Opinion
NOT TO BE PUBLISHED
APPEAL from an order of the Superior Court of Los Angeles County No. VD053576, Robert B. Axel, Temporary Judge.
Grace White for Appellant.
Ishikawa Law Office and Brendon Ishikawa for Respondent.
MANELLA, J.
Appellant Raul Perez challenges a judgment of dissolution of marriage, insofar as it resolves the community estate’s interests in the marital residence and other items of property, and denies Perez’s request for spousal support. We affirm.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
In October 1995, Perez bought a house in Downey for $275,000. He held title to the house as “Raul Perez, an unmarried man.” To pay for the house, Perez obtained a mortgage for $220,000. In addition, he obtained a second mortgage for $27,500.
Perez married respondent Adriana Cervantes in February 1996. In October 1998, Perez obtained a mortgage for $248,800 secured by the house and used the proceeds to pay off the original two mortgages. Perez subsequently obtained a $237,600 mortgage in April 2003 and applied the proceeds to pay off the October 1998 mortgage.
Perez initiated the underlying dissolution action on September 30, 2003. A central issue at trial was the value of the community estate’s share of the appreciation in the house’s fair market value during the marriage under the principles elaborated in In re Marriage of Moore (1980) 28 Cal.3d 366 (Moore), In re Marriage of Marsden (1982) 130 Cal.App.3d 426 (Marsden), and their progeny. Following trial, the family court filed its judgment on February 8, 2006. The court awarded the house to Perez as his separate property, but found that the community estate was entitled to a share of the marital appreciation in the house, and calculated the community property interest in this appreciation as $482,528. In addition, it awarded an item of real property in Mexico to Cervantes as her separate property, and denied Perez’s request for spousal support.
DISCUSSION
Perez contends the family court erred in (1) determining the community estate’s interest in the house under Moore, Marsden, and their progeny, (2) awarding Cervantes the real property in Mexico as her separate property, and (3) excluding evidence relevant to his request for spousal support.
A. Community Interest in Appreciation
Perez contends the family court incorrectly determined the community property interest in the house. We therefore begin with an examination of the pertinent case authority.
1. Governing Principles
Generally, “[w]hen community property is used to reduce the principal balance of a mortgage on one spouse’s separate property, the community acquires a pro tanto interest in the property. [Citations.] This well-established principle is known as ‘the Moore/Marsden rule’. [Citations.]” (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1421-1422.)
In Moore, supra, 28 Cal.3d 366, an unmarried woman bought a house in 1966 by making a down payment and securing a loan for the balance of the purchase price. For a brief period, she also reduced the loan balance through payments from her earnings. (Id. at p. 370.) She then married, and the loan payments were made with community funds until she separated from her husband in 1977. (Ibid.) Thereafter, she made mortgage payments from her own funds until the time of trial. (Ibid.) After trial, the trial court found that the house was the woman’s separate property. (Ibid.)
The key issue in Moore was the determination of the community’s percentage interest in the house’s increase in appreciation during the marriage by virtue of the use of community funds to reduce the loan balance. (Moore, supra, 28 Cal.3d at pp. 370-371.) The court in Moore held that this use of community funds constituted a “capital investment” in the house that entitled the community to a share of the house’s appreciation “‘represented by the ratio of the community investment to the total separate and community investment in the property,’” (Id. at p. 372, quoting Bare v. Bare (1967) 256 Cal.App.2d 684, 690.) It further concluded that the separate property and community estate investments that determine this ratio must be limited to sums that increase “the equity value of the property.” (Moore, supra, 28 Cal.3d at p. 372.)
On this matter, the Moore court explained: “The value of real property is generally represented by the owners’ equity in it, and the equity value does not include finance charges or other expenses incurred to maintain the investment. Amounts paid for interest, taxes and insurance do not contribute to the capital investment and are not considered part of it. A variety of expenses may be incurred in the maintenance of investment property, but such expenses are not considered in the valuation of the property except to the extent they may be relevant in determining its market value from which in turn the owners’ equity is derived by subtracting the outstanding obligation.” (Moore, supra, 28 Cal.3d at p. 372.)
Applying this rule to facts in Moore, the court held that the loan was a separate property contribution, and that the woman was entitled to credit for the down payment. (Moore, supra, 28 Cal.3d. at p. 373.) It calculated the woman’s separate property percentage interest in the house’s appreciation by adding the amounts of the down payment and the loan, subtracting the amount by which the community payments had reduced the loan balance, and dividing the result by the purchase price. It further calculated the community property percentage interest by dividing the amount that the community payments had reduced the loan balance by the purchase price. (Id. at pp. 373-374.)
In Marsden, supra, 130 Cal.App.3d 426, the court confronted an issue not addressed in Moore, namely, the allocation of prenuptial appreciation on separate property. In Marsden, a man bought property and constructed a house in 1962. (Id. at p. 436.) In so doing, he expended personal funds and obtained a loan, towards which he made payment prior to the marriage. (Ibid.) The house appreciated in value between its purchase and the marriage. (Ibid.) After the parties married, community funds were used to reduce the outstanding loan balance until they separated, when the man used his earnings to further reduce this balance. (Ibid.)
On appeal, the man contended that the Moore rules for determining his separate property percentage interest and the community property percentage interest in the house’s appreciation during the marriage should be modified to reflect the house’s prenuptial appreciation. (Marsden, supra, 130 Cal.App.3d at pp. 436-437.) Whereas the Moore rules calculated these shares as percentages of the house’s original price, the man proposed that (1) they should be calculated as percentages of the house’s fair market value at the time of the marriage, and (2) he should be accorded the entire prenuptial appreciation as his separate property. (Ibid.) The net effect of these proposals was to enhance his separate property percentage interest over that determined under the Moore rule. (Id. at pp. 437-439.) The court in Marsden concluded that the man was entitled to the prenuptial appreciation on the house as his separate property, but rejected the proposed modification of the Moore rule. (Marsden, supra, 130 Cal.App.3d at pp. 438-440.) Accordingly, Marsden dictates that in cases not involving improvements, prenuptial appreciation is not a factor in the calculation of the separate property percentage interest or the community property percentage interest in a house’s marital appreciation under the Moore rule.
In In re Marriage of Branco (1996) 47 Cal.App.4th 1621 (Branco), the court addressed the application of the Moore/Marsden rule when community funds from a mortgage secured by separate property are used to pay off a prenuptial loan obtained by the owner of the separate property. There, a woman owned a house that was subject to a mortgage when she married in 1977. (Id. at p. 1623.) In 1978, she and her husband jointly refinanced the mortgage on the house, and used the proceeds to pay off the original mortgage and other debts they had incurred before their marriage. (Ibid.) In refinancing the mortgage, the woman deeded the property to the community, and one day later her husband executed a quitclaim deed that transferred the house back to the woman as her separate property. (Id. at p. 1624.) The family court found that the house was the woman’s separate property and that the 1978 mortgage constituted a community debt, but concluded that the community did not acquire an interest in the house through the 1978 mortgage, reasoning that “to the extent that community property money was used to satisfy separate obligations of both parties, each had made a gift to each other.” (Id. at p. 1625.)
The court of appeal disagreed, concluding that the parties had not intended to make a gift of the community proceeds from the 1978 mortgage, notwithstanding their conduct in executing deeds regarding the house. (Branco, supra, 47 Cal.App.4th at pp. 1627-1628.) It further concluded the community estate acquired an interest in the house’s appreciation under the Moore/Marsden rule through the use of the proceeds from the 1978 mortgage. (Id. at pp. 1627-1629.) On this matter, the Branco court reasoned that there was “no meaningful difference, for purposes of determining whether the community acquires an interest in real property, between the use of community funds to make payments on one spouse’s preexisting loan and the use of proceeds from a community property loan to pay off the preexisting separate loan.” (Id. at p. 1627.) It thus concluded: “Applied to the present case, the community property interest in the home would be computed by dividing the community’s contribution to the purchase price of the home (payments reducing principal made with community funds on the original loan, if any, plus the principal balance of the loan paid off with proceeds [from the post-nuptial mortgage]) by the purchase price. This percentage would then be multiplied by the appreciation of the home during the years of the marriage.” (Id. at p. 1629.)
Because Perez does not assert that improvements constituting a capital investment in the house were made during the marriage, we do not discuss the case authority regarding the application of the Moore/Marsden rule to situations involving such improvements (e.g., Bono v. Clark, supra, 103 Cal.App.4th 1409; In re Marriage of Sherman (2005) 133 Cal.App.4th 795).
2. Community Mortgage Proceeds
At trial, the parties presented conflicting assessments -- each prepared by accountants -- regarding application of the Moore/Marsden rule. Perez’s assessment accorded an interest in the house to the community estate solely to the extent that mortgage payments by the community reduced the principal balance of the outstanding mortgages. Perez estimated that (1) community funds had reduced the principal balance by $7,874, (2) the community estate thereby acquired a 2.5 percent interest in the house’s marital appreciation, and (3) the community estate’s interest in this appreciation was $11,626.
In contrast, Cervantes’s assessment credited the community estate with an interest based, in part, on the use of loan proceeds from the 1998 mortgage to pay off the original mortgages Perez obtained to buy the house. Cervantes estimated that (1) the community estate had acquired an 89.91 percent interest in the house’s marital appreciation, and (2) the community estate’s interest in this appreciation was $482,528. In view of the judgment, the family court apparently accepted Cervantes’s assessment of the application of the Moore/Marsden rule.
The family court did not issue a statement of decision in connection with the judgment. Because no statement of decision was requested, we presume that the family court made all findings necessary to support the judgment (Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 792-793), and our review is limited to the existence of substantial evidence to support these findings (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622-623). On review for substantial evidence, “all of the evidence must be examined, but it is not weighed. All of the evidence most favorable to the respondent must be accepted as true, and that 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, the judgment must be affirmed.” (Estate of Teel (1944) 25 Cal.2d 520, 527.)
Perez’s main contention is that the family court improperly found that the proceeds from the October 1998 mortgage constituted a capital investment in the house by the community estate for purposes of the Moore/Marsden rule. We disagree. Under Branco, the family court properly concluded that the community estate’s interest in the house was determined, in part, by the use of the community proceeds from the 1998 mortgage to pay off the prenuptial mortgage.
The parties’ assessments differed on matters other than those noted in the text, including the fair market value of the house at the time of the marriage. Following established appellate principles, we limit our review of Perez’s challenges to Cervantes’s assessment to the contentions in Perez’s opening brief that are supported by legal argument and citations to the record. (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, §589, p. 625, § 594, p. 627.)
Perez argues that Branco is inapplicable here because he never transferred the house to the community estate in arranging the 1998 mortgage. We recognize that in Branco, the separate property owner of the house briefly transferred the house in question to the community in connection with the post-nuptial mortgage, before it was deeded back to the separate property owner. However, this fact played no role in the Branco court’s application of the Moore/Marsden rule. (Branco, supra, 47 Cal.App.4th at pp. 1625-1629.) As the court in Branco recognized, this rule governs “the division of interests when community property is used to reduce the encumbrance on separate property.” (Id. at p. 1626, italics added.) It assumed that the house was properly awarded to the woman as her separate property, and concluded that the use of the community proceeds from the post-nuptial mortgage to pay off the prenuptial mortgage enlarged the community estate’s interest in the house’s marital appreciation. (Id. at pp. 1627-1629.) Like the court in Branco, we see no difference between the use of community funds from a spouse’s earnings to pay down (or pay off) the prenuptial mortgage balance, and the use of community proceeds from a loan for the same purpose.
Perez also suggests that the proceeds from the 1998 mortgage were not community funds because Cervantes did not execute a loan application and refinancing document, and her name is not included on the title to the house, which secured the 1998 mortgage. As we explain below, he is mistaken.
The character of proceeds from a loan obtained during marriage depends on “the intent of the lender to rely upon the separate property of the purchaser or upon a community asset.” (In re Marriage of Aufmuth (1979) 89 Cal.App.3d 446, 455, disapproved on another ground in In re Marriage of Lucas (1980) 27 Cal.3d 808, 815.) However, “[l]oan proceeds acquired during marriage are presumptively community property.” (In re Marriage of Grinius (1985) 166 Cal.App.3d 1179, 1187.) Accordingly, in the absence of a sufficient showing that “the lender intended to rely solely upon a spouse’s separate property and did in fact do so[,] . . . the general presumption prevails.” (Ibid., italics added.)
At trial, the family court received evidence that Perez indicated on the 1998 mortgage application that he was married, and would pay the mortgage from his earnings. Income earned from a spouse’s time, labor, and skill during a marriage is community property. (In re Marriage of Harrison (1986) 179 Cal.App.3d 1216, 1226; see State Bd. of Equalization v. Woo (2000) 82 Cal.App.4th 481, 483.) Because the record supports the reasonable inference that the lender relied in part on Perez’s earnings with respect to the mortgage, Perez failed to defeat the presumption that the proceeds from this mortgage belonged to the community. (See In re Marriage of Grinius, supra, 166 Cal.App.3d at pp. 1186-1189.)
Finally, Perez contends that (1) Cervantes’s assessment is unsupported by adequate evidence, and (2) the family court did not give this assessment adequate consideration before accepting it. Regarding item (1), Perez forfeited this contention by agreeing to the admission of Cervantes’s assessment before the family court. (See Electronic Equipment Express, Inc. v. Donald H. Seiler & Co. (1981) 122 Cal.App.3d 834, 856-857.) During trial, Mariela Caravetta, Perez’s counsel, stipulated that the family court could admit and consider the parties’ respective assessments of the application of the Moore/Marsden rule, and their underlying evidentiary showings. In view of this stipulation, Perez may not challenge the evidentiary basis of Cervantes’s assessment on appeal. (Asher v. Johnson (1938) 26 Cal.App.2d 403, 408.)
Perez’s reply brief suggests that Caravetta rejected the stipulation. We disagree. The record discloses that Caravetta was initially reluctant to enter into the stipulation because she was unfamiliar with an appraisal submitted by Cervantes regarding the value of the house in September 2003. However, after Caravetta objected to this appraisal, the family court stated that it would evaluate the appraisal carefully in conjunction with Perez’s appraisal, and Caravetta responded “Fine, your honor.” The family court then examined the submitted documents without any further objection from Caravetta. Although Perez’s reply brief quotes Caravetta’s initial objection to the appraisal, it omits her subsequent remarks indicating agreement with the stipulation.
Regarding item (2), the record discloses that in admitting the parties’ assessments regarding the application of the Moore/Marsden rule, the family court remarked, “I’m going to make my own computation on this.” Because the family court ultimately accepted Cervantes’ estimate of the community estate’s interest in the house, Perez argues that the family court did not independently examine the parties’ assessments. We are not persuaded. On an otherwise silent record, we presume the family court discharged its duties at trial. (Evid. Code, § 664; Assem. Com. on Judiciary com., reprinted at 29B pt. 2 West’s Evid. Code (1995 ed.) foll. § 606, pp. 64-65; 1 Witkin, Cal. Evidence (4th ed. 2000) Burden of Proof and Presumptions, § 89, p. 223.) Here, the record shows that in addition to admitting the parties’ assessments, the trial court heard testimony and oral argument regarding the application of the Moore/Marsden rule. Nothing before us supports Perez’s contention of error.
B. Property In Mexico
Perez contends there is insufficient evidence to support the family court’s finding that an item of real property in Mexico is Cervantes’s separate property. As we explain below, Perez has forfeited this contention.
Prior to trial, Perez filed a schedule of assets and debts indicating that the community estate had an interest in some real property in Mexico. The schedule asserted that the property was held in Cervantes’s name, but was acquired during the marriage. Although the record lacks Cervantes’s trial brief, she apparently contended that her mother had given her the property in 1974, and that it was her separate property.
At the inception of trial, the family court asked the parties to identify the issues remaining for resolution following mandatory settlement discussions. Neither party mentioned the property in question, and no testimony was admitted regarded its classification as Cervantes’s separate property. During Perez’s testimony regarding the application of the Moore/Marsden rule, Caravetta requested leave to question Perez about unspecified “other property” or “properties” to achieve an equal division of property, but she did not make an offer of proof. The family court denied this request. When the family court addressed the Mexican property near the end of the trial, Caravetta complained that she had not received a copy of Cervantes’s deed in discovery. Although Caravetta noted that the family court was disinclined to hear more testimony, she did not make an offer of proof regarding testimony she might present about the Mexican property. Dorothy Carfrae, Cervantes’s counsel, represented that Cervantes’s deed showed that she had acquired the property in 1974, and indicated that Perez had received a copy of the deed during discovery. The family court ordered Carfrae to provide Caravetta with a copy of the deed, and awarded the Mexican property to Cervantes as her separate property. The family court sustained evidentiary objections to much of Perez’s testimony on this issue. Furthermore, with one exception, it excluded the parties’ exhibits -- including those bearing on Cervantes’s income -- insofar as these exhibits had not been exchanged by the parties 30 days prior to trial, in accordance with the order setting trial. Over Caravetta’s objection, it later admitted one such exhibit submitted by Carfrae -- namely, a receipt showing that Perez had paid for a vacation resort in August 2002 -- as relevant to the date of separation.
The record does not appear to contain this order. Los Angeles Superior Court rule 7.9(h) provides in pertinent part: “The court shall require counsel to attend a final status conference, which shall be held not more than 10 days prior to the trial date. . . . At least 5 days prior to this conference, counsel must have exchanged and filed lists of pre-marked exhibits . . . . Failure to exchange and file these items may result in not being able to . . . present exhibits at trial . . . . If actual trial does not commence within 30 days of the set trial date any party has the right to request a modification of any final status conference order or any previously submitted required exchange list.”
In wholly conclusory terms, Perez contends the family court erred in excluding the evidence he tendered to establish Cervantes’s income. This contention is forfeited for want of legal argument. (9 Witkin, Cal. Procedure, supra, Appeal, § 594, at p. 627.)
DISPOSITION
The judgment is affirmed. Respondent is awarded her costs on appeal.
We concur: EPSTEIN, P. J. WILLHITE, J.