Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Marin County Super. Ct. No. FL 022262
Haerle, Acting P.J.
I. INTRODUCTION
This is the second time we have been asked to review a judgment relating to the demise of the marriage of Ann Marie Meagher (Meagher) and Malekpour Maleki (Maleki). In July 2005, this court reversed a judgment that annulled the marriage on the ground of fraud. (In re Marriage of Meagher & Maleki (2005) 131 Cal.App.4th 1 (Meagher I).) Now, both parties appeal a judgment on reserved issues following the dissolution of their marriage.
The judgment establishes that all real property assets held in Meagher’s name are Meagher’s separate property and that various agreements which gave Maleki a 50 percent interest in these assets were rescinded on the ground they were induced by fraud. However, the judgment also requires Meagher to repay Maleki sums that he contributed toward the acquisition of these real property assets and to pay some of Maleki’s attorney’s fees. We affirm.
II. STATEMENT OF FACTS
A. Background
Meagher, a physician and licensed psychiatrist, and Maleki, a real estate broker and investor, first met socially in October 1997. (Meagher I, supra, 131 Cal.App.4th at p. 3.) At the time, Meagher was nearing retirement age and was on disability, but worked part-time as a psychiatrist for the City and County of San Francisco. Maleki was in his late sixties and lived on income from real property he owned. Meagher and Maleki developed a romantic relationship, became engaged in February 1998, and married on August 28, 1999. (Id. at p. 3-4.) The parties separated in April or May 2002, and, on May 6, 2002, Meagher filed a petition for dissolution of the marriage. (Id. at p. 5.) Subsequently, Meagher amended her petition to seek an annulment on the ground of fraud. (Ibid.)
On January 21, 2004, the superior court granted Meagher an annulment on the ground that Maleki fraudulently induced Meagher to enter into a business venture and a marriage with him. (Meagher I, supra, 131 Cal.App.4th at p. 6.) On July 18, 2005, this court reversed the judgment granting an annulment. We held that, as a matter of law, the financial fraud that the lower court found that Maleki had committed did not justify an annulment because it did not go to the very essence of the marriage relation. (Id. at p. 9.) However, we expressly left unresolved the question whether Maleki’s fraud entitled Meager to rescission of agreements underlying the former couple’s business venture. (Ibid.)
It appears that, subsequent to our remand, the marriage was dissolved, although we are unable to verify that fact from the slender appellate record prepared by these parties. In any event, a trial on reserved issues was conducted in January and February of 2007 before the Honorable Beverly Wood. The appellate record does not contain any pleading or other filed document listing the issues that were submitted for trial. Nor do we find this information in the appellate briefs. Fortunately, the lower court prepared a very detailed statement of decision which supplies a much-needed framework for these appeals.
The statement of decision indicates that the primary dispute at trial was whether Maleki had a contractual right to a 50 percent interest in all assets held in Meagher’s name pursuant to the terms of various agreements executed by the parties before and during their marriage. Maleki sought to enforce these agreements and also made various alternative claims to interests in property that was held in Meagher’s name. Meagher sought relief based on rescission. Claiming that her consent to the agreements she made with Maleki was induced by fraud, Meagher sought to confirm that all assets held in her name were her separate property.
B. Trial Evidence
1. The 1998 Real Property Transactions
When Meagher and Maleki were becoming acquainted in late 1997, Maleki represented that he was a well-educated, wealthy and successful business man. He told Meagher that he was a licensed real estate broker and an expert in real estate, that he currently owned two homes and that he had previously owned numerous other properties in the best parts of San Francisco. During this same time period, Maleki told Meagher that he was the broker for a property for sale on Allison Street in San Francisco. Maleki said the investment would be good for Meagher and that he could get her a good purchase price. Meagher purchased the Allison Street property on January 23, 1998, for a purchase price of $236,000.
Maleki also told Meagher that he had previously served in the Cabinet of the Shah of Iran, as both the Director of Finance and the Director of Public Health. Maleki said he had an M.D. degree, a M.A. degree in Journalism and a Ph.D. in Persian Literature. He told Meagher he practiced medicine as a cardiac pulmonary surgeon in Iran and Switzerland and had also been a Professor of Journalism at U.C. Berkeley.
After Meagher purchased the Allison Street property, Maleki asked Meagher to do him “a favor.” He said that he needed cash which he could generate by transferring his two residential properties to Meagher. Maleki wanted to retain ownership of the properties and said he would reimburse Meagher for all of her costs relating to the purchase. Meagher agreed to take legal title to the properties but allow Maleki to retain his equitable ownership because it was not going to cost her anything and she wanted to help out. As noted above, the couple became engaged to marry in February 1998. In May of that year, Meagher purchased Maleki’s property on Crocker Avenue in Daly City and in October, she purchased his home on Solano Way in Concord. Maleki reimbursed Meagher for most of her expenses relating to these purchases. He paid Meagher $55,755 for the Crocker property and $26,000 for the Solano property.
After the titles to Maleki’s properties were transferred into Meagher’s name, Maleki proposed that he and Meagher could make future real estate investments together if they jointly owned the Allison, Solano and Crocker properties. Meagher agreed to this proposal and purchased a 50 percent equity interest in the Solano and Crocker properties by paying Maleki $54,000 and giving him a 50 percent interest in the Allison property. Maleki also suggested that the two open a bank account for their real estate. On October 16, 1998, the parties opened an account at the Bank of Marin. The account was held in Meagher’s name and Maleki was given a power of attorney. Shortly thereafter, Maleki deposited $10,000 into the account.
2. The December 1998 Agreement
On December 7, 1998, Maleki and Meagher signed the following agreement: “As of 11/1/98, the following properties: [¶] (a) 150 Allison San Francisco, Ca. [¶] (b) 853 Crocker Ave., Daly City, Ca. [¶] (c) 2015 Solano Way, Concord,Ca. [¶] Are legally in the name of Ann-Marie Meagher, which as of 11/1/98, with the agreement of both parties, are owned 50/50, and every cost is shared 50/50 between the parties.”
Meagher testified that she handwrote the December 1998 agreement as Maleki dictated it to her. She believed this agreement protected her because it confirmed that the three properties were owned 50/50 and that she and Maleki would share expenses equally. Meagher also testified that Maleki assured her then, and other times, that she could “back out” any time and he would reimburse her for everything she had contributed.
In early 1999, Maleki began asking Meagher for money so he could arrange for improvements to their real estate and pay mortgages and other expenses. Meagher provided money when Maleki requested and Maleki represented that he was matching her contributions with his own money. However, as time passed, it appeared to Meagher that she was paying for all of the couple’s business (and living) expenses from her separate accounts. When Meagher asked Maleki to match her contributions, he responded that he was paying for other real estate expenses out of his separate funds and that the two should sit down and compare what they had spent. When Meagher showed Maleki documentation of her expenditures, he responded that he had actually contributed a small amount more than she had during the first several months of their joint business activities.
3. The May 1999 Agreement
In early 1999, Meagher and Maleki began to pursue an opportunity to purchase the Washington Center, a commercial property in San Leandro. To facilitate this endeavor, an account was opened on April 13, 1999, at Bank of America in the name of Dr. Meagher Real Estate Investment. Maleki proposed, and Meagher agreed, that the Bank of America account would become the business account for future real estate investments and that Maleki would manage this account using his power of attorney, and would “take care of the whole business.”
Maleki also suggested, and Meagher agreed, that the Bank of Marin account would remain opened in Meagher’s name and that Maleki would make deposits from his separate property funds into that account in order to build up Meagher’s credit in anticipation of the purchase of the Washington Center. The parties agreed that Meagher’s separate property funds would not be deposited into the Bank of Marin account. Thereafter, Maleki represented to Meagher that all of the deposits he made into the Bank of Marin account had come from his separate property funds.
On May 18, 1999, Maleki and Meagher signed a handwritten agreement which stated:
“This agreement has been made and approved between Mr. MALEKPOUR MALEK[I] holder of Social Security # [omitted] and Mrs. Ann Marie Meagher, M.D. holder of Social Security # [omitted] for purposes of a real-estate investment mostly in commercial shopping center as follows:
“1 – Mr. MALEKPOU[R] MALEKI and Mrs. Ann Marie Meagher, M.D. shall be as partner all in term of fifty/fifty share of entire real-estate business investment and capital investment as equal share holder.
“2 – Mr. MALEKPOUR MALEKI and his partner, Mrs. Ann Marie Meagher, M.D., each are liable for all profit and loss of operating business according to their fifty percent equal share regardless who carry the title and owns the properties.
“3 – Mr. MALEKPOUR MALEKI is solely responsible for operating the business and run the real-estate business for profit and expand the real-estate asset at his will.”
The spelling and grammatical errors appear in the hand-written agreement.
Meagher testified that Maleki wrote the May 1999 agreement in order to reflect that the couple had agreed that Maleki would now be solely responsible for managing and expanding their real estate business. Meagher believed that the agreement also confirmed that the couple would continue to share the costs of purchasing new properties and the expenses relating to their properties on a 50/50 basis.
4. The Washington Center
On April 13, 1999, Meagher took out a $500,000 mortgage on her home in Tiburon in order to raise funds to purchase the Washington Center. The loan proceeds were divided into three checks, one for $291,971.04, one for $200,000, and one for $872. Meagher gave Maleki the $291,971.04 check and instructed him to deposit it into the Bank of America business account. On April 14, Maleki deposited that check into the Bank of Marin account. The following week, an additional $91,175 was deposited into the Bank of Marin account. Evidence presented at trial showed this money was also part of the proceeds from Meagher’s refinancing her Tiburon home.
Evidence regarding negotiations for the purchase of the Washington Center is confusing, if not incomprehensible. Apparently, prior to the close of escrow, Maleki agreed to pay the owner, Yuan-Ji Su, $175,000 outside of escrow, all in $100 bills. Meagher testified that Maleki told her they needed to pay the money and she wrote several checks from her separate account and gave them to Maleki. The $175,000 cash payment from Meagher to Su was acknowledged in a May 18, 1999, agreement that Meagher wrote as it was dictated to her by Maleki.
The Washington Center was purchased in Meagher’s name on August 19, 1999, for $1,450,000. The very confusing evidence provided to us indicates that consideration for the transaction included a cash payment and transfer of ownership of the Allison property and the Solano property to Su. Meagher testified that, based on Maleki’s representations and assurances, she believed that half the cash payment had come from Maleki’s separate funds and that, pursuant to their prior agreements, she and Maleki each had a 50 percent interest in the two properties that were transferred as part of the purchase price for the Washington Center.
5. Post-Marriage Transactions
Meagher testified that the parties’ business agreement and relationship did not change after their August 28, 1999, marriage. The parties never agreed that Maleki would be paid for his administrative work. Nor did they ever agree that Maleki was not required to contribute equally to the business. Meagher also testified that there were numerous instances during the marriage when Maleki confirmed in writing that both parties would make equal contributions to their real estate investments. However, after Meagher would provide her share for a given expense or investment, Maleki would tear up the written agreement.
In early 2001, Maleki and Meagher pursued an opportunity to purchase a commercial property on South La Brea Street in Los Angeles. The property was purchased in November 2001, in Meagher’s name, for $4,177,023. She paid $1,189,523 in cash and financed the remainder of the purchase price by taking out a loan in her name alone. To generate the cash for this purchase, Meagher refinanced her Tiburon home for a second time and also took a line of credit against her home. In addition, on Maleki’s advice, Meagher “cashed out” all of her retirement accounts.
In December 2001, Maleki suggested they could generate more cash for future real estate deals by refinancing the Washington Center. Meagher testified that Maleki convinced her to first give him a note against the Washington Center for a loan of $375,000. That way, Maleki explained, when the property was refinanced, he could use the note to get additional money from the bank that could be used for their business.
In early 2002, Meagher used her separate funds to purchase a BMW so that Maleki would have a car to use. Meagher testified that, although she paid for the car, Maleki insisted that he sign his own name to the title because it was “about time” that he had his name on the title of something. Shortly after Meagher purchased the BMW, Maleki revealed that the couple had serious financial problems. Meagher was shocked because Maleki had always told her they had millions of dollars. Meagher had reluctantly charged $180,000 in business expenses to her personal credit cards based on representations from Maleki that the business would reimburse her. But Maleki said the business had no money to pay her back. In the past, Maleki had refused to let Meagher see the business records because he was the sole manager of their business. When Maleki continued to deny her access to the records, Meagher revoked Maleki’s power of attorney on the Bank of America business account. She told Maleki she wanted the “buy-out” he had always said was available but Maleki said he could not do it.
In mid-March 2002, Maleki told Meagher that he wanted her to transfer all of her assets, including her home, social security and pension benefits, into a joint tenancy with him. He told her that he would take complete control of all their assets and she would be a silent partner. Maleki said that if Meagher did not agree, he would divorce her and collect his $375,000 note against the Washington Center, and take his 50 percent interest of all of Meagher’s assets. Meagher refused to go along with this proposal and lost trust in Maleki and his management of their business investments. Prior to that time, when Maleki asked for money, Meagher gave it to him in reliance on his representations that the money was being used for their joint business investments and expenses and that Maleki was matching her contributions with his own separate funds.
6. Other Evidence
William Hinton is a Certified Pubic Accountant who examined various documents including escrow statements and tax returns in order to calculate the total amount of cash that was invested in real estate during the parties’ business venture from January 1, 1998, through December 31, 2002. Hinton testified that the total amount of cash that was spent on all of the real property transactions was $1,621,596. Meagher kept records of her separate property contributions and submitted evidence at trial that she contributed a total of $2,772,411.94 to the parties’ business investments.
Meagher also presented evidence that (1) the only payments of separate property funds that Maleki ever made to Meagher were the $55,755 and $26,000 payments made in connection with the title transfers of the Crocker and Solano properties and the $10,000 deposit into the Bank of Marin account in October 1998; (2) between October 1998 and April 2002, Maleki transferred a total of $75,650 from the Bank of Marin account into his separate personal bank account; and (3) Maleki used some funds from the Bank of America business account to pay his own credit card bills notwithstanding his representations that he paid those bills with his separate property funds.
C. The Trial Court’s Decision
1. The December 1998 and May 1999 Agreements
The trial court found that Meagher was authorized, by Civil Code section 1689, to rescind the December 1998 and May 1999 agreements on the ground that her consent to the agreements was obtained by fraud as defined in Civil Code section 1572.
Civil Code section 1689, subdivision (b)(1) provides that a party to a contract may rescind the contract “[i]f the consent of the party rescinding, or of any party jointly contracting with him, was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party.”
The court found that an essential, material term of both of these agreements was that, with respect to each piece of real property, each party would contribute one-half of the costs and each would be entitled to one half of the profits and that Maleki made representations to Meagher that he would contribute equally to the joint venture without any intention of doing so. In this regard, the court noted that the use of the two bank accounts and the mandate that Meagher “stay out of” banking matters were schemes Maleki used to lead Meagher to believe he was financially contributing to the joint venture when he never actually intended to do so.
Ultimately, the court found that ”[t]he end result is that Meager advanced the money to sustain the real estate projects, contrary to the equal sharing of costs called for in the agreement[s]. Since Maleki orchestrated the transactions in such a convoluted fashion from the onset, this Court concludes that Maleki’s intent was not to share in the costs but to let Meagher carry the brunt of the financial burden. There is clear and convincing evidence of this intentional misrepresentation, and that this misrepresentation was used to obtain Meagher’s consent to the agreements.”
2. Post-Marriage Agreements
The court ordered that any post-marital agreements regarding the ownership of real property were also rescinded because of fraud and undue influence. After their August 28, 1999, marriage, the parties stood in a fiduciary relationship with each other (Fam. Code, § 721, subd. (b)) and there was a rebuttable presumption that transactions advantaging one spouse were induced by undue influence. That presumption was not rebutted at trial. Rather, the evidence established a course of conduct pursuant to which Maleki acquired equal ownership of assets while imposing the full economic burden of all transactions on Meagher’s separate property. This course of conduct, which culminated in “Maleki’s ultimatum in early 2002 that he would divorce Meagher if she did not sign over one half of the title to the properties and give him complete control of all assets, indicates a breach of Maleki’s fiduciary responsibilities.”
3. Adjustment of the Equities
The court exercised its authority to adjust the equities between the parties after it determined that it was not possible to un-do the real estate transactions and put the parties back in the same position they were in prior to entering into the agreements. (See Civ. Code, § 1692; Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304.) The court ordered that: (1) Meagher was to return to Maleki the sum of $91,755 which represented the amount of money that Maleki did actually transfer to Meagher in 1998; and (2) Meagher was deemed the sole owner of the three properties and of all properties taken in her name subsequent to that date including those which may have been purchased in part with any proceeds from the original three properties.
This amount represents the sum of the $55,755 and $26,000 payments Maleki made in connection with the title transfers of the Crocker and Solano properties to Meagher and the $10,000 deposit Maleki made into the Bank of Marin account in October 1998.
4. The Tiburon Home
Maleki claimed a community property interest in the increased value of Meagher’s Tiburon home. The trial court rejected this claim.
The evidence established that, before Meagher became involved with Maleki, her Tiburon home did not have any liens or encumbrances. During the business relationship, Meagher refinanced the home and the Bank of America account was used to service that debt. Therefore, the court found, “[h]ad the funds in Bank of Marin/Bank of America account been community in nature, or traceable to Maleki’s own separate property Maleki would have a claim. But no such proof was ever given.” The court also found that, to the extent some commingling may have occurred, Meagher produced evidence that the funds used for her Tiburon home, “as well as the other properties, was traced back to her.”
Maleki also claimed that he was entitled to reimbursement from Meagher for payments he allegedly made from his personal funds to make improvements to the Tiburon home. The trial court rejected this claim on the ground that there was “no evidence corroborating those contributions.” The court also rejected Maleki’s contention that he personally worked on projects at the home, finding these allegations were not credible in light of Maleki’s conflicting assertions that he was a sick man, disabled and frequently ill and hospitalized during that time period.
5. Quantum Meruit
Maleki sought equitable reimbursement and/or quantum meruit payment for the capital and labor that he expended in furtherance of the parties’ business enterprise. The court denied this claim for two independent reasons.
First, the court invoked the doctrine of unclean hands. (Citing Boerick v. Weise (1945) 68 Cal.App.2d 407; Samuelson v. Ingraham (1969) 272 Cal.App.2d 804, 806.) The evidence established at least two separate acts of fraud by Maleki. First, he defrauded creditors and avoided his child support obligation by transferring his properties into Meagher’s name in 1998. Then, Maleki attempted to defraud Meager of one-half of all her property.
The second reason the court denied Maleki’s claim to equitable relief was that Maleki’s trial testimony was contradictory and not credible and, according to the court, “certainly did not support a finding of Maleki working full time on these projects for three years.” Furthermore, Maleki had failed to provide an actual quantification of the time he allegedly worked. Maleki attempted to support his claim with evidence that Meagher ultimately benefited financially as a result of all the transactions during the marriage. However, the court found that “Maleki never offered any analysis of actual profit or loss on the transactions that would support his claims for quantum meruit based on a percentage of the net appreciated value of the venture.”
Maleki also claimed a community property interest in all real property assets acquired in Meagher’s name during the marriage pursuant to Family Code section 760 (section 760), which establishes a presumption that property acquired during the marriage is community property.
The trial court found that Meagher successfully rebutted the section 760 presumption. There was no evidence that Maleki contributed any money to the acquisition of properties during the marriage. Meagher “successfully accounted that the funds used to accomplish the transactions [were] traced to her separate property,” and thereby met her burden of proof.
Maleki claimed that, even if the assets were Meagher’s separate property, he was entitled to a portion of the appreciation “by virtue of his being a spouse who devoted time, talent and labor to a separate property asset during Marriage.” The trial court acknowledged this claim was legally sound and implicitly found that Maleki’s services were a community asset. (Citing Van Camp v. Van Camp (1921) 53 Cal.App.17.) However, there was no evidence by which to determine the reasonable value of Maleki’s services in generating profits with respect to these assets. Therefore, the court ordered that “Maleki’s services to the community under this theory are to be offset by the funds he directed to his own benefit from the Bank of Marin” account.
7. Attorney Fees
Maleki sought to recover attorney fees in the amount of $320,588.12 pursuant to Family Code, section 2030 (section 2030).
Section 2030, subdivision (a), states that, in a proceeding such as this, the “court shall ensure that each party has access to legal representation to preserve each party’s rights by ordering, if necessary based on the income and needs assessments, one party . . . to pay to the other party, or to the other party’s attorney, whatever amount is reasonably necessary for attorney’s fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding.”
In evaluating Maleki’s fee request, the court identified several relevant factors. First, although it had information about Meagher’s needs and ability to pay, it had not been provided reliable information about Maleki’s situation which made it difficult to perform a needs assessment under section 2030. In this regard, the court specifically noted that Maleki’s “current protestations of poverty” were to be questioned. Second, as required by section 2030, the court evaluated Maleki’s fee request to determine whether the fees that were incurred were reasonably necessary. Finally, the court assessed whether Maleki had engaged in bad faith during the proceedings. (See Code Civ. Proc., §§ 128.5-128.6.)
Ultimately, the court ordered Meagher to pay Maleki’s attorneys $25,000. It found that any balance to which Maleki might be entitled was “deemed to have been already advanced to Maleki by his sale of the BMW automobile, monies removed from Meagher’s accounts, and monies used by Maleki to pay his separate obligation in violation of the ATRO.”
III. MALEKI’S APPEAL
A. Fraud
Maleki challenges the trial court’s finding that he committed fraud and contends there is insufficient evidence to establish any of the elements of fraud which are: “(1) a false representation, actual or implied, or the concealment of a matter of fact, material to the transaction, made falsely; (2) knowledge of the falsity, or statements made with such disregard and recklessness that knowledge is inferred; (3) intent to induce another into relying on the representation; (4) reliance by one who has a right to rely; and (5) resulting damage.” (Ach v. Finkelstein (1968) 264 Cal.App.2d 667, 674-675.)
“When a finding of fact is attacked on grounds that it is not supported by substantial evidence, the power of an appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted, which will support the findings. [Citation.] The reviewing court looks to the evidence supporting the successful party and must disregard any contrary showing. [Citation.] When two or more inferences can reasonably be deduced from the facts, we are without power to substitute our deductions for those of the trial court. The testimony of a single witness, even a party, is adequate to support the trial court’s findings. [Citation.] All the evidence most favorable to respondent must be accepted as true, and the unfavorable discarded as not having sufficient verity to be accepted by the trier of fact. If the evidence so viewed is sufficient as a matter of law, we must affirm the judgment. [Citation.]” (In Re Cheryl E. (1984) 161 Cal.App.3d 587, 598.)
Maleki completely ignores our standard of review. Unquestionably, Meagher’s trial testimony and documentary evidence constitutes substantial evidence supporting the finding of fraud. That evidence shows that Maleki promised that he would match all of Meagher’s separate property contributions to the costs and expenses of their business, that Maleki never had any intention of keeping this promise and, indeed, did not contribute any separate funds to any of the real property acquisitions or business expenses with the exception of the payments he made in connection with the 1998 title transfers of the Crocker and Solano properties and the $10,000 deposit into the Bank of Marin account in October 1998. The evidence relating to these three payments also supports the fraud finding because it explains why Meagher trusted and believed Maleki. Indeed, evidence relating to these payment constitutes substantial evidence that Meagher reasonably relied on Maleki’s representations that he would pay for one-half of all real property acquisitions and expenses from his separate funds. The trial evidence also establishes that Meagher was damaged by this fraudulent scheme. It gave Maleki a contractual right to claim a 50 percent interest in assets that were acquired solely with Meagher’s separate property. Furthermore, because the scheme required Meagher to acquire the assets in her own name, she also had to personally assume all liabilities relating to the transactions, some of which appear to have been unorthodox at best.
Maleki maintains that he did not make the representation that he was going to match Meagher “50/50 as to costs and expenses.” However, Meagher testified that Maleki repeatedly made this representation to her. Furthermore, the trial court expressly found that this promise was an essential term of the written agreements. Maleki disagrees with the court’s interpretation of the relevant contract language, but provides neither a factual nor legal basis for compelling us to accept his self-serving alternative interpretation of the written agreements.
Maleki contends that “during the trial the court itself determined that there was no agreement that appellant should have matched respondent’s contribution of funds . . . .” (Italics omitted.) We have reviewed the record citation provided by Maleki and find his characterization of the court’s comment to be questionable, at best. In any event, as a matter of law, the court’s “finding” on this issue appears in its statement of decision. (Wurzl v. Holloway (1996) 46 Cal.App.4th 1740, 1756.)
The statement upon which Maleki relies occurred during cross-examination of Meagher. Apparently, Maleki’s attorney believed he could impeach Meagher’s testimony that Maleki had promised to match all of her contribution with deposition testimony during which she allegedly conceded that the written agreements did not expressly require Maleki to match each of Meagher’s “capital contributions” dollar for dollar. The court urged counsel to move on from this non-issue, stating: “There’s no agreement that specifically spells out Mr. Maleki must put in dollar for dollar what Dr. Meagher puts in. There’s an agreement. It says what it says. They are to split profits and expenses.”
Maleki argues that, even if we find that he did represent that he would make equal contributions from his separate funds, that representation was not false because he established at trial that he did make substantial separate property contributions to the business. However, the only evidence Maleki cites to support this contention is his own trial testimony.
The trial court made express findings that Maleki lacked credibility as a trial witness. By way of example, the court observed that Maleki’s trial testimony that he made financial contributions to the business was inconsistent with a pre-trial sworn statement in which he stated that he made no contributions because “there were never any cash contributions to be made by me.” The court also quoted the following passage from a sworn declaration that Maleki had filed in a 1996 child support proceeding: “I am seriously ill with heart disease. I am often in the hospital. I am completely disabled and will never again be able to work. . . . I have lost the rental property I previously owned through foreclosure. I have now lost my residence to foreclosure. I have no income. I have no savings. I have no assets. I am sometimes living with friends and at a shelter for the homeless. I have no hope of ever being able to support myself again.” The representations in this declaration were inconsistent with Maleki’s trial testimony that he owned real estate, that he had several ongoing businesses involving real estate, precious gems and import/export, and that he was physically active during the time frame covered by the 1996 declaration.
The trial court also found that Maleki failed to produce any evidence to corroborate his trial testimony that he contributed separate funds to the business venture. As the court explained, “[d]espite the introduction of over 150 exhibits, and the Court’s repeated requests that Mr. Maleki provide evidence of contributions to the joint venture that were not traced to Meagher, no such corroboration was ever produced. Each time Maleki identified funds in the Bank of Marin account or funds from an escrow that he claimed were his separate contribution, those funds were traced back to Meagher’s resources.” Ultimately, the lower court concluded that “[g]iven Maleki’s complete lack of credibility his testimony, absent some corroboration, simply failed to support his claims of financial contributions to the joint venture.”
Maleki does not challenge or even acknowledge the finding that he was not a credible witness. Nevertheless, this finding undermines his claim that the evidence establishes he did not commit fraud; although Maleki methodically addresses each element of fraud, he also methodically relies solely on his own discredited trial testimony. Furthermore, as discussed above, the trial court’s finding that Maleki committed fraud is supported by substantial evidence. Therefore, we affirm that finding on appeal.
B. There Was No Abuse of Discretion
Maleki next contends that the lower court abused its discretion by determining that all real property assets held in Meagher’s name were her separate property. To support this claim, Maleki first recites several rules and cases which have no obvious connection to his situation or the legal issues on appeal. He then makes a series of factual assertions which are unsupported by proper references to the record and which, for the most part, do not address the lower court’s findings in the statement of decision. Sifting through Maleki’s very confusing presentation in search of an actual point is not our job. In any event, to the extent Maleki’s complaints are decipherable, none establishes an abuse of discretion.
Maleki contends that Meagher failed to rebut the section 760 presumption that assets acquired during the marriage are community property. However, he completely ignores the evidence that Meagher produced at trial and relies instead on a version of the events that does not appear to be supported by any evidence except, to some extent, his own testimony which was found not to be credible.
Maleki repeatedly asserts that these assets were acquired through his skill, time, effort and labor. However, he ignores the fact that the trial court did compensate him for the time, skill and labor he contributed on behalf of the community. To compensate Maleki for his share of this community asset, the court gave him an offset credit against amounts Maleki took from the Bank of Marin account for his own personal use. Meagher’s testimony as well as documentary evidence in the form of bank statements and cancelled checks showed that Maleki transferred a total of $75,650 from the Bank of Marin account into his personal bank account. Therefore, Maleki was awarded this amount as his share of the community interest in Meagher’s real property assets.
Although not clear, it appears that Maleki is arguing that the trial court failed a supposed obligation to expressly address each individual asset and make a ruling as to the community’s interest therein. Every permeation of this argument is unsupported by relevant legal authority or proper citations to the trial evidence. Furthermore, Maleki’s specific claims to interests in Meagher’s various assets all fail to acknowledge or account for the fact that the lower court found that Maleki committed fraud and that all business agreements between the parties were rescinded. Maleki has simply not shown any error with respect to the court’s finding that all assets held in Meagher’s name are her separate property.
Maleki contends that the trial court erred by failing to make findings that Maleki’s separate properties would be distributed to him. He claims that he testified at trial “that he had personal properties that he had acquired prior to marriage and/or by way of gift or inheritance,” and that the court failed to confirm these assets were his separate property. This allegation is not supported by any reference to the trial record or even by an explanation in Maleki’s appellate brief as to what specific assets he has in mind. This superficial analysis is simply insufficient to establish an abuse of discretion.
Finally, Maleki challenges the lower court’s finding that the community does not have an interest in the increased value of the Tiburon home. His sole contention in this regard is that the court erroneously “refused to allow” him to testify as to the value of his services in improving that asset. Again, this contention is not supported by any reference to the record. The statement of decision reflects that the trial court considered Maleki’s testimony regarding the value of his services but concluded that testimony was not credible.
C. Partnership Claims
Maleki contends that the lower court erred by failing to distribute the properties in accordance with California partnership law. He reasons that the written agreements establish that he and Meagher were in a partnership and, therefore, all properties acquired during the relevant time period belong to the partnership itself. Like most of his arguments on appeal, this one is premised on the erroneous proposition that the written agreements remain valid and enforceable. To the contrary, “[a] contract is extinguished by its rescission.” (Civ. Code § 1688.)
D. Attorney Fees
Maleki’s sole contention regarding the attorney fees order limiting his recoverable fees to $25,000 is that he did not commit fraud and, therefore, is entitled to all of his attorney’s fees. Since the finding of fraud is supported by substantial evidence, the premise of this argument fails.
IV. MEAGHER’S APPEAL
A. Maleki’s $91,755 Investment
Meagher challenges the trial court’s order requiring her to pay Maleki $91,755 as reimbursement for his 1998 contributions to the business venture.
Meagher does not deny that Maleki contributed separate property funds totaling $91,755 to this business venture. Indeed, her own testimony confirms this fact. Nor does Meagher dispute that the lower court had authority to adjust the equities by ordering Meagher to make this payment. Authority cited by Meagher confirms that, “ ‘[i]t is the purpose of rescission ‘to restore both parties to their former position as far as possible’ [citation] and ‘to bring about substantial justice by adjusting the equities between the parties’ despite the fact that ‘the status quo cannot be exactly reproduced.’ [Citations.]” (Runyan v. Pacific Air Industries, Inc., supra, 2 Cal.3d at p. 316.) Furthermore, section 1692 of the Civil Code expressly provides that the court may require a party who is granted relief based on rescission “to make any compensation to the other which justice may require and may otherwise in its judgment adjust the equities between the parties.”
Nevertheless, Meagher maintains that she should not have to reimburse Maleki for his initial investment in the business because some of her separate funds have not been accounted for and also because she was damaged by Maleki’s mismanagement. It is not clear to us from this record whether Meagher simply failed to prove these alleged damages at trial or whether this is a newfound claim for damages. In either case, her request that we reverse this judgment and remand this case so that she can have the opportunity to prove that she suffered additional damage as a result of Maleki’s fraud and mis-management is improper.
A judgment is presumed to be correct. (State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 610.) The appellant has the burden of overcoming this presumption of correctness by providing an adequate appellate record demonstrating the alleged error. (Bennett v. McCall (1993) 19 Cal.App.4th 122, 127.) This burden carries with it an obligation to present argument and legal authority supporting the claim of error. (People v. Stanley (1995) 10 Cal.4th 764, 793.) Meagher’s desire to prove she suffered additional damages simply does not establish any error in the judgment.
B. Maleki’s Compensation for Value of Time, Talent and Labor
Meagher contends the trial court erred by finding that Maleki was entitled to compensation for devoting his time, talent and labor to Meagher’s separate property assets. As discussed previously, the trial court acknowledged that Maleki’s efforts with respect to Meagher’s separate property gave rise to a community interest in the assets and, to compensate Maleki for his share of this community asset, the court gave him an offset credit against the amounts he withdrew from the Bank of Marin account for his own personal use.
“[I]n California, property acquired prior to marriage is separate while property acquired during the marriage is presumed community property. [Citations.] Income from separate property is separate, the intrinsic increase of separate property is separate, but the fruits of the community’s expenditures of time, talent, and labor are community property. [Citations.]” (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850 (Dekker).) In the present case, the lower court properly applied these rules. It found that Meagher overcame the section 760 presumption and established that real property assets acquired during the marriage were her separate property. However, it also properly concluded that Maleki’s expenditures of time, talent and labor during the marriage gave the community an interest in the assets, and it compensated Maleki for his share of that community interest by giving him the offset credit.
Meagher contends the offset credit was improper because the lower court found there was no evidence that Maleki contributed time, talent or labor to her separate property assets. Meagher is mistaken. The court found that there was no evidence by which to value Maleki’s contribution; it did not find that no contribution was made. The court necessarily determined that Maleki did contribute services on behalf of the community by awarding Maleki offset credit.
Meagher contends there is “substantial evidence that Mr. Maleki’s efforts were directed to Mr. Maleki taking Dr. Meagher’s assets rather than augmenting value to Dr. Meagher’s assets.” This claim is unaccompanied by any reference to the record and improperly ignores our standard of review. More important, Meager ignores the relevant inquiry with respect to this specific issue. Regardless of Maleki’s alleged intent, there can be no question on this record that he contributed time and effort to the acquisition and maintenance of the assets which have now been identified as Meagher’s separate property. To the extent those contributions were made during the marriage, the community is entitled to credit for any resulting increase in value. (Dekker, supra, 17 Cal.App.4th at p. 850; see also Beam v. Bank of America (1971) 6 Cal.3d 12 (Beam).)
Meagher complains about the process by which the court valued the community interest resulting from Maleki’s efforts, but she fails to articulate any legal basis for her challenge. In this case, the lower court followed a judicially approved approach by assigning a reasonable value to Maleki’s services, allocating that value to the community and the balance to Meagher’s separate property. (See Beam, supra, 6 Cal.3d at p. 18; Dekker, supra, 17 Cal.App.4th at p. 853.)
Relevant law also establishes that, in determining a reasonable value for services rendered, the court is not bound by fixed rules or formulas. For example, it is not required to fix a salary for the spouse’s services and limit the community interest to that amount. Instead, it may select whichever formula will “‘achieve substantial justice between the parties. [Citations.]’ [Citations.]” (Beam, supra, 6 Cal.3d at p. 18.) In the present case, because of the paucity of credible evidence regarding the value of Maleki’s services, the court adopted a formula which it determined would “achieve substantial justice between the parties.” It awarded Maleki his share of this community asset as an offset against the funds that Maleki took from the Bank of Marin account for his own personal use. Meagher has failed to identify any error with respect to this ruling.
C. Attorney Fees
Meagher contends that the attorney fee award to Maleki should be stricken. “‘A motion for attorney fees and costs in a dissolution action is addressed to the sound discretion of the trial court, and in the absence of a clear showing of abuse, its determination will not be disturbed on appeal. [Citations.] The discretion invoked is that of the trial court, not the reviewing court, and the trial court’s order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made. [Citations.]’ [Citation.]” (In re Marriage of Keech (1999) 75 Cal.App.4th 860, 866.)
Meagher has failed to establish that the trial court abused its discretion. She complains that Maleki’s fraudulent conduct and his dishonesty during these proceedings disqualifies him from obtaining any fees. However, she ignores the fact that these factors were expressly addressed by the trial court. As discussed more fully above, the court explicitly considered both Maleki’s bad faith and the requirement that fees be reasonably incurred and it adjusted the fee award to account for these factors.
Meagher also erroneously contends that our decision in Meagher I, supra, 131 Cal.App.4th 1, precluded the trial court from reimbursing Maleki for fees incurred prior to the issuance of that decision because the parties were ordered to bear their own costs on appeal. Neither the disposition order, nor any other part of the decision in Meagher I, addressed the question of Maleki’s statutory right to recover attorney fees pursuant to section 2030.
Meagher also claims that she is entitled to an award of attorney fees pursuant to section 128.5 and 128.6 of the Code of Civil Procedure. These statutes pertain to requests for attorney fees from the trial court, not from the Court of Appeal. “A request for trial court attorney fees pursuant to statute is properly addressed to the trial court in the first instance (not the appellate court) . . . at least where the governing statute expressly calls for an award by the trial court. An appellate court may reach the issue only upon timely appeal of the trial court’s decision on the fee request.” (Eisenberg, et al., Cal. Practice Guide, Civil Appeals and Writs (The Rutter Group 2007) ¶ 14:116, p. 14-25, citing Olsen v. Harbison (2005) 134 Cal.App.4th 278, 288.)
In this court, Meagher does not expressly assert that she filed a motion for attorney fees in the trial court. As best we can determine from our own review of the record, she did not file such a motion. Her Respondent’s Appendix does contain a document which is described as a “Motion of Ann Marie Meagher for Attorney Fees and Costs filed April 2, 2007.” However, that description is erroneous. The referenced document is actually a motion for reconsideration of the superior court’s award of attorney’s fees to Maleki.
Meagher’s contention that she is entitled to trial court attorney fees that she did not seek to recover in the trial court is not a valid ground upon which to appeal this judgment.
V. DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
We concur: Lambden, J., Richman, J.
Civil Code section 1572 defines fraud as “any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract: [¶] 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; [¶] 2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; [¶] 3. The suppression of that which is true, by one having knowledge or belief of the fact; [¶] 4. A promise made without any intention of performing it; or, [¶] 5. Any other act fitted to deceive.”