Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the San Diego County Super. Ct. No. DN130162, Harry L. Powazek, Judge.
IRION, J.
After separating from John S. MacDonald, her husband of 22 years, Candace A. MacDonald withdrew approximately $25,000 from two bank accounts held in the name of the couple's children and, after placing the money in an account held in her name, paid over $30,000 toward the children's college-related expenses. John appeals the trial court's ruling that Candace was not required to reimburse the community for the monies withdrawn from the two accounts prior to equalization of the marital estate. We find no error in the trial court's ruling, and affirm the judgment.
As is customary in family law cases, for clarity we refer to the parties by their first names. By doing so, we intend no disrespect.
FACTUAL AND PROCEDURAL HISTORY
In approximately 1988, Candace opened a "college fund" bank account for each of the couple's two children with a check from Candace's employer, to which she later added $3,800 from an inheritance. Candace also provided regular contributions to the accounts through an automatic payroll deduction. At the time of marital separation, the accounts contained a combined sum of approximately $25,000.
Candace filed for divorce in October 2003. In violation of the automatic temporary restraining orders contained in the dissolution summons, Candace closed the college fund accounts, and placed the money withdrawn in a bank account held in her name and from which she had been paying her postseparation living expenses. Candace subsequently paid over $30,000 for the children's "college expenses" from that account.
The majority of the issues relating to the distribution of the marital estate were resolved by agreement of the parties. However, the parties could not come to an agreement as to whether Candace was required to reimburse the marital estate prior to equalization for the money withdrawn from the college fund accounts.
In March 2006, trial was held on the issue of whether the approximately $25,000 withdrawn by Candace from the college fund accounts was community property and, if so, whether Candace should be required to reimburse the community for such sums prior to equalization. The parties stipulated that if reimbursement was required, the court should then order an equalization payment from John to Candace of $46,370. Conversely, if reimbursement was not required, John would owe Candace an equalization payment of $71,370.
Also litigated were the issues of: (i) spousal support; (ii) whether John had breached his fiduciary duty to Candace by investing in a fraudulent investment opportunity; and (iii) the parties' respective entitlement to Watts credits (see In re Marriage of Watts (1985) 171 Cal.App.3d 366, 374). The court's resolution of these issues is not at issue on appeal.
Prior to trial, the parties stipulated as follows: "As far as the equalization payment, we are in agreement as to the amount it's going to be. It's going to be between $46,370, depending upon the court's ruling, through $71,370. So the equalization payment we have stipulated will be between those two amounts."
At trial, Candace took the position that the bank accounts were, at least in part, her separate property, having been funded through an inheritance. Alternatively, she contended that even if the accounts were community property, she used the funds for the purposes agreed to by the parties, namely payment of the children's college expenses. John, through counsel, argued that reimbursement was required because "the evidence will show that [Candace] is unable to account for where [the] money went," and although "[s]he's indicated that it was spent on the children, . . . we believe we can . . . provide to the court evidence to the contrary."
After hearing the testimony and argument of counsel, the trial court ruled that while the money withdrawn from the college fund accounts was indeed community property, Candace was not required to reimburse the community. The court stated in part: "The parties intended [the $25,000] to be used for the children's education and despite [Candace's] unauthorized and clearly inappropriate conduct in her [postseparation] liquidation of said funds, she has spent more than the balances as of date of separation toward the children's education. Therefore, [John's] request for a reimbursement is denied."
Characterization of the college fund accounts as community property is not at issue on appeal. Candace did not file a cross-appeal, and John's appellate arguments all proceed from the assumption that the funds were properly characterized, but that the court erred by not ordering reimbursement of those funds to the community before the marital estate was equalized.
DISCUSSION
On appeal, John contends that the trial court's ruling was erroneous because: the ruling resulted in an unequal division of the marital estate; the payment of adult children's college expenses is not a community debt, and Candace's payment of the college-related expenses of the parties' children must be considered her separate property gift to them; there is no evidence in the record to support the trial court's finding that the parties intended that the money in the college fund accounts be used to pay the children's college-related expenses; and Candace commingled community funds with her separate property funds. As we explain below, we reject these contentions and affirm the judgment.
We first reject John's contention that the trial court's ruling must be reversed because it resulted in an unequal division of the community estate in violation of Family Code section 2550. This contention is unavailing because the parties stipulated at trial that an equal division of the property would result from an equalization payment of either $46,370 or $71,370, depending on the trial court's ruling on reimbursement to the community of the $25,000 withdrawn from the college fund accounts. Thus, we must presume equal distribution absent some showing that the trial court erred in its decision regarding reimbursement of the $25,000 withdrawn by Candace.
All statutory references are to the Family Code unless otherwise indicated.
With respect to John's request for reimbursement, the trial court's ruling was governed by a handful of statutory provisions that permit the trial court to order reimbursement of the community estate in certain circumstances. Under section 2626, "[t]he court has jurisdiction to order reimbursement in cases it deems appropriate for debts paid after separation but before trial"; under section 2602, "the court may award" to one party "the amount the court determines to have been deliberately misappropriated by the party to the exclusion of the interest of the other party in the community estate"; and, finally, section 2553 grants the court sweeping discretionary power to "make any orders the court considers necessary to carry out the purposes of this division," including, of course, the requirement that the trial court "divide the community estate of the parties equally." (§ 2550; see generally Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2007) ¶ 8:866, p. 8-218.) As the text of these statutes suggests, the Legislature has granted trial courts broad discretion in ruling on a reimbursement request, and consequently reversal on appeal is permitted only upon a showing of abuse of discretion.
We begin our analysis by rejecting as forfeited John's appellate contention that the trial court's reimbursement ruling must be reversed because payment of college-related expenses of adult children are not community obligations and thus Candace's payment of those expenses must be considered a gift of her separate property to the children. John did not present this contention to the trial court, and consequently the claim cannot constitute a proper basis for reversal on appeal. (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117 ["It is well established that issues or theories not properly raised or presented in the trial court may not be asserted on appeal, and will not be considered by an appellate tribunal"].)
Moreover, John's challenge appears to be based on a misunderstanding of the trial court's ruling. The trial court did not find that the college-related expenses of the parties' adult children were a community obligation. Rather, the court, exercising its discretionary authority under the Family Code, ruled that reimbursement to the community estate of amounts held in the college fund accounts was not required because the parties agreed preseparation that the money in those accounts would go toward the children's college-related expenses, and despite Candace's improper withdrawal and commingling of the funds with her separate property, she had shown that the money was ultimately used for that purpose. We see no legal basis, and John presents none, upon which we can disturb the court's ruling.
In fact, in a posttrial ruling denying John's motion for reimbursement for monies he spent on the children's college education, the court specifically stated: "The court did not make any findings that the community was responsible for any of the postseparation expenses paid by the parties for their adult children."
Candace testified: "I am not a lawyer, and I didn't realize it mattered which account I took the money out of. It's a total dollar amount [that was withdrawn], and I spent well above and beyond that for the kids."
The parties to a marriage may, of course, agree to dispose of community property in a manner that is not otherwise required by a community obligation — for example, an agreement to spend community funds on their children's college education. (Cf. Kamper v. Waldon (1941) 17 Cal.2d 718, 721 ["There is nothing in the law to prevent a parent from contracting to support a child, minor or adult, married or unmarried"]; Hogoboom & King, Cal. Practice Guide: Family Law, supra, ¶ 6:25, p. 6-27 ["So long as the court's jurisdiction to act in the child's best interests is preserved, agreements . . . providing for support although no legal obligation to do so (e.g., child now an adult) may be enforceable as between the parents"].) The trial court concluded that such an agreement was present here and made a finding to that effect.
John challenges the trial court's finding of an agreement, but fails to recognize our limited power to disturb factual findings on appeal. It is the trial court that is charged with hearing the testimony and resolving factual questions, and consequently, "[i]t is well established" that on appeal we "start[] with the presumption that the record contains evidence to sustain every finding of fact." (In re Marriage of Burkhart (1986) 180 Cal.App.3d 198, 202.) From that premise, we then review the appellant's challenge in light of the fact that "[t]he power of an appellate court begins and ends with the determination as to whether there is any substantial evidence contradicted or uncontradicted which will support the finding of fact." (Ibid.; see also In re Marriage of Mix (1975) 14 Cal.3d 604, 614 [trial court's factual findings will not be disturbed on appeal if supported by substantial evidence and noting that " '[t]he testimony of a witness, even the party himself, may be sufficient' " to support a trial court's finding].) Finally, it is John's burden on appeal, as the appellant, to "show[] that there is no substantial evidence to support the trial court's findings." (Burkhart, at p. 202.)
Here, John fails to carry his burden of demonstrating the absence of evidence to support the trial court's findings, instead resorting to various rhetorical arguments that would be better addressed to a trial court (which decides factual issues) than an appellate tribunal (which is limited to reviewing factual findings for substantial evidence). Further, our independent review of the record demonstrates that there is substantial evidence to support the trial court's findings, both as to the parties' agreement to use the money in the college fund accounts for their children's college-related expenses and the actual use by Candace of the amount of those funds for the intended purpose.
It was undisputed that the accounts from which Candace withdrew the funds at issue on this appeal, referred to as the "college funds" during the proceedings, were opened in the children's names. Candace further testified that those accounts "were strictly set up for college" and that "no moneys had been taken out until they were in college." At trial, John did not dispute Candace's testimony regarding the accounts, and failed to suggest any other purpose or contrary intent for the utilization of those funds.
John contends that the trial court's finding is "inconsistent" with section 2040's requirement of "written consent" for a postseparation withdrawal of community assets. (See § 2040, subd. (a)(2) [imposing "a temporary restraining order" at the outset of dissolution proceedings, "[r]estraining both parties from . . . in any way disposing of any property . . ., without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life"].) We see no inconsistency. The trial court's ruling was not that John agreed to Candace's postseparation withdrawal of the funds. Rather, the court found a preseparation agreement that the funds would be used for the children's education, and concluded that they ultimately were used for that purpose.
Substantial evidence also supports the trial court's finding that Candace ultimately used the money withdrawn from the college fund accounts for the children's college-related expenses by expending more than $25,000 from her separate bank account on the children's education. Although Candace concedes that the college funds were commingled with her separate funds (and thus it could not be established that literally the same funds withdrawn were then used for college), at trial she was able, despite John's counsel's efforts on cross-examination and in argument, to document to the court's satisfaction her payment of over $30,000 for the children's education-related expenses from the account into which the "college funds" had been placed. Candace presented bank statements, cancelled checks and other documentation substantiating those payments. Given this, evidently even John's trial counsel was eventually forced to concede in closing argument, contrary to his position in opening statement, that "some of the money" did go "to pay the children." Thus, regardless of whether we would have arrived at the same conclusions as the trial court, given the record before us, we have no power to disturb that court's findings.
We construe John's appellate contention — that the funds were commingled in Candace's account and thus the precise funds withdrawn were not used to pay the children's college expenses — as essentially a substantial evidence challenge to the court's finding that the funds in question were used to pay the parties' children's college-related expenses. Were we to construe the argument as it appears to be presented in John's brief — that the mere commingling required reimbursement as a matter of law — we would reject it, as we are aware of no authority for that proposition, and the cases John cites do not support it. (See In re Marriage of Braud (1996) 45 Cal.App.4th 797, 822 [recognizing that party was entitled to reimbursement from the community "for any contributions to improvements of the family home to the extent he could trace the contributions to a separate property source"]; In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1057 [recognizing that "tracing to a separate property source . . . will establish a prima facie statutory right of reimbursement" from the community "in a marital action dividing the community estate"].)
In conclusion, we determine that John has failed to carry his burden on appeal of demonstrating any legal error in the court's ruling. The trial court acted within its statutory discretion, and the factual findings challenged on appeal are supported by substantial evidence. Consequently we have no power to reverse the trial court's ruling, and must affirm.
DISPOSITION
Affirmed.
WE CONCUR: McDONALD, Acting P. J., McINTYRE, J.
Section 2550 states that "in a proceeding for dissolution of marriage . . ., the court shall . . . divide the community estate of the parties equally."
John also posits that "parties['] intentions change" over time, and particularly after separation, but even assuming that such a change in intent was dispositive, there was no evidence presented to the trial court as to any change in the parties' intent.