Opinion
C080473
10-23-2017
In re the Marriage of JAMES and SHARON HOFF. JAMES HOFF, Appellant, v. SHARON HOFF, Respondent.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. FL1200284)
James (Jim) Hoff appeals from a judgment on reserved issues in this marital dissolution proceeding. Jim's primary argument on appeal is that an earlier "partial judgment" limited the superior court's jurisdiction over the issues remaining for trial and the court exceeded its jurisdiction by deciding those issues on grounds that were not specifically reserved in the "partial judgment." We disagree and affirm the judgment. We do not, however, find the appeal so egregious as to warrant the imposition of sanctions. Therefore, we deny respondent Sharon Hoff's motion for sanctions.
We will refer to the parties as Jim and Sharon, respectively, as the trial court did.
I. BACKGROUND
Jim and Sharon separated on May 1, 1997, after 28 years of marriage. Jim filed this dissolution action in 2012. On November 5, 2014, the superior court entered a "partial judgment" based on the agreement of the parties that awarded certain property to Jim and Sharon, respectively. In particular, it explained, "Husband shall receive the real property located at . . . Smoke Tree Lane . . . with no debt as Husband's sole and separate property. Any Epstein credits or reimbursements will be 'washed out' as against the Chadwell property." (Italics added.) Meanwhile, "Wife shall receive the real property located at . . . Chadwell Drive . . . with no debt as her sole and separate property. Any Epstein credits or reimbursements or Watt's [sic] charges for fair rental value on the Chadwell property will be 'wiped out' as against the Smoke Tree property." (Italics added.) The document also set forth the following issues to be determined at trial:
See In re Marriage of Epstein (1979) 24 Cal.3d 76 (Epstein), superseded by statute on other grounds.
See In re Marriage of Watts (1985) 171 Cal.App.3d 366 (Watts).
"1. Whether Husband should receive any reimbursement for the $20,134 of principal mortgage payments paid by him after separation on the Smoke Tree property prior to the lump-sum payoff.
"2. Whether the source of the $28,556 used to pay off the Smoke Tree property was community property or the separate property of the Husband. Husband will bear the burden of proof that the funds were from a separate property source.
"3. Whether Husband has any separate property interest in the joint Wells Fargo Advisors account which was liquidated in July of 2010. Husband will bear the burden of proof by tracing that any monies in the account were from a separate property source."
Two other issues were set forth but later conceded by Jim, including whether a Wells Fargo Mutual Fund opened in 1998 in Sharon's name was community or separate property. A third issue was decided in Jim's favor. Because Sharon did not appeal, we need not address this ruling. (See In re Marriage of Moore (1980) 28 Cal.3d 366, 374 ["Since [appellant] was not prejudiced by the error and [respondent] did not appeal, reversal of this portion of the judgment is unwarranted"].)
The superior court conducted a trial on these issues. During trial, the trial court entered a judgment of dissolution as to status only terminating the marriage effective May 1, 2015. After trial, the court issued a final statement of decision.
With respect to the first issue, the court found that Jim was not entitled to reimbursement for paying $20,134 of the principal mortgage payments after separation on the Smoke Tree property because he made the monthly payments while he was living on the property and there was no evidence that they exceeded the value of the property's use as required by In re Marriage of Hebbring (1989) 207 Cal.App.3d 1260, 1271 (Hebbring).
With respect to the second issue, the court found that Jim did not meet his burden to show that the funds used to pay off the Smoke Tree property came from his separate funds because, as it discussed in more detail regarding the third issue, "the funds were (by Jim's admission) hopelessly commingled." Further, both Jim and Sharon authorized the payoff and Sharon did not intend to use Jim's separate property funds for the payoff. With respect to the third issue, the court denied Jim any reimbursement for the funds distributed to Sharon from the previously liquidated account. The court explained it considered equitable principles because "the funds in the joint account no longer exist, and apparently the funds were not used to purchase or invest in any other property. The funds were taken out of the account and split equally between the parties on July 9, 2010. Jim now seeks reimbursement. However, Family Code section 2640[, subdivision ](b) provides that the amount to be reimbursed may not exceed the net value of the property at the time of the division. Therefore, as there is no value in the bank account, and the money [was] spent by Sharon, there is nothing from which to be reimbursed.
"Even if the Court were to find that Jim carried his burden in tracing the money to a separate property source, the Court finds reimbursement would cause an undue hardship on Sharon and should be barred. Sharon understood the division of the joint account to be a final settlement of that account. She received approximately $86,000, and has paid out $55,000 in attorneys['] fees for the divorce and $25,000 was gifted to the children prior to finding out Jim was going to claim reimbursement. She detrimentally relied on the conduct by Jim, not previously claiming any separate property interest in the account. At trial, Jim admitted that he knew in 2010 that Sharon could do whatever she wanted to with the money, that there was no discussion in 2010 of Jim ever making a claim for reimbursement. Finally, the written withdrawal authorization from the bank provided for disbursement without restriction and waiving any recourse.
"With regard to the specific tracing issue, the Court finds that certain funds were deposited in the joint account in 1999 that came from [Jim's mother's] and Jim's account that were Jim's separate property, as these funds were Jim's inheritance. The parties do not dispute that funds from Jim's mother were commingled in a joint account. Jim had a separate investment account with his mother, Helen, until she died . . . , at which time he transferred this account into the joint account . . . which amounted to $151,149. However, it is uncertain to the Court what amount in the joint account was Jim's separate property at the time the monies were divided in 2010, and disbursed equally to Jim and Sharon." The court explained that the analysis conducted by Jim's expert witness did not acknowledge that all the money in the joint account was community property before the 1999 transfer of funds. The expert testified that he considered an additional $60,000 from Jim's mother deposited into the account to be Jim's separate property, but the court rejected this characterization because the evidence was undisputed that Jim's mother wrote three $10,000 checks to Jim and three $10,000 checks to Sharon over a course of three years. Therefore, Jim failed to meet his burden of proof to show that the $60,000 was his separate property. Further, the expert did not take into account post-2002 expenditures that totaled more than $60,000. Additionally, Jim did not differentiate between the community property funds and what he considered his separate property funds.
A judgment on reserved issues was filed on August 11, 2015.
Jim filed his notice of appeal on September 25, 2015.
II. DISCUSSION
A. The Judgment on Reserved Issues Did Not Exceed the Trial Court's Jurisdiction
Jim's primary argument is that the "partial judgment" limited the superior court's jurisdiction over the remaining issues for trial and that the court exceeded its jurisdiction by deciding those issues on grounds that were not specifically reserved in the "partial judgment." This argument relies on the general principle that "after the trial court has divided the property, and the judgment has become final, the court loses jurisdiction to modify or alter the division made" unless there is an express reservation of jurisdiction to do so. (Mueller v. Walker (1985) 167 Cal.App.3d 600, 605, 606.) This principle is inapplicable here because the "partial judgment" was preliminary to later proceedings and not sufficiently final to be appealable. (In re Marriage of Levine (1994) 28 Cal.App.4th 585, 589.) The practice of dividing the hearing on property division into parts and rendering a series of "partial judgments" does not render them final judgments or appealable while other issues concerning the same subject matter are pending. (In re Marriage of Nicholson & Sparks (2002) 104 Cal.App.4th 289, 291, fn. 1.) Moreover, the portion of the "partial judgment" that set forth the issues to be decided at trial did not divide any property but rather was preliminary to actually doing so. (See In re Marriage of Ellis (2002) 101 Cal.App.4th 400, 403 ["[T]he order determines that the trial court has authority to evaluate and divide the medical subsidy, but it is only preliminary to actually doing so"].) As such, it was essentially a nonappealable interim order. Thus, Jim's jurisdictional arguments are unpersuasive. Further, as we discuss next, the grounds the trial court used to decide the issues adversely to Jim were permitted by the language setting forth the issues for trial. B. The Court's Decision Did Not Exceed the Scope of the Issues Outlined for Trial
With respect to the first issue, Jim asserts that "under the Partial Judgment, the issue of Epstein credits to either party had been settled" and thus the trial court erred in denying reimbursement under Epstein and Hebbring. This argument, if true, would defeat his own claim. The partial judgment states that any Epstein credits or reimbursements will be "washed out" or "wiped out" between the properties. Our Supreme Court in Epstein explained generally that a spouse may receive reimbursement for separate property funds used to pay preexisting community obligations after separation. (Epstein, supra, 24 Cal.3d at p. 84.) However, both Epstein and Hebbring add that reimbursement should not be ordered for payments on obligations on a house made by the spouse remaining in the home unless the payment substantially exceeds the value of the use of the home. (Epstein, supra, at pp. 84-85; Hebbring, supra, 207 Cal.App.3d at p. 1271.) As Jim explained in his trial court briefing, the first issue involved his request for Epstein credits. He cannot claim that the court was forbidden by the "partial judgment" to apply Epstein at the same time he seeks Epstein credits. Thus, we reject Jim's challenge to the trial court's decision on the first issue.
With respect to the second issue, the court held that Jim failed to meet his burden of proof to show that the funds used to pay off the Smoke Tree property came from his separate property funds because the funds in the joint account were "hopelessly comingled" and Sharon authorized the payoff but did not intend to use Jim's separate property. Jim attempts to characterize the court's analysis of his failure to meet his burden of proof as going beyond the scope of the issue presented. He asserts that intent had to be specifically reserved in order to be addressed as part of the trial court's analysis. This claim is not colorable. The court squarely addressed the question presented by the second issue. (See In re Marriage of Mix (1975) 14 Cal.3d 604, 612 [explaining that when funds are comingled, whether the intention of the drawer of funds was to withdraw separate property funds is a question of fact for determination by the trial court].) In fact, Jim cities no authority to suggest that the trial court's analysis was contrary to the applicable law. (See In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 ["The absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived"].) Accordingly, we reject Jim's challenge to the trial court's decision on the second issue.
With respect to the third issue regarding the previously liquidated account, we reject Jim's claim that the "partial judgment" limited the court's ability to consider equitable principles and the fact that reimbursement would cause an undue hardship on Sharon. The interim order contained no such limitation. It stated the issue broadly as "[w]hether Husband has any separate property interest in the joint Wells Fargo Advisors account which was liquidated in July of 2010." The added statement that "Husband will bear the burden of proof by tracing that any monies in the account were from a separate property source" did not limit the scope of the third issue or specify that no defenses could be presented. And even if it had, Jim also failed to meet his burden of proof by performing an adequate tracing. Instead of challenging the superior court's findings on this point directly, Jim asserts that all of the defects that the superior court noted related to issues that were not reserved for trial. Again, he cites no authority to suggest that any portion of the trial court's analysis was contrary to the applicable law on the issue before it. Accordingly, we affirm the judgment on the reserved issues. C. Sharon's Motion for Sanctions
Because we affirm the trial court's decision on these grounds, we need not address its usage of Family Code section 2640, subdivision (b). --------
By written motion, Sharon asks that we impose sanctions on Jim for filing a frivolous appeal or appealing solely for the purpose of delay. (Code Civ. Proc., § 907; Cal. Rules of Court, rule 8.276.) Although Jim's claims lack merit, we decline to find that his appeal is so egregious as to warrant the imposition of sanctions. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 ["[T]he punishment should be used most sparingly to deter only the most egregious conduct"].) Accordingly, Sharon's motion is denied.
III. DISPOSITION
The judgment is affirmed. Sharon shall recover her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/S/_________
RENNER, J. We concur: /S/_________
ROBIE, Acting P. J. /S/_________
HOCH, J.