. At trial, the man offered financial records to prove he deserved half. He admitted, however, to underreporting his income. The trial court also thought it remarkable the man “seemed to remember the basis for every check paid to cash and to [the woman] for the period in question even though some of the checks were written six or seven years ago and no notation or reference is indicated on those checks.” Indeed, many of the checks had no bank marks showing they even had been cashed or deposited. The trial court rejected the man’s testimony and entered judgment for the woman. We affirm.
I
In 1994 appellant Karl Fjoslien and respondent Patricia Masterson rented a condominium on the esplanade in Redondo Beach for $1,428 a month. They agreed to share all expenses.
Fjoslien was a landscape contractor with a fluctuating business. In 1995 he filed for bankruptcy protection. Masterson, on the other hand, was employed in an administrative position with the Hancock and Rothford law firm. During this period Masterson paid the bulk of their living expenses. Apparently only Masterson had credit cards in her name. Sometimes Fjoslien used her cards to make personal purchases. They also periodically used Masterson’s credit cards to make joint purchases.
In 1997 Fjoslien received a discharge from bankruptcy. Fjoslien and Masterson became engaged the same year.
In 1998 Fjoslien and Masterson told the owner, Dr. Leonardo Chait, they wanted the opportunity to purchase the unit if he ever decided to sell it. In July 1999 Dr. Chait agreed to sell the unit to Masterson for $289,000.
Initially Fjoslien and Masterson planned to purchase the property together. They met once with Dr. Chait. Fjoslien and Masterson also consulted an attorney to discuss the possibility of quit claiming an interest in the property to Fjoslien. Neither one pursued the matter. Fjoslien later decided he could not afford to buy the condominium and did not want to be responsible for the mortgage. Because of his recent bankruptcy, and knowing his landscaping business could not guarantee a reliable source of income, and in fact might create undue liability for them, Fjoslien decided not to purchase the property jointly with Masterson.
Masterson for her part wanted the property as a tax write-off and as an investment. She cobbled together the $43,000 down payment from a variety of sources. Masterson borrowed $14,000 or $15,000 against her 401K plan. Fjoslien’s mother arranged for another bank loan to Masterson of $14,000 or $15,000. Masterson took a personal loan from her credit union.
Months before, in January 1999, Fjoslien gave Masterson two checks for $5,000 each. She also used some of this money toward the down payment. At trial, Fjoslien claimed the $10,000 represented his contribution to the purchase of the condominium. Masterson, by contrast, said the $10,000 was reimbursement for her payment of his share of the expenses during the years he was broke and bankrupt.
Masterson took title to the condominium in her name alone as an unmarried woman. All the escrow closing, title insurance, mortgage, homeowners association, and other documents about the condominium are also in Masterson’s name alone. Fjoslien acknowledges this point. At trial, Fjoslien testified Masterson never promised to transfer title to him. He also said they had no agreement about how to split any proceeds in the event the condominium was refinanced or sold.
Fjoslien and Masterson continued to share expenses after Masterson bought the condominium. As before, they used Masterson’s credit cards for certain joint purchases. Once a month Masterson would figure their expenses and ask Fjoslien for a check for his share. He usually paid her by check. Sometimes he paid her in cash. Masterson paid the bills. She wrote all the checks for recurring expenses like mortgage payments, utilities, insurance, loan repayments, property tax, homeowners’ association, credit cards, and other bills. Fjoslien never asked Masterson for an accounting because he trusted her.
According to Fjoslien, in January 2005 he discovered Masterson had changed the locks to the condominium and moved his personal belongings into the garage. Around the same time Masterson took another law office position at Westco earning over $50,000 a year.
Fjoslien told Masterson he was entitled to half of the condominium. When he received an unsatisfactory response, Fjoslien sued Masterson to quiet title, for partition, and for declaratory relief. Fjoslien acknowledged the parties had no written agreement regarding the condominium and conceded the statute of frauds would otherwise bar his claim. Instead he claimed entitlement to an undivided one-half interest in the property based on an oral agreement with Masterson.
Trial was to the bench. Fjoslien’s approach at trial was to show Masterson had insufficient income to pay for the condominium and that, but for his contributions, Masterson would have lost the condominium.
Fjoslien testified Masterson had almost no sources of income to pay any of the expenses of the condominium. He said she lost her job at Hancock and Rothford and did not work for a very long time. He claimed her income was insufficient to even cover her personal expenses. Fjoslien introduced copies of several years’ of her credit card statements showing monthly balances exceeding what he claimed was her income.
To prove how much he had paid Masterson, Fjoslien introduced into evidence years’ worth of cancelled checks from his checking account. In painstaking detail, Fjoslien identified the purpose of each check he had written since he and Masterson began living together in 1994. He identified each check from memory, with no corroborating documentation. Fjoslien wrote checks to pay for cable television and for his subscription to the Los Angeles Times. He sometimes wrote checks to the dry cleaners, presumably for both their clothes. He also occasionally wrote checks to grocery and similar stores.
Fjoslien acknowledged using his checking account for both personal expenses and business expenses. He agreed he usually paid his employees cash from checks he cashed written to “cash.” Fjoslien claimed his trial exhibits did not include any checks he wrote to his employees.
At trial Masterson confronted Fjoslien with a report from the Social Security Administration showing he had consistently reported far less income than he now claimed he had paid to Masterson every year. Fjoslien did not deny underreporting his income. He explained he made far more than the numbers he reported for income tax purposes because he routinely took cash out of his business.
Fjoslien said he had never given Masterson money to invest on his behalf and further agreed “[s]he did not handle the money for the business.”
Fjoslien said all the checks he wrote to Masterson were for household expenses. Fjoslien testified he also gave the proceeds of many checks written to “cash” in amounts ranging from $500 to several thousand dollars to Masterson for household expenses as well. Fjoslien said this was true whether or not the checks made to “cash” bore her endorsement or not, or bore any endorsement at all. Checks he wrote to “cash” for less than $500 were nearly without exception for their entertainment and meals, according to Fjoslien. Many checks written to cash were in the $300 to $500 range. Fjoslien also identified many checks for $30 or less he wrote to Pedone’s, their local pizza parlor.
The evidence from the checks was equally consistent with an interpretation less favorable to Fjoslien. That alternative was that the checks Fjoslien wrote to “cash” were to pay his employees, himself, or vendors, and had nothing to do with the condo. Some of the checks he wrote to “cash” bore no notations or bank markings. Other checks he wrote to “cash” did not have Masterson’s endorsement, and in some case, had no endorsement at all. Fjoslien said he used his checking account for both personal and business expenses. He said he worked in the “underground” economy for a while. He admitted paying employees and certain vendors in cash. The many checks he wrote to “cash” in the $300 to $500 range on a nearly weekly basis suggested these checks were instead to pay his workers. If, as Fjoslien testified, all the checks he wrote in the $300 to $500 range were for their entertainment and meals it was odd, for instance, he did not have $30 in cash for the pizza at Pedone’s. Yet many of Fjoslien’s numerous checks to Pedone’s were for under $30.
Masterson testified she always had sources of income and always had enough money to pay expenses associated with the condominium as well as her personal expenses. She worked for the law firm Hancock and Rothford from 1991 to the end of 2000. Her salary was $51,000 a year plus bonuses of seven to ten percent. She always deposited her bonuses into one of her savings accounts. In 1994 she also deposited into her savings account a $17,000 insurance settlement she received after someone stole her car and a $32,000 inheritance she received that year. Masterson testified she also kept $10,000 in cash in a safety deposit box as a “cushion.”
Between 2001 and 2004 Masterson earned limited income. Fjoslien claimed this fact proved he alone paid for all the expenses associated with the condominium during those years. At the end of 2000 Masterson took family medical leave. She continued to receive her full salary until the summer of 2001. Thereafter, Masterson received state disability payments of $2,500 a month. She received these payments for 52 weeks. When the disability benefits terminated she received unemployment benefits of several hundred dollars a week. As necessary, Masterson dipped into her savings to pay her household and personal expenses. Masterson also had a series of short-term jobs. At these jobs she earned salaries in the $40,000 to $50,000 a year range. Masterson testified this income was enough to cover her personal and condominium expenses during that period.
At trial, Fjoslien asked Masterson to identify and/or explain entries in her bank statements, cancelled checks, credit card statements, and savings account statements. He also asked her to acknowledge receipt of checks made payable to “cash” that Fjoslien claimed he had given her to pay their household expenses. Masterson did not recall Fjoslien ever giving her checks made out to “cash.” She could not identify several such checks, either because the checks did not have her endorsement signature on the back, or because the checks had no endorsement at all.
The trial court issued a written statement of decision. Masterson had made a motion for judgment (Code Civ. Proc., § 631.8) at the conclusion of Fjoslien’s case-in-chief. The court granted Masterson’s motion after reviewing the evidence. The court found Fjoslien had failed to carry his burden of overcoming Masterson’s presumed legal and beneficial title to the condominium. The court found Fjoslien had two separate failures of proof. First, he had failed to prove by clear and convincing evidence that the parties had agreed Masterson would hold beneficial title to half of the condominium for Fjoslien. Second, he had failed to prove by clear and convincing evidence that he had entrusted management and control of his funds to Masterson such that the law would impose a constructive trust on half the condominium for his benefit.
The core of the problem for Fjoslien was simple: Fjoslien was the central witness for his case and the trial court did not believe him. The court also found his evidence of payments to Masterson incredible. The court explained its credibility finding. “Mr. Fjoslien provided more checks than his own reported income during the period in question. Mr. Fjoslien testified that he made more than his reported income but provided no evidence of the same. The checks to Ms. Masterson, however, seem to support his claim that he made more income. This evidence, however, does not bolster Mr. Fjoslien’s veracity or credibility in the Court’s eyes. Mr. Fjoslien seemed to remember the basis for every check paid to cash and to Ms. Masterson for the period in question even though some of the checks were written six to seven years ago and no notation or reference is indicated on those checks. Though he paid his employees in cash, Mr. Fjoslien testified that those checks to cash were not included in the trial exhibits. As noted previously, however, even without those checks Mr. Fjoslien’s income could not have covered those amounts and thus his income could not possibly have supported the writing of all of the other checks provided to this Court. Further, many of the checks contained in the trial exhibits had no identifying marks from a bank demonstrating that they were cashed or deposited.”
The court found in favor of Masterson and against Fjoslien on his causes of action regarding the condominium to quiet title, for partition, and declaratory relief. Fjoslien appeals.
II
A
Evidence Code section 662 states, “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.”
Fjoslien’s position is Masterson purchased the condominium in her name alone, “but for the benefit of Fjoslien in order to benefit each of the parties.” He claims the evidence of both parties’ “financial contributions to both the purchase and maintenance of the [condominium] proves that . . . Masterson holds beneficial title for [Fjoslien.]” He says the trial court’s damaging findings about his own lack of credibility do not matter because simple mathematical calculation should win the case for him. That mathematical calculation, he says, proves his own contributions, as well as Masterson’s lack of income and high personal expenses. Given evidence of the confidential nature of their relationship, Fjoslien concludes he is entitled to a half interest in the property secured by an involuntary or constructive trust. (Civ. Code, § 2224 [regarding creation of involuntary trusts].)
B
A confidential relationship may be “founded on a moral, social, domestic, or merely personal relationship.” (Barbara A. v. John G. (1983) 145 Cal.App.3d 369, 382.) The “essence” of a confidential relationship “is that the parties do not deal on equal terms, because the person in whom trust and confidence is reposed and who accepts that trust and confidence is in a superior position to exert undue influence over the dependent party.” (Id. at p. 383.) Whether or not specifically pleaded in Fjoslien’s verified complaint, the trial court nevertheless made the factual finding Fjoslien and Masterson had been in a confidential relationship. The court based its finding on the facts they had been engaged to be married and lived together for over 11 years.
The law required Fjoslien to present clear and convincing evidence of his claimed half ownership. (Taylor v. Bunnell (1931) 211 Cal. 601, 606 [“The rule is also well established that to prove a trust by parol under a conveyance absolute in its terms the evidence must be clear, satisfactory and convincing.”].) There is no “confidential relationship” exception to the requirement of proof by clear and convincing evidence to rebut Evidence Code section 662’s presumption of title. (Id. atp. 606 [“After the showing of the confidential relationship the burden was still upon the plaintiff to prove that the deed was not what it purported on its face to be;” by “clear, satisfactory and convincing” proof]; Toney v. Nolder (1985) 173 Cal.App.3d 791, 796 [“irrespective of whether a confidential relationship is shown, to overcome the presumption of title the fact that the property is held in trust must be independently proved by clear and convincing evidence.”]; see also, Tannehill v. Finch (1986) 188 Cal.App.3d 224, 228 [to rebut the presumption of title in a Marvin contract action similarly requires proof by clear and convincing evidence].)
Fjoslien could have proved his case in one of two ways. He could have presented clear and convincing evidence that he entrusted management and control of his funds to Masterson. (Toney v. Nolder, supra, 173 Cal.App.3d 791, 796.) Or Fjoslien could have presented clear and convincing proof that the parties had an oral partnership agreement for the purchase of the property. (Ibid.)
Fjoslien says he satisfied each method and so the court should impose a constructive trust securing his ownership interest in the condominium. Whether Fjoslien presented clear and convincing proof to rebut Masterson’s presumed legal and beneficial title is determined by the trial court. (Taylor v. Bunnell, supra, 211 Cal. 601, 606.) We review the trial court’s findings for substantial evidence. (Bickel v. City of Piedmont (1997) 16 Cal.4th 1040, 1053; Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 925.)
C
Fjoslien’s evidence did not show an oral agreement to jointly purchase the condominium.
Fjoslien and Masterson told Dr. Chait they wanted the opportunity to purchase the unit if and when he decided to sell it. Fjoslien and Masterson consulted an attorney and explored the idea of using a quit claim deed. However, nothing came of the discussion.
All the evidence showed Fjoslien and Masterson had no oral agreement to acquire the condominium together. They agreed Masterson should buy the condominium in her name alone. Fjoslien explained he had only recently been discharged from bankruptcy. He could not afford to be responsible for mortgage and other payments associated with the purchase of a condominium. His landscape contracting business fluctuated too much to provide a reliable source of income. He was concerned about the liabilities his landscaping business created and the potential of losing the property to his creditors’ claims.
Dr. Chait testified he dealt only with Masterson on the purchase of the condominium. The grant deed, mortgage, title insurance, and other pertinent documents are all in Masterson’s name alone. After escrow closed and title transferred to her, Masterson wrote the checks to pay all the bills associated with the property: payments for loans, property taxes, property insurance, and homeowners’ association expenses.
Fjoslien agreed they had no agreement how proceeds should be split if the condominium were refinanced or sold.
This evidence is substantial. It supports the trial court’s finding that Fjoslien failed to establish an oral agreement to acquire and hold the property as joint beneficial owners.
D
Fjoslien claimed he had entrusted management and control of his funds to Masterson. He concluded a constructive trust should be imposed to preserve his beneficial interest in the condominium. The trial court correctly found evidence to the contrary.
Fjoslien wrote a lot of checks to Masterson during their 11 years together. As Fjoslien explained it, once a month Masterson would figure out their routine and extraordinary expenses for the month and ask him to give her a check for his share of the expenses. He would write a check for the amount requested. Masterson then deposited his check into her account and applied its proceeds to the bills she paid each month.
Based on this evidence, the trial court found Fjoslien contributed his share to the couple’s household and living expenses. But Fjoslien presented no evidence to show he entrusted his property or funds to Masterson. Fjoslien did not turn over assets and property to Masterson for her to invest, hold, or manage. Indeed, he testified he did nothing of the sort. He also testified she did not handle his business affairs and did not handle the money from his business.
Fjoslien’s own evidence defeated any reasonable inference that Masterson managed and controlled Fjoslien’s funds. (Maglica v. Maglica (1998) 66 Cal.App.4th 442, 448 [the plaintiff was required to produce clear and convincing evidence she entrusted her property to her life-long partner to overcome the presumption he held both legal and beneficial title to Mag Instrument stock issued solely in his name].) Clear and convincing evidence of her management and control was necessary to impose a constructive trust on the condominium in his favor.
In sum, this record supports the trial court’s findings Fjoslien failed to produce clear and convincing evidence to rebut the presumption of Masterson’s legal and beneficial title to the condominium. We find no error.
E
Fjoslien claims this case is strictly math. He says this appeal can be resolved with a straightforward analysis of the financial numbers. But which numbers?
The trial court found Fjoslien had not established a foundation for his financial numbers. The court did not credit Fjoslien’s explanations because it heard Fjoslien’s admissions of false reporting and deception and concluded he was incredible. Many of the checks to cash that Fjoslien claimed he gave Masterson did not bear her endorsement. Other checks had no endorsement at all. Other checks are stamped NSF. Many checks he wrote to cash had no notations showing their purpose or recipient. Fjoslien ran a largely cash business. He used his checking account for both personal and business matters. He paid his employees cash after he cashed checks he wrote to “cash.” Masterson did not recall Fjoslien ever giving her a check made payable to cash. Numbers must mean something to be significant. Fjoslien has never established his numbers mean something.
Fjoslien also argues that Masterson’s numbers do not add up. He says her claim of adequate funds to cover her personal and condominium expenses is false. This point cannot help Fjoslien even in principle. Where neither side’s evidence can be credited, the party with the burden of proof loses. As plaintiff, Fjoslien’s burden was to prove by clear and convincing evidence he held a beneficial half interest in the property. He failed. Fjoslien provides no basis to disturb the trial court’s judgment.
III
We decline Masterson’s request sanctions be imposed against Fjoslien for a frivolous appeal. In the case of In re Marriage of Flaherty (1982) 31 Cal.3d 637 our Supreme Court instructed “an appeal should be held to be frivolous only when it is prosecuted for an improper motive—to harass the respondent or delay the effect of an adverse judgment—or when it indisputably has no merit—when any reasonable attorney would agree that the appeal is totally and completely without merit.” (Id. at p. 650.)
Fjoslien’s appeal was not successful. However, this is not the same as saying his appeal satisfies the criteria described by the Flaherty court as warranting sanctions.
IV
The judgment is affirmed. Masterson is awarded her costs on appeal.
We concur: PERLUSS, P. J., WOODS, J.