Farida
Filed 6/25/13 Marriage of
Farida CA4/1
NOT TO BE PUBLISHED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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
In re the
Marriage of ROSE and RAGHAD FARIDA.
ROSE
FARIDA,
Respondent,
v.
RAGHAD
FARIDA,
Appellant.
D060705
(Super. Ct.
No. ED74696)
APPEAL
from a judgment of the Superior Court
of
County, Joel R. Wohlfeil, Judge. Affirmed.
Stephen
Temko for Appellant.
Law
Office of Anthony J. Boucek, Anthony J. Boucek; Law Offices of Stanley
J. Bacinett and Stanley J. Bacinett
for Respondent.
Because
neither party in this family law case was completely forthcoming with respect
to the amount of appellant's income, much of it apparently in cash received
from appellant's retail liquor business, the
available to appellant for child and spousal support purposes based on the
court's estimate of the family's living expenses prior to separation and the
fact that during the marriage appellant was the sole source of financial
support for his family. The court's
estimate of the family's living expenses is fully supported by the record, and
given the record available, was a reasonable means of determining appellant's
income.
Given the
family court's reasoning, which is supported by the record and was reasonable,
the family court was not required to break down in detail charges it believed
were attributable to household expenses which appeared on appellant's business
credit card. The family court's
statement of decision makes it clear the credit card charges, while they showed
the parties routinely commingled business and household expenses, were not the
basis for the court's determination of the amount of income available to
appellant. Indeed, in its statement of decision,
the family court agreed with appellant that most of the credit charges were
business related. Because the family
court did not rely on the credit card charges in determining the amount of
appellant's income, it was not required to make any subsidiary finding as to
those charges.
We also
reject appellant's contention the family court should have permitted him to
sell the community's interest in the liquor store to his brother and then
divide the proceeds with respondent rather than, as the court directed, pay
respondent one-half the appraised value of the business. The family court has wide discretion in the
means by which it divides community assets, and it did not abuse its discretion
in requiring payment to respondent of what it believed was one-half the value
of a major asset of the community.
We also
reject appellant's claims that the family court erred in denying his request
for Watts
credits, in making an award of attorney fees to respondent and in denying his
claim for reimbursement of credit card charges.
FACTUAL AND PROCEDURAL
BACKGROUND
1. Marital
Income and Expenses
Rose Farida and Rocky Farida were married in
January 1997 and separated in July 2008.
During their marriage they had two sons:
Tristan, who was born in 1998, and Aiden, who was born in 2003.
The
record shows that during the marriage Rocky devoted himself to managing a
family owned business, Par Liquor, which was quite successful. During the marriage, Rocky's work at Par
Liquor permitted him to purchase a newly-constructed $498,500 home for the
family in 2002, drive a luxury car, purchase a luxury car for Rose and place
both children in private schools. The
proceeds of the business also permitted Rose to forego work outside the home
and provide full-time care for her children and husband.
In addition to making a $150,000 down payment on
the family residence, furnishing it and landscaping the yard, Rocky's work in
the family business also permitted him to invest with his brother in a car wash
and acquire a commercial lot on which they planned to develop a fast food
restaurant.
At the time Rose and Rocky separated in 2008, they
had no debt other than the mortgage on their home, which Rocky had
substantially reduced at one point by making additional principal
payments. Rocky, Rose and the children
had health care coverage provided under a policy obtained by the family
business. The record shows Rocky paid
many of his household obligations, including the mortgage, taxes and insurance,
with money orders he purchased with cash and, in addition, Rose used an American
Express credit card, which was issued in the name of the family business, to
pay for a substantial amount of the family's monthly expenses, including
travel, food, clothes and entertainment.
However, the record also shows Rocky used the American Express account
to pay for large portions of the store's inventory and supplies.
2.
The parties were unable to reach an agreement with
respect to child and spousal support, division of the community's interest in
the family business, Rocky's reimbursement claims, and Rose's request for
attorney fees. Following a trial, the
family court resolved these issues largely in favor of Rose and filed a
statement of intended decision (SID).
With respect to child and spousal support, the
family court found that Rocky had a monthly income of $10,000 composed of his
conceded $2,000 salary from the liquor store, dividend income of $745, rental
income of $1,100 and untaxed or nontaxable income of $6,155.
The SID stated that: "The parties chose to live in an
attractive home, drive nice cars, place their children in a private school, and
enjoy leisure time outside of San Diego
as [Rocky's] work schedule permitted, all of which was paid for in cash or
money orders from Respondent's liquor store."
In explaining how it reached its conclusions about
Rocky's income, the SID stated:
"[Rocky's] income has been a recurring issue throughout this
litigation and remains the most vexing challenge to the court. Though both parties were integrally involved
in the community's finances -- either making it, spending it, or both -- the
court has been left with the distinct impression that neither party is
motivated to disclose the true extent of his/her knowledge of [Rocky's] income
(and the corresponding duty to make appropriate representations to the taxing
authorities). The court is limited to
arriving at a reasonable estimate, based on the evidence -- vague and ambiguous
as it may be, of [Rocky's] income."
In its principal conclusion about Rocky's income,
the SID stated: "[Rocky's] liquor
store is literally and figuratively a cash cow.
Though [Rocky] has chosen to downsize his lifestyle (evidenced, in part,
by [Rocky] living with the paternal grandparents), the Court is persuaded that
the income available to [Rocky] to pay support at this time is more, rather
than less, consistent with the income which was available to [Rocky] to support
the community lifestyle before the parties separated in July 2008."
Because it had been a contested issue at trial,
the SID also made findings with respect to the parties' use of the liquor
store's American Express card: "The
liquor store's payment of [Rose and Rocky's] personal expenses constitutes
constructive income available to [Rocky] to pay
support. . . . At the
urging of [Rocky's] counsel, the Court has reviewed the individual charges
reflected in Exhibit '97' and found that a substantial percentage of the
charges were devoted to purchases for the liquor store rather than, as argued
by [Rose], entirely personal in nature to benefit [Rose and Rocky]."
Rocky objected to the SID and, in particular,
asked the family court to make specific findings with respect to which American
Express charges, as reflected in Exhibit 97, were for personal or family
expenses and which were business related.
In rejecting Rocky's request for more specific findings with respect to
the credit card charges, the family court stated: "[Counsel], you persuaded me in at least
one respect, and that was to spend meaningful time reviewing how much, if any,
of the expenses reflected in [Exhibit] 97 could be constructively charged to
Mr. Farida as income. . . .
Ms. Farida said that when she used the card, those were personal expenses;
generally speaking, not always, when Mr. Farida used the card, it was more to
pay business expenses, and you gave me some meaningful examples, like
Costco. And as I was going through 97,
there were a whole bunch of entries which were charged by Ms. Farida. To the extent that those charges were put on
the card by her, I tended to view those as personal expenses that were paid for
by the business, but there were a bunch of expenses, many times in amounts much
greater than the personal expenses charged by Ms. Farida, but these other
expenses were put on the card by Mr. Farida, which I tended to view as business
expenses paid for by the business and not chargeable as income to Mr.
Farida." Accordingly, "after
having been persuaded by you, [counsel], I was no longer comfortable that that
would be an appropriate tool by which to evaluate or identify or come up with
some way that would be a reflection upon Mr. Farida's income. So, I'm not inclined to go through item by
item as you requested."
In light of its decision not to provide more
detailed findings, the family court filed as its final statement of decision a
slightly amended version of the SID and entered a judgment according to its
terms. Rocky filed a timely
DISCUSSION
I
In his
principal argument on appeal, Rocky argues the family court abused its
discretion in failing to make detailed findings with respect to the American
Express credit card charges. We find no
error.
"The
specific rules concerning the adequacy of a statement of decision are derived
from the Code of Civil Procedure.
Section 632 requires a statement of decision to explain 'the factual and
legal basis for [the] decision as to each of the principal controverted issues'
of the case.
"Appellate review of a statement of decision
is addressed in Code of Civil Procedure section 634: 'When a statement of decision does not
resolve a controverted issue, or if the statement is ambiguous and the record
shows that the omission or ambiguity was brought to the attention of the trial
court either prior to entry of judgment or in conjunction with a motion under
Section 657 or 663, it shall not be inferred on appeal . . . that the
trial court decided in favor of the prevailing party as to those facts or on
that issue.'"
title="">[2] (Central
Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 513, fn.
omitted (Central Valley General Hospital).)
Sections 632 and 634 require no more than that a
statement of decision fairly disclose "determinations as to the ultimate
facts and material issues in the case."
(Central Valley General Hospital,
supra, 162 Cal.App.4th at p.
513.) "When this rule is applied,
the term 'ultimate fact' generally refers to a core fact, such as an essential
element of a claim. [Citation.] Ultimate facts are distinguished from
evidentiary facts and from legal conclusions.
[Citations.]" (
547, 559 (Yield Dynamics) [ultimate
fact is fact "without which the claim or defense must fail"].)
Here, the family court's statement
of decision plainly disposed of the core issue:
Rocky's monthly income. Moreover,
as we indicated at the outset, this finding is amply supported by evidence of
the parties' fairly comfortable and somewhat affluent lifestyle. In particular, we note that on Rocky's income
the family was able to acquire substantial assets, and aside from a home
mortgage, remain debt free and place both children in private schools. In our view, given these circumstances, the
family court's estimate that Rocky had $10,000 in income available to him was,
if anything, somewhat conservative.
Contrary to Rocky's argument on appeal, section
634 does not require that we reverse the family court's order. As applied to the parties' dispute over the
American Express credit card, section 634 merely prevents us from presuming the
family court resolved the credit card
dispute in Rose's favor. If resolution
of the credit card dispute were needed to determine Rocky's income, there would
of course be a problem. However, the
statement of decision, as well as the statement the family court made later
when it denied Rocky's request for further findings, make it clear the family
court resolved the ultimate question of Rocky's income without reference to the
credit card dispute, and that determination is supported by
issue are not needed to support the family court's income determination and
judgment, the family court's unwillingness to provide them, and the presumption
altered by section 634, are of no consequence on appeal.
II
Next,
Rocky argues the trial court abused its discretion in awarding the community's
interest in the corporation which owned the liquor store, Farida Brothers,
Inc., to Rocky and ordering that Rocky make a compensating payment of $179,000
to Rose. Rocky argues the family court
should have instead ordered the community's interest in the business be sold to
his brother Raad, who was the majority owner of the corporation's stock, and
the proceeds of the sale then be distributed equally to each party. We find no abuse of discretion.
In
applying the statutes and rules governing division and distribution of community
property, "trial courts possess broad discretion to determine the manner
in which marital property is divided in order to accomplish an equal
division. [Citation.] Likewise, as long as its determination is
within the range of the evidence presented, the court possesses broad
discretion to determine the value of community assets. [Citation.]" (In re
Marriage of Cream (1993) 13 Cal.App.4th 81, 88.)
Significantly,
Family Code section 2601 provides:
"Where economic circumstances warrant, the court may award an asset
of the community estate to one party on such conditions as the court deems
proper to effect a substantially equal division of the community
estate." Thus,"where only one
spouse is capable of operating the business, it is appropriate to award the
business to him or her, rather than sell it off to a third party or order an
in-kind division in favor of a spouse whose lack of experience could impede the
business success." (Hogoboom &
King, Cal. Practice Guide: Family Law (The Rutter Group 2012) ¶ 8:1053, p.
8-248.2.) This rule was applied in
Cal.App.3d 65, 70-71, In re Marriage of
Smith (1978) 79 Cal.App.3d 725, 750-751, and In re Marriage of Clark (1978) 80 Cal.App.3d 417, 421, which are
all cases where one spouse was the active and dominant participant in a
family-owned business. In
coin-operated laundry business was awarded to the husband who had years of
experience maintaining the business's aging washers and dryers; in
awarded the community's sign-making business because the wife did not have any
of the technical skill needed to run the business; and in In re Marriage of Clark, the husband was awarded the community's
one-half interest in a closely held corporation operated by the husband and his
business partner because the business partner was unwilling to go forward with
the wife as a minority owner.
Here, the
circumstances also fully justified an award of the Farida Bros., Inc. stock to
Rocky. The value of the stock consisted
mainly of the value of the liquor store, to which Rocky had devoted most of his
time while Rose stayed home with their children. The liquor store also appeared to be Rocky's
principal source of income. We also note
the majority interest in the corporation appeared to be owned by Rocky's
brother. Given all these circumstances,
the family court could reasonably conclude that it was not practical for Rose
to have a minority interest in a business controlled by Rocky and his family
and in which she had limited experience.
The
family court could reasonably reject Rocky's suggestion the community's
interest in Farida Bros., Inc. be divided between him and Rose and then sold to
his brother at the appraised value and the proceeds divided. Rocky offered this disposition for the first
time at the time of trial and relied on Raad's testimony to the effect Raad was
willing to buy Rocky and Rose's interest in the business. The family court rejected the suggestion
because it found that the late offer was not entirely credible in light of
Rocky's substantial contributions to the family business over 10 years, Rocky's
motivation for making the suggestion at the time of trial and thereby reducing
the income attributable to him from the business, and the absence of
corroboration beyond Raad's testimony at trial.
The record fully supports the family court's
reluctance to treat the proposed sale to Raad as bona fide. Plainly, there were ample opportunities prior
to trial to make and corroborate the details of a sale to Raad and permit Rose
to prepare a response to such a disposition.
In this regard, we note Rocky's last-minute suggestion posed the obvious
risk of further proceedings in the event Raad was later unwilling or unable to
complete the purchase. Rocky's tardiness
in making the proposal, and the risks it posed to Rose with respect to one of
the marital community's principal assets, would give pause to any reasonable
finder of fact.
We are not persuaded by Rocky's additional
contention that in awarding the business to him and requiring an offsetting
payment to Rose, the family court unfairly exposed him to a potentially higher
tax burden upon any eventual sale of the business. Because the family court was not in any sense
required to accept Rocky's argument that he desired or would be forced to sell
his interest to his brother, the family court was not required to consider the
tax consequences of such a sale. (See
consequences pertinent only when they are immediate and specific].)
In sum, the family court acted well within its
discretion in its disposition of the community's interest in Farida Bros., Inc.
III
Next,
Rocky claims the family court erred in failing to determine whether the
community was entitled to reimbursement from Rose for the rental value of the
family home following separation and before trial. (See In
re Marriage of Watts, supra, 171
Cal.App.3d at p. 374 (Watts).)
Rocky argued in the family court that the monthly
rental value of the home exceeded the cost of the mortgage, insurance and taxes
by $696 and that given Rose's exclusive use of the home prior to trial,
community $12,528. At trial, the family
court stated that it was inclined to deny Rocky's request for
Rose, the home was occupied by the parties' two minor children. The family court's rationale was reasonable
under the circumstances. (See
circumstances in determining whether spouse had exclusive possession of marital
home].)
Although the family court's SID did not expressly
address Rocky's request for a Watts
reimbursement, thereafter, in its final statement of decision, the family court
formally and expressly denied Rocky's request for Watts credits. On appeal,
Rocky contends the statement of decision is inadequate because it does not more
fully set forth the family court's reasoning in denying his claim for
reimbursement.
We reject
Rocky's contention that the final statement of decision was inadequate. The statement of decision expressly addresses
and rules on the ultimate question presented, to wit: Rocky's request for a Watts reimbursement credit.
In the case Rocky relies upon, In
re Marriage of Bell (1996) 49 Cal.App.4th 300, 311, the family court failed
entirely to address a party's request for Watts
credits. Moreover, because it is clear
from the family court's statement at trial that any fuller explanation of the
court's reasoning would not alter its resolution of the issue, any inadequacy
in its later statement of decision was harmless. (See McAdams
v. McElroy (1976) 62 Cal.App.3d 985, 996.)
IV
Next,
Rocky contends the family court erred in awarding Rose $8,000 of her $25,000
request for attorney fees. Contrary to
Rocky's argument, the record shows a clear disparity in net income between the
parties, especially in light of Rose's expenses in maintaining the family
home. Moreover, notwithstanding Rocky's
argument to the contrary, the family court could rely on its own experience and
observation of the proceedings in concluding that in fact substantial and
reasonable legal services were rendered to Rose. (See In
re Marriage of Cueva (1978) 86 Cal.App.3d 290, 301.)
V
Finally,
Rocky argues that, although he charged his attorney fees to the liquor store
credit card, Rose should reimburse him for $17,000 in attorney fees he believes
she placed on the card and which were eventually paid from liquor store
receipts. Again, we find no error. Given the parties intermingling of household
and business expenses, both as reflected in their use of the credit card and
cash from the business, the record does not show that Rocky's payment of the
credit card debt from the liquor store receipts established any right to
reimbursement. On this record we have no
means of determining whether the funds used to pay the credit card debt were
separate or community property.
DISPOSITION
The
judgment is affirmed. Rose to recover
her costs on appeal.
BENKE, Acting P. J.
WE CONCUR:
HALLER,
J.
IRION,
J.
name="_ftn1" title="">[1] See In re Marriage of
Watts (1985) 171 Cal.App.3d 366.
name="_ftn2" title="">[2] All further statutory references are to the Code of Civil
Procedure unless otherwise indicated.
