Marriage of Rynda
Filed 7/25/13 Marriage of Rynda CA1/3
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opinion has not been certified for publication or ordered published for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
THREE
In re the
Marriage of CAROLINA C. and DAVID
J. RYNDA.
CAROLINA
C. RYNDA,
Appellant,
v.
DAVID J.
RYNDA,
Respondent.
A137298
(Alameda County
Super. Ct.
No. HFO4150159)
Carolina
C. Rynda (Carolina) appeals an
order denying her postjudgment motion for property division in a
found there was no property to divide following Carolina’s
declaration of bankruptcy and a trustee sale of assets to Carolina’s
ex-husband, David J. Rynda (David). We shall affirm the order.
The
parties are proceeding in propria persona
and only Carolina has filed a
brief. The docket for the case spans nine years and contains hundreds of
entries yet only a few documents are included in the clerk’s transcript. The
following facts are based on the partial record provided.
The
parties were married in January 1996 and operated a family-owned insurance
agency. In April 2004, Carolina
filed a petition for dissolution of marriage. A judgment of dissolution of
marriage was filed the following year, in May 2005, and the court ordered an
equal division of community property and debts including, without further
specification, “50% of business with three locations†to each party. The court
reserved “jurisdiction to make whatever orders may be necessary or desirable to
carry out this order and to divide equally between the parties any community
assets or liabilities omitted from division under this order.†Sometime later,
a receiver was appointed to manage, control and inventory the business.
In
February 2009, Carolina filed for
bankruptcy. In March 2009, the superior court ordered: the “[v]aluation and
division of assets shall be determined by this court at the conclusion of the
bankruptcy court proceedings to the extent that they remain available to the
parties.†The superior court delegated interim management and control of
specified properties and business offices to each party, subject to bankruptcy
court oversight. The bankruptcy trustee evaluated the parties’ business and, in
April 2010, sold Carolina’s stock
in Rynda’s Number 1 Insurances Services, Inc. to David. The record does not
contain information on the distribution of other assets and liabilities by the
bankruptcy trustee. According to David, the bankruptcy trustee disposed of all
community property except for two real estate holdings, which were subsequently
foreclosed.
Carolina
claims there are community assets and liabilities still to be divided. In
September 2012, she filed a “Motion for a trial . . . for Valuation and
Division of community assets†and “Allocation of Debts.†Carolina
believes the bankruptcy proceeding discharged community debts without settling
community assets. She claims entitlement to half the insurance agency business
(now operated by David) and reimbursement for half the community debts
discharged in bankruptcy. In addition to filing a motion to set trial on
property division, Carolina also
filed a motion seeking sanctions against David for breach of fiduciary duty in
managing the insurance agency.
David
opposed the motions and submitted evidence that he purchased Carolina’s
interest in the insurance agency from the bankruptcy trustee charged with
administering Carolina’s assets.
David declared: Carolina’s
“interest in Rynda’s Number 1 Insurance Services, Inc., was voluntarily
transferred to the Trustee when she filed for bankruptcy and was later sold by
the Bankruptcy Trustee, at a court supervised auction in which she participated
as a possible purchaser.â€
A
hearing on the matter was held on November
13, 2012. The court explained to Carolina
that “the bankruptcy court has superior jurisdiction to the superior court. And
if the bankruptcy court divided your businesses or sold them, then they’re done
with them. I can’t do anything about that.†Carolina
acknowledged the bankruptcy court’s authority to discharge community debt but
disputed its authority to dispose of community property.
The
court denied Carolina’s motion for
a trial on the division of community business and real estate assets, finding
none to divide. The court continued Carolina’s
motion for division of a bank debt, raised for the first time at the hearing,
and ordered David to produce accountings for the period of his interim
management of community assets. Carolina filed a timely
Discussion
Carolina
contends there are community business and real estate assets to divide despite
the bankruptcy court proceeding. The contention is based on a misunderstanding
of the bankruptcy court’s reach. “In states such as California, where each
spouse has management and control of community property, . . .
the bankruptcy estate includes all community property as of the commencement of
the case, of both the debtor and the non-debtor-spouse.†(McCoy v. Bank of America (Bankr. 9th Cir. 1990) 111 B.R. 276, 278,
citing 11 U.S.C.A. § 541(a)(2).) “[T]he community property is liable for a
debt incurred by either spouse before or during the marriage, regardless [of]
which spouse has the management and control of the property and regardless [of]
whether one or more spouses are parties to the debt or to a judgment for the
debt.†(McCoy, supra, at p. 280.)
The bankruptcy court takes control of community property and may distribute
community assets to satisfy community debts. (8B C.J.S. (2013) Bankruptcy,
§ 1103.)
Carolina
acknowledges that she filed her bankruptcy petition before there was a final property
division. Her bankruptcy petition lists over $3 million in assets and
liabilities and includes the parties’ community real estate and business
holdings. Community property was therefore within the bankruptcy estate and
subject to the bankruptcy court’s disposition.
In
recognition of the bankruptcy court’s jurisdiction, the superior court
suspended property division proceedings: “Valuation and division of assets
shall be determined by this court at the conclusion of the bankruptcy court
proceedings to the extent that they remain available to the parties.†The court
found there were no assets at the conclusion of the bankruptcy court
proceedings, apart from two real property parcels that were foreclosed, and
therefore nothing for the superior court to divide. Carolina has failed to
produce any evidence to the contrary. She claims one-half interest in the Rynda
insurance agency but it is clear from the record that the bankruptcy trustee
sold Carolina’s stock in the business to David. On the record provided, there
is no evidence of community property to be divided. The superior court did not
err in denying Carolina’s motion to set trial for marital property division.
The
order is affirmed.
_________________________
Pollak,
J.
We concur:
_________________________
McGuiness, P. J.
_________________________
Jenkins, J.
