Opinion
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. CV154040
McAdams, J.
Appellant Yashna Asnani appeals an order granting respondent Scott Kohn’s motion for sale of real property to satisfy a judgment against Sham Asnani. In the proceedings below, Sham and Yashna alleged that they were not married and that the property at issue was Yashna’s separate property. Relying on documents it had judicially noticed, the court found that Sham and Yashna were married, that the property at issue was Sham and Yashna’s community property, and that it was therefore subject to execution to satisfy a judgment against Sham. Thus, the court impliedly found that Sham and Yashna were married. The court also found, based on the presumption of undue influence in interspousal transfers, that a 1992 deed in which Sham transferred his interest in the property to Yashna as her sole and separate property, was without force and effect.
For ease of reference and not out of disrespect, we shall hereafter refer to Sham Asnani and Yashna Asnani by their first names. Sham is not a party to the appeal.
On appeal, Yashna contends that the court erred when it relied on factual statements in the documents it had judicially noticed to find that Sham and Yashna were married. She also asserts that if the trial court did not err in finding that Sham and Yashna were married, then the court erred in applying the presumption of undue influence in transactions involving interspousal transfers to this case because the presumption only applies to litigation between spouses and cannot be asserted by third party creditors like Kohn.
We conclude that, while the trial court could properly take judicial notice of various recorded documents and declarations filed in other court cases, the court erred in finding that those documents constituted proof that Sham and Yashna were married and in holding that the property at issue was community property. As set forth in greater detail in the opinion, we asked the parties for supplemental briefing on the form of title presumption. We conclude that the form of title presumption is controlling in this case and that since Sham and Yashna originally took title to the property as “husband and wife as joint tenants, ” they each owned a one-half separate interest in the property. We therefore conclude that the court erred in finding that the property was community property and ordering the sale of the dwelling. We hold that the court erred in applying the presumption of undue influence to conclude that Sham’s transfer of his interest in the property to Yashna in 1992 was fraudulent. We reverse the order for sale of the dwelling and remand to the trial court to entertain a renewed motion should Kohn elect to proceed in that manner. We also deny Kohn’s request for judicial notice on appeal of certain bankruptcy records.
Factual and Procedural History
Judgment and Assignment of Judgment
In December 1999, Sherrie Wilkins and Krissie Oyler obtained a default judgment against Sham and an entity known as Royal Crown Funding in Alameda County in a case entitled Wilkins v. Royal Crown Funding, Alameda County Superior Court case number H207764-B. The court awarded Wilkins $150,000, plus $10,000 in attorney’s fees. The court awarded the same amounts to Oyler and ordered that Sham and Royal Crown Funding were jointly and severally liable for the judgment. The total amount of the judgment was $320,000.
In July 2008, Wilkins and Oyler renewed the judgment. By that time, the value of the judgment was $588,097.44. In 2009, Wilkins and Oyler assigned the judgment to Kohn.
Motion for Order for Sale of Dwelling
In October 2009, in an effort to collect on the judgment debt, Kohn filed a motion in Santa Clara County Superior Court for an Order for Sale of Dwelling pursuant to Code of Civil Procedure section 704.750 regarding the real property, including a single-family dwelling, located at 1722 Vista Glen Drive in San Jose (the Property or the Vista Glen Property). Kohn’s motion described the judgment, the renewal of the judgment, and its assignment to Kohn. Kohn alleged that no part of the judgment had been paid and that the amount of the judgment, plus interest, was “over $642,000.”
Kohn claimed that the amount of the renewed judgment was $588,097.44 as of June 17, 2009, and that interest on the judgment continued to accrue at “a daily rate of $161.12.”
Kohn alleged: (1) that the sheriff had levied on the Property and had directed Kohn to obtain an order for sale of dwelling; (2) that the fair market value of the Property was $300,000 based on reports of comparable sales prepared by a title company; (3) that the liens and encumbrances against the Property consisted of a deed of trust “executed by Sham Asnani and Yashna Asnani, husband and wife, ” securing a promissory note with an unpaid balance of $60,000; (4) that the Property may be the subject of a $50,000 homestead exemption; (5) that the Property therefore had over $190,000 of equity available to satisfy the judgment; and (6) that he had met all of the statutory requirements for the sale of the Property. Kohn alleged that although the Property may be a homestead, it was not occupied by the judgment creditor. Instead, it was occupied by a renter. Although Kohn’s motion alleged that Sham was the record owner of the Property, the title report (the only documentary evidence Kohn submitted regarding the Property) indicated that Yashna was the owner pursuant to an “[i]nterspousal” transfer in 1992.
Opposition to Motion
Sham filed a declaration in opposition to the motion for sale of dwelling, in which he denied that he owned the Property. He declared that Yashna was the owner of the Property, that he was not married to Yashna, and that he had never been married to Yashna. He explained that he and Yashna had “a child of [their] non-marital relationship.”
Yashna also filed a declaration in opposition to the motion for sale of dwelling. Yashna asserted that she was the record owner of the Vista Glen Property. She stated that she was not and had never been married to Sham. She explained that she had “taken the last name of ‘Asnani’ ” because she and Sham had a child together. She declared that she did not reside at the Property and that she rented it to tenants. Yashna attached a copy of a grant deed that she signed on January 3, 2008, in which “Yashna Asnani, an unmarried woman, who acquired title as a married woman as her sole and separate property” transferred her interest in the Property to herself as “Trustee of the Yashna Asnani Revocable Living Trust.” The grant deed was recorded on January 14, 2008.
Kohn’s Reply
Kohn filed a reply memorandum in which he asserted that Sham and Yashna were married and that Sham, accordingly, held a community property interest in the Property. Kohn argued that because the “community property interest of a spouse... is subject to execution under the Enforcement of Judgments law, the Court should order the sale of the Dwelling as requested in the Petition for Order of Sale.”
In support of his contention that Sham and Yashna were in fact married, Kohn asked the court to judicially notice seven documents that described Sham and Yashna as “husband” and “wife.”
Kohn asked the court to judicially notice two documents relating to the Vista Glen Property: (1) a grant deed dated January 31, 1992, in which Paul and Vivian Curiel granted the Vista Glen Property to “Sham Asnani and Yashna Asnani, husband and wife as joint tenants” and (2) a deed of trust dated January 30, 1992 between “Sham Asnani and Yashna Asnani, husband and wife” and the Curiels securing a promissory note in the amount of $138,331.34.
Kohn asked the court to judicially notice three grant deeds from 1991 and 1993, which indicated that Sham and Yashna had taken title to a different property (a condominium) as “husband and wife as joint tenants.”
Additionally, Kohn asked the court to judicially notice two declarations that Sham and Yashna filed in an unrelated collection action in Orange County in 2003 in which Sham described Yashna as his “wife” and Yashna purportedly described Sham as her “husband.” Kohn argued that while an unmarried couple may hold themselves out as husband and wife in social situations, “[i]t is unimaginable that an unmarried couple would falsely identify themselves on legal documents as husband and wife.”
Although Kohn’s memorandum of points and authorities stated that Sham and Yashna filed separate declarations in the Orange County action in which they claimed to be married to each other, Kohn attached two copies of Sham’s declaration to the request for judicial notice. It appears Kohn mistakenly placed a second copy of Sham’s declaration under the tab intended for Yashna’s declaration. In his declaration, Sham referred to Yashna as “my wife” five times.
Initial Hearing on Motion
The court held a hearing on the motion on November 10, 2009. The record on appeal does not include the reporter’s transcript of that hearing. That day, Sham filed a declaration in which he stated “I don’t own house.” Attached to the declaration was a copy of a quitclaim deed dated June 16, 1992, in which Sham transferred his interest in the Property to “Yashna Asnani a married woman as her sole and sep[a]rate property” (hereafter Quitclaim Deed). The Quitclaim Deed contained the handwritten notations “Interspousal” and “No consideration.” The court continued the hearing to permit the parties to file supplemental points and authorities.
Supplemental Briefing in the Trial Court
Yashna subsequently filed points and authorities in opposition to the motion for sale of dwelling, in which she argued that Kohn’s showing was insufficient to prove that she and Sham were married because (1) there was no marriage certificate; and (2) the court could not take judicial notice of “collateral documents” like the deeds and declarations submitted by Kohn. She argued, alternatively, that even if the court assumed that she and Sham were married, the Quitclaim Deed showed that Sham had quitclaimed the Property to Yashna “a married woman, as her sole and separate property, ” thereby effecting a transmutation of their community property interest in the Property to her separate property. Yashna argued that since she owned the Vista Glen Property and was not a named defendant or a judgment debtor, the motion for sale of dwelling should be denied.
Thereafter, Kohn filed supplemental points and authorities in which he argued that Sham and Yashna were judicially estopped from denying that they were married to each other, since they had held themselves out as husband and wife in “important legal documents, ” including grant deeds, deeds of trust, and sworn declarations. He argued that the Quitclaim Deed was insufficient to effect a transmutation of their community property to Yashna’s separate property, because the requirements of Family Code section 852 for a valid transmutation had not been met. He argued that it was a “sham transfer” that stripped the community of an asset while leaving it fully liable on the deed of trust and that it was presumptively invalid.
Sham filed written opposition to the motion consisting of: (1) a letter from the county clerk-recorder that stated that there was no record of a marriage by Sham in Santa Clara County between January 1, 1992, and October 28, 2009, and (2) another copy of the Quitclaim Deed.
Kohn filed a surreply, in which he asserted that Sham had failed to prove that he was not married to Yashna. Kohn argued that the letter covered only one of 58 counties in California and that the best evidence of the marriage was the deeds and declarations. Kohn argued that the Quitclaim Deed was invalid because the face of the deed showed that no consideration was given for the transfer and that since there was no consideration for the transfer, Sham and Yashna had failed to rebut the presumption that the transfer was the result of undue influence.
Further Hearing on Motion for Sale of Dwelling
At the second hearing on the motion, Sham told the court that he had no interest in the property and that he and Yashna were never married under the laws of California or any other state. He stated that California law requires that one be married in a certain way, which he had not done. He also stated that he never made any mortgage payments on the Property and that the loan was in Yashna’s name alone. Yashna argued that the presumption of undue influence only applies to litigation between spouses and offered to make an offer of proof regarding the sufficiency of the consideration for the Quitclaim Deed. She also requested a full evidentiary hearing on the marriage issue and on the sufficiency of the consideration for the Quitclaim Deed.
Sham was not sworn and did not formally testify at the hearing. He represented himself and told the court that his statements were being made “under penalty of perjury.”
Ruling on Motion
The trial court granted Kohn’s request for judicial notice and granted the motion for order for sale of dwelling. The court’s ruling, which identified Yashna as a “third party claimant, ” was based in its findings that the Quitclaim Deed “of the Dwelling from Sham Asnani to Yashna Asnani (which reflects no consideration for the transfer) is of no force and effect because Yashna Asnani has failed to rebut the presumption that the transfer was induced by undue influence, and in light of the documents judicially noticed, the Dwelling belongs to the community and is therefore subject to execution.”
Discussion
Yashna argues that the trial court erred in finding that the Property was community property because Kohn’s evidentiary showing was insufficient to prove that Sham and Yashna were married. Specifically, Yashna contends that the court erred in taking judicial notice of the truth of facts stated in the deeds and declarations. In the event this court affirms the trial court’s finding that Yashna and Sham were married, she also contends that the trial court erred in voiding the Quitclaim Deed because Kohn did not have standing to assert the presumption of undue influence since he is not a spouse.
Sham appeared in propria persona in the trial court and has not sought appellate review.
In his respondent’s brief, Kohn contends that the trial court properly took judicial notice of the truth of the contents of the deeds and declarations as proof that Sham and Yashna were married, since judicial notice may be taken of matters that are not reasonably subject to dispute. Alternatively, Kohn asserts that Yashna waived the issue by failing to object to judicial notice in the proceedings below. He also asserts that the declarations of Sham and Yashna constitute party admissions regarding their marriage, and, in any event, being required to obtain a copy of their marriage certificate would be an insurmountable burden. Finally, Kohn argues that Yashna presented no evidence to overcome the presumption that the transfer of Sham’s interest in the Property to her as her separate property for no consideration was the result of undue influence.
Before addressing the parties’ contentions, we briefly review the statutory procedure for obtaining an order for sale of dwelling.
I. Statutory Framework for an Order for Sale of Dwelling
The procedure for obtaining an order for sale of a dwelling is set forth in Code of Civil Procedure, section 704.740, et seq. Section 704.740 provides, with an exception not relevant here, that “the interest of a natural person in a dwelling may not be sold under this division to enforce a money judgment except pursuant to a court order for sale obtained under this article and the dwelling exemption shall be determined under this article.” The procedure for obtaining an order for sale of a dwelling where, as here, the dwelling is located in a county other than where the judgment was entered, is provided by section 704.750.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
The judgment creditor must levy upon the subject property, serve a notice of levy on the judgment debtor, and file an application for an order for sale. (§§ 704.750, 704.760.) After the application is filed, the trial court sets a hearing and orders the judgment debtor to show cause why an order for sale should not be made in accordance with the application. (§ 704.770.) At the hearing, the trial court determines whether the property is subject to a homestead exemption, the amount of the exemption, the fair market value of the property, and the amount of any liens or encumbrances on the property. (§ 704.780, subd. (b).) “The court shall make an order for sale of the dwelling subject to the homestead exemption, unless the court determines that the sale of the dwelling would not be likely to produce a bid sufficient to satisfy any part... of the judgment....” (§ 704.780, subd. (b).) Where the judgment creditor’s application is opposed by the owners of the dwelling, the issues raised in opposition may be determined at the hearing. (Abbott Electric Corp. v. Storek (1994) 22 Cal.App.4th 1460, 1464-1465 (Abbott Electric).)
In this case, in addition to the findings set forth previously, the court found: (1) that the Property was not subject to a homestead exemption; (2) that the fair market value of the Property was $300,000; (3) that the liens and encumbrances included a promissory note in favor of the Curiels with an unpaid balance of $60,000; and (4) that the sale of the Property “will produce a bid sufficient to satisfy all or part of the amount due on the judgment.”
II. Judicial Notice
A. Forfeiture
Generally, an appellant forfeits any claims of error that were not asserted in the trial court. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 185, fn. 1.) “[A] reviewing court ordinarily will not consider a challenge to a ruling if an objection could have been but was not made in the trial court. [Citation.] The purpose of this rule is to encourage parties to bring errors to the attention of the trial court, so that they may be corrected.” (In re S.B. (2004) 32 Cal.4th 1287, 1293, fn. omitted, superseded on other grounds by statute as stated in In re S.J. (2008) 167 Cal.App.4th 953, 962.)
To preserve the right to challenge the erroneous admission of evidence, the appellant must make a timely and proper objection or motion to exclude or strike the evidence in the trial court, stating the specific ground for the objection or motion. (Evid. Code, § 353, subd. (a); Broden v. Marin Humane Soc. (1999) 70 Cal.App.4th 1212, 1226-1227 & fn. 13.)
In this case, Yashna objected in her supplemental points and authorities, which were filed shortly after Kohn filed his request for judicial notice, that “judicial notice cannot be taken of collateral documents to establish the alleged fact of marriage.” In our view, this was sufficient to preserve for appeal her contention that the court could not judicially notice the factual allegations in the declarations and the recorded deeds for the truth of the matter stated therein. We therefore conclude that Yashna has not forfeited the issue.
B. General Principles Governing Judicial Notice
“ ‘Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.’ ” (Lockley v. Law Offices of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 (Lockley), quoting 2 Jefferson, Cal. Evidence Benchbook (Cont.Ed.Bar 3d ed. 1997) Judicial Notice, § 47.1, pp. 1064-1065; accord, 2 Jefferson, Cal. Evidence Benchbook (Cont.Ed.Bar 4th ed. 2010) Judicial Notice, § 49.1, p. 1144.) “The underlying theory of judicial notice is that the matter being judicially noticed is a law or fact that is not reasonably subject to dispute.” (Lockley, at p. 882, citing Evid. Code, § 451, subd. (f) & Post v. Prati (1979) 90 Cal.App.3d 626, 633.)
“Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code, § 450.) Matters that are subject to judicial notice are listed in Evidence Code sections 451 (mandatory judicial notice) and 452 (permissive judicial notice).
Kohn asked the court to judicially notice deeds and a deed of trust recorded against the Vista Glen Property and another property. He also asked the court to judicially notice declarations Sham and Yashna had filed in the Orange County action. Such matters fall under Evidence Code section 452, which provides in relevant part: “Judicial notice may be taken of...: [¶]... [¶] (d) Records of (1) any court of this state... [¶]... [¶] (h) Facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” We begin by reviewing the propriety of judicially noticing the declarations filed in the Orange County action in 2003.
C. Judicial Notice of Declarations Filed in Another Court Case
“Judicial notice may be taken of the records of a court of this state [citations]. This is not to say, however, that judicial notice may be taken of the truth of facts asserted in every document in a court record.” (People v. Tolbert (1986) 176 Cal.App.3d 685, 690.) Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable. (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9.)
A court “may take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached-in the documents such as orders, statements of decision, and judgments-but cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (Williams v. Wraxall (1995) 33 Cal.App.4th 120, 130, fn. 7; see also Lockley, supra, 91 Cal.App.4th at p. 882.)
Sosinsky v. Grant (1992) 6 Cal.App.4th 1548 (Sosinsky), which affirmed a trial court’s refusal to take judicial notice of a judge’s factual findings in a prior case, explored this point further. The court concluded that while it may be proper, “at some subsequent time” to take judicial notice that a judge made a particular factual finding, it is quite another matter to judicially notice “that the ‘facts’ found by the judge must necessarily be the true facts, i.e., must necessarily be ‘the truth.’ ” (Id. at p. 1565.) The court explained, “ ‘Under the doctrine of judicial notice, certain matters are assumed to be indisputably true, and the introduction of evidence to prove them will not be required.’ ” (Id. at p. 1564.) The court reasoned that taking judicial notice of the truth of a judge’s factual finding, even after a contested adversary hearing, is “tantamount to taking judicial notice that the judge’s factual finding must necessarily have been correct and that the judge is therefore infallible. We resist the temptation to do so.” (Id. at p. 1568.)
“Judicial notice of findings of fact does not mean those findings are true, but simply that they were made. [Citations.] Thus, while a court can take judicial notice that a court made a particular ruling, it cannot take judicial notice of the truth of a factual finding made in another action.” (People v. Moore (1997) 59 Cal.App.4th 168, 178, citing Sosinsky, supra, 6 Cal.App.4th at pp. 1564-1565.)
Here, Sham described Yashna as his “wife” in a declaration filed in a collection case in Orange County in 2003 in support of Sham and Yashna’s motion for relief from a default judgment. According to Kohn’s papers below, Yashna described Sham as her “husband” in a declaration filed in the same case. As noted before, Yashna’s declaration is not in the record on appeal. Nothing in the record suggests that Sham and Yashna’s marital status was at issue in the Orange County case or that the court made any factual findings regarding their marital status. Under the rules set forth above, it was improper for the court to judicially notice Sham and Yashna’s statements in the declarations for the indisputable truth that they were married.
D. Judicial Notice of Recorded Documents
A court may judicially notice recorded deeds. (Maryland Casualty Co. v. Reeder (1990) 221 Cal.App.3d 961, 977.) However, as with court records, the fact that “a court may take judicial notice of a recorded deed, or similar document, does not mean it may take judicial notice of factual matters stated therein.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117, citing Kilroy v. State of California (2004) 119 Cal.App.4th 140 .) After stating the general rule, Poseidon held that there was no problem in taking judicial notice of a recorded assignment of a note and deed of trust from Poseidon to another entity because “it [was] not reasonably subject to dispute that, whatever else occurred, Poseidon gave up and no longer held the beneficial interest under the deed of trust.” (Poseidon, at p. 1118.)
In this case, the trial court judicially noticed the contents of several deeds and a deed of trust in which Sham and Yashna described themselves as “husband and wife” as proof of the fact that they were married. Applying the rules set forth above, we conclude the court erred when it relied on the factual matters stated in the deeds as proof that Sham and Yashna were married, since whether they are married is a fact that is reasonably subject to dispute, and that was disputed in the trial court.
E. Prejudice
When a trial court’s judicial notice rulings are challenged, harmless error standards apply. (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 569.) “ ‘The Evidence Code declares the party’s right and the trial judge’s duty, but does not deal with the problems of appellate review and reversible error. Hence, even though the matter called for compulsory notice, or was appropriate for optional notice, and the appellant fully complied with the procedural requirements, refusal to take notice is merely error. Whether it is reversible error depends on the state of the record, and also involves considerations of estoppel and waiver. [Citations.] Likewise, the improper taking of notice is subject to harmless error analysis.’ ” (Ibid., citing 1 Witkin, Cal. Evidence (4th ed. 2000) Judicial Notice, § 44, p. 137; see West Valley-Mission Community College Dist. v. Concepcion (1993) 16 Cal.App.4th 1766, 1778 [trial court’s error in judicially noticing transcripts that were not presented in administrative proceeding was harmless, since the evidence was redundant to the administrative record].)
We do not have a reporter’s transcript of the November 10, 2009 hearing and do not know what the parties’ arguments were with regard to the deeds and declarations or whether they presented any other documentary evidence or testimony relating to the marriage issue. But, since the deeds and declarations submitted by Kohn contain the only evidence in the record that supports the court’s implied finding that Sham and Yashna were married, the error in judicially noticing the facts in the deeds and declarations was arguably prejudicial. However, we conclude that we need not decide the prejudice issue, since our analysis of the applicability of the form of title presumption, disposes of the appeal in this case.
On appeal, the trial court’s order or judgment is presumed to be correct. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) The appellant, Yashna in this case, has the burden to provide this court with an adequate record to demonstrate error below and overcome the presumption that the trial court’s order was correct. (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.) Yashna’s failure to provide this court with the reporter’s transcript of the first hearing on the motion raises some question regarding whether she has met that burden.
III. The Form of Title Presumption
Kohn’s motion for sale of dwelling assumed that demonstrating that the Property was held by a married couple was sufficient to allow its sale as a community asset to satisfy Sham’s debt. Sham’s and Yashna’s opposition labored under the same assumption, contesting the existence of a community asset on the ground that they were not married. On appeal, the parties assume that the merits of the trial court’s order turns on whether the court properly concluded that Sham and Yashna were married and that the Vista Glen Property was therefore community property. The parties overlook the form of title presumption, which we believe is crucial to the analysis of the issues in this case.
Nature of Presumption
Community property is “subject to enforcement of a money judgment as provided in the Family Code.” (§ 695.020, subd. (a).) Family Code section 910, subdivision (a) provides that “Except as otherwise expressly provided by statute, the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regardless of whether one or both spouses are parties to the debt or to a judgment for the debt.” On the other hand, the separate property of one spouse may not be taken to satisfy the personal debts of the other spouse. (Fam. Code, § 913, subd. (b)(1).)
There is a presumption regarding the characterization of property that was not addressed in the parties’ initial briefs or in their papers below. “According to the ‘form of title’ presumption, the description in a deed as to how title is held is presumed to reflect the actual ownership interests in the property. [Citations.] This common law presumption is codified in Evidence Code section 662, which provides: ‘ “The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.” ’ [Citation.] The presumption is based ‘on promoting the public “policy... in favor of the stability of titles to property.” [Citation.] “Allegations... that legal title does not represent beneficial ownership have... been historically disfavored because society and the courts have a reluctance to tamper with duly executed instruments and documents of legal title.” [Citation.]’ [Citation.] Thus, ‘in the absence of any showing to the contrary, the status declared by the instrument through which [the parties] acquired title is controlling.’ ” (In re Marriage of Brooks & Robinson (2008) 169 Cal.App.4th 176, 184-185 (Brooks).)
The general presumption of community property in Family Code section 760 does not trump the form of title presumption. Family Code section 760 provides: “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” But the Family Code section 760 presumption does not negate the form of title presumption. (Brooks, supra, 169 Cal.App.4th at pp. 186-187.) To the contrary, as the court observed in Brooks, “ ‘the affirmative act of specifying a form of ownership in the conveyance of title... removes such property from the more general presumption.’ ” (Id. at p. 186;see also Siberell v. Siberell (1932) 214 Cal. 767, 773 [community property presumption “has no application to a case where ‘a different intention is expressed in the instrument’ ”].)
Under the form of title presumption, “[w]hen property is conveyed to a husband and wife as joint tenants, the form of the conveyance is such as to destroy the statutory presumption that the property is community even though the consideration for such conveyance consists of community funds or assets; such an instrument creates a tenancy in which the interests of the husband and wife are separate property.” (Lovetro v. Steers (1965) 234 Cal.App.2d 461, 468; Estate of Mitchell (1999) 76 Cal.App.4th 1378, 1385 [property cannot be held both as community property and joint tenancy at the same time].) Thus, “each spouse’s interest in a joint tenancy... is his or her own separate property.” (Estate of Mitchell, supra, 76 Cal.App.4th at p. 1385.)
Sham and Yashna originally took title to the Property as “husband and wife, joint tenants.” Under the form of title presumption, they each had a separate property interest in one half of the Property. Thus, even if Kohn could prove that Sham’s subsequent transfer of his separate property interest to Yashna in the Quitclaim Deed was invalid, under this presumption, the court could order the sale of no more than Sham’s one-half separate property interest to satisfy the debt.
The form of title presumption is rebuttable. “[I]t is well settled in this state that the form of the instrument under which a husband and wife hold title is not conclusive as to the status of the property, and that property acquired under a joint tenancy deed may be shown to be actually community property or the separate property of one spouse according to the intention, understanding or agreement of the parties.” (Socol v. King (1950) 36 Cal.2d 342, 345; Brooks, supra, 169 Cal.App.4th at p. 189.)
“The form of title presumption affects the burden of proof. [Citations.] That is, the party asserting that title is other than as stated in the deed ([Kohn]) has the burden of proving that fact by clear and convincing evidence. [Citations.] The presumption can be overcome only by evidence of an agreement or understanding between the parties that the title reflected in the deed is not what the parties intended. [Citations.] Significantly, ‘the presumption cannot be overcome solely by tracing the funds used to purchase the property, nor by testimony of an intention not disclosed to the grantee at the time of the execution of the conveyance.’ [Citations.] Nor can the presumption be rebutted by evidence that title was taken in a particular manner merely to obtain a loan.” (Brooks, supra, 169 Cal.App.4th at pp. 189-190.) The mere fact that property was acquired during marriage does not rebut the form of title presumption. (Id. at pp. 186-187.)
“To overcome the form of title presumption, the evidence of a contrary agreement or understanding must be ‘clear and convincing.’ (Evid. Code, § 662; cf. In re Marriage of Weaver [(1990)]224 Cal.App.3d [478, ] 486....) This standard requires evidence that is ‘ “ ‘ “so clear as to leave no substantial doubt” [and] “sufficiently strong to command the unhesitating assent of every reasonable mind.” ’ ” ’ ” (Brooks, supra, 169 Cal.App.4th at p. 190.)
Supplemental Briefing
Pursuant to Government Code section 68081, we requested supplemental briefing on questions relating to the form of title presumption. First, we inquired whether “the fact that the Asnanis originally took title as joint tenants affect[ed] Kohn’s claim that the [Property] was community property.” We asked the parties to discuss the form of title presumption and referred them to Brooks and Marriage of Haines (1995) 33 Cal.App.4th 277, 291-292 (Haines). We asked the parties to discuss whether the form of title presumption applies to this case, whether Kohn’s motion should have been denied on the ground that Kohn failed to overcome the form of title presumption, and whether Yashna has forfeited this issue on appeal by failing to raise it below.
We also asked the parties whether the Vista Glen Property was “the proper subject of a motion for an order for sale of dwelling pursuant to the procedure set forth in... section 704.740 et seq., since the undisputed evidence... is that the property was income property and was not used by either [Sham or Yashna] as a residence?” The parties agree that the Property was the proper subject of such a motion. As Kohn notes, the Property falls under the definition of a “dwelling” in the Enforcement of Judgment Law, which defines a dwelling as “a place where a person resides and may include but is not limited to... (1) A house together with the outbuildings and the land upon which they are situated.” (§ 704.710, subd. (a).) Since the purpose of section 704.740 is to determine whether a homestead or dwelling exemption applies in an action to enforce a money judgment (California Coastal Com. v.Allen (2008) 167 Cal.App.4th 322, 328), we conclude that it was appropriate for Kohn to file a motion for an order for sale of dwelling with regard to the Vista Glen Property notwithstanding that fact that it was income property.
Yashna filed a supplemental brief arguing that the fact that she and Sham initially took title as “husband and wife, joint tenants” does not affect Kohn’s claim. In her view, the issue is whether she and Sham were married. She reasons that since Kohn cannot prove that they were married, he cannot rely on the general presumption that property acquired during the marriage is community property. Yashna also argues that since “a ‘marriage’ can not be ascertained, ” the court must rely on the common law form of title presumption. She notes that when Kohn levied on the property, title was in her name alone as trustee of her revocable trust and argues that nothing about that form of title supports Kohn’s claim that the property was community property. On the question of forfeiture, Yashna argues that she has not forfeited the issue, citing Brooks which decided a title question based on common law presumptions that had not been briefed by the parties after requesting supplemental briefing. Yashna urges us to exercise our discretion to do the same.
In his supplemental brief, Kohn relies on the presumption in Family Code section 2581, which provides in part: “For the purpose of division of property on dissolution of marriage or legal separation of the parties, 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.” Kohn notes that this presumption is rebuttable and asserts that the Asnanis offered no evidence to rebut the presumption that the Property was community property when they acquired it in 1992. Kohn acknowledges that when he levied on the property, title was vested solely in Yashna’s name pursuant to the Quitclaim Deed. He argues, however, that the presumption of undue influence in interspousal transfers trumps the form of title presumption; that under the presumption of undue influence, the transfer pursuant to the Quitclaim Deed was presumptively invalid; and that Yashna did not meet her burden of proving that the transfer was a valid transmutation. He also asserts that Yashna has forfeited the issue by failing to raise it in the trial court.
Forfeiture
We begin with the question of forfeiture. Generally, a party will not be able to raise new theories or issues on appeal that were not raised in the trial court. (Giraldo v. Department of Corrections & Rehabilitation (2008) 168 Cal.App.4th 231, 251.) But, the application of the forfeiture rule is not automatic and appellate courts have the discretion to excuse a forfeiture. (In re S.B. (2004) 32 Cal.4th 1287, 1293.) “Parties have been permitted to raise new issues on appeal where the issue is purely a question of law on undisputed facts.” (Sheller v. Superior Court (2008) 158 Cal.App.4th 1697, 1709.)
This is an appropriate case for the exercise of such discretion. We are concerned here with the purely legal questions regarding the applicability of certain legal presumptions, the interpretation of the deeds, as well as the sufficiency of the evidence to support the court’s conclusion that the Property was community property. A claim that a judgment or order is not supported by sufficient evidence is never forfeited and may be asserted for the first time on appeal. (In re Gregory A. (205) 126 Cal.App.4th 1554, 1560.)
Analysis
Sham and Yashna acquired the Property in January 1992 and originally held title as “husband and wife as joint tenants.” Under the form of title presumption, Sham and Yashna each had separate property interests in the property. (Estate of Mitchell, supra, 76 Cal.App.4th at p. 1385.)
In June 1992, Sham transferred his separate property interest in the Property to Yashna, “a married woman as her sole and sep[a]rate property.” Since then, the recorded grant deeds show that Yashna owns the Vista Glen property as her separate property, which would not be subject to Sham’s property judgment debt. (The last recorded grant deed states that as of 2008 the record owner of the Property was Yashna, “an unmarried woman, who acquired title as a married woman, as her sole and separate property, ” and currently holds title as “Trustee of the Yashna Asnani Revocable Living Trust.”)
Kohn attacks the validity of Yashna’s legal title to the Property on the ground that the Quitclaim Deed constitutes an invalid transmutation of community property to Yashna’s separate property. His argument depends on a finding that Sham and Yashna originally held the Property as community property and he reasons that since the subsequent granting of legal title to Yashna was invalid, the Property remains community property subject to Sham’s judgment debt. However, as demonstrated above, even if Sham and Yashna were married when they acquired the Property, under the form of title presumption, they each held a separate property interest in the Vista Glen Property; it was not community property.
To overcome the form of title presumption, Kohn had the burden to show by clear and convincing evidence that Sham and Yashna had an “intention, understanding or agreement” that the Vista Glen Property would be held as community property despite holding legal title as joint tenants. (Evid. Code, § 662; Socol v. King, supra, 36 Cal.2d at p. 345; Brooks, supra, 169 Cal.App.4th at pp. 189-190.) “Whether the evidence is sufficient to overcome the presumption arising from the form of the instrument is a question of fact.” (Lovetro v. Steers, supra, 234 Cal.App.2d at p. 469.) Therefore, the standard of review is substantial evidence. (Id. at p. 470.)
Here, the trial court’s finding that the Property was community property is not supported by substantial evidence. Even if the trial court was correct in finding that Sham and Yashna were married, to overcome the presumption that Sham and Yashna had separate property interests in the Property because they took title as joint tenants, Kohn was required to provide evidence that Sham and Yashna had an intention, understanding or agreement that the property would be held as community property. Kohn made no such showing. At most, he presented evidence that suggested that Sham and Yashna were married. As noted previously, the mere fact that property was acquired during marriage does not rebut the form of title presumption. (Brooks, supra, 169 Cal.App.4th at pp. 186-187.)
Applying the form of title presumption, even if Kohn had proven that the 1992 transfer of Sham’s separate property interest to Yashna via the Quitclaim Deed was invalid, at most Kohn would have been able to levy against Sham’s one-half separate property interest, since at all times Yashna retained her own one-half interest in the property. Since the court concluded that the Property was community property and ordered sale of the entire property to satisfy the debt, we must reverse and remand for further proceedings.
Kohn’s reliance on the community property presumption in Family Code section 2561 is misplaced. As noted previously, that section provides that “For the purpose of division of property on dissolution of marriage or legal separation of the parties, 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. This presumption is a presumption affecting the burden of proof and may be rebutted by either of the following: [¶] (a) A clear statement in the deed or other documentary evidence of title by which the property is acquired that the property is separate property and not community property. [¶] (b) Proof that the parties have made a written agreement that the property is separate property.” (§ 2581.)
It is well established that Family Code section 2581 has limited application. As the express language of the statute indicates, the community property presumption in Family Code section 2581 applies only to the “division of property on dissolution of marriage or legal separation.” (Fam. Code, § 2581; Brooks, supra, 169 Cal.App.4th at p. 188; Dorn v. Solomon (1997) 57 Cal.App.4th 650, 652.) It does not apply to suits by third party creditors. (Abbott Electric, supra, 22 Cal.App.4th at pp. 1466-1467 & fn. 7 [discussing Civil Code former section 4800.1, Family Code section 2581 continued the language of section 4800.1 without substantive change].)
IV. Presumption of Undue Influence
In her original brief on appeal, Yashna asserted that, in the event this court affirms the trial court’s implied finding that Yashna and Sham were married to one another, the trial court erred in voiding the Quitclaim Deed because Kohn did not have standing to assert the presumption of undue influence. She argued, without citation to authority, that “[i]t is the right of a spouse to assert the claim of undue influence, not that of a third party.” Kohn did not respond to this contention, but argued instead that Yashna failed to rebut the presumption of undue influence.
In our request for supplemental briefing, we asked the parties to address the question: “Is the presumption of undue influence in interspousal transactions limited... to disputes between spouses or does it apply to cases such as this one involving a third party creditor?”
Yashna responds that this presumption only applies to actions between spouses, citing In reMarriage of Burkle (2006) 139 Cal.App.4th 712 (Burkle). She contends that Sham, the disadvantaged party, does not claim undue influence and does not complain of the transaction. She asserts, further, that if the court had conducted an evidentiary hearing, as she requested, she would have proven that there was consideration for the transfer.
In his supplemental brief, Kohn responds that he has not found any authority directly on point, but asserts that the public policy behind the presumption of undue influence in interspousal transactions is not limited to disputes between spouses and that the presumption therefore applies to cases involving third party creditors.
We begin by noting that Burkle, the case cited by Yashna, does not address the question presented here: whether the presumption of undue influence can be asserted in a non-marital proceeding by a third party creditor. Since the question whether Sham has any interest in the property turns on the validity of the Quitclam Deed and Kohn may raise the presumption of undue influence again in the trial court, we briefly address the issue to provide guidance to the parties and the court.
Spouses “may enter into any transaction with the other, or with any other person, respecting property, which either might if unmarried.” (Fam. Code, § 721, subd. (a).) A transmutation is an interspousal transaction that changes the character of property; special rules govern such transactions. (Haines, supra, 33 Cal.App.4th at p. 293, citing Fam. Code, § 850 et seq.)
Like all interspousal property transactions, property transmutations are subject to the fiduciary standards in Family Code section 721, which provides: “[I]n 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....” (Fam. Code, § 721, subd. (b); Haines, supra, 33 Cal.App.4th at p. 293; In re Marriage of Barneson (1999) 69 Cal.App.4th 583, 588.)
Because transmutations are subject to the Family Code section 721, subdivision (b) fiduciary standards, a transmutation that unfairly advantages one spouse over the other is presumed to have been induced by undue influence. (Haines, supra, 33 Cal.App.4th at pp. 296-297, 301.) As a result, when the disadvantaged spouse contests the alleged transmutation, the advantaged spouse has the burden of proving by a preponderance of the evidence that the transaction was not consummated in violation of his or her fiduciary duties. (Id. at pp. 296-297.) “Thus, the requirements of [Family Code] section 852 are prerequisites to a valid transmutation but do not necessarily in and of themselves determine whether a valid transmutation has occurred.” (In re Marriage of Barneson, supra, 69 Cal.App.4th at p. 588.)
Family Code section 852 provides in relevant part: “(a) 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. [¶] (b) A transmutation of real property is not effective as to third parties without notice thereof unless recorded. [¶]... [¶] (d) Nothing in this section affects the law governing characterization of property in which separate property and community property are commingled or otherwise combined.”
The presumption has been “regularly applied in marital transactions in which one spouse has deeded property to the other, ” and thereby obtained an unfair benefit at the expense of the other, including property transfers like the Quitclaim Deed here that involved no consideration or inadequate consideration. (Burkle, supra, 139 Cal.App.4th at pp. 730-731 [reviewing history of presumption in the case law and holding that the presumption of undue influence applies only to transactions in which one spouse obtains an unfair advantage over the other], citing Haines and Weil v. Weil (1951) 37 Cal.2d 770, 787-789.)
When a transmutation is evidenced by a deed or other title document, the form of title presumption comes into play, which requires clear and convincing evidence to rebut the presumption. Thus, the presumption of undue influence necessarily conflicts with the form of title presumption and its higher rebuttal standard of proof. Thus, it has been held, in a marital proceeding, that when an alleged transmutation that unfairly advantages one spouse is challenged by the other spouse, the presumption of title must yield to the presumption of undue influence. (Haines, supra, 33 Cal.App.4th at pp. 300-302.)
“When a presumption of undue influence applies to a transaction, the spouse who was advantaged by the transaction must establish that the disadvantaged spouse’s action ‘was freely and voluntarily made, with a full knowledge of all the facts, and with a complete understanding of the effect of’ the transaction.” (Burkle, supra, 139 Cal.App.4th at pp. 738-739.) “The question ‘whether the spouse gaining an advantage has overcome the presumption of undue influence is a question for the trier of fact, whose decision will not be reversed on appeal if supported by substantial evidence.’ ” (Id. at p. 737.) Yashna asserts, however, that the presumption of undue influence only applies to disputes between spouses and, consequently, does not apply in this case because Kohn is a third party creditor and not her spouse. In our view, whether Kohn has standing to assert the presumption of undue influence is a question of law, relating to the selection of a rule, which we review independently. (Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888.)
The trial court found that the presumption of undue influence applied here and concluded that Yashna had not rebutted that presumption. However, Kohn did not raise the presumption of undue influence until he filed his surreply, shortly before the second hearing on his motion. At that hearing, Yashna asked the court for an evidentiary hearing and an opportunity to rebut the presumption of undue influence, which the court denied.
The parties have not cited a single case that applied the presumption of undue influence in a case such as this or that addresses the applicability of the presumption to litigation between a married person and a third party creditor. Given the theoretical underpinnings of the presumption, we conclude that a third party creditor cannot rely on this presumption. The presumption of undue influence is based on the requirement that married persons comply with special standards of disclosure respecting marital property that arise out of their confidential and fiduciary relationship. (Haines, supra, 33 Cal.App.4th at p. 293.) That same confidential relationship does not apply to transactions between married persons and third party creditors. Since there is no fiduciary relationship between a married person and a creditor, we do not think that a creditor should be afforded the same benefits as a disadvantaged spouse in the form of a lower burden of proof when contesting the validity of a transfer. The creditor is not on the same footing as a disadvantaged spouse and should not be permitted to assert the presumption of undue influence. Moreover, as the court observed in Haines, “the law regarding transmutations makes reference to third party rights and affords protections against fraud in transmutations as follows: (1) a transmutation is subject to the laws governing fraudulent transfers (... [Fam. Code, § 851]); and (2) a transmutation of real property is not effective with respect to third parties that do not have notice of the transmutation unless it is recorded (... [Fam. Code, § 852, subd. (b)]).” (Id. at p. 295.) In light of these protections and the reasons stated above, we conclude that Kohn was not entitled to rely on the presumption of undue influence.
V. Kohn’s Request for Judicial Notice on Appeal
Kohn has filed a request for judicial notice in this court, asking the court to judicially notice a bankruptcy petition Sham and Yashna filed in 1995 and other documents filed in that proceeding. According to Kohn’s request, the petition was a joint bankruptcy petition, which can only be filed by spouses. However, in the petition, Sham and Yashna described themselves as “individual debtor[s]” and did not mark the box “Joint (Husband and Wife).”
Kohn asks this court to judicially notice this material “because it shows again that [Yashna] and Sham... held themselves [out] as husband and wife and signed a [sic] documents under oath that they were husband and wife.” According to Kohn, the bankruptcy petition lists Sham and Yashna’s wedding rings as exempt property and characterizes the Vista Glen Property as community property. Sham and Yashna described themselves as “married” in one of the schedules filed in the bankruptcy.
Judicial notice by appellate courts is governed by section 459, which provides in part: “(a) The reviewing court shall take judicial notice of (1) each matter properly noticed by the trial court and (2) each matter that the trial court was required to notice under Section 451 or 453. The reviewing court may take judicial notice of any matter specified in Section 452. The reviewing court may take judicial notice of a matter in a tenor different from that noticed by the trial court. [¶] (b) In determining the propriety of taking judicial notice of a matter, or the tenor thereof, the reviewing court has the same power as the trial court under Section 454.”
Kohn’s request for judicial notice of this material is denied. As with the trial court, while we may take judicial notice of the existence of the bankruptcy file and the documents therein, it is inappropriate for this court to take judicial notice of the truth of the statements contained in the documents if those matters are reasonably disputable. (StorMedia, Inc. v. Superior Court, supra, 20 Cal.4th at p. 457, fn. 9.) In our view, whether two people are married and the nature of jointly held property are matters that are reasonably subject to dispute.
More importantly, this court will not take judicial notice of matters that should have been, but were not, presented to the trial court for its consideration. (Brosterhous v. State Bar (1995) 12 Cal.4th 315, 325.) In his request for judicial notice, Kohn states that after Yashna filed her notice of appeal, Sham filed for bankruptcy and that it subsequently occurred to Kohn that Sham and Yashna may have filed other bankruptcies. However, he does not explain why this material could not have also been presented to the trial court as part of the motion below. Moreover, Kohn’s request, in effect, asks this court to take additional evidence on the marriage issue. That is not our role. For these reasons, we deny Kohn’s request for judicial notice of the bankruptcy documents. On remand, Kohn may request judicial notice of the bankruptcy documents if he elects to file a renewed motion for sale of dwelling.
This court previously granted Kohn’s separate request for judicial notice of public record documents relating to the procurement of a copy of a marriage license from public sources.
Disposition
The December 14, 2009 order for sale of dwelling is reversed. The matter is remanded to the trial court with directions to entertain a renewed motion for sale of dwelling, should respondent Kohn elect to proceed with a renewed motion. Upon a renewed motion, the trial court shall consider the form of title presumption in accordance with the views expressed in this opinion. The parties shall bear their own costs on appeal.
WE CONCUR: Bamattre-Manoukian, Acting P.J., Mihara, J.
We also requested supplemental briefing on the question whether the presumption of undue influence in interspousal transactions is limited to disputes between spouses or applies to cases such as this one involving a third party creditors, which we discuss in section IV of this opinion.