Opinion
B195991
11-16-2007
In re the Marriage of GEORGINA and EDWIN MAISONET. EDWIN MAISONET, Appellant, v. GEORGINA MAISONET, Respondent.
Law Firm of Fox and Fox, Frank O. Fox and Claire S. Fox for Appellant, Edwin Maisonet. Edgardo Garcia for Respondent, Georgina Maisonet.
NOT TO BE PUBLISHED
Appellant Edwin Maisonet ("husband") appeals from the judgment of dissolution of his marriage to respondent Georgina Maisonet ("wife"), to the extent the judgment treats as community property the family home, and sets aside a quitclaim deed on the property executed by wife. The trial court concluded that husband had failed to overcome the presumption of undue influence in the execution of the quitclaim deed. As substantial evidence supports the trial courts judgment, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
We set forth the facts in the light most favorable to the judgment.
Husband and wife were married in 1960. In March 1970, they acquired the property in question, taking title as joint tenants. They have a son, Isaias Maisonet ("son"), who has a mental disability, and is receiving social security benefits.
Son testified that he receives social security benefits due to scoliosis, but agreed that he is classified as having a mental disability.
Wife has "limited cognitive function which is best described into the mild range of retardation." An expert testified that it is "more likely than not" that wifes limitations have been longstanding. It is not the case that wifes abilities are "approaching" the level of retardation; in fact, her cognitive abilities are solidly at that level, as she presents with an IQ score below 70, placing her below the second percentile. Moreover, wife possesses "dependent personality traits," which mean that she has a tendency to defer or subsume her own goals to someone else on whom she is dependent. During their marriage, husband handled all of the familys finances. After their eventual separation, wifes niece handled her finances for her, as she could "hardly . . . do it [her]self." During the marriage, wife trusted husband not to do anything harmful to her.
The actual diagnosis of "retardation" refers to a developmental disorder that must appear before age 18. If the disorder does not "unfold" before that age, the patient "would be functioning at that level, but [you would] not call it mental retardation." An expert testified to his belief that wife met the diagnosis, but the expert could not be positive in the absence of evidence of the time of onset of wifes limitations. However, regardless of whether wife could technically be classified as "retarded," wifes level of functioning was "well within the level of retardation."
In 1996, husband and wife, by grant deed, transferred the property to husband, wife and son as joint tenants. Husband and wife did this as a rudimentary form of estate planning, so that son would receive the property in the event of their deaths. They did not intend to convey any present interest in the property to him. Ultimately, the court would conclude that this deed had no effect.
On November 1, 2004, wife and son executed a quitclaim deed on the property, conveying the property to husband as his sole and separate property. Husband and wife had never discussed the possibility of wifes execution of such a deed. Instead, husband simply had the deed prepared, and made an appointment with notary Luis Alvarez ("notary") to have it signed. Husband told wife and son only that "they need[ed] to go to the notary to get some papers signed," and drove them there. At notarys office, notary spoke to wife, in Spanish, and explained to her that by signing the quitclaim deed, she would no longer be an owner of the property. Wife indicated that she understood, and signed the deed. Notary testified that the entire transaction, including his explanations to wife and son, took approximately ten minutes. Husband did not threaten wife, intimidate her, or place any pressure on her to sign the deed. Wifes execution of the deed was voluntary.
Husband testified that he had the deed prepared because he had overheard wife and son discussing the house and agreeing that, because husband had put some $80,000 into the house, he "should be able to get the house." Wife testified that she never had such a conversation with son. The trial court accepted husbands testimony on this point, expressly stating, "You said that you overheard your wife and your son talking about giving it to you. And thats what you said. And I dont have any evidence to show that thats not true especially in light of [wifes] testimony." In his reply brief on appeal, husband states that the trial court made a finding that the reason wife transferred the property to husband was because of the $80,000 husband had invested in the house. This is an overstatement of the record. Although the trial court explicitly told husband that it did not find husband to be lying, the court also said, in the same ruling, that "theres just absolutely no evidence in this case to show me any motive whatsoever for" wife to give up her interest in the property.
At trial, notary answered "yes" to the question, "[D]id you tell [wife], before she signed [the quitclaim deed], that she was transferring all of her interest in the real property at [address], whether separate or community, to [husband] as his separate property?" However, when asked, in cross-examination, whether that was true, notary testified that he "explained that [she] would no longer own the property." When asked specifically if he explained the concepts of separate and community property interests to wife, notary testified, "I didnt get into detail."
At the same time, wife and son executed an accompanying document, confirming their execution of the quitclaim deed and indicating that they had "received full consideration, outside of this escrow." Notary testified that, before wife signed this document, he repeated his explanation that by signing it, she would be transferring her interest in the property. Wife said that she understood and agreed before signing the document.
On November 4, 2004, three days after wifes execution of the quitclaim deed, the parties separated. The separation was husbands idea; he told wife he wanted to separate. Husband listed the property for sale on the date of separation. Husband had not discussed selling the property with wife before he listed it for sale. He had no idea as to where wife and son would live after he sold the family home; he assumed she would return to her family. Husband listed the house for sale for $450,000; outstanding debt was $155,000, leaving approximately $295,000 in equity. Husband had not given wife anything in exchange for her $147,500 share in the property.
There is some dispute in the evidence as to whether husband told wife he wanted to separate before or after she executed the quitclaim deed. It is undisputed, however, that: (1) husband told wife he wanted to separate; (2) the date of the parties separation is November 4, 2004; and (3) the quitclaim deed was executed prior to the separation.
Subsequently, wife filed a petition for dissolution of the marriage. By the time of trial, the property had been sold; the proceeds were held in a trust account. The parties agreed to the distribution of all assets, with the exception of the proceeds from the sale of the property. A bench trial was held. Because the transaction was an interspousal transaction in which husband was advantaged, the trial proceeded on the basis that a presumption of undue influence had arisen, and it was husbands burden to overcome that presumption. Husband introduced his testimony, and the testimony of notary, to the effect that notary had explained the quitclaim deed to wife, and she had voluntarily signed it.
Wifes testimony at the trial was marked by inconsistency and confusion. Although wife did not volunteer any lack of ability to understand the questions posed to her, her answers demonstrated her limited cognitive abilities. A few examples should suffice. When wife was first asked the preliminary question of when she and husband had purchased the property, she answered, "November the 4th of [2004]." Thereafter, when she was asked when she put son on the title to the property, she again identified November 4, 2004. When asked why she and her husband had put son on the title to the property, she first gave one reason ("[b]ecause [husband] was using his money") and indicated there were no other reasons. Moments later, she agreed to a different reason (so son could inherit the property if something happened to her and husband) and said that reason was "the only reason." Wifes testimony regarding the control of sons social security benefits was even more confused. She first testified that she controlled sons money, even before the separation. Moments later, she testified that husband controlled sons money until the date of separation. When the court then expressed confusion and asked wife again, she returned to her original testimony that husband never controlled sons money. When reminded that she had just said that husband controlled sons money, and asked again if husband had access to it, she replied, "[n]ot until we moved." The fifth time the question was asked, she said that husband controlled sons money before the separation. Later that same day, she again testified that she was on the account until the separation. Her counsel then elicited testimony that she did not begin managing sons money until after the separation. The trial court, hoping to pin down wifes testimony one final time, asked wife who was on the account prior to the separation. This time, she answered that she and husband were both on the account. The court remarked, "Ive asked you that multiple times before. You told me something different." The court asked, "Did you not understand the question before when I asked you? Is that how this mistake happened?" Wife answered, "Probably, yes."
Wifes testimony on other issues was also confused and contradictory. Depending on who was questioning her, wife testified that when she went to notarys office, she both knew, and did not know, that husband wanted to separate. Wife first testified that when she signed the deed, she signed it on her own without being influenced by anyone else. She then testified that she signed the deed because husband had asked her to sign it. She testified both that nobody forced her to sign the deed, and that she signed it because husband forced her to sign. When first asked what she meant to do by signing the deed, she responded, "Im not sure." However, she then testified that by signing the document, she intended to give the house to husband. When asked again if that is what she had wanted to do, wife responded, "No."
The trial court questioned wife as to the basis for her fear. Wife testified that she was nervous that husband would "say bad things about" her if she did not sign the deed. The court asked wife why she thought husband would get mad if she did not sign; wife replied, "I dont have no idea."
On two occasions, the court allowed counsel to ask leading questions of wife, due to her apparent impairment. At the first instance, prior to any testimony regarding wifes limited cognitive abilities, the trial court stated, "[Wife] to the court appears to be somewhat fragile having to have questions repeated quite often. Her facial expressions are that some of the questions I dont think shes understood until theyve been rephrased."
At trial, the court also heard testimony from Timothy Collister, Ph.D., a psychologist ("psychologist"), who testified as to wifes limited cognitive abilities, based on a comprehensive evaluation he had performed in September 2005. Based on his evaluation, psychologist testified that it was "highly unlikely" that wife would have had a full comprehension of a quitclaim deed in November of 2004. He testified that a ten minute explanation would be insufficient to make her understand. Psychologist believed wifes level of "academic achievement related to reading" is at best at a third grade level, and her understanding of the concept of "ownership" is that of a seven- or eight-year-old child. Psychologist noted that, during his evaluation, wife had been confused about simple matters, such as how many brothers and sisters she has. Finally, he indicated no suspicions that wife had been contriving her mental limitations in order to prevail in this litigation.
Notary did not perceive wife to be slow. He apparently made no attempt to explain the quitclaim deed to her as to a child.
At the close of the hearing, the trial court concluded that husband had not overcome the presumption of undue influence. While the court concluded that husband had not affirmatively unduly influenced wife, the court concluded that husband had not established that wife understood the true consequences of signing the quitclaim deed. Specifically, the court found psychologists testimony persuasive, and confirmed by wifes conduct in court. The court concluded wife had no clear understanding that, by signing the quitclaim deed, she was relinquishing her $147,500 interest in the property, nor that husband would be able to sell the house and leave her to live with her relatives. As husband failed to rebut the presumption of undue influence, the court set aside the quitclaim deed, and treated the property as community property to be evenly divided between the parties. Judgment was entered accordingly. Husband filed a timely notice of appeal.
ISSUE ON APPEAL
The sole issue on appeal is whether substantial evidence supports the trial courts findings. Husband contends that the court erred both in concluding that the presumption of undue influence arose in connection with the quitclaim deed, and in concluding that he had failed to rebut it.
DISCUSSION
1. Governing Principles of Law
Family Code section 721, subdivision (b) provides, in pertinent part, that "in transactions between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other." Because of this fiduciary relationship, "[w]hen an interspousal transaction advantages one spouse, `[t]he law, from considerations of public policy, presumes such transactions to have been induced by undue influence." (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 293.)
The presumption of undue influence arises when two elements are present: (1) an interspousal transaction; and (2) one spouse has obtained an advantage over the other. (In re Marriage of Mathews (2005) 133 Cal.App.4th 624, 629.) "Generally, a fiduciary obtains an advantage if his position is improved, he obtains a favorable opportunity, or he otherwise gains, benefits or profits." (In re Marriage of Lange (2002) 102 Cal.App.4th 360, 364.) Whether an interspousal transaction gives one spouse an advantage, and therefore gives rise to the presumption, is a question of fact. (In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 734.) Property transfers without consideration "necessarily raise a presumption of undue influence, because one spouse obtains a benefit at the expense of the other, who receives nothing in return." (Id. at p. 731.) Even if there is some consideration for an interspousal property transfer, if that consideration is "clearly inadequate," the presumption arises. (In re Marriage of Haines, supra, 33 Cal.App.4th at p. 296.)
Once the presumption of undue influence arises, the advantaged spouse has the burden to establish, by the preponderance of the evidence, that the advantage was not gained in violation of the fiduciary relationship. To establish this, the advantaged spouse must prove that the transfer " `was freely and voluntarily made, . . . with a full knowledge of all the facts, and with a complete understanding of the effect of the transfer. " (In re Marriage of Haines, supra, 33 Cal.App.4th at p. 296.) The inquiry does not focus solely on the affirmative acts performed by the advantaged spouse. Instead, factors relating to the disadvantaged spouses cognitive abilities and level of reliance on the advantaged spouse are also considered. (See In re Marriage of Delaney (2003) 111 Cal.App.4th 991, 1000 [substantial evidence supports trial courts conclusion that the presumption was not overcome, given that the husband suffered cognitive impairments and had entrusted all financial and legal matters to his wife, and simply signed the documents without questioning the wifes instruction that it was necessary to do so].) On appeal, a trial courts determination of whether the presumption has been overcome will be affirmed if supported by substantial evidence. (In re Marriage of Burkle, supra, 139 Cal.App.4th at p. 737.)
In his reply brief on appeal, husband argues that In re Marriage of Mathews, supra, 133 Cal.App.4th 624 holds "that an advantaged spouse does not have to show that the disadvantaged spouse understood the legal consequences of the quitclaim deed." On the contrary, that case holds that the advantaged spouse has the burden to show that the deed was freely and voluntarily made, with full knowledge of all the facts "and with a complete understanding of its effect." (Id. at p. 630.) Indeed, the result in In re Marriage of Mathews was not based on a change in the applicable legal test, but on the fact that substantial evidence supported the trial courts conclusion "that the quitclaim deed was the voluntary and deliberate act of [the disadvantaged spouse], taken with full knowledge of its legal effect." (Id. at p. 632.)
2. Substantial Evidence Supports the Conclusion that the Presumption Arose
Husband argues that the presumption did not arise because he was not unfairly advantaged by wifes execution of the quitclaim deed. First, the contention is waived. At trial, husbands counsel conceded that the presumption arose. In any event, the contention is meritless. Only two things are necessary for the presumption to arise: (1) an interspousal transaction; and (2) one spouse gaining an advantage over the other. The quitclaim deed was indisputably an interspousal transfer. Moreover, the evidence is overwhelming that husband gained an advantage. Wife had a $147,500 interest in the property, which was transferred to husband for no consideration at all. Husband suggests the transfer was supported by adequate consideration because husband had spent $80,000 of his own funds to improve the property. Assuming, without deciding, that the $80,000 husband invested in the property consisted of separate property funds rather than community funds, recognition of husbands prior $80,000 investment is clearly insufficient consideration for wifes transfer of an interest valued at $147,500. The trial court did not err in concluding husband was advantaged by this transfer, and that the presumption of undue influence therefore arose.
On appeal, husband suggests that the "advantage" which gives rise to the presumption is not "merely that a gain or benefit has been obtained," but must instead be an unfair advantage gained as the result of an abuse of the marital relationship. This is not the law. The presumption arises in "any interspousal transaction in which the evidence shows one spouse obtained an advantage over the other. [Citation.] Nothing in [In re Marriage of Haines, supra, 33 Cal.App.4th 277] confines its holding to situations in which the interspousal property conveyance was the result of actual fraud, deceit or coercion." (In re Marriage of Mathews, supra, 133 Cal.App.4th at pp. 629-630.)
3. Substantial Evidence Supports the Conclusion that Husband Did Not Overcome the Presumption
To overcome the presumption, husband had to establish that the transaction was freely and voluntarily made, with a full knowledge of all the facts, and with a complete understanding of the effect of the transfer. The trial court found that the transaction was freely and voluntarily made, with no threats or intimidation. However, the court found that husband had not established that wife had a complete understanding of the effect of the transfer. Substantial evidence supports this conclusion. Specifically, the trial court relied on psychologists testimony that wife lacked the cognitive abilities to truly understand the effect of executing a quitclaim deed, and that a ten-minute explanation would not change this. This testimony constitutes substantial evidence. Moreover, the courts own observations of wife at trial confirmed psychologists testimony, both regarding her cognitive limitations and her dependent personality traits.
In his brief on appeal, husband argues that there is substantial evidence in the record that wife did understand the effect of the quitclaim deed. That may be, but that is not the test on appeal. We are concerned with whether substantial evidence supports the trial courts conclusion, not with whether substantial evidence would have also supported the opposite conclusion.
Husband argues, no less than four times in his opening brief, that psychologists testimony was inadequate because psychologist conceded that he could not confirm the diagnosis of retardation without knowing the onset of wifes limitations. Husband misconstrues psychologists testimony. Psychologist explained that the specific diagnosis of mental retardation was in doubt, as that diagnosis depends upon an early onset. However, psychologist confirmed that, even in the absence of that diagnosis, wifes cognitive abilities were within the range normally categorized as mental retardation. Wifes IQ was less than 70, placing her below the second percentile. Not only was this testimony sufficient, it was undisputed.
Husband also argues that psychologists testimony is insufficient because psychologist testified "that if he had obtained additional facts concerning the . . . transaction, his opinion concerning [wife]s alleged lack of legal understanding of the transaction may be different." (Emphasis original.) The relevant testimony, which occurred during cross-examination, is as follows:
"[Q]: Would it in any way affect your opinion with respect to her cognitive ability to understand the refinancing of a real property lien if you learned of the circumstances upon which she may have been involved in that?
"[Wifes counsel]: Objection, your honor. Improper hypothetical.
"[Husbands counsel]: Its not a hypothetical.
"The Court: Doctor, do you understand the question? In other words, if you learned some more facts about this proposed transaction, is it possible that would have an effect on your opinion?
"The Witness: Its conceivably possible. But its hard to say yes or no.
"The Court: Because you dont know what the facts are. [¶] Next question." Husbands counsel never elicited testimony as to whether psychologists opinion would change based on any specific facts that were actually present in this case. That the psychologist admitted that his testimony could "conceivably" change based on some unidentified, unproven facts does not in any way undermine his testimony.
Husband also argues in his brief that wife "participated in the trial, with out having any comprehension predicament concerning the proceedings, a year after executing the [q]uitclaim [d]eed." (Emphasis original.) The contention is wholly belied by the record. Wifes testimony was often confused; the court commented on wifes apparent lack of comprehension; wife admitted to the court that she had "probably" not understood some of the courts questioning; and the court twice permitted counsel to ask leading questions due to wifes apparent lack of comprehension. From wifes first appearance on the stand, when she answered "November 4, 2004" to every question asking when something had occurred, it was apparent that wifes cognitive abilities were in doubt, despite her eagerness to answer questions without indicating her lack of understanding. In short, the evidence was more than sufficient to support the trial courts conclusion that wife could not, and therefore did not, truly understand the effect of signing the quitclaim deed. The courts determination that the presumption of undue influence was not overcome is therefore well-supported.
DISPOSITION
The judgment is affirmed. Wife shall recover her costs on appeal.
We concur:
KLEIN, P. J.
KITCHING, J.