Recent Family Law Cases

Joseph Trenk et al., v. Maryam Soheili et al.
12/22/20, CA 2/2: B295434
https://www.courts.ca.gov/opinions/documents/B295434M.PDF

Appellants appeal from a judgment quieting title to a house (the Residence) owned by Respondents (H&W). Respondent/H is a lawyer who previously represented Appellant. Appellant sued Respondent/H for malpractice, and the parties subsequently entered into a settlement wherein Respondent/H agreed to pay $100,000 and executed a promissory note and a trust deed on the Residence to secure the obligation. Respondent/W did not sign the deed or the note. When Respondent/H stopped regular payments on the note and, 15 years later, still owed about $75,000. Appellant began nonjudicial foreclosure proceedings and the Respondents then filed a lawsuit to clear title to their Residence, alleging that the trust deed was no longer enforceable. After a short trial, the trial court quieted title on the Residence in favor of the Respondents, ruling that both the statute of limitations and the Marketable Record Title Act (Civ. Code §880.020
et seq.) barred enforcement of the trust deed and also argued as an alternative ground for affirmance that the trust deed is unenforceable because Respondent/W did not sign it. The appeals court agreed with both arguments.

The appeals court reasoned that the Residence is presumptively community property. Appellants did not rebut that presumption at trial. Family Code §760 provides that, “[e]xcept 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.” This provision establishes a presumption affecting the burden of proof, which may be rebutted by a preponderance of the evidence. (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1103; In re Marriage of Valli (2014) 58 Cal.4th 1396, 1400 (Valli).)

In In re Brace (2020) 9 Cal.5th 903 (Brace), the Supreme Court held that, for properties acquired after 1975, the presumption established by Family Code §760: (1) applies to claims by third parties outside the context of marital dissolution proceedings; and (2) prevails over another, more general, statutory presumption that “[t]he owner of the legal title to property is presumed to be the owner of the full beneficial title.” (Evid. Code, §662.) The court further held that, for properties acquired after 1985, the “titling of a deed” as a joint tenancy is not sufficient to show that the spouses intended that writing to convert community property into separate property. (Brace, at pp. 937–938.) The appeals court concluded that Appellants failed to rebut the statutory presumption that the Respondents held the Residence as community property. Because Respondent/W did not execute the Trust Deed, that deed was voidable, and the trial court properly canceled it. Affirmed.

In re the Marriage of Anna and Grzegorz Wozniak
12/29/20 CA 4/1: D074813
https://www.courts.ca.gov/opinions/documents/D074813.PDF

During the course of their marriage, Appellant transmuted title of her separate property to the community. At a subsequent point in time, Respondent prepared and executed an Interspousal Transfer Deed, that would transfer the property back to Appellant as her separate property.  At the time she was presented with the deed, Appellant rejected it and did not record it until after an incident occurred in which a protective order was granted in favor of Respondent and against Appellant. Appellant argued that the Interspousal Transfer Deed that Respondent executed satisfied the requirements of Family Code §852, subdivisions (a) and (e), because it is a “writing” that demonstrated his “intent to transmute his interest in the real property” to Appellant.  Respondent did not dispute that the interspousal transfer deed met the requirements of the writing discussed in section 852, subdivision (a). However, while the existence of a writing that meets the requirements of §852, subdivision (a) is one of the formalities necessary to effectuate the transmutation of spousal property, it is not, in and of itself, sufficient to establish that a valid transmutation has occurred. Rather, a court must make a finding, based on the evidence before it, that a valid transmutation has actually occurred under Family Code §850, and that the transmutation was not the result of undue influence (see In re Marriage of Bonds (2000) 24 Cal.4th 1, 27).

Additionally, “the essential requirements to convey real property [pursuant to a deed] under California law [are] as follows: ‘. . . To be effective, an instrument conveying real property must be written and must name a grantor and a grantee. It must be subscribed by the grantor or the grantor’s agent, and it must be delivered to and accepted by, the grantee. These are the minimum requirements for a valid deed, and if they are all present, the deed is effective to transfer title to the grantee, but if one of the essential elements is missing, the deed is ineffective to transfer title.’” (Carne v. Worthington (2016) 246 Cal.App.4th 548, 558, italics added, quoting 3 Miller & Starr, Cal. Real Estate (4th ed. 2015) § 8.3, pp. 8-18 to 8-19 (rel. 9/2015), fns. omitted (Miller & Starr).)

The appellate court found that, when delivery fails because of the rejection of a deed, and in the absence of any indication that the intent to pass the property continues, there is no basis for concluding that the grantor’s intent to pass the property remains in effect until the time the grantee decides to accept the previously rejected deed. A deed becomes ineffective to transfer title upon its rejection. Appellant’s rejection of the deed at the time Respondent attempted to deliver it to her thus rendered the deed ineffective to transfer title. Therefore, a renewed delivery and acceptance of the interspousal transfer deed would have been required in order for a transmutation to be effectuated. The judgment of the trial court is affirmed.

Seda Galstian Aghaian et al. v. Alice Minassian et al.
12/31/20, CA 2/1: B300726
https://www.courts.ca.gov/opinions/documents/B300726.PDF

Plaintiffs (Aghaian et al) are trustees and beneficiaries of a trust established by their deceased parents. Plaintiffs sued Shahen Minassian based upon actions Shahen took pertaining to trust properties located in Iran (the underlying action). Plaintiff sought millions in monetary damages. While the underlying action was pending, Arthur (Shahen’s son), Shahen, and Alice (Shahen’s wife) decided to put the two houses owned by Shahen and Alice into Alice’s name only, and thereby making it more difficult for the Plaintiff’s in the underlying action to levy on them. In furtherance of this scheme, Alice filed a petition for the dissolution of her marriage to Shahen. Furthermore, according to the dissolution petition, Shahen and Alice separated on a date that preceded the events that gave rise to the underlying action.

About three weeks after Alice filed the petition, the family court granted Arthur’s application to be appointed Shahen’s guardian ad litem in the dissolution proceeding. Notwithstanding the dissolution proceeding and ostensible separation, Shahen and Alice continued to live together and hold themselves out as husband and wife. Arthur, as Shahen’s guardian ad litem, and Alice stipulated to a division of property in the dissolution proceeding that allocated the two properties to Alice; Shahen assumed the entire obligation to pay any judgment against him in the underlying action. The family court entered a judgment in accordance with the stipulation. Arthur, acting as Shahen’s “attorney-in-fact,” executed quitclaim deeds to Alice of Shahen’s interest in their two properties, however, Shahen retained control of the two properties.

Subsequently, the trial court issued its final statement of decision in the underlying action, awarding Plaintiffs $34,506,989. The following month, the court entered judgment for Plaintiffs in that amount. Plaintiffs alleged the facts we summarized above and further alleged: “The divorce between Shahen and Alice is a ‘complete sham’; plaintiffs are creditors within the meaning of California’s enactment of the Uniform Voidable Transactions Act (UVTA) (section 3439 et seq.); and Shahen, in making the alleged transfers, acted with ‘an actual intent to hinder, delay or defraud any creditor of the debtor,’ for purposes of the UVTA (see § 3439.04, subd. (a)(1).)”

Respondents demurred to all causes of action on the grounds that the alleged causes of action asserted against them failed to state a cause of action. The trial court sustained the demurrers as to the first cause of action for fraudulent conveyance without leave to amend because Arthur made the challenged transfer as Shahen’s guardian ad litem “under the supervision of the family court.” Plaintiffs, therefore, “will not be able to demonstrate that transfer was made by Shahen with intent to defraud.” The plaintiffs’ inability to establish Shahen’s fraudulent intent also defeated the third cause of action against Arthur for aiding and abetting fraudulent transfer. Plaintiffs subsequently dismissed these remaining causes of action without prejudice. The court thereafter entered a judgment of dismissal, and plaintiffs timely appealed.

The appellate court found that “The purpose of the UVTA is to prevent debtors from placing, beyond the reach of creditors, property that should be made available to satisfy a debt.” (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 817 (Chen).) In furtherance of the state’s “general policy of protecting creditors from fraudulent transfers, including transfers between spouses,” the UVTA applies to property transfers made pursuant to a marital settlement agreement incorporated into a judgment of dissolution. (Mejia v. Reed (2003) 31 Cal.4th 657, 668.).  The appellate court also found that the litigation privilege does not apply.  The trial court’s judgment is reversed.

In re the Marriage of Nancy G. Erndt and Michael A. Terhorst
1/11/21 CA 1/3: A157876
https://www.courts.ca.gov/opinions/documents/A157876.PDF

The parties entered into a settlement agreement, in the form of a verbal stipulation on the record in court, regarding the terms of their marital dissolution (“the stipulation”). The stipulation included an equal division of the community property portion of Petitioner’s retirement plan without any mention of the plan’s survivor benefits. Thereafter, the parties could not agree as to whether Respondent had survivor benefits under Petitioner’s retirement plan, and they asked the court to resolve their dispute; in the alternative, Petitioner asked the court to vacate the stipulation.

The trial court ruled as follows: the survivor benefits were found to be an “omitted asset” (Fam. Code, § 2556) subject to an equal division under section 2610, subdivision (a)(2); Petitioner was not entitled to an order vacating the stipulation; and judgment was to be entered accordingly. The trial court also awarded Respondent $800 in attorney fees and $180 in costs in the nature of sanctions under Family Code §271.

On appeal, Petitioner contended that the court erred in treating the survivor benefits as an omitted asset as the stipulation provided Respondent would not receive a survivor benefit by virtue of its silence on the topic. Alternatively, she sought to vacate the stipulation in its entirety based on there being no “meeting of the minds” concerning the division of survivor benefits. The appellate court reasoned that if the court is asked to divide a community retirement plan, each party is entitled to receive their full community property share including all survivor benefits. Family Code §2610, subdivision (a), provides that the court shall make orders to ensure that “each party receives the party’s full community property share in any retirement plan, . . . including all survivor and death benefits” and such orders include the disposition of survivor benefits consistent with Family Code §2550. Family Code §2550 provides that the court shall divide the community estate equally absent agreement of the parties in writing or verbally in open court. In re Marriage of Higinbotham (1988) 203 Cal.App.3d 322, 334 [even though no request or objection was made in the trial court a party was entitled to payment of a suitable share of any survivor benefit available under a community pension plan (decided under former Civ. Code § 4800.8 continued without substantive change in § 2610); a party’s “entitlement . . . ‘involves only a question of law determinable from a factual situation already present in the record”].

The appellate court found no merit to Petitioner’s contentions and, accordingly, affirmed that portion of the judgment that provided Respondent is to receive a survivor benefit related to his community property share of the retirement plan. The appellate court reversed, in part, that portion of the judgment and order awarding Respondent the sum of $800 in attorney fees as Family Code §271 does not permit an award of fees to a self- represented party.

In re the Marriage of Martha J. Nevai and John Klemunes
12/29/20, CA 3: C086584
https://www.courts.ca.gov/opinions/documents/C086584.PDF

Appellant contends that the trial court erred in various orders of reimbursement to the community for spending on property taxes and insurance related to wife’s separate property. She also argues that the trial court erred in setting spousal support when it failed to consider Family Code §4320 factors in making its ruling and in refusing to award her attorney fees.

The appeals court discussed the required analysis that the court must follow when determining reimbursement issues with respect to expenditures made to a spouse’s separate property.  First, the separate property estate is credited with both premarital and postseparation appreciation in the value of the property. Next, the community’s contributions to equity are considered. Finally, the community’s interest in the property, expressed as a percentage, is multiplied by the appreciation in the property’s value during the marriage.” (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1425.) Given the nature of the community’s payments, courts have made clear that expenditures for interest and taxes must not be included when calculating the community’s interest in the separate property. (Moore, supra, 28 Cal.3d at p. 372; see also In re Marriage of Wolfe (2001) 91 Cal.App.4th 962, 973 [“tax payments do not come within the rule established in Moore”] (Wolfe).) Such payments neither “contribute to the capital investment” nor “increase the equity value of the property.” (Moore, at p. 372.) Instead, expenditures for interest and taxes are more properly considered as “expenses incurred to maintain the investment.” “Because they are not assets or debts of the community, they may not be considered by the court at dissolution. Moreover, if these items were considered to be part of the community’s interest, fairness would also require that the community be charged for its use of the property.” Accordingly, the appellate court concluded that the trial court erred in determining the community was entitled to reimbursement for property taxes and mortgage interest related to Appellant’s separate property.

With respect to Appellant’s challenge to the spousal support order, the appellate court found that nothing in the record indicated that the trial court took steps to consider the Family Code §4320 factors and based its order on the amounts determined by the XSpouse and Dissomaster programs. The record does not support the conclusion that the trial court exercised its discretion in making the award of spousal support, therefore the appellate court reversed the award and remanded to the trial court with directions to reconsider the issue, and to make the required factual findings under Family Code §4320.

With respect to the issue of Appellant’s request for attorney fees, the appellate court found that the trial court failed to make explicit whether the court granted or denied wife’s request for need-based fees, let alone whether and how it weighed the three required findings regarding reasonableness, disparity in access to funds, and husband’s ability to pay for legal representation for both parties. The appellate court, therefore, reversed the order that each side pay its own attorney fees and remand the matter for further proceedings consistent with its opinion.

In re A.G.
12/18/20, CA 6:  H047951
https://www.courts.ca.gov/opinions/documents/H047951.PDF

The trial court denied a parent a trial to contest termination of parental rights by ruling the offer of proof that the parental bond exception (common defense against termination of parental rights) applied insufficient, following In re Tamika T. (2002) 97 Cal.App.4th 1114.  Citing numerous other cases including Tamika T., the appellate court reversed and remanded, ruling that only the first 2 (of 3) elements, namely 1) regular and consistent visitation, 2) that the relationship was beneficial to the minor, and 3) that maintenance of that parental relationship was necessary to prevent harm to the child, were required in an offer of proof.  The court reasoned that the weighing required to make the 3rd determination was impractical for a parent to proffer – as well as being nearly impossible to develop a coherent description for application to every case.  Additionally, the appellate court opined that such offers of proof must be construed liberally in favor of their sufficiency.  Finally, the Appellate court rejected application of the harmless error analysis, basically reasoning that it should not speculate about how non-written evidence might impact the trier of fact wherein presentation of that evidence has not occurred.

In re K.B.
1/5/21, CA 2/8:  B305420
https://www.courts.ca.gov/opinions/documents/B305420.PDF

The appellate court affirmed the trial court’s rulings by concluding that neither actual harm nor a DSM-IV-TR substance abuse disorder diagnosis is needed for a court to conclude there is risk to the physical health of a child in parental care as a result of substance use. The court joined others in rejecting the standard requiring a clinical substance abuse diagnosis articulated in In re Drake M. (2012) 211 Cal.App.4th 754.  Other factors, primarily dissimulation by the parents, was cited as relevant to the trial court’s assessment of risk.