Marriage of Flagg-Malek



















Filed 1/15/13
Marriage of Flagg-Malek 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NOT TO BE PUBLISHED IN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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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 MARCIA FLAGG-MALEK and NADER MALEK.
MARCIA FLAGG-MALEK, Appellant, v. NADER MALEK, Respondent; BROADMOOR COMMUNITY CHURCH, Claimant and Appellant.	A133231 (Contra Costa County Super. Ct. No. MSD08-02808) ORDER MODIFYING OPINION AND DENYING REHEARING [NO CHANGE IN JUDGMENT]

THE COURThref="#_ftn1" name="_ftnref1" title="">[1]:



The opinion filed December 24, 2012, is hereby modified as
follows:



1. On page 5 and continuing on to page 6, the last sentence on the page
shall be modified so that “the 2008 resolution” is changed to “the 2007
resolution” and the new sentence will read as follows:



In particular, the family law court pointed
to the November 2008 resolution, which the court described as secretive and
collusive, revoking the August 2007 resolution, and to Flagg’s failure to
disclose the 2007 resolution, which the court characterized as being in bad
faith.



There is no change in the judgment.



Respondent’s petition for rehearing is
denied.





Dated:



_______________________

Marchiano,
P. J.

Filed 12/24/12 Marriage of Flagg-Malek CA1/1 (unmodified
version)

>NOT TO BE PUBLISHED IN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opinion has not been certified for publication or ordered published for purposes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 MARCIA FLAGG-MALEK and NADER MALEK.
MARCIA FLAGG-MALEK, Appellant, v. NADER MALEK, Respondent; BROADMOOR COMMUNITY CHURCH, Claimant and Appellant.	A133231 (Contra Costa County Super. Ct. No. MSD08-02808)

Marcia Flagg and Broadmoor Community
Church (BCC) appeal from an order and judgment in this dissolution action (a)
sanctioning Flagg for failing to list on her schedule of assets a promise by
BCC to retroactively pay her $105,000 for past work and (b) requiring BCC to
pay Nader Malek, Flagg’s former husband, $105,000. As we explain, the promise to pay $105,000
was never a viable community asset, contingent or otherwise. Rather, the promise was an unenforceable
“expectancy” that Flagg was not required to include in her schedule of
assets. Therefore, the sanction against
her cannot stand, nor can the judgment against BCC requiring it to pay the
monies to Malek. We note that had Flagg
actually received the monies, she would have had an asset in-hand she was
required to disclose and to which Malek would have had a partial claim. However, she never received any of the monies
and consequently never had anything more than an expectancy, which neither she
nor Malek ever had any right to enforce.
We therefore reverse the sanction order against Flagg for failing to
disclose the supposed asset and the judgment against BCC requiring it to
disgorge it.

Factual
and Procedural Background

Flagg and Malek married in September
1996. Just a few months earlier, in June
1996, BCC hired Flagg as its pastor. The
employment agreement provided “[t]he position [was] half-time.” Six years later, in August 2002, BCC and
Flagg signed an amended employment agreement increasing her compensation. The agreement stated Flagg was “now 3/4
time.” According to Flagg, BCC fully met
its obligations under these agreements and owed her no further
compensation.

Despite this, five years later, on
August 26, 2007, the eight remaining members of the dwindling BCC congregation
passed a resolution stating Flagg, having worked at BCC for “part time pay[]
for full time work” without a cost of living or merit-based raise since 1996,
would be “retroactively compensate[d]”
for what BCC “owe[d] her for the last 10
and 1/2 years” in the amount of $105,000.
(Italics added.) This was to be
paid, however, only upon sale of BCC’s church facility, which BCC then
authorized. Flagg, herself, authored the
August 2007 resolution. Although Flagg
told Malek “the church was going to pay her some past-due compensation,” she
did not show Malek the August 2007 resolution.


The following year, on April
28, 2008,
Flagg and Malek separated. Flagg
commenced this dissolution action on June 18, 2008.


On July 14,
2008,
Flagg served Malek with a mandatory disclosure of assets and debts. She did not list as an asset the August 2007
resolution promising $105,000 in retroactive compensation upon sale of the
church property.

Five months later, on November 23, 2008, the remaining members of BCC passed a second resolution declaring the
August 2007 resolution a nullity. The
church property had not been sold, and the resolution stated, “after reviewing
[its] contractual financial obligations with” Flagg, BCC had kept its
obligations to her and did “not by contract owe her past compensation.” Flagg
did not inform Malek of this second resolution.

After several failed attempts, BCC
finally sold the church facility for $1.3 million. Due to the precipitously declining real
estate market, this price was much lower than had been hoped and the sale terms
were unconventional. BCC obtained
$500,000 cash and an $800,000 promissory note.
After paying debts, the sale netted BCC only $349,000 in cash and the
note, which generated approximately $6,900 a month. Although BCC continues to exist, its
operations are limited. Flagg continues
to perform pastoral duties as needed and administers the BCC-related Heaven
Sent day care center. By virtue of the note,
she continues to be paid for her ongoing work.
As far as the record shows, Flagg has never received any “retroactive”
compensation under the rescinded August 2007 resolution or otherwise.

Two years after the dissolution
action was filed, Malek, on March 10, 2009, moved to join BCC in the
proceedings, asserting he had a right to half of Flagg’s retroactive
compensation to which she was assertedly entitled under the August 2007
resolution. The family law court allowed
the joinder, and on April 24, 2009, Malek filed a verified complaint against
BCC. He
alleged BCC had agreed, by the resolution of August 26, 2007, “to pay [Flagg]
the sum of $105,000 as and for retroactive compensation for professional
pastoral services rendered to [BCC] from 1996 to August 2007.” His complaint contained no labeled causes of
action, but further alleged BCC had “wrongfully denied the existence of the
asset” and “wrongfully possesses and detains the asset,” and had colluded with
Flagg to thwart his interest. Malek sought an order determining his
and Flagg’s interests in the money and other injunctive relief aimed at
protecting his interests.

Also on April 24, 2009, and in
conjunction with Malek’s complaint, the clerk issued a summons to BCC. The summons warned BCC it might face default
if it failed to respond within 30 days.
It further notified “the person [being] served” that “[y]ou are served”
on “behalf of: Broadmoor Community
Church.” The summons then had a series
of checkboxes to specify which statute service was under. “Other” was checked, while “CCP 416.10
(Corporation)” was not.

On June 16, 2009, Malek filed a
proof of service of the summons and complaint.
Flagg, as it turns out, was BCC’s registered agent for service of
process. According to Malek’s proof of
service, seven attempts to serve Flagg personally failed. Accordingly, on May 8, 2009, the process
server left the summons and complaint with a “Manger/co Worker” working at
BCC’s address, Laura Boaz. The process
server then mailed the documents to Flagg.


BCC did not file a response, and on
June 16, 2009, Malek’s attorney signed a request for entry of default. The request was mailed to Flagg on June 18,
2009, and filed on June 19, 2009. The
clerk entered default on the date of filing, June 19, 2009.

Meanwhile, on the morning of June
18, 2009—one day before entry of default—Malek had filed for chapter 7
bankruptcy. He listed his claimed
community interest in the $105,000 retroactive compensation as a “liquidated
debt[],” stating it was “unknown if collectable.” On that same day, his attorney wrote to
counsel for BCC, recapping an earlier phone conversation: “it is our mutual understanding that the
Superior Court proceedings in the Malek matter have been stayed as a result of
[Malek’s] bankruptcy filing.” Counsel
continued “I will refrain from causing the notice of entry of default as to
[BCC] from being filed with the Court (it is my understanding that the Court
Clerk has the notice in her possession, but it was not yet filed).” Nevertheless, BCC’s default was entered.

During Malek’s bankruptcy, the
dissolution action languished, but was not entirely inactive. On July 21, 2009, the court entered a
judgment as to status, ending the marriage and fixing a separation date, but
reserved other issues, including property division. Despite the entry of default, counsel for BCC
made an appearance at the July 21 hearing, and neither the family law court nor
Malek complained.

Following resolution of Malek’s
bankruptcy case in late 2010, trial was set in this action on the reserved
issues for March 15, 2011. On March 11,
2011, BCC, after receiving Malek’s trial brief, moved to set aside the
long-standing entry of default. BCC
claimed it’s default resulted from mistake, inadvertence, or excusable neglect
and Malek would suffer no prejudice from allowing it to participate in the
upcoming trial—in fact, BCC claimed it participated in discovery, producing
documents and making its witnesses available for deposition. BCC, on March 15, also filed a trial
brief. The brief asserted, albeit in
cursory fashion, that the August 2007 resolution reflected an illusory gift and
was not an enforceable agreement to pay Flagg anything.

When counsel for BCC appeared on the
scheduled trial date, the court refused to allow the church to
participate: “Your client is in default,
and you are not going to be participating in the trial.” The family law court noted BCC’s motion to
set aside the default had been calendared for an April hearing and the church
had not requested an order shortening time.
Trial proceeded, and the court took the matter under submission.

The following month, on April 21,
2011, the court heard and denied BCC’s motion to set aside its default. The court was troubled by BCC’s failure to
show it never received, or had difficulty receiving, notice of entry of
default: “That’s a problem.”

Three months later, on July 20,
2011, the court filed its statement of decision on the reserved issues. With respect to Malek’s claim against BCC,
the court concluded BBC’s default ipso facto meant it owed $105,000 to the
community. Ordinarily, Malek would be
entitled to only half that amount as his community share. The court awarded the whole amount to him,
however, as a sanction against Flagg for taking “dishonest and underhanded
steps, in collusion with BCC’s membership, to try and convince [husband] and
the Court that the asset did not validly exist to start with.” In particular, the family law court pointed
to the November 2008 resolution, which the court described as secretive and
collusive, revoking the August 2007 resolution, and to Flagg’s failure to
disclose the 2008 resolution, which the court characterized as being in bad
faith. The sanctions were ostensibly
based on Family Code section 1101, subdivision (g)href="#_ftn2" name="_ftnref2" title="">>[2] and “general
principles of equity.” At no point did
the court address whether the August 2007 resolution ever gave rise to a valid
and binding compensation agreement, which Flagg, let alone Malek, could
enforce.

On July 26, 2011, the court entered
judgment for Malek and against BCC in the amount of $105,000. Flagg and BCC each appealed on September 20,
2011.href="#_ftn3" name="_ftnref3" title="">[3]

>Discussion

Sanction
Against Flagg

The sanction against Flagg—awarding
the $105,000 of promised “retroactive”
compensation to Malek—is grounded on Flagg’s failure to list the promised
amount on the mandatory disclosure of assets and debts form. The family law court viewed Flagg’s failure
to include the promised amount as an attempt to conceal the “asset,” although
it is undisputed Malek knew about the promise when it was made.

The
Family Code’s asset disclosure requirements (§ 2100 et seq>.) require spouses to make preliminary
and final disclosures of “all assets and liabilities in which one or both . . .
may have an interest.” (§ 2103.) An asset, for these purposes, “includes, but
is not limited to, any real or personal property of any nature, whether
tangible or intangible, and whether currently existing or contingent.” (§ 2101, subd. (a).)

We
are concerned here with the meaning of “contingent” asset. A contingent interest is an enforceable
“contractual right” upon the occurrence of a future condition. (In re
Marriage of Brown (1976) 15 Cal.3d 838, 845 (Brown).) For example, an
employer’s promise of pension benefits as deferred compensation for ongoing
work creates a contingent interest. The
benefits “ ‘do not derive from the beneficence of the employer, but are
properly part of the consideration earned by the employee.’ ” (Id. at
p. 845.) “The employee’s right to
such benefits is a contractual right, derived from the terms of the employment
contract.” (Ibid.) Similarly, an
employer’s contractual promise to award a bonus for reaching certain
productivity targets creates an enforceable contingent interest in the bonus—an
“asset” requiring disclosure under the Family Code. (Cf. In
re Marriage of Nelson (1986) 177 Cal.App.3d 150, 157-158 (>Nelson) [comparing the right to a bonus
“contingent solely upon continued employment” with a gratuitous bonus an
employer might or might not bestow at will].)

Contingent
interests, however, are distinguishable from “expectancies.” (See Civ. Code, § 700 [“A mere possibility,
such as the expectancy of an heir apparent, is not to be deemed an interest of
any kind.”].) “ ‘The term expectancy
describes the interest of a person who merely foresees that he might receive a
future beneficence, such as the interest of an heir apparent [citations], or a
beneficiary designated by a living insured who has a right to change the
beneficiary [citations]. . . . The defining characteristic of an expectancy
is that its holder has no enforceable
right to his beneficence.’ ” (>In re Marriage of Spengler (1992) 5
Cal.App.4th 288, 298 (Spengler); see
also Brown, supra, 15 Cal.3d at p. 844-845.) Other examples of an expectancy include the
renewal right under a life insurance policy which, though having “potential
value,” gives the insured spouse no “right . . . to enforce that value” and “is
not ‘property’ within the meaning of the community property laws.” (Spengler,
supra, 5 Cal.App.4th at p. 299;
see also In re Marriage of Havins (1996)
43 Cal.App.4th 414, 421.) Returning to
the example of an employment bonus—a bonus that may be typically given
annually, but is not contractually assured, is an unenforceable expectancy, not
an enforceable contingent interest. (>Nelson, supra, 177 Cal.App.3d at pp. 157-158; see also In re Marriage of Frahm (1996) 45 Cal.App.4th 536,
544-545 [postdissolution severance payment that “resulted solely from
[employer’s] beneficence” was not property for purposes of community property
law].)

Given that the Family Law
distinguishes between “expectancies,” which are not legally enforceable and
need not be disclosed on a schedule of assets, and “contingent interests,”
which are enforceable if the contingency comes to pass and thus do need to be
disclosed, we turn to whether BBC’s August
2007 resolution gave rise to an unenforceable expectancy or to an enforceable
contingent interest.href="#_ftn4"
name="_ftnref4" title="">[4]

To
be enforceable, a promise must be supported by legally sufficient
consideration. “California courts have
repeatedly refused to enforce gratuitous promises, even if reduced to writing
in the form of an agreement.” (Jara
v. Suprema Meats, Inc. (2004)
121 Cal.App.4th 1238, 1249.) “[T]he
consideration for a promise must be an act or a return promise, bargained for and given in exchange for the
promise.” (Simmons v.
California Institute of Technology (1949)
34 Cal.2d 264, 272 (Simmons); see also Passante v. McWilliam (1997)
53 Cal.App.4th 1240, 1247 (Passante)
[for an enforceable promise, a plaintiff must give consideration and it “must
result from a bargain”].)

The
requirement of a bargained-for exchange of consideration and promise means
“[p]ast consideration cannot support a contract.” (Passante, supra, 53 Cal.App.4th at p. 1247; see also Simmons, supra,
34 Cal.2d at p. 272; accord, Patriot Scientific Corp. v. Korodi (S.D.
Cal. 2007) 504 F.Supp.2d 952, 960-961.)
Thus, in Passante, a corporation’s promise to pay the plaintiff
corporate stock for finding a crucial investor in the nick of time was not
valid consideration when the corporation’s promise came after the
plaintiff found the investor. (Passante,
supra, 53 Cal.App.4th at pp.
1244-1245, 1247.) Likewise, in Simmons,
a contract made “in consideration of employment” in fact lacked consideration
because the phrase referred to past
employment. (Simmons, >supra, 34 Cal.2d at p. 272 [past
employment “is inadequate consideration to support a contract”].) Similarly, in Dow v. River Farms Co. of California (1952) 110 Cal.App.2d 403,
404, 408, a resolution “promising to pay . . . $50,000 for past services . . .
was not intended to create any legal obligation at all” and a deceased
husband’s wife could not enforce the promise.

The
language of the August 2007 resolution, itself, states the contemplated payment
to Flagg was to “retroactively
compensate” her for past work. (Italics added.) There was no evidence Flagg agreed to continue working or to
perform any additional work in exchange for the expressly retroactive pay. Malek, moreover, alleged in his verified
complaint against BCC that the August 2007 resolution
promised “to pay [Flagg] the sum of $105,000 as and for retroactive compensation for professional pastoral services
rendered to [BCC] from 1996 to August
2007” (italics added).

Thus,
both the language of the August 2007 resolution and the operative allegations
of Malek’s verified the complaint, in addition to the evidence adduced at trial
concerning the resolution and BBC’s obligations to Flagg, demonstrate no
legally enforceable promise was made.href="#_ftn5" name="_ftnref5" title="">>[5] BBC’s promise to pay Flagg “retroactive”
compensation was simply that—a gratuitous promise that lacked consideration and
which Flagg, herself, could not have enforced, even if the church had sold its
property.

In
short, all Flagg ever had was an unenforceable “expectancy.” Accordingly, the August 2007 resolution did
not create any community asset, contingent or otherwise, to which either Flagg
or Malek could lay claim.href="#_ftn6"
name="_ftnref6" title="">[6] Flagg therefore did not run afoul of the
Family Code disclosure requirements by not listing BBC’s August 2007 resolution
embodying its gratuitous and unenforceable promise to her.

We
further observe the promised “retroactive” compensation for past work was not
only an unenforceable expectancy, but a contingent expectancy based on a sale
of the church property, and no sale
occurred before the November 2008 resolution rescinding the August 2007
resolution. Thus, during its one year
duration, the August 2007 resolution was not only gratuitous, but additionally
dependent on a condition that never occurred before it was rescinded.

Had
Flagg actually received any or all of
the promised amount—and thus changed from having a mere expectancy to having an
asset in hand—a different set of principles would apply. In Downer
v. Bramet (1984) 152 Cal.App.3d 837 (Downer),
the Court of Appeal concluded the proceeds from the sale of a ranch the
husband’s employer gave to the husband and several coworkers, during their
employment, because the employer had no pension plan, were “[e]arnings . . .
acquired as a result of the labor, skill and effort of a spouse during marriage
are community property.” (>Id. at pp. 843-844.) The court agreed the husband’s employment
contract had not entitled him to the ranch and therefore the property was
gratuitously given. But the fact the
husband would not have been able to enforce the promise before it was fulfilled
did not detract from the fact the employer had, in fact, made the gift and the
proceeds from the sale of the ranch were thus “acquired” as a result of the
husband’s work during the marriage. (>Id. at p. 840.)

Here,
however, BBC never gave Flagg any or all of the promised retroactive
compensation. Accordingly, unlike in >Downer, Flagg never received any monies
that could be characterized as having been “acquired” as a result of her
employment and that could be physically shared with Malek. Indeed, the parties have cited no case, and
we are aware of none, in which a family court has allowed a spouse to which a
gratuitous promise has been made to force the promisor to make good on the
promise, let alone, allowed the other spouse to enforce the promise. In fact, we are not aware of any case in any
context in which a court has enforced a mere expectancy and required a promisor
to fulfill a gratuitous promise.

The
primary authority the family law court relied on to sanction Flagg was Family
Code section 1101, which applies when one spouse’s breach of the fiduciary duty
owed to the other “results in impairment to the claimant spouse’s present
undivided one-half interest in the community estate.” (Fam. Code, § 1101, subd. (a).) However, as we have discussed, there was no
viable community asset here, contingent or otherwise, and Flagg’s failure to
list her unenforceable expectancy did not impair Malek’s interest in the
community estate.

We
understand the family court believed Flagg and the tiny congregation of BCC
acted in cahoots in passing to the November 2008 resolution rescinding the
August 2007 resolution to insure Malek had no claim against Flagg. But the motive for the November 2008
resolution does not change the threshold
issue in regard to the August 2007 resolution—did the August 2007 resolution
give rise to an enforceable contingent interest Flagg (and Malek and the family
court) could enforce, or to an unenforceable expectancy. For the reasons we have explained, Flagg had
only the latter.

Thus,
even if the BCC congregation approved the November 2008 resolution out of less
than charitable motives, the spirit with which that resolution was adopted is
irrelevant. (Cf. In re Marriage of Lehman (1998) 18 Cal.4th 169, 180
[“characterization of property, including the right to retirement benefits and
retirement benefits themselves, as the community property of the employee
spouse and the nonemployee spouse or the separate property of the employee
spouse alone, does not turn on the motive of the employer”].) All the second resolution did was rescind a
gratuitous and unenforceable promise—an expectancy—that had never been acted
upon. Thus, it did not compromise or
obscure any enforceable community asset because no such asset ever
existed.

Default Judgment
Against BCC

BCC
challenges the entry of default and default judgment against it on a number of
grounds, including that the automatic bankruptcy stay in Malek’s bankruptcy
precluded entry of its default, it was not properly served, and the First
Amendment’s “ministerial exception” barred the family court’s ruling on a
church employment matter. We need not
and do not reach any of these issues since we conclude the default judgment
against BCC was erroneous for a more fundamental reason—Malek’s complaint
failed to state a claim. As noted in the
preceding section, even accepting the allegations of Malek’s verified complaint
as true, he alleged facts that precluded him from recovering the $105,000
promised by the August 2007 resolution and which the default judgment awarded.

A
“ ‘ “judgment by default is said to ‘confess’ the material facts alleged
by the plaintiff, i.e., the defendant’s failure to answer has the same effect
as an express admission of the matters well pleaded in the complaint.”
’ (Steven M. Garber & Associates
v. Eskandarian (2007) 150 Cal.App.4th 813, 823 . . . , second italics added.) The ‘well-pleaded allegations’ of a complaint
refer to ‘ “ ‘all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law.’ ” ’
(Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6 . . . , quoting
Serrano v. Priest (1971) 5 Cal.3d 584, 591 . . . .)” (Kim
v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 281 (>Kim).)

“Because
the default confesses those properly pleaded facts, plaintiff has no
responsibility to provide the court with sufficient evidence to prove them—they
are treated as true for purposes of obtaining a default judgment. (Ostling v. Loring (1994)
27 Cal.App.4th 1731, 1746 . . . .)
But that is all the default does.
There is no penalty for defaulting.
‘A defendant has the right to elect not to answer the complaint. (Greenup v. Rodman [(1986)] 42 Cal.3d
[822,] 829 . . . .) Although this may have been a
tactical move by defendant, it is a permissible tactic.’ (Stein v. York (2010)
181 Cal.App.4th 320, 325 . . . .)” (Kim,
supra, 201 Cal.App.4th at pp.
281-282.)

“And
if the well-pleaded allegations of the complaint do not state any proper cause
of action, the default judgment in plaintiff’s favor cannot stand. On appeal from the default judgment, ‘[a]n
objection that the complaint failed to state facts sufficient to constitute a
cause of action may be considered.’ (Bristol
Convalescent Hosp. v. Stone (1968) 258 Cal.App.2d 848, 859 . . . ; see Martin
v. Lawrence (1909) 156 Cal. 191 . . . .)
Moreover, ‘[w]hen considering the legal effect of those facts, we
disregard any erroneous or confusing labels employed by the plaintiff.’ (Mead v. Sanwa Bank California (1998)
61 Cal.App.4th 561, 564 . . . , citing Saunders v. Cariss (1990) 224
Cal.App.3d 905, 908 . . . .)” (>Kim, supra,
201 Cal.App.4th at p. 282.) We also
keep in mind “ ‘the law strongly favors trial and disposition on the
merits.’ ” (Maynard v. Brandon (2005) 36 Cal.4th 364, 371-372.)

We
therefore look, at this point in our analysis, only at Malek’s complaint to see
if it states a claim and do not consider the evidence presented at trial, in
which BCC did not participate because of its default. As we have already pointed out, Malek’s
verified complaint alleged BCC agreed, by the resolution of August 26, 2007,
“to pay [Flagg] the sum of $105,000 as and for retroactive compensation for professional pastoral services
rendered to [BCC] from 1996 to August
2007” (italics added). The complaint
further alleged BCC, by refusing to make payment, had “wrongfully denied the
existence of the asset” and continued to “wrongfully possess[] and detain[] the
asset.” As we have also already
explained, Malek alleged only a promise unsupported by any consideration, and
thus failed to allege any valid and legally enforceable community property
right. He therefore failed to state a
claim against BCC.href="#_ftn7" name="_ftnref7"
title="">[7]

In
his supplemental brief, Malek cites Civil Code section 1614, which provides
“[a] written instrument is presumptive evidence of a consideration,” and
contends BCC had the burden of pleading and proving lack of consideration,
which it did not do. (See >National Farm Workers Service Center, Inc.
v. M. Caratan, Inc. (1983) 146 Cal.App.3d 796, 808 [generally lack of
consideration an affirmative defense]; Brooks
v. Fidelity Savings & Loan Assn. (1938) 26 Cal.App.2d 114,
117-118.) To begin with, BCC never had
the opportunity to file an answer, since it suffered a default, and we are
therefore left to examine only the verified allegations of the complaint. (We note BCC’s proffered trial brief did, in
fact, raise the consideration issue.)
Furthermore, the presumption of adequate consideration applies “>unless the terms of the agreement are
such as to exclude or forbid such assumption.”
(Vickrey v. Maier (1912) 164
Cal. 384, 388, italics added; accord, Brooks,
supra, 26 Cal.App.2d at pp. 116-117, quoting McCarty v. Beach (1858) 10 Cal. 461, 463.) Thus the presumption created by section 1614
is compatible with another longstanding principle: that when a litigant includes allegations
that foreclose the asserted claim, it has “pleaded itself out of court.” (Grossmont
Union High School Dist. v. State Dept. of Education (2008)
169 Cal.App.4th 869, 886.) As we
have discussed, Malek alleged in his own verified complaint that the promised
$105,000 was in exchange for “professional pastoral services rendered. . . >from 1996 to August 2007,” i.e., for >past work, which is, as a matter of law,
inadequate consideration. (Italics
added.) Finally, the statutory
presumption, by its terms, applies only to “written instruments,” and BBC’s
resolution—never signed by Flagg and to which Flagg (as Malek also alleged) was
only a “third party beneficiar[y]”—lacks the indicia of a formal written
instrument. (See Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093,
1112 [“The term ‘written instrument’ as it appears in that statute, however,
does not apply to letters, but only to more formal legal documents.”]; >Foltz v. First Trust & Savings Bank of
Pasadena (1948) 86 Cal.App.2d 59, 62 [“the document signed by decedent was
merely a letter written by him to plaintiff in which he made certain promises”
not an “instrument”]; Bevis v. Murphey
(1932) 127 Cal.App. 518, 520-521 [“receipt upon which the appellants rely
in this case is not a written instrument between the parties, but is only a
receipt for money on account signed by one of the parties”].)

In
sum, Malek’s own allegations foreclosed his claim against BBC, and the default
judgment against BBC most therefore be reversed. Further, on remand, judgment must be entered
for BCC. “ ‘ “When the plaintiff has had
full and fair opportunity to present the case, and the evidence is insufficient
as a matter of law to support plaintiff’s cause of action, a judgment for
defendant is required and no new trial is ordinarily allowed, save for newly
discovered evidence . . . . Certainly, where the plaintiff’s evidence is
insufficient as a matter of law to support a judgment for plaintiff, a reversal
with directions to enter judgment for the defendant is proper.” ’ (Kelly v. Haag (2006) 145 Cal.App.4th
910, 919 . . . , quoting McCoy v. Hearst Corp. (1991) 227 Cal.App.3d
1657, 1661 . . . [, fn. omitted]; accord, Avalon Pacific–Santa Ana, L.P. v.
HD Supply Repair & Remodel, LLC (2011) 192 Cal.App.4th 1183 . . . ; Frank
v. County of Los Angeles (2007) 149 Cal.App.4th 805, 833 . . . .)” (Kim, supra, 201 Cal.App.4th at p. 289.)

Certainly Malek had to show the
$105,000 of purported retroactive compensation was a community asset in order
to argue Flagg should be sanctioned for concealing it. (See Bono v. Clark (2002) 103 Cal.App.4th
1409, 1430.) However, as we have discussed, he did not
carry his burden of making this showing—nor, given the allegations of his
complaint, let alone the evidence adduced at trial, could he ever make such a
showing. The August 2007 resolution was
a gratuitous and legally unenforceable promise—it did not create, even for the
one year it existed before it was rescinded, any viable community property
asset.

Disposition

The
sanction against Flagg in connection with the disclosure of the promised
retroactive compensation provided by the BCC’s August 26, 2007, resolution is
reversed. The judgment against BCC is
also reversed, and on remand, the trial court is to enter judgment in favor of
BCC and against Malek on his claims against BCC. Parties to bear their own costs on appeal.







_________________________

Banke,
J.





We concur:





_________________________

Marchiano, P. J.





_________________________

Dondero, J.