Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from an order of the Superior Court of Fresno County Ct. No. 637148-8. W. Kent Levis, Jr., Judge.
Michele M. Nelson, in pro. per., for Appellant.
Nancy M. Epstein for Respondent.
OPINION
Levy, J.
Appellant, Michele M. Nelson (Wife), challenges certain aspects of the trial court’s order following a hearing on the bifurcated issues in the action dissolving her marriage to respondent, Charles J. Nelson (Husband).
In dividing the family residence, the court applied the “Moore/Marsden rule.” (In re Marriage of Moore (1980) 28 Cal.3d 366, 371-372; In re Marriage of Marsden (1982) 130 Cal.App.3d 426, 436-440.) Under this rule, the community acquires a pro tanto interest in one spouse’s separate property when community property is used to reduce the principal balance of the mortgage on that property. (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1421-1422.) Wife argues the trial court erred in applying this rule because Husband transmuted his separate property residence to community property when he executed and recorded a deed from Husband to Husband and Wife as joint tenants.
Wife further argues that the court erred in charging her rent for her exclusive use of the residence following separation, terminating spousal support, and failing to order Husband to continue to provide Wife’s medical insurance.
As discussed below, Husband’s execution of the joint tenancy deed constituted a transmutation of his separate property to community property. Consequently, the trial court’s order on the division of the residence will be reversed and remanded. However, the trial court acted within its discretion in making the remaining orders. Accordingly, those orders will be affirmed.
BACKGROUND
Husband purchased a residence on Austin Way in 1983 for approximately $70,000. When Husband and Wife married in 1985, title to this property was held in Husband’s name alone. During their marriage, Husband and Wife lived in the residence and made the mortgage payments from their community property earnings.
The residence was refinanced in 1991 to lower the interest rate on the loan. As part of this refinance, Husband executed and recorded a grant deed from Husband to Husband and Wife as joint tenants. Title to the property remained in this form. In 1992, Husband and Wife declared that they each held a 50 percent ownership interest in the residence when they executed and recorded a homestead declaration.
Husband moved out of the residence on December 1, 1998. Wife has had the sole and exclusive possession of the residence since that time.
Husband filed for dissolution in October 1999. Also in 1999, Husband paid the mortgage balance on the residence in full with separate property funds. Spousal support and child support orders were filed in August 2000.
Pursuant to a stipulation and order for bifurcation, the marriage was dissolved in 2001. Trial on the remaining issues was held in March 2007. Following the hearing, the trial court made various orders. At issue here are the orders dividing the residence, ordering Wife to pay Husband retroactive rent for the use of the residence, and terminating spousal support. Wife further argues that Husband should have been ordered to provide her with medical insurance.
DISCUSSION
1. A transmutation of the residence occurred when Husband granted the property to Husband and Wife as joint tenants.
In ordering the division of the residence, the trial court directed Husband’s counsel to determine the respective interests of the parties pursuant to the Moore/Marsden calculation. As noted above, this rule is applied when community property has been used to reduce the principal balance of a mortgage on one spouse’s separate property. (Bono v. Clark, supra, 103 Cal.App.4th at pp. 1409, 1421-1422.) The implied finding underlying this order is that the residence was Husband’s separate property.
Wife contends the trial court erred in ordering the application of Moore/Marsden because the residence is not Husband’s separate property. Rather, Wife argues that when Husband executed and recorded the deed granting the residence to Husband and Wife as joint tenants, he transmuted the residence to community property.
Married persons may, by agreement or transfer, transmute separate property of either spouse to community property. (Fam. Code, § 850, subd. (b).) A transmutation is an interspousal transaction or agreement that changes the character of the property. (In re Marriage of Campbell (1999) 74 Cal.App.4th 1058, 1062.) However, statutory formalities must be met. “A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.” (§ 852, subd. (a).) An express declaration must contain language that expressly states that the characterization or ownership of the property is being changed. (In re Marriage of Starkman (2005) 129 Cal.App.4th 659, 664.) However, it does not require use of the terms “transmutation,” “community property,” “separate property,” or a particular locution. (Estate of MacDonald (1990) 51 Cal.3d 262, 273.)
All further statutory references are to the Family Code.
Where one spouse transfers his or her separate property by way of a grant deed to both spouses as joint tenants, that spouse has validly transmuted the property to community property. Such a deed contains a clear and unambiguous expression of intent to transfer an interest in property. (Estate of Bibb (2001) 87 Cal.App.4th 461, 468-469.) Thus, here, when Husband executed the grant deed transferring title to the residence to Husband and Wife as joint tenants, he transmuted the residence to community property.
Husband testified that he executed the deed solely for the purpose of refinancing the residence and did not intend to make a gift of his separate interest to Wife. Therefore, Husband argues, he did not transmute his separate property residence to community property.
However, when the Legislature enacted the written express declaration requirement, it intended to enable the courts to validate transmutations without resort to extrinsic evidence and thus, without encouraging perjury and the proliferation of litigation. (Estate of MacDonald, supra, 51 Cal.3d at p. 272.) Therefore, in deciding whether a transmutation occurred, the court must interpret the written instruments independently, without resort to extrinsic evidence. (Ibid.) Accordingly, Husband’s testimony regarding his intent when he executed the deed cannot be considered. Since the deed satisfies the requirements of section 852, it transmuted the residence to community property. Therefore, the order directing the residence to be divided using the Moore/Marsden rule will be reversed and the matter remanded for further proceedings on this issue.
Wife also objects to the stated value of the residence and the separation date in the trial court’s order directing the division of the residence. The trial court valued the residence at $265,000. This value was based on a June 2006 appraisal. Wife contends that, because the matter was tried in March 2007, this value was not the fair market value. However, the only valuation evidence presented to the court was the 2006 appraisal. Thus, it was reasonable for the court to rely on that appraisal. Similarly, the December 1, 1998, separation date was the separation date adopted by the parties and neither party presented any contrary evidence. Accordingly, these objections have no merit.
2. The trial court did not abuse its discretion in charging Wife rent for her exclusive use of the residence.
The trial court found that Wife had sole and exclusive possession of the residence from the date of separation, December 1, 1998, until the time of trial in March 2007. The court determined that the reasonable rental value of the residence was $600 per month. Husband was awarded retroactive rent accruing from December 1, 1998, to the date that Wife either purchases or moves out of the residence.
Wife argues it was unreasonable to charge her rent. According to Wife, she should have been able to explain why she had asked Husband to leave and thus had the exclusive possession and control of the residence.
The trial court has the authority to reimburse the community for the value of a party’s exclusive use of the family residence. (In re Marriage of Watts (1985) 171 Cal.App.3d 366, 374; In re Marriage of Jeffries (1991) 228 Cal.App.3d 548, 552.) Thus, the court acted within its discretion in charging Wife rent. Further, the trial court correctly determined that Wife’s reason for asking Husband to leave the residence was irrelevant. However, because the residence is community property, the rent assessed against Wife must be reimbursed to the community estate, not solely to Husband. (In re Marriage of Jeffries, supra, 228 Cal.App.3d at p. 555.)
3. The trial court did not abuse its discretion in terminating spousal support.
Husband began paying court ordered spousal support to Wife in August 2000 and continued to do so until the trial court terminated the support as of May 1, 2007. He also provided support from the date of separation until the formal support order. Thus, Husband paid spousal support for over eight years after a 13-year marriage.
In terminating spousal support, the court found that, due to injury, Husband’s income would be substantially reduced in the near future. Husband had recently undergone surgery. The court found that additional surgeries would be required in the near future and that Husband would be receiving either disability income or would retire. Husband testified that he will receive approximately $1,700 per month in retirement income. Wife will receive approximately 19 percent of that amount. The court noted that Wife was also in failing health but that she had her own business and had the ability to earn a great deal more than the $418 per month she had reported.
Wife contends the trial court abused its discretion in terminating support two months after the hearing and not retaining jurisdiction. Wife also objects to income having been imputed to her despite her poor health.
Section 4320 requires the court to consider various factors in ordering spousal support. Relevant here are the earning capacity of each party, the ability of Husband to pay spousal support, the needs of each party, the assets of each party, the duration of the marriage, the health and age of the parties, and the balance of the hardships to each party. The trial court took these factors into account, focusing primarily on earning capacities, Wife’s receipt of spousal support for approximately eight and one-half years, Husband’s ability to continue to pay such support, and the physical health of each party. After balancing these factors, the court concluded that support should terminate. However, Husband was ordered to continue to pay child support.
Although the trial court must consider all the relevant circumstances enumerated in section 4320, it has broad discretion in balancing the applicable statutory factors and determining the appropriate weight to accord to each. (In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 207.) Once the court recognizes and applies each pertinent factor, “‘the ultimate decision as to amount and duration of spousal support rests within its broad discretion and will not be reversed on appeal absent an abuse of that discretion.’” (Ibid.) The court’s goal is to accomplish substantial justice for the parties in the case before it. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 304.) Because trial courts have such broad discretion, appellate courts must act with cautious judicial restraint in reviewing spousal support orders. (In re Marriage of Drapeau (2001) 93 Cal.App.4th 1086, 1096.)
Here, the trial court was faced with both parties having diminished earning capacity due to health problems. However, Wife testified that she could earn $20 to $25 per hour as a housecleaner and was in the process of giving estimates to take on more jobs. In contrast, Husband was being forced into retirement from his job at a glass plant at age 55 because of injuries and had no other work-related skills. Further, Wife had received support from Husband for over eight years. Under these circumstances it must be concluded that the trial court did not abuse its discretion when it balanced the factors before it and terminated spousal support. Wife has not met her burden of demonstrating otherwise.
4. Wife has not demonstrated that the trial court erred on “medical issues.”
The parties entered into a stipulation for the severance of, and early trial on, the dissolution of the status of the marriage apart from other issues. In this stipulation and order for bifurcation, Husband was ordered to maintain Wife’s medical insurance coverage until the time of trial as authorized by section 2337, subdivision (c)(2). Nevertheless, Husband did not do so. Accordingly, the trial court ordered Husband to pay Wife her unreimbursed medical expenses in the amount of $23,926.64.
On appeal, Wife engages in a rambling diatribe aimed at Husband’s failure to pay her medical insurance premiums before trial. However, Wife requested, and was awarded, reimbursement for these expenses. Thus, no error occurred.
Wife also appears to argue that this court should modify section 2337, subdivision (c)(2), to require Husband to continue to maintain Wife’s medical insurance after judgment has been entered on all remaining issues in the dissolution action. However, it is not up to this court to so revise a statute.
DISPOSITION
The order after hearing is reversed in part and remanded for further proceedings in accordance with this opinion. Each party shall bear their own costs on appeal.
WE CONCUR: Wiseman, Acting P.J., Dawson, J.