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In re Marriage of Miner

California Court of Appeals, Fourth District, Second Division
Mar 14, 2008
No. E042898 (Cal. Ct. App. Mar. 14, 2008)

Opinion


In re the Marriage of NANCY MARIE AND GARY ALLEN MINER. NANCY MARIE MINER, Appellant, v. GARY ALLEN MINER, Respondent. E042898 California Court of Appeal, Fourth District, Second Division March 14, 2008

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

APPEAL from the Superior Court of San Bernardino County. Super. Ct. No. SBF44473 John M. Pacheco, Judge.

Edward R. Strelow for Appellant.

Joseph C. Kastner for Respondent.

OPINION

RAMIREZ P.J.

Appellant Nancy Marie Miner (Nancy) appeals from a postjudgment order to sell property issued by the superior court in response to a motion by respondent Gary Allen Miner (Gary). In this appeal, Nancy contends the superior court erred in issuing the order because it essentially rewrote the marital settlement agreement into which the parties entered in 1999 by setting a date for the sale of the family home. In the alternative, Nancy argues that the value of Gary’s share of the property should be established as of the date of the 1999 judgment. Nancy also contends that she should be given Epstein credits to reimburse her for mortgage payments made on the home to offset the Watts charges for having had exclusive use of the home.

“Epstein” credits are awarded to reimburse a spouse who has used separate property to pay a preexisting community obligation. (In re Marriage of Epstein (1979) 24 Cal.3d 76, 84 (Epstein).)

“Watts” credits or charges are used to reimburse the community when one party has had exclusive use of the family residence. (See In re Marriage of Watts (1985) 171 Cal.App.3d 366 (Watts).)

We note at the outset that Epstein credits and Watts charges can accrue even after the date of dissolution, until the date “on which the community itself no longer held an interest in the residence, which, in this case, was the date on which the marital home was sold.” (In re Marriage of Jeffries (1991) 228 Cal.App.3d 548, 552.)

As discussed below, we conclude that the superior court acted properly when it ordered Nancy to sell the home and ruled that each party would receive one-half of the equity in the home as of the date of sale. However, we remand to the superior court to reconsider whether Nancy is entitled to Epstein credits for the mortgage payments she made on the family home.

Statement of Facts

The judgment of dissolution that ended the parties’ marriage was entered on October 21, 1999, and became effective November 9, 1999. Attached to the judgment was a marital settlement agreement made between the parties. The very brief agreement provided that the parties would have joint legal custody of their 17-1/2-year-old son and divided the community property as follows: Nancy was awarded her retirement benefits, stock, and 401(k) account, along with “1/2 equity upon sale” of the family home. Gary was awarded his personal property and “1/2 equity in said house.” The agreement provided that “[t]he Court retains jurisdiction over issue of said house.”

Since October 21, 1999, Nancy has remained in the home and paid all mortgage payments and expenses. Gary has not lived in the home nor paid any mortgage payments or expenses.

On December 4, 2006, Gary filed a motion in the family law proceeding asking the court to order that the house be sold or refinanced so that he could receive his one-half interest in the current equity in the home. Gary also requested Watts charges for the time that Nancy had exclusive use of the home. On December 29, 2006, Nancy filed a response, objecting to the proposed order and arguing that the agreement provided that Gary would receive “his share of [the] equity only upon sale of the house, when [Nancy] chooses to sell.” Nancy objected to the Watts claim as beyond the reservation of the court’s jurisdiction contained in the agreement and pointed out that Watts charges are normally offset by Epstein credits.

After the hearing held on February 2, 2007, the superior court issued its ruling in a minute order dated February 8, 2007. The court granted Gary’s request to have the property sold or, in the alternative, to have Nancy buy out his one-half equity interest as of the date of sale. The court assessed Watts charges of $800 per month and gave Nancy credit for repairs and improvements made to the home. The court did not mention any Epstein credits for the mortgage payments Nancy had made. This appeal followed.

Discussion

Nancy’s main contentions on appeal are: (1) the superior court did not have jurisdiction to consider Gary’s request because this would require the court to reopen the terms of a final judgment; (2) the original judgment provided that Nancy could remain in the home until both she and Gary agreed to sell it; (3) if the home is to be sold, Gary should only receive a one-half interest in the equity as of the date the judgment was entered; and (4) Nancy is entitled to Epstein credits for making the mortgage payments out of her separate property to offset the Watts charges for having had sole use of the home.

1. De Novo Standard of Review

Nancy argues that the standard of review here is de novo because the facts are undisputed and the issue the superior court decided is purely a question of law. Gary counters that the standard of review is abuse of discretion because the parties disputed the ultimate facts as to whether there was a time frame in which the home must be sold and whether Nancy could block any sale and distribution indefinitely by refusing to consent. Where “no conflicting extrinsic evidence is offered of an interpretation as to which the language of a marital settlement agreement is reasonably susceptible, and the facts are otherwise undisputed, we apply the unambiguous contract terms to the undisputed facts as a matter of law.” (In re Marriage of Iberti (1997) 55 Cal.App.4th 1434, 1439.) Here, Nancy’s declaration attached to her opposition to Gary’s request for the order to sell property contained an explanation of “these factors [that] were part of my thinking as to why I should be given the use of the house until it suited me to get [sic] sell it.” However, the interpretation of the marital settlement agreement that Nancy offered (that she was to remain in the home as long as she wished) is not an interpretation to which the agreement is “reasonably susceptible.” Thus, we find that the facts (the terms of the marital settlement agreement as incorporated into the judgment) were undisputed and the interpretation of the agreement was a matter of law, and so we review the superior court’s interpretation of that agreement de novo.

However, we review the portion of the court’s ruling on the Watts charges and Epstein credits for abuse of discretion. (In re Marriage of Jeffries, supra, 228 Cal.App.3d at p. 552.)

2. Jurisdiction

Nancy contends the superior court had no jurisdiction to hear this case because Gary merely sought to reopen the terms of a final judgment. As Nancy points out, more than six months after a judgment of dissolution becomes final, the marital settlement agreement may be attacked only for actual fraud, perjury, duress, mental incapacity, mistake, or failure to disclose. (Fam. Code, § 2122.) Gary alleged none of these in his request for an order to sell the property.

The form judgment of dissolution specifically provides that “[e]ach attachment to this judgment is incorporated into this judgment, and the parties are ordered to comply with each attachment’s provisions. Jurisdiction is reserved to make other orders necessary to carry out this judgment.”

Contrary to Nancy’s assertion, it is apparent to us that this is an action to enforce the terms of the marital settlement agreement as written, and as incorporated into the judgment, rather than to attack or modify the terms. The agreement provides that each party will receive one-half of the equity in the family home. Nancy alleges that the terms of the agreement “allowed the petitioner to remain in the family home,” and that, consequently, Gary’s request that the court order her to sell the home was, in effect, a request to modify the terms of the judgment. We disagree, based on the fact that the agreement does not provide for either party to live in the home. Rather, the agreement simply awards each party a one-half interest in the home’s equity. Thus, the superior court did have jurisdiction to consider Gary’s request, because Gary sought to enforce the terms of the agreement as incorporated into the judgment.

3. Nancy’s Right to Remain in the Home until Mutual Agreement to Sell

Nancy contends that, assuming the superior court had jurisdiction to consider Gary’s request, the agreement and judgment provide that she may remain in the home until both she and Gary agree to sell it. This effectively gives Nancy veto power over whether Gary can ever make use of his one-half share of the home’s equity. We look to the terms of the agreement to determine whether it provides for this.

Marital settlement agreements incorporated into a judgment of dissolution are interpreted under the statutory rules governing the interpretation of contracts. (In re Marriage of Iberti, supra, 55 Cal.App.4th at p. 1439.) Here, the marital settlement agreement says nothing about who is to live in the home and for how long. It is also silent as to when the house will be sold. Rather, it simply awards Nancy “1/2 equity upon sale of house at 1399 Cherry Tree [Road], Colton, CA” and awards Gary “1/2 equity in said house.” “If no time is specified for the performance of an act required to be performed, a reasonable time is allowed.” (Civ. Code, § 1657.) What constitutes a reasonable time for a party to perform its obligations under a contract is ordinarily a question of fact, dependent upon the facts of the particular case. (Kotler v. PacifiCare of California (2005) 126 Cal.App.4th 950, 956.)

Counsel for Nancy stated at oral argument that the stipulated judgment unambiguously provides for the home to be sold when both parties agree. This simply is not the case.

The agreement as incorporated into the judgment thus requires Nancy to sell the home and divide the equity with Gary within a reasonable time. Under the circumstances of this case, we conclude that a reasonable time had already passed when Gary filed his request on December 4, 2006. We reach this conclusion based on the fact that the parties’ son was 17-1/2 years old at the time of the judgment and is now no longer dependent on Nancy for support or housing. We also consider the amount of time that has passed since the 1999 judgment. Thus, under the terms of the agreement incorporated into the judgment, any alleged entitlement that Nancy had to remain in the home at her option has long passed, and she is obligated to sell the home and split the equity equally with Gary.

4. Date of Equity Determination

Nancy argues that, if she is obligated to sell the home and give Gary one-half of the equity, Gary should receive one-half of the equity that was in the home at the time of the judgment. According to Nancy’s estimation, the home was valued at $85,000 at the time of the judgment, with approximately $23,000 in equity. The appraisal that Gary submitted along with his request valued the home at $368,000. The rationale behind Nancy’s argument is that giving Gary half of the current equity gives Gary a windfall over what he would have received after a trial or default judgment.

This reasoning ignores the simple terms of the agreement as incorporated into the judgment—that each party is to receive one-half of the equity in the property “upon sale.” The agreement does not freeze Gary’s share of the equity at its 1999 value, nor does it provide that, when the home is sold, Nancy should receive more than one-half of the equity. Thus, the equity to be divided equally between the parties is the profit actually realized from the sale of the home.

5. Epstein Credits and Watts Charges

Nancy contends that the court abused its discretion when it assessed the community $800 per month in Watts charges for the time that she had exclusive use of the home, but failed to award her Epstein credits for the mortgage payments she made on the home out of her separate property. The court’s order did award Nancy “credit for repairs and/or improvement[s]” to the home, but was silent as to Epstein credits for mortgage payments.

Gary defends the Watts charges as proper, but does not challenge Nancy’s contention that the superior court should have granted Epstein credits for the mortgage payments.

In Epstein, supra, 24 Cal.3d at pages 84 and 85, our Supreme Court said that, “as a general rule, a spouse who, after separation of the parties, uses . . . separate funds to pay preexisting community obligations should be reimbursed therefor out of the community property . . . .” (Citing In re Marriage of Smith (1978) 79 Cal.App.3d 725.) The court excepted from that general rule several situations, including where the spouse making the debt payments on an asset was using the asset “and the amount paid was not substantially in excess of the value of the use.” (Epstein, supra, at p. 85.)

The record shows that Nancy made mortgage payments on the home in the amount of $776 each month, plus $150.03 for taxes and insurance. The superior court set the value of Nancy’s exclusive use of the property at $800 per month. It appears that the monthly mortgage payment Nancy made out of her separate property is approximately equal to the amount set by the superior court as the fair monthly value of Nancy’s use of the home. However, the court in its ruling did not state whether it was denying or granting Nancy’s request for Epstein credits for the mortgage payments. We decline to calculate the amount of the Epstein credits, or even to order the court to grant Epstein credits. Rather, we remand this case to the superior court so it can rule on Nancy’srequest for Epstein credits for the mortgage payments she made from her separate property.

Counsel for Nancy suggested at oral argument that case law does not support such an award of credits after a stipulated judgment and up to the time of a post-judgment order. We direct counsel to In re Marriage of Jeffries, cited in footnote 3 of this opinion.

Disposition

The superior court’s ruling is affirmed, but the case is remanded with directions to rule on whether Nancy is entitled to Epstein credits for the mortgage payments she made on the home. The court may receive additional evidence, briefing or oral argument if, and to the extent, it deems advisable. However, unless the court sets a briefing and/or hearing schedule within 30 days after our remittitur issues, the matter will be deemed to have been submitted on the date of the remittitur. The parties will each bear their own costs on appeal.

We concur: McKinster J. GAUT J.


Summaries of

In re Marriage of Miner

California Court of Appeals, Fourth District, Second Division
Mar 14, 2008
No. E042898 (Cal. Ct. App. Mar. 14, 2008)
Case details for

In re Marriage of Miner

Case Details

Full title:NANCY MARIE MINER, Appellant, v. GARY ALLEN MINER, Respondent.

Court:California Court of Appeals, Fourth District, Second Division

Date published: Mar 14, 2008

Citations

No. E042898 (Cal. Ct. App. Mar. 14, 2008)