Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Stanislaus County Super. Ct. No. 337306. Jack M. Jacobson, Judge.
E. F. Cash-Dudley for Appellant.
Jones Cochrane Hollenback Nelson & Zumwalt and John J. Hollenback, Jr. for Respondent.
OPINION
Gomes, J.
In this marital dissolution action between petitioner/appellant Linda Mae Silva (Linda) and respondent Wayne Joseph Silva (Wayne), Linda appeals from the judgment of dissolution which divided the couple’s community property, and ordered Wayne to pay Linda an equalizing payment of $24,944, spousal support of $750 per month for ten months, and $5,000 in attorney fees. Linda contends the trial court erred when it (1) determined that a residence purchased during marriage with community property funds pursuant to an oral option to purchase made before the marriage was Wayne’s separate property, which he held in trust for the benefit of his former step-grandchildren; (2) failed to find Wayne breached his fiduciary duty when he did not file income tax returns for three years and had his bookkeeper sign Linda’s name to their income tax returns for two years; (3) failed to consider Wayne’s wealth when setting spousal support; and (4) failed to award Linda adequate attorney fees. As we shall explain, we will affirm.
For purposes of clarity and not out of disrespect, we refer to the parties by their first names.
FACTUAL AND PROCEDURAL BACKGROUND
Linda and Wayne were married on January 28, 1998 and separated on August 25, 2003. There were no minor children of the marriage. On January 16, 2004, Linda petitioned for dissolution. At trial, the parties stipulated to the division of personal property. Disputed issues were tried, which included the characterization of real property located in Riverbank, California (the Riverbank property), spousal support and attorney fees.
The facts in this section are drawn from the trial court’s statement of decision, which are unchallenged on appeal.
1. The Riverbank Property
The Riverbank property was owned by Wayne and his first wife, Jeanette Silva (Jeanette), who petitioned for dissolution of their marriage in November 1992. Their 1994 judgment of dissolution awarded Jeanette the Riverbank property as part of the community property division and required her to pay Wayne an equalizing payment of $48,883.50. Jeanette, however, never took possession of the property after entry of the dissolution judgment. Instead, she agreed to lease the property to Wayne, who paid her monthly rent from 1994 to 2000.
In 1994, Jeanette and Wayne entered into an oral agreement whereby she gave Wayne an option to repurchase the Riverbank property. Jeanette did not specify any time limitation on the exercise of the option. She agreed to sell the property to Wayne on the condition he subsequently would put the property in trust for her grandchildren. Sometime after this agreement, Jeanette asked Wayne whether he was ready to purchase the property. When Wayne told her he was not ready to purchase it, she took out an equity line of credit. Jeanette never paid Wayne the equalizing payment.
In the spring of 2000, Wayne approached Jeanette, who was unaware he had remarried, and expressed his desire to purchase the property. Shortly thereafter, an escrow company contacted her. Wayne purchased the residence for $55,000, which included the original sales price of $48,000 plus $7,000 Jeanette had paid for a new roof. Escrow documents show a sales price of $68,750, with Jeanette giving Wayne a gift of $13,750, which allowed Wayne to obtain a loan based on 80 percent financing. Wayne used community monies to make a down payment of $8,546.25. Only Wayne signed the loan documents and the loan was extended to him without any financial information from Linda, who refused to sign any documents regarding the loan. As a result, the lender had the grant deed and other escrow documents prepared showing Wayne was an unmarried person.
In July 2000, Jeanette executed a grant deed transferring her interest in the Riverbank property to Wayne, which states he received the property as an unmarried man. The title company was unaware Wayne was married at the time escrow closed. Had it been aware of this fact, it would have required Linda to sign an interspousal deed. The fair market value of the property at the date of purchase was $160,000. House payments were made between the date of purchase and the date of Linda and Wayne’s separation.
After the purchase, Wayne retained an attorney’s services to prepare the necessary documents to create a trust for the benefit of Jeanette’s grandchildren, with the Riverbank property as the trust’s only asset. According to the attorney, he drafted documents in 2002 or 2003 and sent them to Wayne. Eventually, Wayne called the attorney and told him he could not proceed with the trust because of his pending dissolution proceeding with Linda. On February 27, 2004, Linda filed a “Notice of Pending Action” regarding the Riverbank property.
Linda was aware Wayne was renting the Riverbank property when they married, but she was unaware of the option agreement or any discussion Wayne had with Jeanette about purchasing the property. Linda and Wayne never lived in the Riverbank property. Instead, they lived their entire marriage in her residence, which she had rented for several years before their marriage and where she resided after their separation. Shortly before Wayne purchased the property, he asked Linda to go to the title company with him to sign documents that would quitclaim her interest to him, but she refused. Linda never discussed the purchase of the Riverbank property with Jeanette or any lender, and never was asked to provide personal financial information, such as her income.
Linda testified Wayne told her he needed the Riverbank property as a residence for his uncle and after his uncle moved out, the two of them would move in. Linda said she cleaned the house, put up wall decorations and moved in furniture in anticipation of his uncle’s occupancy. Wayne, however, denied telling Linda the property would be their residence, and claimed that at all times he intended to place the property in trust for Jeanette’s grandchildren. Wayne attempted to seek financing to purchase the property before he married Linda, but the lender was slow in processing his application. Eventually, he went to JD Financial, who provided the necessary financing.
At trial, a certified real estate appraiser who Linda retained testified the present market value of the Riverbank property was $495,000. This opinion was based on the assumption Wayne had a fee simple interest in the property. The appraiser had never appraised a property interest that was less than a fee simple interest.
2. Spousal Support
When Wayne first moved into Linda’s residence, she paid all the house expenses. Later, he made the rent payments. Wayne and Linda took a few vacations and occasionally went out to eat or drink. Wayne bought Linda birthday and Christmas presents, but nothing extravagant. Linda owned the same vehicle for more than 11 years. Although Wayne purchased vehicles during the marriage, Linda was not allowed to use them. When asked to describe her standard of living during the marriage, Linda stated it was difficult because Wayne had plenty of money but never gave her any of it.
Linda, who at the time of trial was 57 years old, had completed high school and had a cosmetology license. Linda had been a hairdresser for 35 years. During the last 14 years, however, she worked on a part-time basis due to chronic medical problems. Linda never had applied for social security. According to Linda, she was able to work only 20 hours per week, and her net business income was $500 per month. Linda listed her monthly expenses at $1,936.
Wayne, who at time of trial was 65 years old, is a self-employed truck driver with a 9th grade education. His income and expense declaration listed his net business income as $2,843 per month, plus $1,225 per month in other income. Wayne listed his monthly expenses as $4,201. Wayne had approximately $300,000 in a bank account, which he received from his uncle’s estate. Wayne also received property in Mill Valley from his uncle that had been appraised at $800,000. Wayne owned several trucks that he valued at $30,000.
Following their separation, Linda obtained, beginning on March 1, 2004, a temporary spousal support order of $950 per month.
B. The Statement of Decision
Following trial and the submission of post-trial briefs, the court issued a tentative decision. The court noted the disputed issues were the characterization of the Riverbank property, the existence of cash at the time the parties separated, the award of spousal support, and attorney fees and costs.
The court found the Riverbank property to be Wayne’s separate property. The court stated the issue as to the characterization of the property turned on when the property was acquired -- if it was acquired before the marriage, it was Wayne’s separate property, and if it was acquired during the marriage, it was community property. The court found it to be undisputed that Wayne and Jeanette entered into an oral agreement shortly after their 1994 divorce, but before Wayne’s marriage to Linda, whereby Wayne would lease the property and have an option to purchase it, conditioned on Wayne subsequently placing the property in trust for the benefit of Jeanette’s grandchildren. Applying the case of In re Marriage of Joaquin (1987) 193 Cal.App.3d 1529 (Joaquin), the court reasoned that since Jeanette gave Wayne the option before his marriage to Linda, the option was his separate property and his subsequent exercise of the option and purchase of the property during the marriage did not alter the characterization of his interest.
The court found the community had an interest in the Riverbank property because Wayne used community funds to make the down payment, which entitled Linda to a one-half reimbursement of that amount, or $4,273. The court further found that while the $50,000 loan Wayne took out to finance the purchase of the property was presumed to be a community debt, the evidence rebutted that presumption. The court noted that although there was testimony Wayne made house payments between the dates of purchase and the couple’s separation, no evidence was presented as to how much of the loan principal was paid during this period; consequently, the court was unable to award Linda any further reimbursement.
The court also found Linda had failed to prove the Riverbank property actually had appreciated in value since Wayne’s purchase. Although Linda’s expert appraiser gave an opinion as to the property’s value, the court noted the opinion assumed Wayne had a fee simple interest in the property. Based on the testimony that showed Wayne’s option to purchase the property was subject to the condition that it be placed in a trust for the benefit of Jeanette’s grandchildren and that Wayne had begun to set up the trust, but was stopped from completing the process by Linda’s filing of a Notice of Pending Action, the court concluded that “[i]n reality, [Wayne] was receiving a life estate in the property.” Since Wayne did not have a fee simple interest in the property, the court gave no weight to the appraiser’s opinion. The court found a “Moore/Marsden” analysis to be inapplicable to the case because it believed Wayne had no marketable title that would result in a gain on the property.
In re Marriage of Moore (1980) 28 Cal.3d 366; In re Marriage of Marsden (1982) 130 Cal.App.3d 426.
With respect to spousal support, the court noted Linda was requesting an award of permanent spousal support for a period representing one-half the length of the marriage. Stating it needed to consider the relevant factors set forth in Family Code section 4320, the court explained the case presented an unusual set of facts regarding the marital standard of living, since Linda did not experience any significant increase in her standard of living as a result of marrying Wayne. The court found Linda did have a need for financial support and Wayne had the ability to pay, the parties had a relatively short marriage of approximately 5 years, 7 months, and Wayne had been paying temporary support for almost two years. The court found that, considering all the relevant circumstances and balancing the hardships to each party, an award of permanent support for a brief period of time was appropriate, as it would give Linda sufficient time to either increase her working hours or file a claim for disability benefits. The court also found, however, it would be unjust to obligate Wayne to pay permanent support for any significant period of time given that Linda’s lifestyle and living circumstances were not substantially different before or during the parties’ marriage. Accordingly, the court ordered Wayne to pay Linda $750 per month in permanent spousal support for ten months, commencing March 1, 2006.
Linda requested the court order Wayne to pay her attorney fees of approximately $20,000, while Wayne asked the court to deny Linda’s request in its entirety. In assessing the propriety and amount of fees, the court noted the marriage was of short duration and the parties had little community personal property to be divided. The court found the majority of the attorney fees incurred in preparation of trial and for trial were not reasonable and necessary. The court explained that in its opinion, much of the fees incurred could have been avoided if Linda had conducted pre-trial discovery and research on the issue of the option to buy, which would have disclosed Wayne and Jeanette’s testimony about the option agreement, as well as the Joaquin case supporting Wayne’s position. The court further noted Linda did not present any evidence in support of her position to rebut Wayne’s evidence.
The court also stated that a review of Linda’s counsel’s fee declaration indicated she charges a fixed amount for particular legal services such as court appearances regardless of the actual time spent, and standard charges of .5 hours for preparation of standard documents such as civil subpoenas and notices to consumer. The court explained that although Linda may have a written agreement with her counsel to pay such fixed amounts, the court could order Wayne to pay only a reasonable fee for the actual time spent to perform legal services.
Notwithstanding these findings, the court found that given Wayne’s income and assets in contrast to Linda’s need for financial assistance, it was appropriate to award Linda some of her fees. Consequently, the court ordered Wayne to pay Linda $5,000 for attorney fees.
Finally, the court addressed Linda’s request in her brief for an order that Wayne file income tax returns for 2000 to 2002, and if he refused, he alone would be responsible for any liabilities and penalties. The court noted no evidence was presented at trial concerning any potential tax liability or refund for those particular years and it was not aware of any legal authority allowing the court to order a party to file federal tax returns. The court retained jurisdiction, however, to make post-judgment orders dividing omitted assets or obligations, and if the parties did incur tax liabilities for the years in question, either party may bring a motion to adjudicate those omitted debts.
Wayne testified at trial that he did not file income tax returns for 2000, 2001 or 2002.
C. The Addendum to the Statement of Decision
Linda objected to the tentative decision and a hearing was held on her request to modify it. Following the hearing, the court found Wayne did not violate his fiduciary duty to the marital community with respect to the purchase of the Riverbank property, as he properly acquired the property as his sole and separate property pursuant to the purchase option which predated his marriage to Linda, as he had no duty to give Linda the opportunity to purchase an interest in his separate property and Linda knew he had acquired the property, but had not participated in the transaction.
The court amended its previously announced decision incorporating the parties’ stipulation that Wayne would re-file his 2003 and 2004 federal and state tax returns, because the Internal Revenue Code and California Revenue and Taxation Code prohibit a taxpayer from amending a joint tax return. The court, however, reserved jurisdiction to assess damages against Wayne to compensate Linda for “possible breach of fiduciary duty” for any detriment arising from the 2003 and 2004 tax filings. Such damages would include any liability assessed against Wayne for failing to report income for those years or improperly signing Linda’s name to the returns, and if such liability arises, Wayne can argue it would be offset by the taxes Linda would have paid if the joint tax filing had not taken place.
Wayne testified at trial that he filed tax returns for 2003 and 2004. He filed the 2004 tax return as a joint return and authorized his bookkeeper to sign Linda’s name on it. Wayne did not know if his bookkeeper signed Linda’s name on the 2003 tax return.
DISCUSSION
Characterization of the Riverbank Property
Linda contends the trial court erred when it determined that the Riverbank property was Wayne’s separate property. Specifically, Linda asserts (1) there was no option to purchase the property because such an option must be in writing; (2) the inception of title theory upon which the trial court based its decision is contrary to the law; (3) the trial court erred in finding Wayne did not take title in fee simple; (4) the trial court erred in finding Wayne had a life estate in the property; (5) a trust could not have been created because it was not in writing; and (6) the community property presumption of Family Code section 760 applies to the property. Linda asks us to reverse the trial court’s finding that the Riverbank property is Wayne’s separate property and instead find that the property is community property as a matter of law, and therefore subject to equal division.
All further statutory references are to the Family Code unless otherwise noted.
At dissolution, property is characterized as either community or separate. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 291 (Haines).) Separate property includes all property owned by either spouse before marriage or acquired during marriage “by gift, bequest, devise or descent,” and the “rents, issues and profits” thereof. (§ 770, subd. (a).) Generally, all real or personal property acquired by a spouse during marriage, while domiciled in California, is community property. (§ 760.) “This is a rebuttable presumption affecting the burden of proof; hence it can be overcome by the party contesting community property status.” (In re Marriage of Weaver (2005) 127 Cal.App.4th 858, 864.) Several factors may enter into a determination of the characterization of property, including when the property was acquired, whether it was the subject of an interspousal transfer or agreement, and whether any statutory presumptions apply. (Haines, supra, 33 Cal.App.4th at p. 291.) Spouses may, for instance, transmute community property to one spouse’s separate property or transmute one spouse’s separate property to community property by interspousal agreement or transfer. (§ 850; Haines, supra, 33 Cal.App.4th at p. 293.)
A trial court’s determination whether a specific asset is community or separate property is generally a question of fact to which we apply the substantial evidence standard of review. (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1421.) The selection of the rule of law to determine the characterization of property, however, is a question of law that we review independently. (Ibid.)
Here, the issue before the trial court was the characterization of the Riverbank property. Under section 760, that depends on when the property was “acquired” – if it was acquired during marriage, then it is community property. (§ 760.) In reaching its decision that the property was Wayne’s separate property, the court relied on the case of Joaquin, supra, 193 Cal.App.3d 1529. In that case, the husband executed a five-year lease for the purpose of farming a walnut orchard, which provided an option to renew the lease for an additional five-year period but did not specify how the option would be exercised. A year and a half after the husband entered into the lease, he married. When the five-year initial lease period expired over three years into the marriage, the husband continued to farm the orchard on the same terms and conditions. On dissolution of the marriage, the trial court found the husband’s exercise of the option to renew for the second five years did not create a community property interest in his original separate property leasehold. (Id. at p. 1532.)
On appeal, the court rejected the wife’s argument that the husband’s exercise of the option during the marriage transformed the lease into community property for the remaining five years of the lease. The court recognized the key to resolution of the issue was whether the exercise of the option to renew the lease constituted an acquisition. (Joaquin, supra, 193 Cal.App.3d at p. 1532.) In answering this question, the court first examined the nature of an option: “‘An option, as a matter of legal theory, is considered to have a dual nature: on the one hand it is an irrevocable offer, which upon acceptance ripens into a bilateral contract, and on the other hand, it is a unilateral contract which binds the optionor to perform an underlying agreement upon the optionee’s performance of a condition precedent.’ [Citation.] Thus, for example, an option is an indefeasible right in the optionee to have real property transferred to him upon his performance of a condition precedent (i.e., that which is required to exercise the option, manifesting acceptance of the optionor’s offer). [Citations.] Once the optionee exercises the option, he has a right to specific performance of the transfer, relating back to the time the option was given.” (Id. at pp. 1532-1533.) Based on the nature of an option, the court concluded that an “optionee’s title to the property, at least in equity, was acquired at the time the option was originally given.” (Id. at p. 1533.)
The court also explained that under the inception of title theory, real property acquired before marriage is separate property. (Joaquin, supra, 193 Cal.App.3d at p. 1533.) Under that theory, the word “acquired,” for property characterization purposes, contemplates the inception of title, “‘“and as a general rule the character of the title depends upon the existence or nonexistence of the marriage at the time of the incipiency of the right by virtue of which the title is finally extended and perfected; the title when so extended and perfected relates back to that time. … Under this rule, property to which one spouse has acquired an equitable right before marriage is separate property, though such right is not perfected until after marriage. … Accordingly, the fact that the title to land owned by a man at the time of his marriage was not perfected by a conveyance from the source of paramount title until after that event does not destroy its character as a separate estate. Property bought before the marriage under a suspensive condition by one of the spouses remains his or her separate property, though the condition is realized after the marriage.”’” (Ibid.) The court also noted that by remaining in possession of the property beyond the expiration of the original five-year period, the husband merely extended the lease for an additional five years, and therefore the exercise of the option in effect related the transfer of the leasehold back to the time of the lease’s execution. (Id. at p. 1534.)
The court concluded that by applying the principles regarding options, inception of title, and lease renewals and extensions, the exercise of the option merely extended, or perpetuated, the lease for an additional five years, and related back to the date the option was given. (Joaquin, supra, 193 Cal.App.3d at p. 1534.) Accordingly, the husband actually “acquired” any leasehold interest that was subsequent to the date the initial five-year period ended, on the date he initially entered into the lease before marriage, making the leasehold his separate property. (Ibid.)
Here, the trial court found Wayne had an option to purchase the Riverbank property, which he acquired before his marriage to Linda, thereby making the option his separate property. The court concluded that Joaquin sets forth the legal principle governing the instant case, namely that the optionee acquires equitable title at the time the option is given and, for purposes of family law and community property, the property interest is acquired at that point in time rather than the date the option is exercised. Based on that principle, the trial court found that Wayne’s exercise of the option during his marriage to Linda did not alter the characterization of his property interest, as the characterization related back to the date the option was acquired. Accordingly, the court found the Riverbank property to be Wayne’s separate property.
Linda asserts the trial court erred in applying Joaquin to this case because the option there, as well as the options in the cases on which the Joaquin decision relied, were all in writing. Linda also cites the statute of frauds, Civil Code section 1624, as requiring an option to purchase real property to be in writing. As Wayne points out, however, the fact that an option contract for the sale of real property is oral does not invalidate the agreement, since the statute of frauds does not make oral agreements null and void; it merely makes them voidable. (Masin v. Drain (1984) 150 Cal.App.3d 714, 717.) Moreover, partial performance of an oral option contract to purchase property as part of a leasing arrangement removes the bar of the statute of frauds. (Sutton v. Warner (1993) 12 Cal.App.4th 415, 422-423.) In addition, the statute of frauds may be invoked only by the parties to the unwritten contract, and is not available to third persons who are not parties to it. (Demeter v. Annenson (1947) 80 Cal.App.2d 48, 57.) Based on these authorities, the fact that the option contract between Wayne and Jeanette was oral does not invalidate the agreement and even if the statute of frauds is applicable, Linda has no standing to invoke it. In any event, Wayne’s act of purchasing the property removes the option contract from the statute of frauds. For these reasons, we do not agree that Joaquin is inapplicable here simply because the option was oral.
Linda cites Erich v. Granoff (1980) 109 Cal.App.3d 920 for the proposition that an option to purchase real property must be in writing. While that case does involve a written option, it does not discuss whether an option may be oral.
Linda also asserts the inception of title theory applied in Joaquin is “against the state of the law in California.” The only case Linda cites for this proposition is In re Marriage of Miller (1982) 133 Cal.App.3d 988 (Miller), which was decided five years before Joaquin. The Miller case, however, involved an entirely different issue, namely whether the husband’s signing of a purchase contract before marriage and making a premarital down payment on the home with his separate funds could overcome the effect of his recording a joint tenancy deed after marriage which named his wife as co-owner of the property. (Miller, supra, 133 Cal.App.3d at p. 990.)
On holding that the statutory presumption that a house acquired during marriage as joint tenants is community property applied to the house at issue, the Miller court rejected the husband’s argument that the presumption was not binding because he acquired the house before marriage when he contracted to buy it. (Miller, supra, 133 Cal.App.3d at pp. 990-991.) The court explained that the husband acquired only an equitable right to compel transfer of title on the date set in the contract, which right, or title, merged into the full legal title he and his wife took at closing, and it was the formal act of taking title that removed the property from the more general presumption that property acquired during the marriage is community property. (Id. at p. 991.) The court found the cases espousing the “‘inception of right’” theory, by which the property’s character depends on the purchaser’s marital status at the time of the inception of the right by which title is finally perfected, inapposite, because the cases did not actually stand for this proposition or deal with the statutory special joint tenancy residence presumption. (Id. at pp. 991-992.) The court noted the statutory joint tenancy community property presumption arises purely from the form in which title is taken, and the time of contracting is irrelevant. (Id. at p. 992.) Since title to the property was taken in joint tenancy after marriage, it was presumptively community property. (Ibid.) The court found no unfairness to a spouse who contracts while single to buy property, because that spouse could preserve his or her separate property interest by taking title before marriage, taking title in his or her name alone, or by securing his or her spouse’s agreement that he or she is to retain a separate property interest. (Id. at pp. 992-993.)
Since Miller deals with the statutory presumption that property acquired during marriage in joint form is community property, it has no application here, where Wayne took title to the property in his name alone. (See § 2581 [“For the purpose of division of property on dissolution of marriage …, property acquired by the parties during marriage in joint form, including property held in tenancy in common, joint tenancy, or tenancy by the entirety, or as community property, is presumed to be community property….”].) Although Miller noted that the inception of title theory was unnecessary to the cases upon which the husband had relied, Miller did not address the viability of that theory or its application to the situation presented here, namely the characterization of property when one spouse acquires an option to purchase real property before marriage, but exercises the option after marriage and takes title in his or her name alone. That situation was squarely presented in Joaquin, albeit with respect to lease options, not real estate purchase options, but we agree with the trial court that its principles are equally applicable here.
The only other authority Linda cites to support her claim that the inception of title theory is not the law in California is Civil Code section 3439.06, subdivision (d), which provides that for purposes of the Uniform Fraudulent Transfer Act, Civil Code section 3439, et seq., “[a] transfer is not made until the debtor has acquired rights in the asset transferred.” This statute, however, is inapplicable here, where Linda has not claimed Wayne’s acquisition of the Riverbank property amounts to a fraudulent conveyance aimed at defeating her rights as a creditor. (Civ. Code, § 3439.04, subd. (a).)
Although Linda does also cite to the casebook Blumberg, Community Property in California (1987) in support of her argument, the author’s analysis is not binding on us.
We agree with the trial court that under Joaquin, the Riverbank property is Wayne’s separate property. Wayne had an oral option to purchase the property, which he acquired before marriage. By virtue of that option, he acquired equitable title to the property, which was his separate property. His exercise of the option after marriage, whereby he perfected his title to the property, did not destroy its character as a separate estate, especially in light of the fact he took title in his name alone.
Linda next challenges the trial court’s finding that although Wayne took title in fee simple, he in effect had only a life estate in the Riverbank property because the option to purchase was subject to the condition the property be placed in trust for the benefit of Jeanette’s grandchildren. Although the trial court concluded the community had an interest in the property since community funds were used for the down payment and monthly payments, the court rejected Linda’s expert’s opinion as to the property’s appreciated value because that opinion was based on ownership of the property in fee simple, without being subject to the trust. Linda argues the court erred in finding a life estate and trust existed because the deed clearly shows Wayne took title in fee simple and the life estate and trust must be in writing.
As Wayne points out, although his deed shows he took title in fee simple, the evidence also shows that the option’s terms required him to form a trust for the benefit of Jeanette’s grandchildren and transfer the Riverbank property into it. Consistent with this, Wayne retained an attorney to set up the trust, who proceeded to do so, but the dissolution action placed the creation of the trust on hold. Based on these facts, which Linda does not challenge, the court found that Wayne had no right to sell, convey or encumber the property because the restriction relegated him to the status of a life tenant in the Riverbank property, thereby leaving him owning something different than a fee simple interest. (See, Estate of Malpas (1992) 7 Cal.App.4th 1901, 1907-1908 [life estates are recognized interests in property which may be separately valued]; Estate of Smith (1961) 196 Cal.App.2d 544, 549.) While as Linda points out nothing in the agreement between Wayne and Jeanette used the term “life estate” to describe his interest, no specific words are needed to create such an interest. It suffices that the parties’ agreement limited Wayne’s interest in the property to his lifetime. (Steeve v. Yaeger (1956) 145 Cal.App.2d 455, 462.)
Linda also claims the statute of frauds prohibits an oral agreement to create a life estate or a trust. (Civ. Code, § 1624; see Ward v. Wrixon (1959) 168 Cal.App.2d 642, 655 [oral agreement for a life estate in property subject to the statute of frauds, although estoppel will take the agreement out of the statute].) This claim fails, however, because both Wayne and Jeanette acknowledged he was obligated to make the transfer. Where parties to an oral agreement do not contest its binding effect, a third party cannot invoke the statute of frauds to challenge the agreement. (Friedman v. Jackson (1968) 266 Cal.App.2d 517, 520.) Moreover, even though the promise to place the property in trust was oral, Jeanette’s reliance on it, as shown by her transferring the property to Wayne at an advantageous price, coupled with Wayne’s attempted performance of the contract term by hiring an attorney to prepare the trust, arguably estops Wayne from denying the validity of his obligation. (Evid. Code, § 623; Byrne v. Laura (1997) 52 Cal.App.4th 1054, 1069 [equitable estoppel may preclude the statute of frauds defense].) Since there was sufficient evidence that Wayne’s interest in the property was something other than a fee simple one, despite having taken title in fee simple, the trial court did not err in so concluding.
Wayne asserts in his brief that Linda also contends he violated his fiduciary obligations by taking title to the Riverbank property in his own name, as his separate property. We have reviewed Linda’s opening brief and do not see any argument raised on this issue, and therefore do not address it.
Breach of Fiduciary Duty
Linda contends Wayne breached his fiduciary duty, provided in section 721, subdivision (b), when he failed to file income tax returns for 2000, 2001, and 2002, which created a potential tax consequence to her, and had his bookkeeper forge Linda’s name on the income tax returns he filed for 2003 and 2004. Linda points out that signing a spouse’s name to a joint tax return constitutes a misdemeanor violation of Revenue and Taxation Code section 19701.5, subdivision (a). Linda asks us to reverse the trial court’s finding that Wayne did not breach his fiduciary duty to Linda when he signed her name to tax returns and to order Wayne be responsible for any negative tax consequences.
Under sections 721 and 1100, spouses have fiduciary duties to each another with respect to the management and control of community property. (§§ 721, subd. (b), 1100, subd. (e).) They provide that spouses are involved in a fiduciary or confidential relationship akin to that between nonmarital business partners; accordingly, each is subject to “a duty of the highest good faith and fair dealing,” and “neither shall take any unfair advantage of the other.” (§§ 721 subd. (b), 1100, subd. (e).)
Section 721, subdivision (b) provides: “(b) Except as provided in Sections 143, 144, 146, 16040, and 16047 of the Probate Code, 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. This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners, as provided in Sections 16403, 16404, and 16503 of the Corporations Code, including, but not limited to, the following: [¶] (1) Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying. [¶] (2) Rendering upon request, true and full information of all things affecting any transaction which concerns the community property. Nothing in this section is intended to impose a duty for either spouse to keep detailed books and records of community property transactions. [¶] (3) Accounting to the spouse, and holding as a trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse which concerns the community property.”
Section 1101 provides remedies when a spouse’s breach of fiduciary duty “results in impairment to the [other] spouse’s present undivided one-half interest in the community estate, including, but not limited to, a single transaction or a pattern or series of transactions, which transaction or transactions have caused a detrimental impact to the [other] spouse’s undivided one-half interest in the community estate.” (§ 1101, subd. (a).) Subdivision (g) of section 1101 provides that the remedies “shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.” Whenever fraud, malice, or oppression is present, however, subdivision (h) of section 1101 provides that the remedies “shall include, but not be limited to, an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty.” These remedies are mandatory upon satisfaction of the predicate conditions. (In re Marriage of Hokanson (1998) 68 Cal.App.4th 987, 992-993.)
We need not decide whether Wayne breached his fiduciary duty with respect to his filing of, or failure to file, income tax returns, because even if we conclude he breached his fiduciary duty, Linda has not shown how her interest in the community estate was impaired by Wayne’s acts or omissions. The trial court specifically found there was no evidence that Wayne’s failure to file income tax returns for 2000, 2001 and 2002, presented any potential tax liability or refund for those years, and retained jurisdiction to make post-judgment orders should any tax liability arise. The trial court also impliedly found there was no evidence that the filing of the 2003 and 2004 tax returns impaired Linda’s interests when it reserved jurisdiction to assess damages should any liability arise from those returns. Linda does not point to any evidence presented below showing that Wayne’s acts or omissions impaired her interest in the community estate, or even argue on appeal that they harmed her. In the absence of such evidence, the harm to Linda is speculative.
The trial court is expressly authorized to retain jurisdiction where it is without the requisite evidence to determine the value of an item in the community estate. (§ 2550 [trial court is required to divide the community estate in its judgment of dissolution “or at a later time if it expressly reserves jurisdiction to make such a property division”]; see In re Marriage of Kilbourne (1991) 232 Cal.App.3d 1518, 1525.) In this case, since there was no evidence of impairment of Linda’s community interest, the trial court retained jurisdiction to determine any future liability related to the income tax returns. Given the lack of evidence of impairment to the community estate and the trial court’s retention of jurisdiction on this issue, we see no error and certainly no prejudice in the trial court’s ruling.
Spousal Support
Linda contends the trial court abused its discretion when it set spousal support lower than her monthly expenses. Specifically, Linda contends the trial court did not take into account Wayne’s wealth when making its determination, and considering Wayne’s ability to pay the support, the court should have set the amount higher.
We review permanent spousal support orders for abuse of discretion. (In re Marriage of McTiernan and Dubrow (2005) 133 Cal.App.4th 1090, 1106.) In exercising its discretion, “the trial court must consider and weigh all of the circumstances enumerated in [section 4320], to the extent they are relevant to the case before it. [Citations.] The first of the enumerated circumstances, the marital standard of living, is relevant as a reference point against which the other statutory factors are to be weighed. [Citations.] The other statutory factors include: contributions to the supporting spouse’s education, training, or career; the supporting spouse’s ability to pay; the needs of each party, based on the marital standard of living; the obligations and assets of each party; the duration of the marriage; ... the age and health of the parties; tax consequences; the balance of hardships to the parties; the goal that the supported party be self-supporting within a reasonable period of time; and any other factors deemed just and equitable by the court.” (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 302-304, fn. omitted.)
“In balancing the applicable statutory factors, the trial court has discretion to determine the appropriate weight to accord to each. [Citation.] But the ‘court may not be arbitrary; it must exercise its discretion along legal lines, taking into consideration the applicable circumstances of the parties set forth in [the statute], especially reasonable needs and their financial abilities.’ [Citation.] Furthermore, the court does not have discretion to ignore any relevant circumstance enumerated in the statute. To the contrary, the trial judge must both recognize and apply each applicable statutory factor in setting spousal support.” (In re Marriage of Cheriton, supra, 92 Cal.App.4th at p. 304.)
Here, the trial court addressed the relevant factors of section 4320 in its decision. It first determined that Linda’s standard of living did not increase significantly after marrying Wayne. It also determined that Linda had been working, and although she claimed her net business income was $500 per month, the court suspected her net business income was higher. The court found that Wayne’s total income was $4,068 per month, he had $300,000 in a bank account, property appraised at $800,000, and owned several trucks valued at $30,000. The court further found Linda had a need for financial support, as her monthly expenses were $1,936, and Wayne had the ability to pay, as his monthly expenses were $4,201. The court noted the marriage was relatively short, at 5 years, 7 months, and Wayne had been paying temporary support for almost two years. The court then considered the relevant circumstances, balanced the hardships, and concluded an award of permanent support for a brief period of time was appropriate, so as to give Linda time to increase her working hours or file a claim for disability benefits, and it would be unjust to order Wayne to pay for a significant period of time since Linda’s lifestyle and living circumstances had not changed substantially as a result of marriage.
Since the court did consider Wayne’s wealth when awarding permanent support, Linda’s claim that the court failed to do so is without merit. Linda’s real complaint appears to be that given Wayne’s income, assets, and expenses, he had the ability to pay more than the $750 per month the court ordered, and since Linda’s income was clearly below her expenses, the court should have awarded a higher payment.
As Wayne points out, it was Linda’s burden, as the party seeking permanent spousal support, to establish that she is entitled to support at the level she seeks. (See In re Marriage of Mehlmauer (1976) 60 Cal.App.3d 104, 108 [general rule that “‘a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting’” applies even where provisions of statute, like spousal support statute, do not mention burden of proof].) While the court apparently accepted Linda’s representation that her monthly expenses were $1,936, it believed that her net business income was higher than the $500 per month claimed on her income and expense declaration. Linda testified at trial that she had pain in her neck, shoulder and back that limited her ability to work full time as a hairdresser. She confirmed she worked 20 hours per week, which yielded $550 per month, from which she paid her space rent of $200 per month plus $50 to $100 per month for supplies, which left her with a pre-tax spendable income of about $300 per month. This fell far short of meeting even the $875 monthly rent for her home. Although Linda listed her expenses as $1,936, no explanation was provided as to how she was able to meet those expenses given her claimed income. As Wayne points out, it appears her expenses were not covered by borrowing, because she did not list any debts in her declaration, neither was it covered by payments from third parties, which also were not listed. While Wayne was paying $950 per month in temporary spousal support at that time, there was an unexplained gap of approximately $700 per month between Linda’s reported income and her expenses.
Linda testified that during the first year of marriage, she paid all of the couple’s living expenses, including rent, and thereafter, Wayne paid the rent, which at that time was $550 per month, while she paid the remainder of her living expenses.
Given the state of the evidence, there was no credible figure for Linda’s income. Accordingly, the trial court was well within the bounds of permissible discretion to conclude that, while Linda had a need for financial support, that need was not the equivalent of the difference between the claimed net income of $300 per month and her expenses of $1,936, but instead was something less, and the $750 per month of spousal support it awarded was sufficient to cover her monthly expenses. We find no abuse of discretion.
Attorney Fees
Linda contends the trial court abused its discretion when it reduced her attorney fees because her attorney took a position different than the one the court used in its final decision. Specifically, Linda argues the court’s finding that the majority of Linda’s attorney fees were not reasonable and necessary was an error of law because it was based on its opinion that much of the fees incurred could have been avoided if Linda and her attorney had conducted pre-trial discovery and research on the issue of the option to buy. Linda asserts “[t]his finding has a chilling effect on zealous advocacy” and has the effect of punishing attorneys who proceed with vigorous advocacy because they disagree with the court’s position.
Our standard of review of a motion for attorney fees is well-established: the motion “‘is addressed to the sound discretion of the trial court, and in the absence of a clear showing of abuse, its determination will not be disturbed on appeal. [Citations.] The discretion invoked is that of the trial court, not the reviewing court, and the trial court’s order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made.’” (In re Marriage of Keech (1999) 75 Cal.App.4th 860, 866.)
Section 2030 authorizes the trial court to make a need-based award of attorney fees and costs in marital proceedings. As explained by our Supreme Court, “The purpose of the award is to provide one of the parties, if necessary, with an amount adequate to properly litigate the controversy.” (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 768 (Sullivan).) In relevant part, section 2030, subdivision (a)(1) provides, “In a proceeding for dissolution of marriage, ... the court shall ensure that each party has access to legal representation to preserve each party’s rights by ordering, if necessary based on the income and needs assessments, one party ... to pay to the other party, or to the other party’s attorney, whatever amount is reasonably necessary for attorney’s fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding.” Section 2030, subdivision (a)(2) states, “Whether one party shall be ordered to pay attorney’s fees and costs for another party, and what amount shall be paid, shall be determined based upon, (A) the respective incomes and needs of the parties, and (B) any factors affecting the parties’ respective abilities to pay.”
Under section 2032, the amount of the award must be “just and reasonable under the relative circumstances of the respective parties.” (§ 2032, subd. (a).) However, “[f]inancial resources are only one factor for the court to consider in determining how to apportion the overall cost of the litigation equitably between the parties under their relative circumstances.” (§ 2032, subd. (b), italics added.) Case law has developed other factors for fixing the amount of a reasonable need-based fee award, including: “the nature of the litigation; its difficulty; the amount in controversy; the skill required and employed in handling the litigation; the attention given; the success of the attorney’s efforts; the attorney’s learning and experience in the particular type of work demanded; the intricacies and importance of the litigation; the labor and the necessity for skilled legal training and ability in trying the cause, and the time consumed.” (In re Marriage of Braud (1996) 45 Cal.App.4th 797, 827, fn. 30.)
The court may rely on its own experience and knowledge in determining the reasonable value of such efforts since “[t]he exercise of sound discretion by the trial court in the matter of attorney’s fees includes also judicial evaluation of whether counsel’s skill and effort were wisely devoted to the expeditious disposition of the case. Certainly a desirable objective of domestic litigation is prompt and equitable resolution of marital difficulties rather than their bitter prolongation. Conscientious and successful efforts by counsel to resolve as many areas of disagreement as possible without judicial intervention is entitled to serious consideration in awarding attorney’s fees.” (In re Marriage of Lopez (1974) 38 Cal.App.3d 93, 113, disapproved on another ground in In re Marriage of Morrison (1978) 20 Cal.3d 437, 453.)
To the extent Linda is arguing that a trial court may never consider the position a party has taken in assessing the reasonableness of attorney fees, we disagree. Services having no apparent effect but to prolong and complicate domestic litigation cannot be deemed reasonably necessary to properly litigate the controversy; a trial court may properly disregard them in determining whether to order one party to contribute to the cost of the other’s representation. (In re Marriage of Behrens (1982) 137 Cal.App.3d 562, 576.) In making this determination, the trial court may conclude a party’s litigation of the case was unreasonable. (In re Marriage of Huntington (1992) 10 Cal.App.4th 1513, 1524.) That is precisely what the trial court did here, when it determined that much of Linda’s fees could have been avoided if she had conducted pre-trial discovery and research regarding the option agreement. Linda contends the court reduced her fee award because she disagreed with the court’s position on the law of the case. We do not read the court’s decision so narrowly. Instead, it appears the trial court concluded the fees claimed were unreasonable given the evidence of the option agreement, the applicability of the Joaquin case to that evidence, and Linda’s failure to present any evidence to rebut the agreement. From this, the court reasonably could conclude, based on its own expertise and experience, that the Joaquin case could have been distinguished and its inapplicability argued for much less than the fees Linda claimed she incurred.
On the other hand, if Linda is asserting that the position she took in the trial court with respect to the characterization of the Riverbank property was not frivolous or that the fees she incurred in litigating that issue were reasonable, Linda has not provided us with an adequate record to review such a claim. The record does not contain a fee declaration or other statement evidencing the services performed; neither does it contain the trial briefs or legal arguments presented in the trial court. A fundamental rule of appellate review is that “[a] judgment or order of a lower court is presumed to be correct on appeal[.]” (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) “‘All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown.’” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) The burden is on the appellant to overcome the presumption of correctness and to provide an adequate appellate record to demonstrate error. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295.) Failure to furnish an adequate record will result in affirmance of the order appealed from. (Id. at pp. 1295-1296.)
Without knowing the arguments Linda asserted below or the fees actually incurred in litigating the Riverbank property’s characterization, we simply cannot resolve whether the trial court abused its discretion in reducing the fee award. On this record, viewed most favorably in support of the order, we cannot say no judge reasonably would have reduced Linda’s award of attorney fees. (Sullivan, supra, 37 Cal.3d at pp. 768-769.)
DISPOSITION
The judgment is affirmed. Respondent is awarded his costs on appeal.
WE CONCUR: Harris, Acting P.J., Wiseman, J.
Subdivision (e) of section 1100 provides: “Each spouse shall act with respect to the other spouse in the management and control of the community assets and liabilities in accordance with the general rules governing fiduciary relationships which control the actions of persons having relationships of personal confidence as specified in Section 721, until such time as the assets and liabilities have been divided by the parties or by a court. This duty includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable, and to provide equal access to all information, records, and books that pertain to the value and character of those assets and debts, upon request.”