Filed 6/30/26 Marriage of Allen CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION ONE
In re the Marriage of DARINKA
ALLEN and ERIC ALLEN
DARINKA ALLEN, A173233
Appellant,
(Contra Costa
v. Super. Ct. No. MSD-15-01381)
ERIC ALLEN,
Respondent.
Appellant Darinka Allen appeals from a post-dissolution judgment that
divided assets between her and her former spouse, respondent Eric Allen.1
She challenges two aspects of the judgment, one regarding the post-
separation rental value of the marital home and the other regarding the
valuation of a business the couple started. We remand for further
proceedings.
I.
FACTUAL AND PROCEDURAL
BACKGROUND
Eric and Darinka were married in July 2001, and they purchased a
house in Hercules in 2003. The couple separated in January 2008, and
1 We refer to the parties by their first names in the interest of clarity.
1
Darinka moved out of the house. Eric petitioned to dissolve the marriage in
2015, and a dissolution was entered later that year. When it dissolved the
marriage, the trial court reserved jurisdiction to decide how marital assets
were to be divided. It took several years, and the involvement of two
different trial court judges, to finally decide these issues.
This appeal involves two assets that may have generated income or
increased in value during the years between the parties’ separation and the
final dissolution: the rental value of the Hercules house and the value of a
business that the couple had started. The business was called Fine
Entertainment, which operated a subsidiary called “Interracial Kink.” The
business hosted “adult parties,” initially in venues such as hotels, but later in
the Hercules house. Around 6 to 10 couples and 5 to 10 single men typically
attended the parties. Couples and single men were asked to make a
donation, but single women were not. Photos of Darinka were used to market
the business.
The trial court held two hearings regarding the disposition of marital
assets. The first was held before Judge Hiramoto in 2019. A 23-page
statement of decision was filed at the end of the year, and a judgment was
entered in January 2020. The judgment included the following two
provisions that are relevant to the issues in this appeal:
“[Eric] shall pay [Darinka] one-half of the fair market rental value of
the Hercules home from January 1, 2008 to present. [Eric] testified the
fair market rental value was $3100 per month. The court reserves the
right to receive further evidence from the parties on this issue before
determining the final amount owed to [Darinka].”
“The business known as “Interracial Kink” . . . is community
property. . . . ¶ [It] shall be valued and divided as a community asset.
The court reserves jurisdiction over the valuation and division of this
business.”
2
Eric appealed from the judgment, and this court affirmed. (Allen v.
Allen (March 10, 2023, A159554) [nonpub. opn.].)
In February 2024, the second hearing on reserved issues was held, this
one before Judge Young. Darinka testified and provided additional evidence
about the couple’s business. She admitted that “we got complaints from
people,” “maybe [from] neighbors because it was in a residential area.” She
also admitted that “[t]he house was raided by the police numerous times”
“[b]ecause of complaints of prostitution.” When asked if she thought the
parties were illegal, Darinka said, “I think so.” She later clarified that while
she did not believe the business was illegal at the time, “[n]ow that I look
back, I look to a different view.”
After hearing Darinka’s testimony, the court continued the matter and
asked Darinka to brief several issues, including the extent to which the court
was bound by Judge Hiramoto’s prior orders and whether the couple’s
business was an illegal operation. Ultimately, Judge Young ruled she was
bound by Judge Hiramoto’s prior orders,2 but she set the value of the
business at $0 on the basis that it was an “illegal operation.” No explanation
was given on the nature of the illegality.
The parties agreed that, rather than proceeding with the hearing, the
trial court would resolve the remaining issues on the pleadings and written
submissions. Darinka filed additional briefing and materials, which included
a “Supplemental Declaration [of] Additional Facts” prepared by Eric.3 Most
2 Generally, a trial court judge in a case is bound by rulings entered by
previously assigned judges in the case. (See In re Marriage of Oliverez (2015)
238 Cal.App.4th 1242, 1248–1249.)
3 The record is unclear whether Eric filed the declaration directly with
the court, as the copy in our record is included in Darinka’s submissions and
has no clerk’s file stamp.
3
of the briefing concerned issues unrelated to the two at issue in this appeal.
Neither party provided further evidence on the post-separation value of the
couple’s business.
In February 2025, Judge Young issued her final ruling. The court
found the “the fair market rental value of the house to be zero dollars.” It
noted it had heard “testimony from [Darinka] which led to a finding that the
business was an illegal venture and valued it at zero dollars. [Darinka] also
testified that during the time [Eric] occupied the home, it had been raided by
the Federal Bureau of Investigations[4] at least two times that she was aware
of due to the nature of the [] business being run out of the home.”
Darinka filed objections to the ruling, but they were not ruled upon. A
judgment was entered on March 7, 2025.
II.
DISCUSSION
On appeal, Darinka filed a brief, but Eric did not. She contends the
trial court erred by assigning no post-separation values for the rental value
of the home and the value of the business. We conclude that the appellate
record does not support the court’s rulings, and we therefore remand for
further proceedings.
We begin by discussing the applicable standards of review. Trial
courts have considerable discretion to determine the value of community
property. (In re Marriage of Connolly (1979) 23 Cal.3d 590, 603.) They also
“possess ‘broad discretion to determine the manner in which community
property is awarded in order to accomplish an equal allocation.’ ” (In re
Marriage of Gréaux & Mermin (2014) 223 Cal.App.4th 1242, 1250.)
4 Darinka actually testified that it was the police (not the FBI) that had
raided the house.
4
Appellate courts review trial court orders concerning the valuation
and apportionment of community property for abuse of discretion. (In re
Marriage of Schleich (2017) 8 Cal.App.5th 267, 276.) “Under that standard,
we would reverse only if considering all the relevant circumstances, the
court has ‘ “ ‘ “exceeded the bounds of reason” ’ ” ’ or ‘ “ ‘no judge would
reasonably make the same order in the same circumstances.’ ” ’ ” (In re
Marriage of Honer (2015) 236 Cal.App.4th 687, 694.) We accept the trial
court’s factual determinations as true if supported by substantial evidence.
(Ibid.; In re Marriage of Quay (1993) 18 Cal.App.4th 961, 966.) If the facts
are undisputed and the issues on appeal present questions of law, the
standard of review is de novo. (In re Marriage of Schleich 8 Cal.App.5th at
p. 276.)
1. The trial court’s finding that the post-separation rental value of the
Hercules property was $0 was not supported by the evidence.
Generally, all forms of income produced by an asset in a marital
dissolution take on the character of the property from which they flow. Thus,
“rents, issues, and profits” are community property if derived from
community assets and separate property if derived from separate assets.
(Fam. Code § 770(a)(3); Hicks v. Hicks (1962) 211 Cal.App.2d 144, 152–153.)
Here, the parties do not (and cannot) challenge Judge Hiramoto’s
determinations in the January 2020 judgment that the post-separation rental
value of the Hercules property was community property and that any such
value was to be equally shared between the parties. (See Conservatorship of
Whitley (2007) 155 Cal.App.4th 1447, 1462 [“ ‘[A] judgment or decree among
parties to a lawsuit resolves issues as among them’ ”].)
Thus, we are concerned in this appeal only with whether the trial court
in its 2025 judgment improperly assigned no rental value to the property.
5
When valuing post-separation community property, a shifting burden of proof
applies. The party not in control of the asset need present only a prima facie
showing of the asset’s “existence and value.” (In re Marriage of Prentis-
Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1258.) If such a showing
is made, the “burden of proof shifts to the [party in control of the asset] to
rebut the showing or prove the proper disposition or lesser value of the[]
asset[].” (Id. at p. 1267.)
Here, Eric had possession and was in control of the Hercules home from
the date of the parties’ separation until he vacated the premises in March
2020. Thus, Darinka—the party not in control of the asset—was initially
required to present only a prima facie showing of the asset’s existence and
value. She more than satisfied this burden. Indeed, Judge Hiramoto
essentially found that the burden was satisfied by recognizing in the January
2020 judgment that Eric had “testified that the fair market rental value was
$3100 per month.” Specifically, Eric testified in the first hearing that he
rented the Hercules property for $3,100 per month while he spent a year in
Thailand and the Philippines. He also testified that starting in 2019 he
occasionally (“once every other month or so”) rented out rooms on Airbnb and
received $70 to $80 per night per room for doing so. On average, he received
$1,167 each month.
Because Darinka satisfied her initial burden, the burden of proof
shifted to Eric “to rebut the showing or prove the proper disposition or lesser
value of the[] asset[].” (In re Marriage of Prentis-Margulis & Margulis,
supra, 198 Cal.App.4th at p. 1267.) Rather than analyzing the valuation
with this burden in mind, Judge Young simply determined “the fair market
rental value of the house to be zero dollars,” because the judge had heard
6
“testimony from [Darinka] which led to a finding that the business was an
illegal venture.” The court did not further explain its ruling.
We fail to understand how the nature of the couple’s business in
hosting adult parties, even if illegal, caused the rental value of the property
to be zero during the post-separation period, especially since Eric testified
that he had in fact rented the property during that period. Thus, we remand
for the trial court to further explain or modify its determination that the
Hercules property had no rental value. If the court on remand determines
that the property had a rental value, it shall order Eric to pay Darinka one-
half as required by the January 2020 judgment.
2. The record does not allow us to adequately review the trial court’s
determination that the business’s value was $0 on the basis that it
constituted an illegal operation.
As we have mentioned, during the second hearing, the court heard
testimony from Darinka that Fine Entertainment or Interracial Kink “may
be a business that is illegal or has some illegalities involved.” The court
stated it was “concerned about valuing an illegal business. And if the
business is in fact illegal, then the value will be $0.” The court allowed the
parties to brief the issue. In its final judgment, the court set the value of the
business at $0 on the basis that it was an “illegal operation,” but it did not
explain or analyze the nature of the illegality. On the record before us, we
cannot conclude that the ruling did not constitute an abuse of discretion.
To begin with, nothing in our record convinces us that the business was
illegal. True enough, Darinka testified that she had come to the belief that
the adult parties were illegal. She testified that party attendees were asked
to give a donation, instead of being charged a fee, because she understood
from Eric that doing so would preclude claims of illegality, such as charges of
7
“prostitution.” And she testified that the house had been raided by the police
due to “complaints of prostitution.”
None of this, however, establishes that the business was actually
involved in prostitution or pimping. As Darinka points out in her appellate
brief, “prostitution” is defined as “any lewd act between persons for money or
other consideration.” (Pen. Code, § 647, subd. (b)(4).) A “pimp” is defined as
“any person who, knowing another person is a prostitute, lives or derives
support or maintenance in whole or in part from the earnings or proceeds of
the person’s prostitution.” (Pen. Code § 266h, subd. (a); Wooten v. Superior
Court (2001) 93 Cal.App.4th 422, 427.) The record here shows that the
couple’s business hosted events for consenting adults who, after giving a
donation or paying an entrance charge, were given the opportunity to
participate in, or observe, sexual acts with other consenting attendees. No
evidence was presented that any attendee was compensated for participating
or was required to participate in sexual activity.
While we cannot conclude on the record before us that the business
involved prostitution or pimping, we of course recognize that it may have
been unlawful for other reasons, such as being in violation of local zoning or
other ordinances regulating businesses in residential areas or regulating
adult businesses. But we have no indication from the record that the trial
court was concerned with this type of illegality or that it was the basis of the
court’s ruling.
Furthermore, and in any event, we are unconvinced that any potential
illegality of the business justified its zero valuation for purposes of dividing
the marital estate. “California law appears to recognize that there may be
community ‘property’ interests in assets (or the proceeds thereof) acquired
during marriage through a spouse’s unlawful criminal activity.”
8
(Hogobloom & King, Cal. Practice Guide: Family Law (The Rutter Group
2024) ¶ 8:109, p. 8-45, citing Q-Soft, Inc. v. Superior Court (Mahallaty) (2007)
157 Cal.App.4th 441, 449–450; see also In re Marriage of Shelton (1981)
118 Cal.App.3d 811, 817 [party cannot assert illegality as a defense to
dividing gains from gambling with community funds, at least when the gains
are an “accomplished fact”].)
We therefore remand for the trial court to further explain or modify its
determination that the business had no value. In doing so, we recognize that
even if the court concludes that the business was not valueless due to
illegality concerns, it may nonetheless find that the value was little or
nothing. For one thing, Eric testified in the first hearing that “[a]fter
[Darinka] left” and “due to the economic situation,” the “income [from] parties
decreased significantly . . . [and] dwindled down to very little.” In addition,
the valuation may be affected because the record reflects that any work done
in connection with the business after the parties were separated was
performed by Eric and not Darinka. “ ‘ “[W]hen the hard work and actions of
one spouse alone and after separation . . . greatly increases the ‘community’
estate which must then be divided with the other spouse,” ’ ” trial courts have
discretion to value any portion of community “ ‘ “assets at a date after
separation and prior to trial to accomplish an equal division of the
community property . . . and the quasi-community property in an equitable
manner.” ’ ” (In re Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1290; see
also Fam. Code, § 2552.) We leave these and any other issue involving the
valuation of the business and any allocation between the parties to be
resolved by the trial court.
9
III.
DISPOSITION
The judgment is reversed and the matter is remanded to the trial court
for proceedings consistent with this opinion. Darinka is awarded her
appellate costs.
10
_________________________
Humes, P. J.
WE CONCUR:
_________________________
Banke, J.
_________________________
Langhorne Wilson, J.
In re the Marriage of Allen A173233
11