Marriage of Olson
Filed 6/21/07 Marriage of Olson CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
In re the Marriage of JEANIE AND STEPHEN OLSON.
APPEAL from the Superior Court of Riverside County. Mark Ashton Cope, Judge, and Lori Kennedy, Temporary Judge (Pursuant to Cal. Const., art. VI. 21). Affirmed in part, reversed in part, and remanded with directions.
Dabney B. Finch for Appellant Jeanie Olson.
James W. Wiley for Respondent Stephen Olson.
On March 2, 2000, Jeanie Olson (Wife) filed for dissolution of her marriage to Stephen Olson (Husband). The trial court bifurcated the proceedings to resolve separately the issue of date of separation, and on January 22, 2001, the court found the date of separation to be January 31, 1994. An interim judgment was filed on April 10, 2002, dissolving the parties marriage as of January 22, 2001, setting the date of separation at January 31, 1994, and reserving jurisdiction over other matters.
After a bench trial to determine community and separate property and debts, and rights of reimbursement, the court ruled that Wife shall repay Husband for payments made on her behalf, and Husband shall be reimbursed for principal payments he made toward the residence after date of separation. Judgment was filed on October 12, 2005, and notice of entry of judgment was filed on December 13, 2005.
Wife filed notice of appeal on February 9, 2006. Wife contends the trial court erred in setting the date of separation, in awarding repayment to Husband by Wife for monies paid on Wifes behalf for purchase and use of an automobile, and in failing to award reimbursement to the community for the fair rental value of the family home during Husbands exclusive postseparation occupancy.
For the following reasons, we affirm in part and reverse in part, and remand to the trial court for a determination on the issue of reimbursement to the community for the fair rental value of the home.
I. STATEMENT OF FACTS
The parties were married on December 29, 1973. Over the years, they began to experience increasing strife in their relationship, and on March 2, 2000, Wife petitioned for dissolution of the marriage. In her petition for dissolution, Wife claimed August 22, 1999, as the date of separation. In his response, Husband declared the date of separation to be September 1, 1993. The parties lived in the same house throughout the period in dispute, i.e., SeptemberÂ 1, 1993, to August 22, 1999.
At trial, the parties provided sometimes confusing and often contradictory testimony regarding the conditions under which they lived during the approximate six years in question. Wife testified that while she chose to no longer sleep in the same bedroom as Husband after January 1994, she harbored the subjective intent to maintain the marriage until she moved out of the residence on August 22, 1999. In support of this claim, Wife testified that the couple filed their taxes jointly through 1999, took family vacations until 1996, attended family holiday parties through 1998, and bought a car together in March 1998. She also claimed they sought marriage counseling during the period, but conceded during questioning by the court that those sessions took place no later than 1994.
Husband testified that after several years of acrimony, he formed the subjective intent by September 1993 to end the marriage. In December 1993, he closed the couples joint bank accounts, and opened accounts in his name alone. He acknowledged that during the period in question the couple attended some family holiday parties and sporting events for their sons, but he asserted that they did not sit together at their sons sporting events, did not attend holiday parties at Husbands company, and they attended family holiday parties by arriving and leaving separately. Husband also testified that in 1993 he sought the advice of an attorney regarding dissolution of the marriage, but declined to pursue divorce because of the costs involved.
Husband testified that upon their return from a problematic family vacation in September 1992, Wife declared to Husband that she intended to live her own life. Husband claimed that after making this declaration, Wife began to spend a couple of days per week with friends, staying out all night or returning home late, and that the couple ceased speaking to each other on a daily basis.
After closing the community bank accounts, Husband made all mortgage payments on the family residence from his separate bank account. He also used his separate funds to make repairs and improvements to the residence. In 1998, Husband purchased a used car, which Wife drove exclusively. He made almost all payments on the vehicle purchase loan, and paid all insurance and license fees. Also in 1998, Husband paid $3,530 to discharge a loan taken out by Wife after the parties separation.
A. Appeal Is Timely
Husband argues that Wife was required to appeal the courts interim judgment on the bifurcated issue of date of separation immediately, and her failure to do so precludes such an appeal after final judgment. Husband cites several provisions of the Family Code and California Rules of Court in support of his argument, but he fails to cite the applicable law: California Rules of Court, rule 5.180(h)(1). Wife filed notice of this appeal within 60 days of notice of final judgment, as required by former California Rules of Court, rule 2(a). Thus, we conclude that Wifes appeal of the courts ruling on date of separation is timely, and we shall now consider the substance of the parties arguments.
B. Date of Separation
1. Standard of Review
Wife claims the essential facts concerning the date of separation are undisputed and argues for independent review. (In re Marriage of von der Nuell (1994) 23 Cal.App.4th 730, 736 (von der Nuell).) Husband contends, however, that a trial courts finding of fact is binding on the appellate court if it is supported by sufficient evidence or if it is drawn from evidence which is conflicting or subject to differing inferences. (In re Marriage of Walter (1976) 57 Cal.App.3d 802, 805.) We hold that a determination of the parties subjective intent presents a question of fact, and is thus reviewed for sufficient evidence. (In re Marriage of Marsden (1982) 130 Cal.App.3d 426, 445; see also Feldman v. Nassi (1980) 111 Cal.App.3d 881, 887.) Accordingly, we review for sufficient evidence the trial courts findings regarding date of separation.
2. Date of Separation: Living Separate and Apart
Earnings and accumulations while living separate and apart are the separate property of the spouse. (Fam. Code, Â 771, subd. (a).) Because the parties rights to property can be greatly affected by the date of separation, parties to a dissolution of marriage often fight vigorously about it. Unfortunately, the Legislature has neither defined living separate and apart nor specified a standard for determining it. Adding to the challenge, [m]any marriages are on the rocks for protracted periods of time and it may be many years before the spouses decide to formally dissolve their legal relationship. (In re Marriage of Umphrey (1990) 218 Cal.App.3d 647, 657, fn. 2.)
To resolve date-of-separation disputes equitably, courts have crafted a two-part test. A married couple is deemed to be separated when the husband and wife have come to a parting of the ways with no present intention of resuming marital relations. (In re Marriage of Imperato (1975) 45 Cal.App.3d 432, 435-436 [superseded by statute on other grounds as stated in In re Marriage of Duncan (2001), 90 Cal.App.4th 617, 624-625], citing Makeig v. United Security Bk. & T. Co. (1931) 112 Cal.App. 138, 143 (Makeig).) No particular facts, including whether the husband and wife live in separate residences, are per se determinative; the question to be resolved is whether the parties conduct evidences a complete and final break in the marital relationship. (In re Marriage of Baragry (1977) 73 Cal.App.3d 444, 448 (Baragry).) The standard of proof required at trial for determining date of separation is a preponderance of evidence. (In re Marriage of Peters (1997) 52 Cal.App.4th 1487, 1493.)
In Baragry, supra, 73 Cal.App.3d 444, the court found that the parties conduct did not demonstrate a complete and final break in the marital relationship, despite the fact that the husband moved out of the family residence and took an apartment with his girlfriend. (Id. at pp. 447-448.) The court cited as evidence in support of its finding the following facts: the husband ate frequently at the family residence; he took his family on trips, including a week with the wife in Sun Valley without the children; he attended social functions with the wife; and, he sent gifts and cards to her on holidays. (Id. at p. 447.) Furthermore, the court observed that for four years after the husband moved out of the family residence the parties continued to file joint income tax returns, and the husband maintained his voting registration at the family residence. (Ibid.) Thus, Baragry amply demonstrates how a court discerns the subjective intent of the parties by examining [a]ll factors bearing on either partys intentions. (In re Marriage of Hardin (1995) 38 Cal.App.4th 448, 452; accord, In re Marriage of Manfer (2006)144 Cal.App.4th 925, 930.)
In von der Nuell, supra, 23 Cal.App.4th 730, the court explicitly combined the Makeig, supra, 112 Cal.App. 138, and Baragry, supra, 73 Cal.App.3d 444, definitions, stating: [L]egal separation requires not only a parting of the ways with no present intention of resuming marital relations, but also, more importantly, conduct evidencing a complete and final break in the marital relationship. (Von der Nuell, supra, 23 Cal.App.4th at p. 736, italics in original.) In von der Nuell, the husband moved out of the family residence on November 1, 1987, but until the spring of 1991, the parties maintained joint checking accounts, credit cards, and tax returns, and took title to an automobile jointly. (Id. at p. 733.) The husband maintained close contact with the wife, including frequent visits to the home; they went together on vacations, went out socially, sent cards and gifts on special occasions and holidays, and continued having sexual relations with one another throughout the period between early 1988 and the spring of 1991. (Ibid.) The husband continued to contribute financially to the community. (Ibid.) Also, the husband and wife attempted to reconcile until June 1991, when the wife decided to terminate the marriage after learning of husbands intent not to pay any further support to the marital community. (Ibid.) These facts led the appellate court to overturn the trial courts interlocutory judgment, concluding that regardless of the parties present intention on November 1, 1987, a complete and final break in the marriage did not occur at that time. (Id. at p. 737.) Thus, the court in von der Nuell stressed the importance of looking to the parties conduct, as evidence of their intentions, to determine date of separation.
Wife urges that In re Marriage of Norviel (2002) 102 Cal.App.4th 1152 (Norviel), a more recent case than either Baragrysupra, 73 Cal.App.3d 444, or von der Nuell, supra, 23 Cal.App.4th 730, should guide our ruling, as it was decided upon facts substantially similar to those found in the present case. In Norviel, the parties remained living in the family residence for a period of several weeks after the husband announced to the wife that he considered their marriage finished and the couple agreed to separate. (Norveil, supra, 102 Cal.App.4th at p. 1155.) The appellate court noted that while the period in dispute was short, its determination would have significant financial repercussions for the parties because the husband had reaped large gains in stock options during the period. (Id. at p. 1158.) The court went on to find that because the couple remained living in the same house after their decision to separate âˆ’ in fact, it noted, nothing changed as a result of the husbands decision to separate except the parties habit of sometimes taking Sunday dinner alone together âˆ’ their conduct did not satisfy the test articulated in von der Nuell. (Norveil, supra, 102 Cal.App.4th at p. 1164.)
Wife contends that the ruling in Norviel effectively precludes a finding of living separate and apart any time a couple continues to reside in the same house. A careful reading of Norviel, however, reveals that the rule announced in that case expressly provides for situations in which spouses continue to reside together after a decision to separate: The plain language of the statute and the weight of persuasive authorityÂ .Â .Â . support the view that spouses are not living separate and apart within the meaning of the statute unless they reside in different places. Typically, that would entail each spouse taking up residence at a different address. Â .Â .Â .Â  In any event, our conclusion does not necessarily rule out the possibility of some spouses living apart physically while still occupying the same dwelling. In such cases, however, the evidence would need to demonstrate unambiguous, objectively ascertainable conduct amounting to a physical separation under the same roof. (Norveil, supra, 102 Cal.App.4th at pp. 1163-1164, italics added.) Contrary to Wifes contention that Norviel represents a departure from precedent, we read the caseas an affirmation of the settled proposition that where parties continue to live under the same roof after the date they manifest the intent to end the marriage, the court should scrutinize the parties behavior for other objective evidence of separation.
The trial court in the present case expressly applied the rule found in Baragry, supra, 73 Cal.App.3d 444, and von der Nuell, supra, 23 Cal.App.4th 730, and appears to have implicitly considered the guidance offered in Norviel, supra, 102 Cal.App.4th 1152. In September 1992 Wife declared that she intended to live her own life. Husband claimed that he knew the marriage was over by September 1993. Nevertheless, both parties continued to live at the residence until August 22, 1999. Husband testified that in December 1993 he closed the couples joint bank accounts and opened accounts in his name alone. In January 1994, Wife moved out of their mutual bedroom and slept exclusively on the couch. The couple no longer spoke on a daily basis; the parties no longer held themselves out publicly as a couple; they did not sit together at their sons sporting events, did not attend holiday parties at Husbands company; and, although they attended some family parties together, they arrived and left separately. And while we agree with Wifes argument that the parties practice of filing joint income tax returns through the year 1999 is evidence of a continuing marital relationship, we find such evidence is insufficient to overcome the significant, compelling evidence to the contrary. Thus, we conclude that the parties testimonies regarding their subjective intentions, coupled with their affirmative acts, provides sufficient evidence for the trial court to fix the date of separation as January 31, 1994.
C. Reimbursements for Automobile Payments
Where, as here, the trial court is vested with discretionary powers, we review its ruling for an abuse of discretion. [Citation] (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 625.) An abuse of discretion occurs where after calm and careful reflection upon the entire matter, it can be fairly said that no judge would reasonably make the same order under the same circumstances. (In re Marriage of Lopez (1974) 38 Cal.App.3d 93, 114.)
In 1998, an Astro van owned as community property and used exclusively by Wife was repossessed by a finance company after she had used it as collateral for a loan and failed to make the required payments. Husband paid the finance company the total amount due, $3,530, and recovered the Astro van, which he kept. Shortly thereafter, Husband purchased a used Ford Contour, and Wife drove it exclusively. Husband testified that he agreed to make the car purchase strictly to assist Wife, by allowing her to use his good credit to obtain financing. In addition to his testimony, Husband submitted as evidence an auto purchase contract showing Husband as the sole purchaser of the vehicle for $17,570.60, and an auto insurance contract showing coverage for the vehicle with Wife listed as a driver. He also introduced copies of checks he wrote to the car finance company, the insurance company and to the Department of Motor Vehicles for the vehicles registration. Based on that documentary evidence and testimony of the parties, the trial court found that Husband used his separate funds to purchase a car for Wifes exclusive use, and ordered Wife to reimburse Husband $10,511.80 for car loan payments and licensing fees, and $1,768.15 for car insurance payments.
Wife argues that Husbands payments should be considered as made in lieu of support. She cites In re Marriage of Epstein (1979) 24 Cal.3d 76 (Epstein), superseded by statute on other grounds as stated in In re Marriage of Walrath (1998) 17 Cal.4th 907, 914, for the Epstein rule that reimbursement should not be ordered where the payment on account of a preexisting community obligation constituted in reality a discharge of the paying spouses duty to support. (Epstein, supra, at pp. 84-85.) Because we affirm the trial courts ruling regarding date of separation, however, Wifes argument fails as a matter of law. Husband purchased the car in question after the parties date of separation, thus incurring a separate debt, and the Epstein rule of reimbursement does not apply.
Substantial evidence supports the courts conclusion that Husband used his separate property to pay for an automobile, and that Wife had exclusive possession of that automobile during the period in question. Thus, we hold that the trial court did not abuse its discretion by ordering restitution by Wife to Husband for monies he paid toward his automobile during the period in which Wife enjoyed exclusive use of the vehicle.
D. Mortgage Payments on Family Residence
Wife argues the trial court incorrectly declined to award reimbursement by Husband to the community for the reasonable rental value of the residence after Wife moved out from the residence. (See In re Marriage of Watts (1985) 171 Cal.App.3d 366, 372-374 (Watts).) The trial court eschewed the substantive issue, reasoning it could not make such an award because neither party had presented evidence to support a finding on the homes fair rental value for the period in question. We disagree with the trial courts legal conclusion and review this issue de novo.
Wife claims evidence of a fair rental value of $650 per month was provided by Husband, and our review of the alleged evidence reveals that Husband did offer his own estimate of $650. While the trial court declined to use this evidence, despite Wifes entreaties to do so, we note that under California law the value of property may be shown by the opinion of the owner of the property being valued. (Evid. Code, Â 813, subd. (a).) Thus, we conclude the trial court was incorrect as a matter of law not to consider Husbands estimate as evidence of the homes reasonable rental value.
Where a spouse with exclusive use of a community asset after separation makes the monthly finance payments on the asset, that spouse must compensate the community for use of the asset, if the assets reasonable rental value exceeds the monthly payments and the paying spouse receives credits under the Epstein rule for the monthly payments. (Watts, supra, 171 Cal.App.3d at pp. 372-374; In re Marriage of Jeffries (1991) 228 Cal.App.3d 548, 552.) After Wife moved out of the house on August 22, 1999, Husband alone began to receive the benefit of living in the house. Husband paid the mortgage and the trial court awarded him Epstein credits for his postseparation payments toward that community asset. However, to the extent the fair rental value exceeded his allowable payments on the property, the community was deprived of income on its asset. By awarding Epstein credits to Husband but failing to rely on Husbands opinion of the fair rental value, the trial court performed only half the required calculations. Thus, we remand the matter solely on the issue of reimbursement to the community for fair rental value of the residence. Wife timely raised the issue and is entitled to have that issue determined. We leave it to the courts discretion whether it believes the evidence elicited at trial, in the form of stipulations, testimony or otherwise, is sufficient for it to make a determination of the appropriate credits, if any, owed to the community, or whether the court wishes to proceed by taking new or additional evidence.
The matter is remanded to the family law court to consider the issue of credits under Watts, supra,171 Cal.App.3d 366, and Jeffries, supra, 228 Cal.App.3d 548. In all other respects, the judgment is affirmed. Each party is to bear its own costs on appeal.
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 Under California Rules of Court, rule 5.180(h)(1), a partys failure to move to appeal from the decision on a bifurcated issue does not preclude review of that decision on appeal of the final judgment.