Family Law Case Studies - Volume 9, Number 12

Published and Unpublished Appellate Court Opinions for December 2011

Published as a service to the Fmaily Law Bar Association.

Compiled by the Hon. E. J. Burke, 1035 Palm Street, Room 355, San Luis Obispo, CA 93408, jeffrey.burke@slo.courts.ca.gov.

Published and unpublished slip opinions can be secured from www.courts.ca.gov/opinions.htm.

There were very few family law opinions filed in December. Here are the highlights.

• PUBLISHED OPINIONS
• A grave risk of psychological harm can be found in a history domestic violence.  Even so, the court must order the return of the child if conditions can be imposed to insure a safe return.
• A same sex partner is the presumed parent of children adopted by her partner if she receives them into the family home and holds them out as her own.
• Recusal is appropriate when multiple family entanglements, the complex interrelationships between an attorney and the parties, and the ethical conflicts posed by the attorney's assumption of dual roles.  A person who is not a former client has standing to bring the motion for disqualification.
• A referral to CWS is not necessary when the parents voluntarily consent to a guardianship. A finding of unfitness need not be made to terminate parental rights when the child has been the subject of a guardianship for at least two years.
  
  
• UNPUBLISHED OPINIONS
• A loan made during the marriage to only one spouse is presumptively community property.  Wife’s quitclaim is set aside because the “timing” showed undue influence.
• A loan to a separate property company is not an investment in the company for the purposes of a pereira analysis.; personally guaranteeing a loan made to a separate property holding company to capitalize a subsidiary does not create a community interest in the subsidiary; it was not error to include only a portion of the company’s retained earnings in calculating support.
• A custodial parent's actions that are designed to frustrate the noncustodial parent's visitation rights constitute grounds for changing custody.
• Compensatory and punitive damages cannot be recovered in a family court action; a transaction during the marriage that converts a gift into a loan is not the product of undue influence if both parties are advantaged.
• The trial court should not have imposed a terminating sanction for wife"s failure to file a preliminary declaration of disclosure without first testing the effectiveness of lesser sanctions
• A PMA cannot be said to be involuntary where two attorneys assisted wife during the several months the agreement was being negotiated. the amendment to fc § 1615 that requires presentation of a PMA seven days before the wedding is not retroactive.
• "Uncooperative" parenting supports an award of sole physical custody
•  The trial court may consider filings unsuccessfully brought by an alleged vexatious litigant even if the rulings in question are on appeal: domestic violence protective orders must restrain only the recurrence of abuse that has actually occurred.
• It is not reversible error to fail to make the findings now required by fc § 2030 in making an award of attorney fees if they can be discerned from the record.
• It was not error to determine this PMA was ambiguous and to receive and rely on extrinsic evidence to determine husband's right to reimbursement 
• A request to modify child support must be based on the parents'; current financial circumstances, not the financial circumstances that existed during the marriage: the cost of caring for the children is not a factor used to calculate guideline child support.
• Legal separation requires not only a parting of the ways with no intention of resuming marital relations, but also conduct evidencing a complete and final break in the marital relationship.

Published Opinions

Maurizio R. v. L.C. (2011) ___ Cal.App.4th ___ (CA 2/1 – Opinion filed December 5, 2011)

A grave risk of psychological harm can be found in a history of domestic violence.  Even so, the court must order the return of the child if conditions can be imposed to insure a safe return.

Mother is a US citizen.  Her husband (Father) is an Italian citizen who has always lived in Italy.  The couple married in 2003 and settled in Parma, Italy.  A son was born in August 2005 and other than extended visits to Los Angeles in 2008 and 2009, the child always lived in Italy with both parents.

In 2010, Mother took Leo and left Italy without Father’s knowledge or consent.  Although she promised to return to Parma, she did not and instead filed for legal separation in California.  She asked for custody of the child and monitored visitation for Father.  Mother also obtained a TRO against Father.

In Italy, Father filed a child abduction action against Mother under the Italian Criminal Code.  Father also filed a petition to terminate Mother’s parental rights and a family law action seeking legal separation and custody of the couple’s child.  In the US, Father filed a Hague Convention petition to secure the return of the child to Italy.

The trial court appointed an independent child custody evaluator, to determine if either Mother or the child was abused by Father and if so, whether returning the child to Italy posed a grave risk of physical or psychological harm to him.  The hearing focused on whether clear and convincing evidence established the existence of such a grave risk.
Mother testified that Father required her to “obey him” and refused to permit her to work outside the home or to ask him for money.  He refused to let her get a driver’s license for years or to use his car.  The family’s apartment in Parma was cold and dark because Father imposed strict limits on the use of heat and lighting.  He removed all interior doors in the apartment in order to keep an eye on Mother.

Mother said Father was very critical of her and the child and regularly yelled at them.  Father also frequently criticized and made fun of the child.  Mother said Father restrained her and threatened to beat her.  Mother was afraid for her physical safety and for the child’s.  Mother said she observed Father engage in child sexual abuse on several occasions.  She also described physical and emotional abuse that bordered on torture.  In 2009, the child began expressing self-destructive behavior and said he was “going to kill himself.” 

The evaluator concluded there was a grave risk of physical or psychological harm to the child if he were returned to his Father’s custody in Italy although she said she would be less concerned if the child were returned to Italy in Mother’s custody.  The evaluator could not definitively state the child’s distress was due to emotional abuse as opposed to alienation by Mother.  She proposed further investigation of the issue.

The child’s therapist said he had “childhood PTSD” from chronic exposure to severe and significant trauma that was all linked to abuse by his father.  The therapist reported that the child said he would never go back to Italy because his father was so mean to him and his mother.  The therapist characterized Mother as a “really wonderful parent.”

Several witnesses who claimed to have been family friends of Father and Mother in Italy testified they never saw Father engage in any abusive behavior, nor were they aware that Father’s behavior ever caused Mother to fear for her own or the child’s physical safety.  These witnesses said Mother treated the child like an “obsession or toy.”  Neither teacher from the preschool class the child attended ever saw any sign that the child was physically abused.
Father denied he ever abused Mother or their son.

The trial court found that Father abused Mother and concluded the child feared his father.  The court concluded the child would be harmed if he were simply turned over to his father’s custody and returned to Italy.  The court also found, however, that the child would not be exposed to a grave risk of harm if he returned to Italy with Mother and if Father met a number of other conditions; viz., that all criminal charges against Mother for fleeing Italy with the child were withdrawn; and that an Italian Court issue a protective order against Father and award Mother sole legal and physical custody with monitored visitation to Father pending further custody proceedings in Italy.  The trial court also demanded an undertaking from Father that Mother would be provided housing, living expenses and weekly therapy for the child.

Father submitted a request to the prosecutor’s office in Parma that he wished to withdraw his lawsuit against Mother.  He also produced an order granting Mother temporary physical custody of the child that reserves monitored visitation to Father.  Father also presented an order requiring him temporarily to pay Mother and the child’s living expenses and psychotherapy.

The trial court was not satisfied and denied Father’s request to continue the hearing to obtain evidence demonstrating the criminal charges had been dropped.  The court also denied Father’s Hague Convention petition and awarded Mother sole legal and physical custody of their son.  Father appealed.  REVERSED

The Hague Convention provides a mechanism for the prompt return of a child taken by one parent across international borders in violation of a right of custody.  The court does not resolve the question of who, as between the parents, is best suited to have custody of the child.  With few exceptions, the court must return the abducted child to its country of habitual residence.  (Cuellar v. Joyce (9th Cir. 2010) 596 F.3d 505, 508–509.) The issue of which placement is best for a child in the long run is not relevant.  (Nunez–Escudero v. Tice–Menley (8th Cir. 1995) 58 F.3d 374, 377.)

One exception is provides that return of a child need not be ordered if “there is a grave risk that the child’s return would expose [him] to physical or psychological harm or otherwise place [him] in an intolerable situation.”  The “grave risk” defense is narrow, and must be established by clear and convincing evidence.

Citing the testimony of the child’s therapist, the CA concluded the evidence supported the trial court’s conclusion that returning the child to Italy posed a grave risk of psychological harm.  The CA also concluded the evidence revealed a grave risk to Mother’s safety and that this in turn, would cause the child suffer psychological harm or be placed in an intolerable situation.  (Abbot v. Abbot, supra, 130 S.Ct at p. 1997.) 

The CA said the trial court relied entirely on the testimony and professional opinions of the therapist and custody evaluator to conclude the child could not be returned to Italy in Father’s custody.  “The [trial] court made no finding regarding the source of Leo’s psychological harm, found no evidence of physical abuse and specifically found that Mother had failed to make the requisite evidentiary showing that Leo had been sexually abused.”  The CA added that courts are admonished to interpret the grave risk exception narrowly to protect the interests of the country of habitual residence in determining custody disputes and to deter parents from forum shopping.  While domestic abuse may trigger the exception,  “it is imperative that a showing be made that the risk posed to the child is grave, not merely serious.  (Simcox, supra, 511F.3d at p. 605 [illustrating the distinction between grave and serious risk of harm by articulating three broad categories into which abusive situations might fall].)”

Here, Father argued Mother’s allegations showed only relatively minor abuse because mere “emotional abuse against a parent, in the absence of violence against the child or against the parent in the presence of the child” cannot, as a matter of law, “satisfy the grave risk exception.”  The CA conceded the question was very close but concluded that the trial court did not err.  The discussion following this conclusion includes a helpful discussion of the conclusions reached in this case and others about the grave risk exception.   “In other words, regardless of the source of the child’s trauma, it was apparent to the only mental health experts who testified and to the court, that it would be extremely dangerous, emotionally and psychologically—and possibly life-threatening—to return the child alone to Father in Italy.”

But the inquiry does not stop with this finding.  The trial court must also consider whether alternative remedies could facilitate the child’s repatriation to his habitual residence and mitigate the risk of severe psychological harm.  (Blondin II, supra, 238 F.3d at pp. 156, 158–163.)  The CA said trial court’s analysis faltered at this step.

Prompt but safe return of an abducted child to his or her country of habitual residence is always the overriding goal in an action under the Hague Convention.  Even when confronted with a grave risk of harm, courts have discretion to “return [the] child to the country of habitual residence, provided sufficient protection [is] afforded.  That protection may take the form of ‘undertakings,’ or enforceable conditions of return designed to mitigate the risk of harm occasioned by the child's repatriation.”  (Simcox, supra, 511 F.3d at p. 605.)”

Here, the trial court fashioned specific conditions to ameliorate the risk of harm by returning the child to Parma with both parents under conditions designed to inflict as little trauma as possible.  The court’s error was to order the child’s return on conditions that depended on Mother’s cooperation, thereby allowing her to thwart them should she choose to do so that required Father to deliver something beyond his control.

The trial court required undertakings were clearly premised on the notion that Mother would accompany her son on his court-ordered return to Parma once Father satisfied the conditions making it safe for her to do so.  “Trial courts must be mindful not to craft undertakings so broadly as to allow the abducting parent to gain significant advantages from the abduction.”  The CA said the flaw could be cured by ordering the child returned to Italy in Mother’s company but if she refuses to go, by appointing a guardian or a “child welfare escort” to escort Leo back to Italy.
The CA noted the Italian government has the same capacity as California’s child protective agencies to address the physical and psychological needs of children under its jurisdiction.  The CA noted that the record in this case contains no evidence to justify a conclusion that the Italian courts will be unfair to Mother.  It also rejected her fears of ostracism in Parma, her wish to maintain the financial security of her job and the support of family and friends in Los Angeles.  “None of these concerns justifies a court’s refusal to order return.”

The CA also criticized the condition imposed by the trial court that Father must insure Mother is not subject to prosecution in Italy because he had not control over that issue.  “Whether Mother remains subject to prosecution in Italy for the crime of child abduction is a decision within the discretion of the Italian prosecutors and courts, enforcing Italian law; it is not within Father’s control.” 

 “[N]either the Convention nor the IPCKA prohibits criminal prosecution of an individual once a child is returned pursuant to Hague proceedings. …  [P]roceedings under the Hague Convention should be the ‘first choice of a parent whose child has been abducted.’  That does not, however, preclude prosecution of the kidnapper.”  (U.S. v. Ventre (9th Cir. 2003) 338 F.3d 1047, 1053–1054.)

S.Y. v. S.B. (2011) ___ Cal.App.4th ___ (CA 3 – Opinion filed December 9, 2011)

A same sex partner is the presumed parent of children adopted by her partner if she receives them into the family home and holds them out as her own.

S.Y. and S.B. were in a committed relationship from 1993 to 2009.  S.Y. was a senior planner for the City of Sacramento and was a Colonel in the U.S. Air Force Reserves.  S.B. worked as a kindergarten teacher.

S.B.’s attempts to conceive through artificial insemination were unsuccessful and she decided to adopt.  S.Y. agreed to support S.B. in pursuing her dream and told her that if she became a parent, S.Y. would co-parent.  In 1999, a birth mother chose S.B. and S.Y. helped her prepare for the baby’s arrival.

G.B. was born in November 1999.  S.Y. accompanied S.B. to Redding for the birth of the child after which they all returned to their homes in Sacramento.  S.Y. stayed with S.B. and G.B. most nights and every weekend, assisting in G.B.’s care.  She changed his diapers, helped bathe him, played with him, and prepared formula.  In 2000, the family travelled to Hawaii and later to Texas to visit S.Y.’s parents.

In June 2003, the parties broke up and remained apart for two and one-half years.  Even so, S.Y. remained active in G.B.’s life, continuing to go on outings and vacations with S.B. and G.B.  When S.Y. was promoted to the rank of Colonel, S.B. and G.B. participated in the pinning of the epaulets ceremony, a privilege reserved for family.

While S.Y. and S.B. were apart, S.B. decided to adopt another child.  Because they were not together, S.Y. did not then have an expectation of co-parenting a second child with S.B. and told S.B. so in an email.  In mid 2004, a birth mother in Minnesota selected S.B.  When the child was born in July 2004, S.Y. flew to Minnesota at S.B.’s request to assist with G.B.  Following M.B.’s birth, S.Y. continued to go to S.B.’s home most evenings and every weekend to spend time with the children and to assist with their care.

In 2005, the parties reconciled, and S.Y. resumed spending most nights at S.B.’s and stopping by on other nights to spend time with the children.  When each child reached the age of about one year, S.Y. set up college savings accounts that she continues to fund with monthly contributions.  She named the children as beneficiaries on “everything she had,” including her life insurance policy and mutual funds.  She displayed photographs of the children and S.B. in her cubicle at work for everyone to see.  Through her actions, S.Y. made it obvious that the individuals in the pictures were her family.  During the years they were together, S.B. and the children gave S.Y. Mother’s Day cards.

In 2007, S.Y.’s home was sold while she was deployed to Kuwait.  When S.Y. returned in May 2008, she moved in with S.B. and lived there for eight months until she relocating to a nearby apartment.

Between 1998 and 2009, S.Y. spent in excess of $90,000 on family related expenses, including baby supplies, groceries, school lunches, an updated home study for G.B.’s adoption, karate and gymnastics lessons for G.B. and M.B., a backyard play structure, meals, family vacations, family pets, couples counseling, therapy for G.B., and home security services.

S.Y. believed her position in the military precluded her from adopting the children or formalizing her relationship with S.B.  She also believed that under the military’s “Don’t Ask, Don’t Tell” policy, doing any of those things would have jeopardized her 30-year career in the military and could have resulted in her being court marshaled.

In 2009, S.Y. ended her relationship with S.B. who then told S.Y. that she would not allow her to have any contact with the children.  S.Y. contacted a lawyer the next business day and filed the parentage petition.

The trial court found S.Y. s received the children into her home and held them out as her own.  The court concluded that S.B. failed to rebut the presumption of parentage created by FC. § 7611(d), noting that “allowing the presumption to be rebutted in this case would leave the children with only one parent, a result contrary to the public policy favoring a child having two parents to provide emotional and financial support.”
S.B. appealed.  AFFIRMED

S.Y. Received the Children Into Her Home

Although FC § 7611(d) speaks in term of fathers, the UPA expressly provides that the provisions applicable to determining a father child relationship shall be used to determine a mother and child relationship “insofar as practicable….”  (§ 7650; Elisa B. v. Superior Court (2005) 37 Cal.4th 108, 119-120.)  Thus, a woman is presumed to be the natural mother of a child if she “receives the child into h[er] home and openly holds out the child as h[er] natural child.”  (§ 7611(d).)

The CA rejected S.B.’s contention that because the children did not live with S.Y. at her separate residence, S.Y. never “brought the children into her own house” and thus could not qualify as a parent under the UPA.   The CA concluded that the record amply supported the conclusion that S.B.’s home served as the family home, and that S.Y. received the children into the parties’ joint home.

“That S.Y. also maintained a separate residence does not undermine the court’s finding that she received the children into her home.”  The CA cited In re A. A. (2003) 114 Cal.App.4th 771, 784 where the panel said, “When a mother and father of a child are not inclined to live with each other, their child often lives with only one of the parents and visits the other. … Although the minor was not received into R. B.’s home to live with him on a full-time basis, he was involved with the minor from the very beginning, with Mother’s blessing.”  The CA said “The same is true here.”

The CA also rejected S.B.’s argument the trial court erred in relying on the fact that S.Y. spent most nights at S.B.’s because S.Y. would have stayed there “regardless of her parentage claim.”  The CA distinguished In re Spencer W. (1996) 48 Cal.App.4th 1647 where a similar argument was accepted by the trial court and affirmed on appeal. “S.Y. was not financially dependent upon S.B.  She maintained a separate residence but chose to stay at S.B.’s, at least in part, to be with and help care for the children.” 

The CA specifically approved the trial court’s observation in Spencer W. that “This is not a case where a person cared for the children of someone she was dating just because she happened to be dating the other.  The relationship between the parties lasted longer than it otherwise would have for the sake of the children.  This is not a case where [S.Y.] just cared for the kids because it was convenient or because of self-interest.  [S.Y.] made personal, professional and financial sacrifices.  A person occasionally spending the night on the couch would not do all of the things [S.Y.] did -- would not clean up the children’s vomit, set up college accounts, pay for their therapy, volunteer at the school, name the children as beneficiaries, and act in the myriad [of] other ways [S.Y.] did, as a parent.”

S.Y. Openly Held G.B. And M.B. Out As Her Natural Children

The CA found substantial support in the record for the trial court’s conclusion S.Y. held the children out as her own, citing the long list of ways she supported S.B. and the children emotionally and financially.  “The record is replete with evidence that S.B. not only allowed, but encouraged, S.Y. to co-parent both children from the beginning. … ¶  Our conclusion is consistent with the purpose behind the presumed parent designation, which “is to distinguish between those fathers who have entered into some familial relationship with the mother and child and those who have not.”  (In re Sabrina H. (1990) 217 Cal.App.3d 702, 708.)”

There Is No Basis To Rebut The Parentage Presumption

FC § 7612(a) states that the presumption under § 7611 is rebuttable but “only by clear and convincing evidence.”  Citing Elisa B., the CA observed, “Similarly, here, S.Y. encouraged S.B. to adopt a child with the understanding she would co-parent the child; S.Y. voluntarily accepted the rights and obligations of parenthood since the children were born; there are no competing claims to her being the children’s second parent; and public policy favors children having two parents.  (See Elisa B., supra, 37 Cal.4th at pp. 120, 122.)
S. B.’s Fundamental Right To Rear Her Children

Finally, the CA rejected S.B.’s argument that Troxel v. Granville (2000) 530 U.S. 57 prohibits interference with her right as the parent of G.B. and M.B. to make decisions concerning their care, custody, and control.  The CA pointed out that Troxel speaks to the limits of a statute allowing a court to grant a petition by “any person to petition the court for visitation rights at any time.”  Troxel does not apply “where, as here, the issue is not a non-parental visitation statute, but ‘a statute determining the identity of [G.B. and M.B.’s] parents. … [T]he order declaring [S.Y.] a parent of [G.B. and M.B.] by definition did not extend rights to a nonparent.”  (Charisma R., supra, 175 Cal.App.4th at p. 387.)  The CA also concluded that Charisma R. does not require parental rights to arise simultaneously to receive equal constitutional protection.

Kennedy v. Eldridge (2011) ___ Cal.App.4th ___ (CA 3 – Opinion filed December 13, 2011)

Recusal is appropriate when multiple family entanglements, the complex interrelationships between an attorney and the parties, and the ethical conflicts posed by the attorney's assumption of dual roles.  A person who is not a former client has standing to bring the motion for disqualification.

Mother learned she was pregnant when she and Father were college students, living with their parents.  The parties’ son was born in June 2010.  In July, Mother filed a parentage petition, requesting custody and support.

Paternal Grandfather (PGF), acting as attorney for Father (his son), filed a response to Mother’s petition, admitting paternity and requesting a visitation schedule.  The litigation soon turned bitter and acrimonious.

In September 2010, Mother moved to recuse PGF.  She alleged PGF represented her father (Maternal Grandfather) in his divorce and, during that representation, Mother prepared declarations at the request of PGF’s firm in support of her father.  Mother said she once worked as a process server for PGF’s firm and as a result of all these contacts Mother alleged PGF had access to confidential information about her.

Father and PGF opposed Mother’s motion claiming she lacked standing because she was not a former client of PGF and that her owed Mother no duty of loyalty or confidentiality that would be breached by his continued representation of his son.

Following a hearing, the trial court found that Mother had standing to bring the motion and that PGF’s dual role as witness and advocate compromised his ethical duty to maintain the integrity of the judicial process.  The trial court also concluded the child’s best interest would not be served by having PGF advocate for his son against the child’s mother.  The trial court granted Mother’s motion, ordering PGF’s removal as attorney for Father. 

Father appealed.  AFFIRMED

Standing

The CA rejected Father’s argument that Mother lacked standing to bring the motion because she was never a client of PGF’s firm.  “No California case has held that only a client or former client may bring a disqualification motion.  The reason is simple:  ‘A trial court’s authority to disqualify an attorney derives from the power inherent in every court “[t]o control … the conduct of its ministerial officers, and of all other persons … connected with a judicial proceeding before it ….’ …  ‘[D]isqualification motions involve a conflict between the clients’ right to counsel of their choice and the need to maintain ethical standards of professional responsibility. … The paramount concern must be to preserve public trust in the scrupulous administration of justice and the integrity of the bar.”  (Citing Great Lakes Construction, Inc. v. Burman (2010) 186 Cal.App.4th 1347, 1355.)

In California where an ethical breach may impact the moving party’s interest in a just disposition of the issues tendered to the court, that person has standing to bring a motion to disqualify.  (Burman at p. 1357.)  The CA held, “where an attorney’s continued representation threatens an opposing litigant with cognizable injury or undermines the integrity of the judicial process, the trial court may grant a motion for disqualification, regardless of whether a motion is brought by a present or former client of recused counsel.”

Potential Misuse of Confidential Information

Although exposure to the confidences of an adversary does not, standing alone, warrant disqualification, “disqualification may be considered where ‘there exists a genuine likelihood that the status or misconduct of the attorney in question will affect the outcome of the proceedings before the court.”

Here, the trial court was properly troubled by the fact that PGF may have acquired confidential facts about Mother and her family’s situation that could be used to Father’s advantage.  The CA found support for this conclusion in Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft (1999) 69 Cal.App.4th 223.  “The facts here are less complex …, but the analytical framework is the same.  There is a substantial relationship between PGF’s prior representation of Mother’s father and PGF’s current representation of Father.  In both cases, Mother plays a key role. … ¶ The trial court could reasonably find there was a significant danger that—as a result of its prior involvement in her father’s divorce case—PGF acquired relevant confidential information about Mother to which it otherwise would not have had access.” … ¶ Because of the close relationship between Mother and her father, the similarity between the two cases and the overlapping factual issues common to both, we also conclude that Mother and her father should be treated as a single unity for purposes of determining whether an ethical conflict exists.”

The Advocate-witness Rule

The CA said that it was “almost inevitable” that PGF will act both as a percipient witness and an advocate in the dispute over the child’s care and custody.  The “advocate-witness rule” prohibits an attorney from acting both as an advocate and a witness in the same proceeding. (Compare, People v. Donaldson (2001) 93 Cal.App.4th 916, 927-928.)

Paternal Grandfather is the head of a household that is the subject of controversy and conflicting averments.  Thus, it is a virtual certainty that his testimony as a witness in this custody/visitation dispute will be necessary.  As a witness, it is Paternal Grandfather’s responsibility to tell the truth.  As an advocate, it is his job to obtain the best result for his client.  These duties may not necessarily be coextensive and where they are not, Paternal Grandfather may not be permitted to choose between them.

The CA closed its opinion with the note that “the multiple and interconnected family entanglements present here results in a strong appearance of impropriety and undermines the integrity of the judicial system.  The CA added that family law matters delve into the most personal of human affairs and must receive careful scrutiny when potential ethical conflicts arise.  A search for orders that meet the best interests of a child “could be severely disrupted in a situation where the child’s grandfather might well argue for reducing Mother’s time with her child, where counsel could wind up both litigating and testifying about what goes on in his household, and where PGF’s self-interest could skew the legal advice he gives to his own son.”

Adoption of Myah M. (2011) ___ Cal.App.4th ___ (CA 1/2 – Opinion filed December 19, 2011)

A referral to CWS is not necessary when the parents voluntarily consent to a guardianship.  A finding of unfitness need not be made to terminate parental rights when the child has been the subject of a guardianship for at least two years.

Mother and Father are the biological parents of Myah, who was born in 2004.  Mother and Father abused alcohol, used cocaine and meth and had various encounters with law enforcement.  Their relationship was unstable.  When Myah was five or six months old, they began to leave her with her paternal grandparents (PGP).

By February 2006, PGPs were caring for Myah full time.  After consulting with CWS, they filed a petition for temporary and permanent guardianship of Myah.  In April 2006, the court issued temporary guardianship orders.  PGPs, father, and mother participated in mediation and then entered into a stipulation that Mother would not contest the granting of a permanent guardianship of Myah to PGPs.  Father also agreed that it was in Myah’s best interest for his parents to be granted guardianship.  The parties’ mediated parenting plan provides that Mother and Father could visit with Myah when PGPs were present.

The trial court appointed PGPs as Myah’s guardians.  In January 2009, after paternal grandmother was diagnosed with cancer, PGPs asked Father to move into the home and help care for Myah.  In May 2009, there was a violent confrontation between Father and paternal grandfather.

In September 2009, PGPs filed a petition requesting to adopt Myah and to terminate the parental rights of Father and Mother, asserting Father and Mother “have a long criminal history, drug abuse and domestic violence issues.”  PGPs stated that neither of Myah’s parents had made any provision for her support since February 2006. 

In January 2010, Father and Mother appeared and objected to termination of their parental rights.  The court investigator’s report recommended that the court grant PGPs petition.  She explained that while Mother and Father are not in a position to regain custody of Myah, the child does have a relationship with her birth parents.  But because Mother and Father failed to stabilize their lives through drug treatment and anger management services, the investigator concluded Myah would benefit from being adopted by PGPs.  The ideal outcome was said to be adoption by PGPs with a guarantee Myah’s relationships with her birth parents and half brother would be preserved.

Following a trial, the court’s statement of decision stated the issue litigated was whether it was in Myah’s best interests to continue under the guardianship or to terminate Mother and Father’s parental rights to allow PGPs to adopt her. The trial court concluded that Myah was closely bonded to PGPs and had a “safe and secure home” with them and “lit up” when informed PGPs might be her adoptive parents.  Although Myah was also bonded to her mother and father, their addictions, criminal behavior, repeated arrests and failure to participate in offered services put them in no position to parent their daughter.   This compelled a finding that it was in Myah’s interest to terminate her mother and father’s parental rights and free her from their custody and control pursuant to Probate Code section 1516.5.

Mother and Father appealed.  AFFIRMED

Due Process and the Failure to Refer the Case to CFS

Citing Guardianship of Christian G. (2011) 195 Cal.App.4th 581, Mother and Father argued that their due process rights were violated by the trial court’s failure to refer the case to CFS under Probate Code section 1513 (c), thus depriving them of the safeguards provided by dependency proceedings.  The CA disagreed.

Mother and Father noted that the probate proceedings, unlike dependency proceedings, failed to provide them with family reunification services, periodic reviews of the child’s living situation, and a presumption favoring maintenance and reunification of the biological family.  They also stressed that they would have had appointed counsel throughout the dependency proceedings, which they did not have when the court held the hearing on the guardianship.

The CA said the argument might have had a somewhat greater impact if Mother and Father had not stipulated to the guardianship - orders that had been final for years.  The CA ruled that under these circumstances, “no referral needs to be made when the parents voluntarily consent to the guardianship after mediation.”

The CA distinguished Christian on the basis that in that case the father objected to the guardianship on the grounds that it was unnecessary and that the prospective guardian was not a good choice.  “The present situation is significantly different ….  [H]ere, mother and father participated in mediation and voluntarily consented to the guardianship.  This was not a contested removal of Myah from her home. … When mother and father entered into the stipulation to award guardianship to paternal grandparents they “formally waived” their parental rights.  (In re Charlotte D. (2009) 45 Cal.4th 1140, 1149.)

Terminating Parental Rights Without Finding Unfitness to Parent

Probate Code § 1516.5(a) provides that parental rights may be terminated if one or both parents do not have the legal custody of the child, the child has been in the physical custody of the guardian for a period of not less than two years, and the court finds the child would benefit from being adopted by his or her guardian.

The CA digested the holdings in Adoption of Kelsey S. (1992) 1 Cal.4th 816, 849, Guardianship of Ann S. (2009) 45 Cal.4th 1110, 1122, and In re Charlotte D. (2009) 45 Cal.4th 1140, 1140 and restated the rules established in those cases that parental rights can be terminated without a finding of unfitness.  “Since a parent in a guardianship case has already relinquished parental responsibility for at least two years, while the child and guardian developed interests in a stable placement and the child’s care and custody, an unfitness finding is not required.”  (Ann S. at p. 1118.)
The CA concluded this case was not like the unusual cases where a mother and father can show that Probate Code section 1516.5 as applied to them is unconstitutional.  Here, PGPs did not prevent Mother and Father from seeing Myah.  In fact, Mother and Father often missed their appointments to see Myah and could not have unsupervised visits because they had failed to comply with their agreement to be drug tested.  Moreover, both parents abandoned their responsibilities “and formally waived” their “parental rights when the guardianship was established.”  (Charlotte D. at p. 1149.)

Finally, Mother and Father were not able or willing to take immediate custody of Myah.  Under Kelsey S., they must show that they are willing to assume full custody of the child.  (Kelsey S. at p. 849.)  Both parents continued to use drugs.  “A prolonged guardianship, during which all parental rights and custodial responsibilities are suspended, with the possible exception of visitation rights, is generally inconsistent with ‘a full commitment to . . . parental responsibilities––emotional, financial, and otherwise.’”  (Ann S. at pp. 1131-1332.)

The trial court did not violate their due process rights when it terminated their parental rights without finding unfitness to parent.

Myah’s Best Interests

Probate Code § 1516.5 specifies that in determining a child’s best interests, the court must consider all factors relating to the best interest of the child, including the circumstances leading to guardianship, the parent’s efforts to maintain contact with the child, any exigencies that might hamper those efforts, and other evidence of commitment to parental responsibilities.  (Ann S. at p. 1132.)

The CA digested the evidence and concluded it amply supported the trial court’s finding that Myah’s best interest would be served by the adoption.  “During the guardianship of more than four years, mother and father failed to remedy the problems of substance abuse and anger management that necessitated the guardianship in the first place.”  PGPs provided a safe and secure environment for Myah and “in contrast to In re Amber M., the record shows … ¶ [t]he parents have not shown devotion to Myah by working on the problems that caused the guardianship and their contact and visitation with her has been inconsistent.”

The CA also pointed out that Mother’s arguments ignored the purposes underlying Probate Code section 1516.5 discussed by the Supreme Court in Ann S. at page 1125.  “One [was] to cover situations  ‘where a drug addicted mother gives the child in guardianship, hoping to get herself rehabilitated but repeatedly fail[s], creating a situation where the child is in the custody of the guardian for years without being in the foster care system. . . .  [A]  guardian should be able to adopt the child without having to obtain consent or prove neglect, abandonment, or the mental disorder or mental illness of the parent who gave [him or her] guardianship in the first place.’”  (Ann S. at p. 1125.)

Unpublished Opinions

Please note: The following digests of unpublished opinions of the California Courts of Appeal are presented as case studies to illustrate how commonly recurring family law disputes were resolved in trial and appellate courts.

Caution: Rule 8.1115 (a), California Rules of Court, prohibits courts and parties from citing or relying on any unpublished opinion in any action or proceeding, except in the limited circumstances specified by rule 8.1115 (b).

Irmo Carey – Unpublished opinion of District 4, Division 3 (Filed December 5, 2011)

A loan made during the marriage to onlye one spouse is presumptively community property.  Wife's quitclaim is set aside because the "timing" showed undue influence.

Husband and Wife married in 1995.  In 2000, Husband purchased a residence for about $1.1 million.  A $300,000 down payment came entirely from his separate property.  The balance was derived from a loan to Husband.  Wife quitclaimed any interest in the property to Husband and he took title to the property in his name alone “as his sole and separate property.”  Only Husband’s name was on the loan; Wife told him “I’m not going to go on the loan if I’m not going to be on the title.”  The parties separated in 2006.

The trial court characterized the property as community because it was acquired during the marriage.  The trial court said Wife’s quitclaim deed did not prove otherwise because the “timing of the signing of the deed (immediately before the move to Southern California) showed undue influence.”  Husband appealed.  AFFIRMED

The CA said the trial judge came to the correct conclusion but added a “layer of analysis” that was missing from the ruling.

The CA pointed out, “The community property presumption (FC § 760) operated directly on the proceeds of the loan by which the house was acquired, not the house itself.  Properly speaking, the house was acquired with a combination of a $300,000 separate property down payment and a $855,000 loan [presumptively to the community].  ¶  Even though only Husband was on the loan, he was married at the time.  Because the loan was made during the marriage, the intent of the lender  -- to look to community income or assets, separate income or assets, or some combination of the two -- controls, regardless of whether the loan was to Husband only.  (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 210 [‘There is a rebuttable presumption that property acquired on credit during marriage is community property. . . .  In accordance with this general principle, the character of property acquired by a sale upon credit is determined according to the intent of the seller to rely upon the separate property of the purchaser or upon a community asset.’]; In re Marriage of Grinius (1985) 166 Cal.App.3d 1179, 1186 [‘the character of credit acquisitions during marriage is determined according to the intent of the lender to rely upon the separate property of the purchaser or upon a community asset’].)”

The CA observed that during the trial Husband was offered the opportunity to prove the loan to him was made entirely in reliance upon his separate assets but failed to do so.  The CA found no direct evidence of lender intent in the record and because of its absence, the trial court was correct to apply the community presumption.

The CA also noted substantial evidence in the record that the deed was signed under duress.  (Irmo Delaney (2003) 111 Cal.App.4th 991, 996.)  Wife was presented with the quitclaim deed on the eve of closing and had no real chance to say no.  Thus whatever presumption may have arisen from title was rebutted.

Irmo Nasipour – Unpublished opinion of District 4, Division 1 (Filed December 7, 2011)

1.  A loan to a separate property company is not an investment in the company for the purposes of a Pereira analysis.

2.. Personally guaranteeing a loan made to a separate property holding company to capitalize a subsidiary does not create a community interest in the subsidiary.

3.  It was not error to include only a portion of the company's retained earnings in calculating support..

Husband operates an auto dealership in Vancouver, Canada that he acquired during the marriage with separate property funds he received as a gift from his father.  Husband also operates a party equipment rental business that was started in 1998 with capital borrowed by his holding company.

The Investment in the Dealership

Husband received $400,000 (Can.) from his father as a gift in 1987.  He used $50,000 to buy 100% of the dealership stock at its fair market value.  Husband used the other $350,000 to make a shareholder loan to the company that was used to pay a debt.  Husband’s loan was repaid with interest of 10% within two or three years.

The parties stipulated that the dealership was a separate property business and that the trial court should follow the approach first described in Pereira v. Pereira (1909) 156 Cal. 1 to apportion the value of the business between the community and Husband’s separate property.  In applying Pereira, the court "allocates a fair return to the separate property investment and allocate the balance of the increased value to community property as arising from community efforts."  Three data points are necessary:  (1) Husband's separate property investment in the business; (2) its value at the date of separation; and (3) the fair rate of return on Husband's investment.  Here, the only dispute was the amount Husband's separate property investment.  Was it $50,000 or was it $400,000?

The CA ruled that a loan is not a capital investment in a business because it confers no ownership interest.  Thus the trial court abused its discretion by finding Husband invested $400,000 for the purposes of completing a Pereira analysis.  The CA explained, “There are good reasons to omit Husband's loan to the dealership when conducting the Pereira analysis.  First, the loan incorporates its own rate of return, at an annual rate of 10 percent.  It would be inequitable to compensate Husband again under Pereira by giving him a return on the $350,000 loan.  Second, the loan was repaid ….  Husband should not receive the $350,000 twice.”

The Party Equipment Business

The party equipment company is a wholly owned subsidiary of Husband’s holding company.  It was initially capitalized through a loan secured not by Husband but by the holding company.  Husband was only a "Personal Guarantor" of the company’s note.  The security pledged for the loan was real property owned by the holding company.

Wife argued that Husband’s personal guarantee makes the party equipment business a community asset.  The CA rejected her contention.

"Property bought during marriage by either spouse is rebuttably presumed to be community property."  (Irmo Grinius (1985) 166 Cal.App.3d 1179, 1185.)  That presumption may be rebutted when the property was bought on credit and the lender intended to rely on one spouse's separate property in extending the credit.  (Grinius at pp. 1186-1187.)

"Loan proceeds acquired during marriage are presumptively community property; however, this presumption may be overcome by showing the lender intended to rely solely upon a spouse's separate property and did in fact do so." (In re Marriage of Aufmuth (1979) 89 Cal.App.3d 446, 455.)   Here, Wife’s argument failed because Husband did not become an owner of the party business and did not himself obtain the loan proceeds.  The holding company borrowed the money, capitalized the party business and became its sole owner.  “No presumption arises that MPR or the loan proceeds are community property.

The CA concluded the trial court properly determined the portion of the growth in the value of the party equipment business that was attributable to the separate property investment of the holding company it, and which portion was attributable to community effort.  “Significantly, [the party equipment business and the holding company] were capitalized with different amounts of separate property funds, and community efforts were devoted to them for different periods of time.  To apply the same apportionment percentage to different corporate entities with different initial separate property capital contributions and different corporate life spans during which the community efforts could affect the growth of the corporate entities is not sound analysis.”

Determining the Income Available for Child Support

To calculate child support under the statutory guidelines, a court is required to determine the parent's monthly disposable income.  (§ 4055.)  The parent's monthly disposable income, in turn, is derived from annual gross income.  (§ 4058(a); County of Placer v. Andrade (1997) 55 Cal.App.4th 1393, 1395-1396.)  The CA rejected Wife’s argument that it was error for the trial court not to include the holding company’s retained earnings in the calculation of the income Husband had available for support. 

“No California case law discusses whether the court has discretion to include the retained earnings of a closely held corporation when determining a parent's gross income.  But since Husband did not challenge the family court's decision to include some of the holding company's retained earnings, the CA assumed — without deciding the issue — that California law permits the inclusion of a closely held corporation's retained earnings in a parent's income for purposes of child support.

The CA had no criticism of the trial court’s inclusion of only a portion of the retained earnings.  “A well-managed corporation may be required to retain a portion of its earnings to maintain corporate operations and survive fluctuations in income.  At the same time, corporate structures should not be used to shield available income that could and should serve as available sources of child support funds.”  Here, the trial court focused on the nature of the "very volatile" auto sales business and found it would be irresponsible to drain cash from the company and face the risk of having to lay off employees in a bad economy.

Irmo Baeckel – Unpublished opinion of District 4, Division 2 (Filed December 12, 2011)

A custodial parent's actions that are designed to frustrate the noncustodial parent's visitation rights constitute grounds for changing custody.

In 1997, Father and Mother stipulated to joint legal custody with primary physical custody to Mother.  They also agreed that Father would parent the children on alternating weekends and during certain holidays and for prescribed periods during the summer months.  They stipulated to mutual restraining orders that prohibit the removal of their child from the area.

Even so, Father and Mother’s trouble with one another frequently took them back to court to resolve parenting disputes.  Psychological evaluations and a custody trial in 2002 produced a parenting plan but seemed to settle nothing. Physical custody and visitation was heavily litigated.  The most recent order in 2010 resulted in a change of physical custody from Mother to Father.  Mother appealed.  AFFIRMED

The court has the widest discretion to choose a parenting plan that is in the best interest of the child.  (FC § 3040 (b).)  Once it has been established that a particular custodial arrangement is in the best interests of the child, the court need not reexamine that question.  Instead, it should preserve the established mode of custody unless some significant change in circumstances indicates that a different arrangement would be in the child’s best interest.   (Montenegro, supra, at p. 256.)

The CA rejected Mother’s contention that it was an abuse of discretion to change custody because the child was happy and doing well with Mother.  The record showed Mother “engaged in an ongoing course of conduct designed to frustrate visitation rights and to interfere with the normal development of a healthy father-[daughter] relationship during [S.’s] formative years.”  (Catherine D. v. Dennis B. (1990) 220 Cal.App.3d 922, 932.) 

Mother consistently interfered with Father’s visitation/vacation time and making it difficult, sometimes impossible, for him to have access to the child.  As an example, Mother would tell Father the wrong place or the wrong time to pick up the child.  “A custodial parent’s actions that are designed to frustrate the noncustodial parent’s visitation rights constitute grounds for changing custody.  (Burchard v. Garay (1986) 42 Cal.3d 531, 540, fn. 11; Moffat v. Moffat (1980) 27 Cal.3d 645, 652 [“The deliberate sabotage of visitation rights not only furnishes ground for modification, it is a significant factor bearing on the fitness of the custodial parent”].)

The CA said that on this record, the trial court was within its discretion to change custody.  Regarding Mother’s argument that the trial court erred in failing to consider the child’s preference of remaining with Mother, we note that “the court is not bound to decide [change in custody] according to [the child’s] preference and may award custody consistent with its finding of the best interest of the child.”  (Irmo Hopson (1980) 110 Cal.App.3d 884, 907.)  Here, the trial court’s explanation of its conversation with the child provided solid reasons for orders that did not reflect one element of the child’s parenting preferences.

There was no abuse of discretion in changing primary physical custody from Mother to Father.

Irmo Noghrestchi & Williams – Unpublished opinion of District 1, Division 4 (Filed December 16, 2011)

1. Compensatory and punitive damages cannot be recovered in a family court action.

2. A transaction during the marriage that converts a gift into a loan is not the product of undue influence if both parties are advantaged.

Husband and Wife met in 2005, married in 2006 and separated in 2007.  Troubled by the disparity in their wealth, Husband and Wife met with a financial mediator before they married.  A week before they married, Husband and Wife entered into a premarital agreement (PMA) that waives FC § 2640 reimbursements and provides that the manner in which title was held conclusively determined the character of any property acquired during the marriage regardless of the source of funds used for acquisition.  These provisions favored Husband.

The $1 Million Gift

A few days after the wedding, Wife made a gift to Husband by giving him a check for $1,000,000.  But when Wife learned her gift required her to pay a gift tax of $450,000 because Husband was not a U.S. citizen, she met with an attorney and then told Husband the gift would have to be “unwound.”  Both Husband and Wife agreed it was in the family’s best interest to avoid paying the gift tax.  Wife would not have made the gift had she known it carried a tax equal to 45% of the gift.

Wife and Husband then agreed to recast the transaction as a loan by Wife that would be forgiven in annual installments during their marriage. Husband signed a promissory note with a principal amount of $880,000 reflecting the forgiveness of $120,000 for the year 2006.  Wife forgave another $120,000 in 2007 nothing thereafter.

The Family Residence

Soon after the marriage, Husband pressured Wife into buying a family residence in Lafayette.  Wife agreed to do so but only if Husband promised to contribute the proceeds of the sale of his Mountain View house when he received them.  The deal closed in October 2006 for $2,920,000.  Husband insisted that title to the property be in both names, knowing from the inception that this meant he had half ownership of the property regardless of the source of funds used to acquire it.  Wife ultimately agreed and paid the entire cost of acquiring the property.

Husband’s Mountain View house sold in March 2007 but he refused to pay Wife anything toward the acquisition of their Lafayette home.  The residence was sold in 2009 for $2,200,000.

The Trial Court’s Findings and Ruling on the Lafayette Home

The trial court found that Husband promised to contribute the proceeds of the sale of his house to the acquisition of Lafayette house; that the promise induced Wife to acquire the property and take title in joint form; that Wife would not have done so without the promise; and that Husband did not intend to perform at the time he made the promise.  The court found Husband had violated his fiduciary duties to Wife and that her consent to transmute $2,920,000 of her separate property into community property was obtained by Husband’s fraudulent misconduct.

The court ruled that the community held the property as constructive trustee for Wife but denied Wife’s request for compensatory damages equal to the decline in the value of the house as well as punitive damages and prejudgment interest.  The trial court acknowledged its ruling did not make Wife whole and that it was unfair, but concluded no other remedy was permitted by the Family Code.

Wife appealed the denial of compensatory and punitive damages. AFFIRMED

The Trial Court’s Findings and Ruling on Husband’s Promissory Note

The trial court found Wife’s mistake of fact about the tax consequences of the gift did not go to the very reason for making it.  The trial court concluded she could not unilaterally rescind her completed gift to Husband.

The court also found that although Wife acted in good faith and did not intend to take advantage of Husband, a presumption of undue influence arose from the fact that the promissory note had the effect of converting a completed gift of $1,000,000 into an obligation to repay $880,000 plus interest.  The trial court concluded the promissory note was unenforceable.

Wife appealed.  REVERSED

Attorney Fees

In post-trial proceedings, Wife moved for prevailing party attorney fees, based on Civil Code section 1717 and an attorney fee clause in the PMA.  She was awarded $85,000.  The court denied Husband’s request under section 2030 for attorney fees incurred in opposing Wife’s motion for contract fees.  Husband appealed.  AFFIRMED

Compensatory and Punitive Damages

The CA agreed with the trial court that CRC Rule 5.104 limits the parties to the remedies specifically prescribed by the Family Code and that compensatory damages, punitive damages and prejudgment interest are not recoverable.

Rule 5.104 provides that the parties to a family law proceeding may not assert against the other party or any other person any cause of action or claim for relief other than what is provided for in the Rules of Court and the Family Code.  The exception to the rule is that it does not extend to the resolution of disputes regarding transactions that occurred before the marriage.  (Cf., Irmo Saslow (1985) 40 Cal.3d 848, 865-866 [premarital loan agreement]; Irmo Gagne (1990) 225 Cal.App.3d 277, 279 [id.].)

Here, the relief requested by Wife had nothing to do with the characterization of division of marital property.  It did not involve transactions that took place before or after the marriage, but rather sought compensatory and punitive damages for Husband’s fraud during the marriage.  There is no authority in the Family Code or decisional law permitting these remedies.

The CA rejected Wife’s argument that the parties voluntarily submitted the issue of compensatory and punitive damages for the trial court’s determination.  Although there were “hints in this record that Wife sought compensatory and punitive damages under a tort theory, rather than solely the remedies available to her under family law …, the record does not show that she expressed her intention to rely on those theories of recovery clearly enough to put Husband on notice that he needed to raise a specific jurisdictional objection to the trial court considering tort remedies.”

Wife also argued the trial court erred in concluding she was not entitled to prejudgment interest of $538,720 on the value of the portion of the Lafayette house that Husband held in constructive trust for her.  The CA disagreed.  “[R]ule 5.104 provides that neither party may assert “any . . . claim for relief other than for the relief provided in these rules” or in the Family Code.   Nothing in the Family Code or decisional law authorizes an award of prejudgment interest on community property that the trial court finds was held in constructive trust for one spouse.  The CA also found nothing in the legislative history of FC § 1101 (g) that clearly states prejudgment interest is available on community property subject to a constructive trust, even if that trust was imposed as a result of a spouse’s fraud or breach of fiduciary duty.”

The Promissory Note

A gift can be rescinded if it was induced by a mistake about a “ ‘basic fact.’ ”  (Earl v. Saks & Co. (1951) 36 Cal.2d 602, 609.)  The CA said the donor is entitled to restitution if he or she was mistaken as to the identity or essential characteristics of the gift.

Here, Wife intended to give Husband a $1,000,000 gift but made a mistake of fact regarding the tax consequences of the transaction.  The record demonstrated that she was “horrified” to learn $450,000 gift tax was due because of Husband’s citizenship status.  She told Husband she was sorry, but assumed the gift would be tax-free because it was made during the marriage and that she would not have made it but for her mistake.  When she explained the conversion of the gift to a loan and that she could give him $120,000 per year, he was happy to learn there was a solution and signed the note voluntarily with full knowledge of the effect of the transaction.

The CA rejected Husband’s argument that Wife’s mistake was not the kind of mistake that qualifies for relief citing Walton v. Bank of California (1963) 218 Cal.App.2d 527 and Reid v. Landon (1958) 166 Cal.App.2d 476, 483.  The CA distinguished this authority, noting that in Walton, the donor was not mistaken as to the liability for a gift tax but rather simply misjudged the amount.  There, the panel noted it was “not persuaded that in light of the evidence plaintiff created the trust on the rigid basis of a $75,000 gift tax liability and that she would not have done so if she had been informed of a liability of $92,500.”

FC § 721 (b) provides in part that an inter-spousal transaction that advantages one spouse creates a presumption that the disadvantaged spouse’s consent was produced by undue influence.  “The presumption can be dispelled by evidence that the disadvantaged spouse entered into the transaction ‘freely and voluntarily . . . with a full knowledge of all the facts and with a complete understanding of the effect of the [transaction.]’”  (Irmo Kieturakis (2006) 138 Cal.App.4th 56, 84;  Irmo Delaney (2003) 111 Cal.App.4th 991, 996; Irmo Lange (2002) 102 Cal.App.4th 360, 364.)  The advantage “must necessarily be an unfair advantage … not merely a gain or benefit obtained in a mutual exchange. …  [T]he advantage must operate ‘to the disadvantage’ of the other spouse.”  (Irmo Burkle (2006) 139 Cal.App.4th 712, 730, 731.)

On these facts, the CA said there was no basis to conclude that the transaction gave Wife an unfair advantage over Husband or that he was disadvantaged.”  Wife benefited by not having to pay the gift tax but Husband also received a benefit by being able to keep the money with the promise that the loan would be forgiven at the maximum legal rate during the couple’s marriage.  The trial court erred in refusing to enforce the promissory note.

The CA said the trial court’s view of a party’s right to rescind was too restrictive.  Earlier gifts to Husband were structured to be tax free showing that in this instance, Wife operated under a mistake of fact under the rule expressed in Walton and Reid.  Wife’s forbearance to seek rescission of the gift served as consideration for the transaction in which the gift was “unwound” and the parties substituted a promissory note.  The CA added, “The only rational conclusion is that Husband believed and understood that Wife could rightfully demand that he give the money back, and he happily signed the promissory note to avoid having to do so.” 

Attorney Fees

The premarital agreement included an attorney fee clause that permitted an award to the prevailing party if “court action is undertaken to resolve any disputes about the provisions of [the PMA].”   Wife sought $112,262.38 as reasonable attorney fees for work related to Lafayette property after Husband invoked the attorney fee clause in December 2009 and before the trial court’s tentative ruling.

Husband sought an award of the attorney fees he incurred in responding to Wife’s motion.  Although he acknowledged that he had the funds to pay his own fees, he argued that in view of the disparity of his wealth and Wife’s, such an award was proper under section 2032.

Contractual Attorney Fees

Husband argued the trial court erred in awarding contractual attorney fees to Wife because the action sounded in tort, and was not an action “on the contract” for purposes of Civil Code section 1717.   The CA rejected the argument, stating that as long as the action involves a contract it is “on [the] contract” within the meaning of CC § 1717.  Fees are properly awarded to the extent that the action is to enforce - or to avoid enforcement -of the contract.  (Turner v. Schultz (2009) 175 Cal.App.4th 974, 979-980.)

The CA said Husband specifically invoked the provisions PMA against Wife by arguing she could not challenge the community property title of the Lafayette house because the it mandated that written title was determinative.  Husband also argued Wife waived her statutory right to reimbursement of her separate property contribution to the acquisition of the property.  Thus the PMA was central to Husband’s theory of the case.

The CA also ruled that there was no error in fixing the amount of the attorney fee award.

Husband’s Request for Attorney Fees

Husband argued it was error to deny his request for an award of attorney fees pursuant to FC § 2030 in defending against Wife’s motion for attorney fees.  The CA disagreed, concluding that the trial court properly considered the parties’ relative circumstances (§ 2032 (a)) and the need for the award to enable each party to have sufficient financial resources to present the party’s case adequately. (See Irmo Duncan (2001) 90 Cal.App.4th 617, 629.)

Irmo Singer – Unpublished opinion of District 4, Division 2 (Filed December 19, 2011)

The trial court should not have imposed a terminating sanction for wife's failure to file a preliminary declaration of disclosure without first testing the effectiveness of lesser sanctions.

At a TSC in 2009, at Husband’s request, the trial court ordered Wife serve her preliminary declaration of disclosure within 20 days.  The order was in anticipation of an MSC.  Wife failed to do so and failed to appear at the MSC.  Sua sponte, the trial court invited Husband’s attorney to do a “2107 motion” to strike Wife’s petition so Husband could proceed by way of default.

Six days later, Husband filed a motion to compel Wife to prepare and produce a preliminary declaration of disclosure and for reasonable sanctions up to and including “terminating sanctions.”  At the hearing, the trial court granted terminating sanctions, ordering Wife’s original petition stricken.  Wife, now in “pro per,” filed a “response” to what had been Husband’s response to her original petition (as if Husband’s pleading were the original petition for dissolution) and also served a “completed preliminary declaration of disclosure” on Husband’s attorney.

Husband countered by requesting the entry of Wife’s default and a date for a “prove-up” hearing on the default.  Without hearing from Wife, the trial court granted Husband’s requests.                Six days before the prove-up hearing, Wife’s new counsel filed a motion to set aside the orders.  Her motion to determine whether there should even be a prove-up hearing was set on a date roughly 35 days after the prove-up hearing.  Wife’s explanation for not complying was that she was emotionally distraught and that her distress was compounded by false hope of reconciliation created by Husband.

At the prove-up hearing, Wife was told she had no “pleading” and therefore “no standing.”  The resulting judgment waived Husband’s claim for child support from Wife, distributed the parties’ property and provided for support of $10,000 a month to Wife for 10 years.

At the hearing in 2010 to consider Wife’s set aside motion, the trial court noted Wife’s refusal to “cooperate” and “follow” court orders and denied her motion.  Wife appealed.  REVERSED

California law requires divorcing spouses to exchange preliminary declarations of disclosure, but is indefinite about precisely when it must be served. (§§ 2100 (c), 2103, 2104 (a).)  The declarations must identify all assets and liabilities in which the declarant “has or may have an interest and all liabilities for which the declarant is or may be liable,” regardless of the community or separate character of those assets or liabilities.  (§ 2104 (c)(1).)

The CA concluded the trial court should not have imposed a terminating sanction without first considering the effectiveness of lesser sanctions and should not have denied Wife’s motion to set aside the orders without considering the possibility of doing so “upon any terms as may be just” (CCP § 473 (b)) such as requiring her to pay for any unnecessary legal expense incurred by Husband.

The CA noted FC § 2107 allows a complying party to “request” preparation of the declaration and if the other party fails to respond, to seek one or more of three orders; viz., (1) an order requiring “a further response”; (2) an order for an evidentiary sanction; or (3) an order granting the complying party’s “voluntary waiver of receipt” of the noncomplying party’s declaration.  FC 2107 (c) requires, in addition to other remedies, the imposition of money sanctions sufficient to deter such conduct and an award of reasonable attorney’s fees and costs “unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the imposition of the sanction unjust.”

The CA said a preliminary declaration of disclosure from Wife was not necessary to complete the case.  Husband could have waived the need for it and been made whole by a monetary sanction to make Wife pay for his expense in obtaining that order.  The CA pointed out the injustice of the orders by noting Husband possessed all the records bearing on the identification of the marital assets and thus was not prejudiced by an order that required Wife to proceed on Husband’s declaration of disclosure.

The CA said discovery sanctions cannot confer windfalls on parties by putting them in a better position than they would be had the sought-after discovery been produced.  “Any sanction imposed under the Discovery Act for ‘discovery misuse’ cannot go further than is necessary to accomplish the purpose of the discovery sought; if instead, the sanction is assessed as a penalty to ‘punish’ the offending party, for the omission, it is reversible as an abuse of discretion and a violation of due process.”  (Rutter Family Law Treatise ¶ 11:420, p. 11-104.)

The CA said “this is a large asset divorce” and Wife’s moving papers clearly showed prejudice from the judgment.  Husband was left in a much better position than he would have been if some lesser sanction had been imposed.

The order denying Wife’s set aside motion was reversed but the trial court was directed to require Wife to pay the reasonable attorney fees, costs, and expenses incurred by Husband for her delay.

Irmo Hill & Dittmer – Unpublished opinion of District 2, Division 6 (Filed December 19, 2011)

1. A PMA cannot be said to be involuntary where two attorneys assisted wife during the several months the agreement was being negotiated.

2. The amendment to FC § 1615 that requires presentation of a PMA seven days before the wedding is not retroactive.

Wife and Husband met in 1998 and married in 2001.  They were both accomplished, successful persons who brought substantial separate property estates to the marriage.  Before they married, Husband told Wife a premarital agreement would be required and they began discussing its terms several months before the ceremony.

An Illinois attorney represented Husband.  In January 2001, Wife’s estate-planning Wife’s estate planning attorney sent a draft of a PMA to a family law specialist for review.  Wife’s attorney said she wanted to draft the Agreement and Husband’s attorney agreed.  Several drafts were reviewed and discussed.

The first draft waived spousal support and agreed to full disclosure of the parties' assets and liabilities.  One revision Husband requested was a recital acknowledging that he provided Wife's counsel with full and complete access to Husband's financial information and an opportunity to consult with him, any of his accountants and other representatives as to the nature, value and cash flow from any of his assets and the nature and extent of his liabilities.  Wife did not seek any financial disclosures from Husband.  The final Agreement stated that Husband had "an approximate net worth of $40,000,000" and Wife had an "approximate net worth of $10,000,000."

Husband and Wife executed the final Agreement three days later, just prior to their wedding ceremony.

In 2008, Wife filed a petition to dissolve their marriage.  She alleged Husband misrepresented his wealth in the Agreement and commenced discovery attempting to determine the full extent of Husband's assets.  Husband requested a protective order on the ground that the waiver language in the Agreement precluded a challenge to its validity.

The trial court issued an order for limited discovery.  The issue of the validity of the Agreement was severed and after a three-day hearing, the trial court concluded the Agreement was valid, that the current version of FC § 1615 was inapplicable, and that Husband had not misrepresented his wealth.  Wife appealed.  AFFIRMED

The Agreement is Valid

The CA rejected Wife’s contention that the PMA is invalid because Husband falsely stated in it that he had an approximate net worth of $40 million.

The CA said, “Parties contemplating marriage may validly contract as to their property rights, both as to property then owned and as to property and earnings that may be acquired during the marriage.  (Irmo Dawley (1976) 17 Cal.3d 277, 349.)”  But the statute in effect at the time Wife signed the Agreement, states a PMA will not be enforced if the party resisting enforcement can demonstrate that he or she did not enter into the contract voluntarily.  It can also be invalidated by a showing the contract was unconscionable when entered into and that the complaining party did not have actual or constructive knowledge of the assets and obligations of the other party and did not voluntarily waive knowledge of such assets and obligations.  (FC § 1615 (a)(2).)

Proof that a premarital agreement was involuntary may be shown through (1) the coercion that arises from an agreement that is presented at a time close to the wedding, (2) from surprise; (3) from the presence or absence of independent counsel; (4) from inequality of bargaining power; and (5) whether the parties' knew rights were being waived under the agreement. (Irmo Bonds (2000) 24 Cal.4th 1, 19, 18, 23, 37.)

Parties negotiating a premarital agreement are not presumed to be in a confidential relationship that would give rise to fiduciary duties owed between spouses or to the presumption of undue influence when a transaction benefits one of the parties. 

Here, Wife’s contention that the Agreement is tainted by fraudulent and inadequate disclosures is refuted by evidence that Wife, both in the Agreement itself and in her conduct during the many months of negotiation, waived this claim.  She had the advice of two attorneys specializing in family law and estate planning during the nine months the Agreement was being discussed and negotiated.  Wife's lawyer drafted the Agreement and revised drafts of the Agreement in consultation with Husband and his attorney.  These facts, coupled with Wife's professional background and evident skills are strong evidence that she entered into the Agreement voluntarily.” (Compare, Irmo Pendleton and Fireman (2000) 24 Cal.4th 39.)

Amendments to Section 1615 Do Not Apply Retroactively

In 2001, when the Agreement was executed, FC § 1615 provided a premarital agreement is not enforceable if the party against whom enforcement is sought proves either (1) That party did not execute the agreement voluntarily or (2) the agreement was unconscionable when it was executed and three conditions apply.

In 2002, § 1615 was amended to create a presumption that a premarital agreement was not executed voluntarily unless the court makes five designated findings.  (Irmo Friedman (2002) 100 Cal.App.4th 65, 72.)  These include the finding that the party against whom enforcement is sought had at least seven calendar days between the date he or she was "first presented" with the agreement and the time he or she signed the agreement.

The CA rejected Wife’s contention that the amended version of section 1615 applies retroactively and that the Agreement is invalid because she was not "presented with" the Agreement until the day of the wedding.  Her argument was raised and specifically rejected in Irmo Howell (2011) 195 Cal.App.4th 1062, 1074-1075.)  “Section 1615 (c)(2), like section 1612, subdivision (c), added substantive, not procedural, provisions concerning representation by independent legal counsel.  Thus, the trial court correctly determined that section 1615 did not apply retroactively.”

Moreover, even if  §1615 (c)(2) has retroactive application, it does not support Wife's argument that she did not have seven days to review the Agreement before she signed it.   In Irmo Cadwell-Faso and Faso (2011) 191 Cal.App.4th 945, 962, the court interpreted § 1615 (c)(2), as applying only when a party is unrepresented by counsel.  Here, of course, not only was Wife represented throughout the negotiation of the Agreement by two lawyers, her lawyers were responsible for preparing all drafts of the Agreement.

Irmo Conrad – Unpublished opinion of District 4, Division 1 (Filed December 20, 2011)

"Uncooperative" parenting supports an award of sold physical custody.

Mother and Father married in 1995 and separated in 2008.  They have a daughter and a son.  Mother has an older daughter from a previous relationship.

Father requested primary physical custody of the parties' minor children because Mother.  He said she is a “shopping addict and hoarder” that made the family's life unbearable, limiting movement within the house.  Father also described the effect of Mother's conduct on the parties' children and the family as a whole.  For example, she created $50,000 in credit card debt after Husband refinanced the house to pay off her previous credit card spending.  Mother admitted to “a problem” and treatment for it, but objected to Father’s discovery requests for her mental health records.

Mother alleged Father physically and psychologically abused her and said he violently attacked her oldest daughter.  She claimed that in April 2008 she became aware of an incident in 2007 that she claimed started with a "frantic" telephone call from her daughter.  Father produced telephone records showing the call never occurred and pointed out other inconsistencies.  Mother's request for domestic violence restraining orders was denied.

Similar allegations of abuse against the parties’ son and daughter were made to CPS.  These claims were initially classified as "substantiated," but on appeal, the findings were changed to "unfounded.”

Father presented evidence that Mother changed the children's school and health care providers without consulting him and filed a change of address with the post office for the children so that no mail could be sent to them.  As further evidence of her alleged refusal to co-parent, Father stated Mother failed to provide him with her new telephone number and when he had the number, Mother refused to answer the phone.

Father alleged that when the children were in Mother's custody she left the children alone after school for hours until she returned from work.  Father found his son sitting alone in front of the school an hour after all of the other children had gone home.  Father lodged exhibits of the children's MySpace pages showing their youngest daughter claimed when she was only 12, that she was 18.  The parties' son claimed he was 16 years old when he was actually 10.

Father asserted that his time with the children went very well.  He alleged that he gave the children structure, supervising the children and correcting them when their behavior was out of line.

Following a two-day trial, the trial court awarded the parties joint legal custody but placed the children in the primary physical custody of their Father.  Mother appealed.  AFFIRMED

Custodial Orders

“Evidence of a parent's past conduct demonstrating ‘uncooperative’ parenting that is likely to disrupt the child's relationship with the other parent is highly relevant in making a custody determination.  (Irmo LaMusga (2004) 32 Cal.4th 1072, 1101.)  Courts must consider “which parent is more likely to allow the child frequent and continuing contact with the noncustodial parent.”  (Keith R. v. Superior Court (2009) 174 Cal.App.4th 1047, 1053; FC § 3040 (a)(1).)

Here, the trial court found based upon ample evidence that Mother was an “uncooperative parent,” tried to discourage Father's relationship with the children and her parenting skills were not in the children's bests interests.  The trial court also found that Father was a capable parent who would likely share parenting responsibilities.

The existing parenting orders were temporary and did not require proof of a substantial change in circumstances to warrant their modification.  (Burgess at pp. 34-35.)  Neither party was required to demonstrate either detriment to the minor or any particular need for a change in custody.

The CA rejected Mother’s reliance on the original CPS findings regarding Father's alleged abuse, recommendations of FCS mediators who testified and the requests of the minor children.   The CPS findings were reversed and the trial court expressed doubt about Mother’s credibility in this regard.  The FCS report was only a recommendation and the testimony of the FCS mediators was not included in the record on appeal.  As to the preferences of the children, regardless of their age and "capacity to reason," the court has no mandatory duty to follow the follow the child's wishes.  (Irmo Mehlmauer (1976) 60 Cal.App.3d 104, 110-111.)  Here, given the court's findings as to the parents' respective parenting skills and the other evidence presented to the court, Mother cannot show it was not in the children's best interest to reside with Father.

Irmo Gross – Unpublished opinion of District 4, Division 2 (Filed December 20, 2011)

1. The trial court may consider filings unsuccessfully brought by an alleged vexatious litigant even if the rulings in question are on appeal.

2. Domestic violence protective orders must restrain only the recurrence of abuse that has actually occurred.

Husband and Wife were awarded joint legal custody of their two sons and Husband was awarded sole physical custody.  The parenting plan provided Wife with two weekends a month and daily telephone calls three times a day for 10 minutes at a time.   

Wife filed three petitions, one amended petition for restraining orders, nine motions to modify child custody orders, some of them within days after the denial of the previous motion, and four motions to disqualify the commissioner to whom the case was assigned – a total of 18 unmeritorious motions and petitions in the same case within an eight-month period.  On Husband’s motion, the trial court declared Wife a vexatious litigant.

Husband sought domestic violence restraining orders against Wife based upon his contention telephone calls were excessive (284 times in 15 days, and sometimes 30 times a day) and intended simply to harass.  His application was granted.  Wife’s was restrained from harassing, attacking, striking, threatening, assaulting, hitting, following, stalking, [or] molesting Husband.  She was ordered to stay 100 yards away from him and was ordered not to possess any firearms or to attempt to get his address or location.  Wife was also ordered not to contact him except for brief, peaceful contact for court-ordered visitation.

Wife appealed.  AFFIRMED BUT MODIFIED

Vexatious Litigation

C.C.P. § 391 (b)(3) allows the court to require a “vexatious litigant” to obtain the permission of the presiding judge of the court before filing any new litigation, petition, application or motion in a proceeding under the Family Code or Probate Code.  (§ 391.7.)  A “vexatious litigant” is a person who “repeatedly files unmeritorious motions, pleadings, or other papers, conducts unnecessary discovery, or engages in other tactics that are frivolous or solely intended to cause unnecessary delay.”

The CA rejected Wife’s contention that she was not proved to be a vexatious litigant.  She argued that her filings were not attempts to re-litigate matters that have been finally determined.  (§ 391 (b)(2).)  The CA pointed out that § 391 (b) “provides four separate bases for finding someone to be a vexatious litigant; viz., (1) five or more unsuccessful small claims actions within seven years; (2) repeatedly re-litigating the validity of final adverse determinations against the defendants; (3) repeatedly filing unsuccessful motions, pleadings or unnecessary discovery that are frivolous or intended to delay; and (4) when a person has previously been declared to be a vexatious litigant in a proceeding based upon the same facts.  Here, the trial court based its finding on subdivision 3, not subdivision 2.

Under § 391(b)(3) a person can be found to be a vexatious litigant for repeatedly filing unmeritorious motions or pleadings.  “Under this subdivision, there is no requirement that filings be so unmeritorious as to be frivolous.  (Morton v. Wagner (2007) 156 Cal.App.4th 963, 971-972 [filings must be “numerous, ‘unmeritorious’ or ‘frivolous’”].) There is no bright-line rule as to what constitutes “repeatedly” although in this case, Wife’s three petitions, one amended petition for restraining orders, nine motions to modify child custody orders, some of them within days after the denial of the previous motion, and four motions to disqualify the commissioner to whom the case was assigned – a total of 18 unmeritorious motions and petitions in the same case within an eight-month period - was enough.

The CA agreed with Wife’s point that the trial court’s order was overly broad because it required a pre-filing order for her “future motions, pleadings and papers.”  C.C.P. § 391.7 does not authorize a pre-filing order for “papers” generally.  She should not be required to seek the PJ’s approval of all papers, including responsive pleadings, oppositions to motions brought by Husband, and documents she is required to file, such as I&E’s.  The trial court was directed to strike the word “papers” from the pre-filing order.

The CA rejected Wife’s argument that the trial court had no jurisdiction to consider filings which resulted in orders which were then on appeal because a pending appeal divests the trial court of jurisdiction.  “[W]e conclude that the trial court retains jurisdiction to rule on such a motion.  The vexatious litigant order does not affect the order that is on appeal within the meaning of section 916 (a).  And, if any of the orders on which the vexatious litigant order is based is determined by the appellate court to be erroneous, then the party may seek to quash the vexatious litigant order if there is no longer a basis for finding that he or she has repeatedly filed unmeritorious pleadings, motions or other papers.”

The Restraining Order

Husband’s application for DVPO’s was granted.  Wife’s personal conduct was restrained and she was ordered to stay 100 yards away from Husband.  She was also ordered not to contact him except brief, peaceful contact for court-ordered visitation. 

The CA concluded these orders were overly broad because the only conduct cited by Husband was Wife’s excessive telephone calls (284 times in 15 days, and sometimes 30 times a day.)  Moreover, he didn’t even ask the court to restrain Wife from calling; rather, he asked that the court amend the current order for telephone contact with the children and define reasonable phone contact. 

Repeatedly placing telephone calls to an estranged spouse is abuse within the meaning of FC § 6320, if it is done with the intent to annoy or harass.  But a court can only restrain the recurrence of abuse which it can reasonably find has actually occurred, based on the evidence before it.  (FC § 6300; S.M. v. E.P. (2010) 184 Cal.App.4th 1249, 1265-1266.) … ¶ Nevertheless, we conclude that the court did abuse its discretion because the restraining order restrains Wife from numerous acts which she has not committed:  It orders her not to “harass, attack, strike, threaten, assault (sexually or otherwise), hit, follow, stalk, [or] molest” Husband, and not to destroy his personal property, disturb the peace, keep him under surveillance or block his movements.  In the absence of evidence that Wife has ever committed these forms of abuse, it is an abuse of discretion to issue a protective order restraining her from doing so.  (S.M. v. E.P at pp. 1265-1266.)

Irmo Bader – Unpublished opinion of District 4, Division 3 (Filed December 21, 2011)

It is not reversible error to fail to make the findings now required by FC § 2030 in making an award of attorney fees if they can be discerned from the record.

Wife’s response to Husband’s OSC about support and certain property issues included a request for $25,000 for her attorney fees, $5,000 for costs, and $25,000 for a forensic accounting.  Wife’s I&E indicated she is a hair stylist earning $10 per hour, has no known assets and monthly expenses of $6,450.   Husband’s I&E reported earnings of $6,250 per month as a physician and that he has assets exceeding $1.6 million.  His monthly expenses were also just over $6,000.

At the hearing, Husband argued Wife failed to provide any evidence to support that her fee requests and claimed she failed to complete her I&E.  The court granted Wife’s request in part, ordering Husband to pay $20,000 within 30 days.  The request for costs was denied.  Husband appealed.  AFFIRMED.

Husband argued that FC § 2030 specifically requires findings that reflect the court’s consideration of statutory factors on whether an award of attorney fees and costs is appropriate. 

The CA noted the purpose of § 2030 authorizing an award of attorney fees is parity; “a fair hearing with two sides equally represented.”  But in 2004, section 2030 (a)(2) was amended to provide that the “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.”  The statute required the court to consider various factors, but not to make express findings on them.  As long as the record as a whole shows the court considered the statutory factors, the order itself did not need to contain express findings.

On January 1, 2011, § 2030 (a)(2) was amended again to require the court to “make findings on whether an award of attorney’s fees and costs under this section is appropriate, whether there is a disparity in access to funds to retain counsel, and whether one party is able to pay for legal representation of both parties.  If the findings demonstrate disparity in access and ability to pay, the court shall make an order awarding attorney’s fees and costs.”  Thus, the statute now requires express findings.

Here, counsel did not alert the court to the new statutory language and no one requested express findings.  Understandably, the court did not make the required findings.  Even so, the error was not said to be reversible.  “‘[T]he failure to make a material finding on an issue supported by the pleadings and substantial evidence is harmless when the missing finding may reasonably be found to be implicit in other findings’ or ‘when, under the facts of the case, the finding would necessarily have been adverse to the appellant.’”  (Rojas v. Mitchell (1996) 50 Cal.App.4th 1445, 1450.)

Here, the trial court’s error was harmless because the omitted findings could be discerned from the record.  The disparity in incomes and wealth were evident from their I&E’s.   “In short, the pendente lite attorney fee award is amply supported by the record and the implied findings readily discernible from it.  This renders harmless the lack of express findings now required by section 2030, subdivision (a)(2).

Irmo Gehr – Unpublished Opinion of District 2, Division 2 (Filed December 21, 2011)

It was not error to determine this PMA was ambiguous and to receive and rely on extrinsic evidence to determine husband's right to reimbursement.

Husband, 66, met Wife, 28, in 2005.  For about a year, they negotiated the terms of a PMA with the assistance of counsel.  A 50-page PMA was executed in 2007 and the parties were married about a month later.

The PMA provides, among other things, that during the marriage Husband would give Wife $10,000 per month; a 5% per annum equity ownership interest in his lavish personal residence; a $250,000 savings account; and a $185,000 Aston Martin model DB9.  Husband also gave her other gifts including jewelry cumulatively valued at $1,640,000.  The money and the gifts were apparently not enough.

As originally written, the PMA required Husband to sell his main residence if the parties separated in order to provide Wife with the 5% per annum equity ownership she acquired for each year they were married.  The PMA said nothing about a Beverly Hills condominium.

Early in their relationship, Wife expressed her to buy a condominium.  To facilitate the purchase of the condo, the PMA was amended to permit Husband to keep his main residence and simply buy out Wife’s interest if they separated.  They added that, “In addition, Husband shall purchase a condominium in Beverly Hills …, title to which shall be held by Wife in her sole name as her separate property.”

In 2007, Husband opened an escrow to acquire the condominium in his name but after a fight in early 2008, he cancelled the escrow and filed a petition to dissolve the marriage.  Wife moved out immediately, but Husband resolved to win her back and bought the Beverly Hills condominium in his name, using $935,000 of his separate property to do so.  A few days later, he dismissed his dissolution petition.

According to Husband, Wife hectored him about title to the property and called him daily to complain.  Husband stated that Wife conditioned her resumption of their marriage on his transfer of the condominium to her and other demands.  Wife had a different story.  Whatever the case, Husband quitclaimed the condominium to Wife “as her sole and separate property.”

The principal issue litigated at the trial of property issues concerned the parties’ respective rights to the Beverly Hills condo.  Husband argued that the PMA preserves his right to reimbursement for the separate property funds he used to acquiring the condominium.  Wife argued that the condominium was a “gift” not subject to reimbursement.

Husband argued that other provisions in the PMA preserved his right to reimbursement for the separate property funds he used to acquiring the condominium.  Wife argued that the condominium was a “gift” not subject to reimbursement.

Following a trial, the court noted that the parties’ rights to the condominium were controlled by the PMA and found that the condominium was Wife’s sole and separate property, but that Husband retained a reimbursement right to the separate property funds he used to purchase it.  Since the condominium had declined in value, the court did not require Wife to reimburse the full amount expended by Husband; rather, she was also given the option of simply returning the property to him.

Wife appealed.  AFFIRMED

The CA agreed with the trial court that the PMA did not clearly classify the condominium as a gift from Husband to Wife.  While it was listed under the “gifts” section, the property was not specifically labeled a “gift.”  By contrast, all other gifts to Wife were labeled “gifts.”  Relying extrinsic evidence, the trial court determined that Husband maintained a right of reimbursement under the PMA because “the facts …[and] the language of the contract itself [do not show] that this rises to the level of an outright gift to the petitioner with absolutely no right of reimbursement to the respondent.”

The CA added that principles relevant to the interpretation of a contract “support [the trial court’s] determination that the condominium was not a gift.  If possible, a contract must be interpreted in such a manner that “gives force and effect to every provision, and not in a way that renders some clauses nugatory, inoperative or meaningless.”  (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 473.)  Wife’s asserted interpretation contravenes this rule by placing the condominium—which was not explicitly labeled a “gift”—in the same category as items that were specifically labeled “gifts,” thereby rendering phrases such as “as an additional gift to Wife” mere surplusage. 

The CA added that even if the transfer of the condominium were a “gift,” other terms of the PMA did not preclude reimbursement of the separate property expended by Husband to purchase it.  Thus, it was not error to determine the agreement was ambiguous and to receive and rely on extrinsic evidence to determine Husband’s right to reimbursement.

The Order Restraining Wife’s Disposition of Her Property

The judgment following the property trial included an order restraining and enjoining Wife “from selling, attempting to sell, contracting to sell, or transferring or borrowing against or encumbering the condominium.”  The CA approved this provision noting, “Preventing Wife from selling or hypothecating the condominium was the only reasonable means of ensuring that she complied with the judgment by returning the condominium.  The alternative (allowing a sale or encumbrance) would have required Wife to reimburse Husband the $935,000 he spent in acquiring the condominium. Even if she had the money to pay Husband, actual reimbursement would have severely disadvantaged Wife, since the value of the condominium had diminished substantially since it was purchased.  ¶  The trial court acted equitably and fairly by allowing Wife to return the condominium rather than forcing her to reimburse the purchase price.

The No-Contest Clause

Husband argued that Wife forfeited her right to $40,000 in spousal support payments and $130,187 for her interest in Husband’s residence by violating the “no-contest” clause in the PMA.  The trial court and the CA rejected the claim.

The no-contest clause was unilateral.  It provided that “if Wife … challenges … the validity or enforceability of any provision of this Agreement . . . the Court shall have no jurisdiction to confirm or award to WIFE anything that she receives under and pursuant to this Agreement.  [¶] . . . A challenge to this Agreement includes, but is not limited to, filing any action in any Court which calls into question the validity or enforceability of this Agreement ….”  The trial court declined to enforce the no-contest clause on two grounds.  It found that the clause did not bear a reasonable relationship to the damages a party could suffer in the case of breach, and therefore it was against public policy and void.  The court also found that Wife never challenged the validity of the PMA and in fact attempted to enforce its provisions.

The CA agreed that Wife did not challenge the validity or enforceability of the terms of the PMA but instead sought enforcement and clarification of the terms. “Because a no contest clause results in a forfeiture . . . a court is required to strictly construe it.”  (Burch v. George (1994) 7 Cal.4th 246, 254.)  Strictly construing the no-contest clause here, Wife’s litigation activity was certainly permissible, and the conduct highlighted by Husband does not lead to a different conclusion.

Irmo Lockington – Unpublished opinion of District 4, Division 2 (Filed December 29, 2011)

1. A request to modify child support must be based on the parent's current financial circumstances, not the financial circumstances that existed during the marriage.

2. The cost of caring for the children is not a factor used to calculate guideline child support.

Husband and Wife married in 1991 and divorced in 2006.  The judgment orders Husband to pay $2,074 per month in child support based on his $13,476 gross monthly income, Wife’s $11,473 gross monthly income, and a 70/30 percent timeshare. 

In 2010, Husband moved to reduce his monthly child support payments because his income had significantly decreased and his assets were significantly depleted.  Husband explained that when the he and Wife agreed to the orders in 2006, he was an executive in a home building company but lost his job in 2007 when the housing market began to collapse. 

Husband’s next job also failed and by June 2010, Husband’s monthly income had plummeted to $300.  He had substantial credit card debt, had short sold his home to prevent a foreclosure, and moved in with his sister to avoid becoming homeless.

Wife opposed Husband’s request, arguing the children’s expenses remained the same and she should not have to find a second job to cover Husband’s share of the children’s expenses merely because he lost his job.  She argued Husband should get a job at Starbucks or Target to pay his child support obligations.

The trial court accepted Husband’s testimony regarding his dire financial circumstances but nonetheless denied his request because it believed “the care of the children is paramount.  They have expenses.”  The trial court also said the children had a right to maintain the marital standard of living regardless of any financial difficulties Husband faced.

Husband appealed.  REVERSED

California has implemented a ‘statewide uniform guideline’ for determining child support.  Although the formula is referred to as a “guideline,” the requirements are mandatory; only special circumstances permit a departure from the guideline. (§ 4052.)

The amount of child support is determined by a formula that is rebuttably presumed to be correct.  (§ 4057(a).)  In general, a parent’s obligation is to support his or her minor children according to the parent’s actual income and ability to pay.  (§ 4053 (a), (c), (d) & (f).)  If child support deviates from guideline, the trial court must state the reasons a non-guideline order is warranted.  (§ 4056 (a); Irmo Hall (2000) 81 Cal.App.4th 313, 316.)

An existing child support order can be modified at any time if admissible evidence shows changed circumstances warrant an adjustment.  (Irmo Leonard (2004) 119 Cal.App.4th 546, 556.)  Ordinarily the change is an increase or decrease in either party’s income available to pay child support.  (§ 3651 (a); Irmo Cryer (2011) 198 Cal.App.4th 1039, 1048; Irmo Mosley (2008) 165 Cal.App.4th 1375, 1379-1380.)

Here, the trial court denied Husband’s modification because the court believed the children had a right to maintain the lifestyle they enjoyed during the marriage regardless of any financial difficulties Husband faced after the marriage.  The trial court reasoned that Husband’s financial difficulties did not alter the amount needed to properly care for the children.  But neither justification matches standards for setting or modifying guideline child support.  The CA said, “A trial court must evaluate a request to modify child support based on the parents’ current financial circumstances, not the financial circumstances that existed during the marriage.  (Irmo Cheriton (2001) 92 Cal.App.4th 269, 298.)

Husband’s material change in circumstances required the trial court to modify his child support obligations.  The cost of caring for the children is not a factor in the statutory formula used to calculate child support. (§ 4055 (a) & (b).)

The CA acknowledged that FC 4058 (b) authorizes the court to “consider the earning capacity of a parent” in setting child support.  Earning capacity is based upon an ability to work coupled with an opportunity to do so.  “Opportunity to work’ exists when there is substantial evidence of a reasonable ‘likelihood that a party could, with reasonable effort, apply his or her education, skills and training to produce income.’”  (Irmo Smith (2001) 90 Cal.App.4th 74, 82.) 

In this case, the CA concluded Husband met his burden to show he did not have an opportunity to work at or even near the income level he enjoyed in December 2006.  (Irmo Bardzik (2008) 165 Cal.App.4th 1291, 1304.)  Although the trial court suggested Husband could get a job at Starbucks or Target, even if this were so, there was no evidence the income he would earn there was in any way comparable to the income he earned when he and Wife stipulated to the child support amount.

Irmo Bixler – Unpublished opinion of District 4, Division 1 (Filed December 29, 2011)

Legal separation requires not only a parting of the ways with no intention of resuming marital relations, but also conduct evidencing a complete and final break in the marital relationship.

Husband and Wife married in 1977.  In August 2002, Husband permanently moved out of the family residence after Wife learned he had been unfaithful.  In March 2007, the same month his youngest daughter turned 18, Husband filed a petition for dissolution of marriage.  Wife disputed the date of separation.

Husband never attempted to move back into the family residence, and Wife never asked him to do so.  Husband lived in a hotel for two weeks, moved into another community residence for a while and then rented an apartment for about 18 months.  Husband gave up the apartment to move to Los Angeles for his work where he lived for about two years.  Husband said that after he moved out of the family residence in August 2002, he only returned there to pick up their daughters.

The only social functions where he and Wife were both present were their children's graduations.  They took no vacations together, with or without the children.  They did not attend marriage counseling.  After August 2002, neither party recognized the other person’s birthday or any holiday with a card or a gift.  After August 2002, Wife and Wife opened their own bank accounts and obtained credit cards in their own names.  Since Husband moved out, he and Wife have not had sexual relations.  Wife consulted a divorce attorney as early as January 2003.

Wife testified that after Husband moved out, his paycheck was deposited into their joint account with no restrictions on how either party could use the money.  They shared joint CDs, credit cards and a joint equity line of credit.  They refinanced the family residence several times and some of Husband’s mail was sent to the family residence.  Wife and Husband filed joint tax returns as a married couple through 2007 because, as Husband explained, filing jointly resulted in "more monies in the pot" for them.

Wife also testified she believed she and Husband would get back together.  On these facts, the court found the date of separation was August 26, 2002. Wife appealed. AFFIRMED

Family Code § 771(a) provides that earnings and accumulations while married persons are living separate and apart must be characterized as separate property.  The Legislature did not, however, define the “date of separation” or specify a standard for determining that date.  Decisional law has filled this gap.

The CA digested Makeig v. United Security Bank & Trust Co. (1931) 112 Cal.App. 138, 143; Irmo Baragry (1977) 73 Cal.App.3d 444, 448; Irmo Umphrey (1990) 218 Cal.App.3d 647, 657; and Irmo von der Nuell (1994) 23 Cal.App.4th 730, 736.  Legal separation requires not only a parting of the ways with no intention of resuming marital relations, but also conduct evidencing a complete and final break in the marital relationship.  Thus, the date of separation is determined by examining two components, one subjective and the other objective.  (Irmo Norviel (2002) 102 Cal.App.4th 1152, 1158-1159.)  The subjective component examines whether either of the parties harbors the subjective intent to end the marriage.  The objective component examines whether there is objective conduct evidencing and in furtherance of that intent.

The courts have declined definitively to define the conduct sufficient to establish the date of separation.  Instead, "[a]ll factors bearing on either party's intentions 'to return or not to return to the other spouse' are to be considered [citation] . . . , [and n]o particular facts are per se determinative."  (In re Marriage of Hardin (1995) 38 Cal.App.4th 448, 452.)  The courts have nevertheless tried to distill the kinds of objective conduct that should be weighed in this calculus.  One important factor is whether the parties have ceased sharing a marital home (Norviel at p. 1163 although the fact that the spouses have physically separated and taken up new addresses is not necessarily dispositive.  (Marsden at p. 434.)  The courts also consider whether the parties have continued their conjugal relations (von der Nuell, supra at p. 736), maintained their family life (Baragry at p. 447), continued to attend social outings together or continued to act jointly in financial matters.  (Norviel at p. 1161.)

On August 26, 2002, after discovering her husband had been unfaithful, Wife told Husband to pick up his belongings and leave the family residence.  Husband retrieved his things, which Wife had left outside the house on the front porch, and moved out, never to return.  We are satisfied substantial evidence exists that Husband believed the marriage to be over on August 26, 2002, and communicated his intent to end the marriage by retrieving his items and moving out.  The CA added that although one party's subjective intent is sufficient, the panel also concluded substantial evidence shows Wife believed the marriage was over in August 2002 and conveyed that intent to Husband by removing his belongings from the house, instructing him to come retrieve them, and never evidencing a desire to reconcile.

Thus, substantial evidence in the record supports the trial court’s ruling and while the continuing financial “entanglements” cited by Wife are a consideration to be weighed in deciding whether there was a complete and final break in the marital relationship, they are not a determinative factor in and of themselves.

Other contentions by Wife were rejected because in one way or another, she waived them.