Paul

A California Court of Appeals has ruled that a trial court properly denied spousal support to Mother who inflicted domestic violence on her children and caused them psychological damage through her conviction and incarceration for unlawful sexual conduct with a minor (one of their friends).

In the case of In re Marriage of Schu, Mother and Father were married in 1986, and subsequently had three children who are now adults. Between 1995, and 2001, Father worked in the oil industry in Algeria, spending 28 days there, and then 28 days at home.

Meanwhile, Mother became sexually attracted to one of children’s best friend (Victim), while Victim was still a child. When Victim was 12-years-old, Mother began having oral sex with him. Later the relationship progressed to intercourse, which continued until Victim went to college. On weekends, Mother would provide alcohol for her oldest child and his underage friends, and show them porn movies. The kids would drink until they were sick. The parties oldest son would have sex with underage girls in the house; Mother would have sex with Victim. Although Victim, who wanted to end the relationship, would plead and cry, Mother insisted that he continue to have sex with her. Mother threatened to tell Victims friends and family if he stopped.

The parties children all suspected that something was going on between Mother and Victim, but had no confirmation of the relationship until the parties second child came home to find Mother in the shower and Victim in only a towel. The parties oldest child became concerned after finding Mother and Victim in the bedroom with the door locked. The youngest child wondered why Victim was there when his best friend, the parties oldest child, was not. Fearful that the affair was discussed on the internet, Mother demanded that the second child give her Victims sisters social media password. When the second child refused, Mother had the oldest child hold the second child down while she cut a big chunk out of her very long hair. After that, the second child found it humiliating to go to school with her hair cut.

Subsequently, her home situation caused the second child to develop emotional issues serious enough to make her believe she needed counseling. When she asked Mother to send her to a counselor, Mother warned that a counselor would take her away. Second child understood this to mean that she was to keep quiet about things at home. Therefore, she kept her feelings bottled up to the extent that her friends called her mannequin; she also stated that she never wanted to have children.

Mother was subsequently arrested and pled no contest to seven counts of unlawful sexual conduct with a minor. She was later sentenced to six years in prison. She and Father also began divorce proceedings, and Father paid her $500 per month for spousal support. After their divorce trial, Trial Court found that Mother had sufficient assets to be self-supporting, including $160,000 of her own money, and her name on five to six bank accounts with her father. Mother also received about $914,000 in the community property division, in which she got half of Fathers retirement. Citing California Family Code Section 4320 sections (I) [trial court must consider documented evidence of domestic violence], (m), (n)[other just and equitable factors considered], and (k) [trial court must balance hardships], Trial Court refused to order spousal support for Mother.

Claiming that Trial Court impermissibly considered fault in denying spousal support, Mother appealed. Now, California Court of Appeals has affirmed Trial Courts decision. The Appellate Court has ruled that:

(1) California Family Code Section 2335 precludes Trial Court from admitting evidence of specific acts of misconduct in connection with the divorce case except as otherwise provided by statute;

(2) Family Code Section 4320 is that statute and mandates that Trial Court consider all enumerated factors before making spousal support order, several of which involve acts of misconduct;

(3) Family Code Section 4320(i) requires Trial Court to consider documented evidence of history of domestic violence by party seeking spousal support;

(4) Here, Trial Court correctly determined that Mothers conduct in permitting the oldest child to drink alcohol to the point of nausea and in cutting second child’s hair as punishment constitutes domestic violence (physical and emotional abuse);

(5) Mother provided the oldest child with alcohol and porn and assaulted the second child in order to molest Victim, refused to obtain psychological help for the second child, humiliated and psychologically devastated all three children by being arrested and convicted of sex crimes, and caused inestimable harm to Victim, all of which more than justified Trial Court in denying spousal support to Mother. Finding Mothers assets sufficient for her support (she has beneficial interest in accounts held jointly with her father), the Appellate Court affirms Trial Courts denial of spousal support.

A California Court of Appeals has ruled that Trial Court was not wrong by concluding that the funds in the parties brokerage account were a marital community loan from Mothers parents (not a gift) or by ordering stepped-down spousal support payments that were not in an amount sufficient to maintain the marital standard of living. In the case of In re Marriage of Grimes and Mou, Father and Mother were married in January of 2004, and separated in July of 2015. Father filed for divorce in April of 2016. During the marriage, Father worked as an engineering manager at Google/YouTube earning a six-figure base salary, plus bonuses. Mother, a Chinese immigrant who is fluent in English and Mandarin and held a masters degree in finance, worked as a treasury analyst and generally earned six-figures as well. From 2011, through 2015, Mother and Fathers yearly gross income rose from $316,260 to $778,660. They had a middle to upper middle-class lifestyle in Palo Alto, a child in private school, three cars, yearly vacations, and regular restaurant meals.

For a year after separation, Father paid the rent and utilities on the Palo Alto house to the tune of over $5,000 per month. Father estimated that he had paid voluntary spousal support to Mother of between $250,000 and $300,000 from July of 2015, to May of 2018.

When the parties decided to buy a house, Mother assured Father that she could get money from her brother or her parents, as a gift or a loan. A total of $229,936 was deposited into Mothers brokerage account from various relatives. However, when Father filed their joint income tax returns for 2014, and 2015, he reported gains from the account as income to him and Mother.

At trial, a vocational expert testified that at age 49, Mother would be a little disadvantaged in the job market, but that she was readily employable and able to work toward being self-supporting. The expert opined that there was a range of appropriate jobs for someone with Mothers education and work history, and that she was capable of earning between $101,008 and $123,257 annually.

As to the funds in the brokerage account, Mother testified that after she and Father decided not to buy a house, she offered to return the money that her relatives had provided, but they told her to keep it and invest it for them. Father said he believed that the funds were a gift or at worst, a loan.

After hearing evidence and argument, Trial Court found that the funds at issue in the brokerage account had not been shown to be a gift from Mothers parents, but rather a loan to the community. Trial Court ordered the loan debt divided equally between the parties, with each party to pay half of the loan to Mothers relatives. Trial Court ordered the rest of the brokerage funds divided equally between Mother and Father. Trial Court ordered Father to pay step-down spousal support to Mother of $3,000 per month from June 1, 2018, through December 31, 2019, plus 20% of Fathers additional income over $300,000; $2,000 per month from January 1, 2020, through December 31, 2021; and $1,000 per month from January 1, 2022, through November 30, 2026. Trial Court noted that after it set Mothers earning capacity at $90,000, she got a job earning $96,000, but found that Mothers job search efforts were not appropriately and fully focused. Trial Court set the termination of spousal support at either party’s death, Mothers remarriage, further court order or written agreement, or the date that the youngest child reached age 18 (November 30, 2026).

On October 29, 2018, Trial Court issued further findings and orders after hearing, ordering Mother to transfer half of the brokerage funds to Father and ordering Father to pay his half of the loan debt directly to Mother.

Claiming that Trial Court erred by characterizing brokerage funds as a loan and ordering so little spousal support, Mother appealed the first order after hearing. On January 23, 2019, Trial Court entered a divorce judgment that incorporated the earlier order.

Now, acting on Mothers appeal, California Court of Appeals has affirmed Trial Courts decisions. The Appellate Court has ruled that (1) Mother appealed from an unappealable order but justices choose to treat her appeal as having been taken from the January 23, 2019, judgment since it did not implicate the October 2018, order and doing so will not prejudice Father; (2) on the present record, Trial Court could reasonably reject Mothers testimony regarding the brokerage funds and infer that the parties treated the funds as a loan; and (3) Trial Courts spousal support award was not an abuse of discretion since Trial Court was not required to order support sufficient to maintain the parties marital standard of living, Trial Court considered the appropriate Family Code Section 4320 factors, and Mother could reasonably be expected to become self-supporting.

On December 6, 2018, a California Court of Appeals has ruled that a Trial Court was wrong by determining that the time period for California Code of Civil Procedure Section 917.7 (30-day statutory stay of order permitting a parent to remove a child from California) began to run on date it issued tentative order. According to the Court of Appeals, the time period begins to run on the date that Trial Court enters its judgment allowing the child to be removed from California.

In the case of Lief v. Superior Court (Nissan), Mother met Father in Israel in 2010. She then moved to San Diego, where she married Father the following year in 2011. Their son was born in 2014. In 2017, Father filed for divorce. Trial Court subsequently bifurcated the custody and visitation issues from the remaining issues in the parties divorce case and it held a trial on Mothers request to move to Israel with Child.

On August 10, 2018, Trial Court tentatively granted Mothers request. However, Trial Court reopened the hearing in response to Fathers reconsideration motion, in order to consider new evidence and argument. On November 7, 2018, Trial Court entered a judgment granting Mothers move-away request. Mother then notified Father that she planned to leave for Israel with Child on November 22, 2018.

Father promptly filed an ex parte application for a Trial Court order preventing Mother from leaving until after December 7, 2018, when the Code of Civil Procedure Section 917.7 30-day stay of judgment granting move-away request would have run. On November 21, 2018, Trial Court determined that the 30-day stay time period began to run when it issued its tentative ruling on August 10, 2018, denied Fathers application, and ordered him to return Child to Mother that evening.

Claiming that the 30-day time period did not begin to run until Trial Court entered its judgment on November 7, 2018, Father petitioned California Court of Appeals for a writ of mandate and immediate stay of the order letting Mother move on November 22, 2018. The Appellate Court does grant Fathers petition and issues the requested writ.

The Appellate Court has ruled that (1) Code of Civil Procedure Section 917.7 provides that the order permitting a minor child to be removed from California is stayed for a period of 30 days from the entry of judgment or order; (2) Trial Courts oral statement of decision was not a judgment or order (it contained several conditions to be met before Mother could move away with Child and Trial Court stated that it had not entered a judgment and its decision was still tentative); (3) pursuant to California Rules of Court Rule 3.1590(b), a tentative decision is not a judgment and is not binding on a Trial Court; and (4) Mother has conceded that Father is entitled to relief and agreed not to leave for Israel until December 7, 2018. Therefore, Appellate Court issues a writ commanding Trial Court to vacate its November 21, 2018, order and to enter a new order granting Fathers petition to prevent Mother from removing Child from California until 30 days after the entry of its judgment.

Before his death in 1990, Fathers father held multiple parcels of real property in various trusts, one of which was the Deluca Properties Trust (DPT). One of the properties in DPT was the Florida Street property (an apartment complex). After Fathers father died, Father, his sister (Sister), and their brother (Brother) engaged in years of litigation over their fathers trusts. Meanwhile, Father married Mother on September 7, 1996.

On October 25, 1996, Father, Sister, and Brother reached a settlement agreement to resolve the trust litigation, which included the usual release of claims. Father received commercial properties in Santee, Encinitas, and San Diego; Sister received the Florida Street property and a $75,000 promissory note from Father secured by a first deed of trust on the San Diego property, along with a $32,000 forgiveness of debt from Brother. Brother received title to another San Diego property and a $250,000 promissory note from Father, secured by a third-priority deed of trust on the Santee and Encinitas properties. The agreement also provided that Father relinquished his status as a trust beneficiary and agreed that the trust assets belonged solely to Sister and Brother, and that the agreement could be amended only by a written agreement signed by all the parties.

In September of 1997, as Father would later testify, he and Sister signed a second agreement (Amendment to Settlement Agreement and Mutual Release), which provided that Sister would transfer the Florida Street property to Father by grant deed in exchange for a promissory note of $164,700, secured by the property. Father was to have the option of assuming the first deed of trust of $235,300, or continuing to make the monthly payments on that deed of trust. Father would also pay $20,000 to Sister. The agreement expressly stated that it was intended to be a redistribution of trust assets and not to change any of the provisions of the original agreement, except as stated. Father and Sister signed the agreement; Brother did not.

In January of 1998, at Fathers request, Mother signed a quitclaim deed transferring any interest she had in the Florida Street property to Father as his separate property. In 2002, she signed a spousal acknowledgment that she had no interest in the property in conjunction with a refinance on it.

Mother and Father separated on November 21, 2011. In subsequent proceedings, Father was awarded sole custody of their two children. In the divorce papers, Father stated that he owned and operated an insurance agency, and also owned and managed several income-producing rental properties. Mother, who had a B.A. and a paralegal certificate, had worked as a legal secretary all during their marriage. At trial, Mother claimed that the Florida Street property was community property, but Father maintained it was his separate property. Father claimed that the property was part of his inheritance, while Mother contended that he acquired it during their marriage by a sale between him and Sister. Accountants for both parties testified about the methods each used to calculate Fathers income and determine whether Father had used community property funds to acquire the Florida Street property.

When the trial concluded, Trial Court found, among other things, that the Florida Street property was Fathers separate property, that Father had overcome the presumption of undue influence regarding Mothers signing the quitclaim deed and spousal acknowledgment, and that tracing method used by Fathers accountant was accurate. Trial Court also included the payments on principal Father made to service loans on his income producing properties as income available for spousal support and ordered Father to pay $7,500 per month to Mother for spousal support.

Mother appealed Trial Courts determination that the Florida Street property was Fathers separate property and Father appealed the spousal support order. Now, a California Court of Appeals has affirmed Trial Courts decision in part and has reversed the decision in part.

With respect to the characterization of Florida Street property, the Appellate Court has ruled that Trial Court was wrong in determining that the Florida Street property was Fathers separate property because (a) Father acquired it from Sister by purchasing it, not by inheritance, (b) the amended settlement agreement was not valid because Brother did not sign it,(c) Fathers inception of title argument is unpersuasive, (d) Fathers accountants tracing evidence was insufficient to show that he acquired the property solely with separate funds, and (e) Mothers signing quitclaim deed and spousal acknowledgment did not constitute valid transmutation because Mother lacked full knowledge of the facts and the documents did not contain statutorily required language regarding the change in ownership and characterization of the property. Appellate Court also ruled that Father is entitled to California Family Code Section 2640 reimbursement on showing of his separate property contributions.

With respect to the issue of spousal support, the Appellate Court has ruled that Trial Court was also wrong by including the payments Father made on the property loans as income available for spousal support. Finding guidance in a Wyoming Supreme Court case (Fleenor v. Fleenor (Wyo.1999) 992 P.2d. 1065), the Appellate Court states the general rule that the principal portion of a business mortgage payment may be deductible from income available for spousal support if Trial Court determines that the payment reasonably and legitimately reduces net income for support under the relevant circumstances (ordinary and necessary business expense versus substantial hardship to payor).

The Appellate Court reverses Trial Courts orders regarding the Florida Street property and spousal support payments and sends the case back to Trial Court for further proceedings, but affirms all other provisions of the divorce judgment.

A California Appellate Court has ruled that a Trial Court was wrong when it declined to enforce form I-864 (affidavit of support of immigrant by sponsor) in a divorce action because Wife made insufficient efforts to find work. Wife had no duty to mitigate damages and she had standing to enforce that form in state divorce court.

In the case of In re Marriage of Kumar, Husband, a U.S. citizen, and Wife, a citizen of Fiji, were married in Fiji on September 22, 2012, in an arranged marriage. Husband then filed a form I-130 petition for an immigrant visa for Wife. He also signed a form I-864 affidavit of support, which obligated him to support Wife for 10 years at an income that is at least 125% of the Federal Poverty Guidelines for his household size. The affidavit also stated that Wife would have the right to sue Husband for support if Husband failed to pay.

Wife arrived in the U.S. from Fiji in July of 2013, and began living in Daly City, California with Husband and his family. Wife would later allege that Husband began abusing her almost immediately. Husband refused to speak to Wife except to tell her that he didn’t want her and she should go back to Fiji. Wife claimed that Husband and his family tricked her into going to Fiji with them, and once there, he abandoned her and someone tore the legal permanent resident stamp out of her passport. After receiving temporary travel documents from the U.S. Embassy in Fiji, Wife returned to the U.S. on December 29, 2013.

On January 14, 2014, Husband filed for an annulment or alternatively for a divorce. In her response, Wife asked Trial Court to deny Husbands annulment petition, but to grant a divorce judgment. In April of 2014, Wife followed up with a financial statement showing that she had applied for TANF, SSI, or GA/GR, but had not received any benefits and had no salary.

At the May 7, 2014 hearing on spousal support, Wife’s attorney told Trial Court that Husband and Wife had agreed that Husband would pay W $675 per month for temporary support, but Wife would not agree to a seek work order or a Gavron warning [that she has a duty to become self-supporting within a reasonable period of time which usually is one-half the length of the marriage]. Counsel stated that Wife was on general assistance and living in a shelter, but could not seek work because Husband had stolen her current residency card. Husbands attorney countered that it was Wife’s choice to come here and stay here, thus, she had a duty to become self-supporting. Wife’s attorney then asserted that Husband had signed a form I-864 affidavit that obligated him to support Wife for 10 years or 40 quarters. Husbands attorney countered that the affidavit was irrelevant in this court.

When the hearing concluded, Trial Court ordered Husband to pay $675 per month for temporary support, per their agreement, declined to make a seek work order, gave a Gavron warning, and ordered Wife to make reasonable and good faith efforts to obtain the paperwork needed to enable her to work in the U.S.

On September 3, 2014, Husband sought an order terminating spousal support and granting a status-only divorce judgment. Husband claimed that Wife had not made the necessary efforts to become self-supporting and asked Trial Court to impute the income to Wife that she could expect to earn from a full-time minimum wage job. In her responsive declaration, Wife stated that Husband had stolen her green card and she was waiting for replacement papers. Wife also stated that she received cash aid and food stamps until Husband began paying her spousal support. Wife attached the I-864 form to her response, and asked Trial Court to continue support based on its requirements. Wife followed up with an amended memorandum of points and authorities, asking Trial Court to enforce the I-864 support requirements and to order Husband to pay $1,196 per month in accordance with the poverty guideline for 2014. Wife contended that the affidavit was an enforceable contract, was in addition to any spousal support payable under state law, and that the divorce did not wipe out its obligation. Wife also asserted that she was not required to file a separate contract action to obtain enforcement of the affidavit.

At the March 18, 2015 hearing, Trial Court heard argument on Husbands request to terminate spousal support and Wife’s request to enforce the affidavit. Wife’s attorney told Trial Court that Wife was working part-time at Blimpies for $9 per hour, and taking courses to obtain her GED. Trial Court terminated the temporary support order effective immediately. When Wife’s attorney asked for a ruling on enforcement of the affidavit, Trial Court responded that it declined to order spousal support because Wife failed to work up to her full potential. Trial Court stated that it was declining to enforce the affidavit because Wife failed to use her best efforts to find work, and told Wife to file a federal action. That same day, Trial Court entered the parties status-only divorce judgment and an order terminating spousal support.

Claiming that Trial Court was wrong by failing to enforce the affidavit on the basis of her work efforts, Wife appealed. Now, a California Court of Appeals has reversed Trial Courts decision. The Appellate Court has ruled that (1) I-864 affidavit creates a contractual right to minimum support from sponsor to immigrant; (2) sponsored immigrant may enforce I-864 contract in either the federal or state court (including in the divorce court); and (3) per Liu (7 Cir 2012) 686 F.3d 418, Wife has no duty to mitigate damages (no seek work requirement). The Appellate Court has ruled that Trial Court was wrong by denying Wife’s contract claim under the affidavit on the basis that she failed to use her best efforts to seek work. The Appellate Court reverses and sends the case back to Trial Court in order for Trial Court to consider that claim in accordance with this opinion.

A California Court of Appeals has ruled that separate restraining orders granted by Trial Court in response to separate requests by Mother and Father qualify as mutual restraining orders; and Trial Court was wrong by failing to make the required factual findings under California Family Code Section 6305 as to which party was the primary aggressor and which acted primarily in self-defense.

In the case of Melissa G. v. Raymond M., Mother and Father Son was born in 2010. Sometime that year, Father obtained a three-year restraining order against Mother; he did not renew the order before it expired in 2013. In the meantime, Trial Court granted Mother primary physical custody of Son. On January 18, 2017, Trial Court ordered weekly Saturday visits with Son for Father.

Fathers first visit with Son took place on January 21, 2017. According to Father, he noticed that Sons pants and shirt were sewn together in such a way that he could not use the bathroom. Father took the clothing apart, noticed small cuts on Sons body where the garments had been sewn together and saw a tape recorder fall out. When Father brought Son back at the end of the visit, Mother accused him of stealing the tape recorder and hit Father several times with her fist, bruising his cheek and eye. She also allegedly threw cake in Fathers face and on his car. In Mothers version of the incident, she claimed to have photos of Sons clothing refuting Fathers claim that they were sewn together, and video evidence of Father attacking her.

On February 4, 2017, Mothers friend brought Son to the custody exchange and videotaped it on her phone. According to Father, the friend shoved her phone in his face and called him a racial epithet. When Father tried to leave, he saw Mother and a man waiting outside, and returned to the police station where the exchange took place. Once inside, Father said, Mothers friend spit on him, and he knocked her phone out of her hand. In her declaration, Mother denied Fathers version of the event and claimed to have video to prove her version.

On March 4, 2017, Father showed up at the police station, but Mother did not. Father claimed that he then went to Mothers house, where she assaulted him. He then brought police to her house, but she was no longer there. She showed up with a group of people after the police left and told Son to run to his grandmothers house when Father approached her. Mother then grabbed Fathers arm, bit him, punched and scratched his face, leaving teeth marks and other bruises that were documented by the police when they filed a report. Father also asserted that Mother called him later to ask if it hurt when he bit himself. Mothers version of the incident had her calling Talking Parents to say that she was canceling Fathers visit because of his behavior. She said she was home when Father showed up with a police officer, but then called 911 and spoke to another officer, who came to her house and left a card describing the incident and giving her a number to call. Mother denied inflicting any physical harm on Father and contended that Father had a long history of blaming his own assaults on the other person. Later, Mother claimed that she had received hundreds of blocked calls and voicemails from Father or a woman using a voice changer.

On March 8, 2017, Father filed a request for a Domestic Violence Protection Act restraining order against Mother and for sole legal and physical custody of Son; Father attached a declaration detailing the circumstances surrounding the visitation problems. In response, Mother sought an order that Fathers visits with Son be supervised.

On May 4, 2017, Mother filed her own request for a D.V.P.A. restraining order against Father and for an order curtailing his visitation. Mother attached 12 pages of details regarding the visitation problems, along with several exhibits. Father filed his opposition to her request.

On May 23, 2017, Trial Court held a hearing on both requests, heard Mother testify that she recognized Fathers voice on the calls and voicemails, and discussed the evidence on the parties declarations. When Mother stated that she wanted Trial Court to at least order mutual restraining orders, Fathers counsel reminded Trial Court that it must find that both parties acted as primary aggressors and neither acted primarily in self-defense before ordering mutual orders. Fathers counsel argued that Mothers versions of events were not credible, while Fathers were.

Trial Court reasoned that it did not have to analyze which party was the aggressor because there had been independent acts of domestic violence. Trial Court then issued two restraining orders, one against each party, saying that it was just going to order these two people to leave each other alone. Trial Court made no findings of fact as to which party was the primary aggressor and which acted primarily in self-defense. Trial Court declined to change custody and then made orders regarding implementing existing custody orders. After the hearing, Trial Court issued two separate restraining orders, each on Judicial Council Form DV-130.

Claiming that Trial Court was wrong by failing to issue factual findings as required by California Family Code Section 6305, Father appealed, and now the California Court of Appeals has reversed Trial Courts decision and has remanded the case back to Trial Court for further proceedings.

The Appellate Court has ruled that (1) no prior published case has considered whether, after one single hearing, Trial Court may enter two restraining orders granting two separate applications without making factual findings required by Family Code Section 6305; (2) Family Code Section 6305 precludes Trial Court from making mutual D.V.P.A. restraining orders unless (1) both parties personally appear and present written evidence of abuse or domestic violence using mandatory Judicial Council forms; and (2) Trial Court makes detailed findings of facts indicating that both parties acted as a primary aggressor and neither party acted primary in self-defense; (3) Trial Court may make mutual restraining orders on one order or two separate orders; (4) Trial Court must consider provisions of California Penal Code Section 836(c)(3) regarding dominant aggressors in determining whether both parties acted primarily as aggressors; (5) legislative history and case law support a requirement that Trial Court must make detailed findings pursuant to Family Code Section 6305, regardless of whether parties two requests arise from the same incident or different incidents; (6) the two restraining orders issued by Trial Court here constitute a mutual order and trigger Family Code Section 6305 requirements; (7) Trial Court erred by issuing mutual order without making findings required by Family Code Section 6305; and (8) substantial evidence supports finding that Father was primary aggressor in at least one incident. The Appellate Court reverses mutual restraining orders and sends the case back to Trial Court for Trial Court to make factual findings and to reconsider the parties restraining order requests based on those findings.

In the case of In re Marriage of Begian and Sarajian, Mother and Father were married in August of 1993, and later they had two children. On April 29, 1996, Mothers mother (Grandmother) signed a quitclaim deed that transferred an undivided 48% interest in a residential property to Mother. Grandmother retained a 52% interest in the property. That same day, Father signed a separate quitclaim deed transferring all of his right, title, and interest (community property or otherwise) in the property to Mother as her separate property. On June 21, 2001, Grandmother and Mother executed an Individual Grant Deed granting their respective interests in the property to Grandmother, Mother, and Father, all as joint tenants, giving Father a community property interest in the property.

Five years later, on May 1, 2006, Grandmother, Mother and Father signed a Trust Transfer Deed, which stated that For No Consideration each of them granted to Mother the following real property and listed the legal description of the property. The deed also stated that the conveyance was a bona fide gift which was not subject to documentary transfer tax.

Eight years later, on December 19, 2014, Mother created a separate property trust, with herself as trustee and the parties children as beneficiaries. She also signed another Trust Transfer Deed granting the property, as her separate property, to herself as trustee of the newly created trust.

Mother and Father separated in September of 2015. On June 29, 2016, Father filed for divorce, and asked Trial Court to confirm that the property was community property. In response, Mother contended that the property was her separate property.

Trial Court bifurcated (separated) the issue of the property’s characterization as community property or Wife’s separate property and set that issue for trial. At trial, Father argued that the Trust Transfer Deed he had signed did not contain an unambiguous declaration of his intention, as the adversely affected spouse, to transmute (change the character of) his community property interest in the property to Mothers separate property. Father claimed that the deed had been executed in conjunction with estate planning and that there had been absolutely no mention of changing or adversely affecting his property rights in the property. In opposition, Mother argued that the word grant in the deed was an unambiguous declaration that Father intended to change the characterization of his interest in the property from Joint Tenancy to Mothers separate property. Mother contended that the deed could not be interpreted as transferring the property into her trust because the deed did not mention her trust, which did not exist when the deed was signed.

In a statement of decision issued on August 29, 2016, Trial Court found that the word grant in the Trust Transfer Deed was an express declaration of Fathers intent to transfer his interest to Mother and that the mention of a bona fide gift put Father on notice that he was making a gift to Mother that changed the characterization or ownership of the property. Trial Court also determined that the title of the deed did not mean that the property was being transferred into a trust, since no trust was identified on the face of the deed. On September 14, 2016, Trial Court filed an order deeming the property to be Mothers separate property. On October 3, 2016, Trial Court certified the issue of the characterization of the property for immediate appeal.

Now, acting on Fathers appeal, the California Court of Appeal has reversed Trial Court. The Appellate Court has ruled that (1) pursuant to California Family Code Section 852(a), a valid transmutation must be made in writing by an express declaration made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected; (2) pursuant to the California Supreme Courts decision in the case of In re Estate of MacDonald (1990) 51 Cal.3d 262, the declaration must expressly state that the characterization or ownership of the property is being changed, without resort to extrinsic (outside) evidence; (3) pursuant to the Appellate Courts decision in the case of In re Marriage of Barneson (1999) 69 Cal.App.4th 583, a conveyance that is reasonably susceptible of more than one meaning does not meet the express declaration requirement; (4) here, the use of the word grant is ambiguous because it expresses Fathers intent to transfer an interest in the property, but does not specify what interest is being transferred; (5) the title Trust Transfer on the deed suggests that Father might have been transferring his community property interest to Mother to place into a trust without changing its characterization or ownership; and (6) without extrinsic evidence, which is prohibited, the interest that Father intended to transfer cannot be definitively determined. Therefore, the Appellate Court concludes that the Trust Transfer Deed was not a valid transmutation of Fathers interest in the property and thus, it reverses Trial Courts decision.

A California Court of Appeals has ruled that a Trial Court made a mistake by determining that an interspousal transfer grant deed did not qualify as a transmutation agreement changing the character of a property from community property to separate property.

In the case of In Re Marriage Of Kushesh and Kushesh-Kaviani, Husband and Wife were married in January 2010, but separated two weeks after their only child was born in April 2011. In August 2011, Husband filed for divorce. One bone of contention in the divorce case was the characterization of a condo in Laguna Niguel acquired in May 2010. Evidence showed that the condo was three doors down from the condo in which the parties lived; it had a purchase price of $265,000; and it was purchased with a down-payment of $134,000. The deed to the condo was in Wife’s name as a Married Woman as Her Sole and Separate Property and the loan application and the loan were in Wife’s sole name. Moreover, on May 21, 2010, Husband signed an Interspousal Transfer Grant Deed (ITGD) stating that he granted the condo described therein to Wife as her sole and separate property.

In the divorce case, Wife and Husband both claimed the condo as their own separate property. At trial, testimony indicated that the down-payment for the condo had come from Wife’s fathers funds, but had been funneled from Kuwait through Husbands bank account. Trial Court found that the condo was presumed to be community property since it was acquired during the parties marriage and that the title presumption was of no concern. Trial Court further found that the ITGD did not contain the magic words that would make it a transmutation agreement (an agreement between married people that changes the character of a property from separate to community property or vice versa from community to separate property). Trial Court then ordered the condo sold, with Wife to receive reimbursement for her separate property contribution and the parties to equally divide the remaining proceeds. Wife appealed, and the Court of Appeals has now reversed the Trial Court and has remanded the case back to Trial Court for further proceedings.

The Appellate Court has ruled that (1) the ITGD does contain sufficient language to constitute a transmutation of Husbands interest in the condo to Wife (it says grant to convey title, interspousal means from spouse-to-spouse, and it specifically states that the transfer was to Wife as her sole and separate property); and (2) transfers from spouse to spouse are subject to rebuttable presumption of undue influence. The Appellate Court has ruled that ITGD validly transmuted the condo to Wife as her separate property. Thus, the Appellate Court has reversed and remanded the case back to Trial Court to determine whether Wife can rebut the presumption of undue influence in having Husband signing the ITGD.

A California Court of Appeals has ruled that Trial Court was wrong in reducing the child support obligation of a high earner where salary reduction did not materially impair his ability to pay current child support amount because his other wealth more than made up for the reduction; Trial Court imputed too low a rate of return on his many millions in assets.

In the case of In re Marriage of Usher, Mother and Father were married in 2006; their child was born in February 2006. During the marriage Father, a successful director and producer earned $4.25 million per year; Father also had substantial assets in cash, investment funds, and real and personal property. Mother and Father separated in 2008.

In October 2009, Trial Court entered the parties stipulated divorce judgment which provided, among other things, that Father would pay child support of $12,500 per month, would permit Mother and Child to live in his Pacific Palisades home until June of 2010, and would pay an additional $5,000 per month for child support after they moved out. Father was also to pay spousal support of $15,329 per month to Mother for two years (October 2009, through September 2011), after which Mother waived any further right to spousal support. The judgment stated that Father was a high earner under Family Code Section 4057(b)(3), that the child support amount deviated from guideline, that Childs needs would be adequately met by the chosen amount, and that the parties had arrived at the amount with the aid of attorneys and accountants. In June of 2010, Mother and Child moved into another house in the same Pacific Palisades area, which rented for $7,500 per month, and Fathers child support payments increased to $17,500 per month.

In June of 2014, Father filed a request to reduce his child support payments to $5,184 per month, plus a percentage of any income earned above $841,272 per year. Father claimed to be earning substantially less now ($70,106 per month instead of $350,000 per month) and that the requested amount was arrived at by DissoMaster (the program that calculates California child support guideline), using his current salary, minus insurance and property taxes, and a 30% timeshare for Father. In opposition, Mother contended that Fathers salary reduction was not a material change of circumstances because he had numerous alternative sources of income and assets from which to pay child support. Before the hearing, Father conceded that Trial Court should impute some income from his other assets and contended that a rate of return of 1% would be reasonable in the current financial climate. Fathers CPA claimed that Father was against tying up his assets for long periods and was pursuing a very conservative investment strategy. Mother contended that Fathers investments should yield a 4.5% return.

At the hearing, CPAs for both parties testified regarding Fathers income, Fathers investment income and the rate of return, and the amount of income to be imputed to Mother. When the hearing concluded, Trial Court found that the reduction in Fathers salary constituted a material change in circumstances, imputed a 4.5% return on Fathers non-income producing assets (anticipated property sales) and a 1% return on his other investments (Fathers average for last five years). Trial Court calculated Fathers monthly income at $140,000 and Mothers imputed income at $3,343 per month, deducted property taxes on Fathers Montecito home of $6,000 per month and came up with a child support order of $9,842. Trial Court also ordered Father to pay Ostler and Smith (a percentage) child support on any earned income of more than $1,681,692 per year, plus Childs private school tuition, medical insurance premiums, medical expenses not covered by insurance, and 85% of Childs costs for extracurricular activities. Claiming that Trial Court erred by reducing child support and imputing a rate of return on Fathers investments that was too low, Mother appealed.

Now, California Court of Appeals has reversed Trial Court. The Appellate Court has ruled that:

(1) Where a child support order is arrived at by a stipulated divorce judgment, Trial Court must consider the parties intent and their reasonable expectations when making a reduction;

(2) This Stipulated judgment stated that current child support payment was necessary to meet the Childs needs and support him in accordance with Fathers lifestyle;

(3) At the hearing, Father presented no evidence that his salary deduction made him unable to pay the current child support amount;

(4) The reduction in income, standing alone, is not a sufficient change of circumstances to support a child support reduction where payor is still able to meet his obligation with income from other assets;

(5) The parties agreement that the current child support order was necessary to meet Childs needs was evidence that a child support reduction would cause Childs needs to be unmet (Father failed to show that Childs financial needs had diminished);

(6) Evidence did not support imposition of a 1% rate of return on Fathers investment portfolio; and

(7) Trial Courts imputing an unreasonably low rate of return on Fathers investments resulted in a child support order that deprived Child of funds to support the lifestyle that Father had agreed was appropriate and could easily afford to provide.