Opinion
G043425
10-24-2011
AURORA NATIONAL LIFE ASSURANCE COMPANY, Plaintiff, v. LORI ANN LIVACICH et al., Defendants and Appellants. LORRAINE LORI LIVACICH, Plaintiff and Appellant, v. ESTATE OF JOHN LIVACICH et al., Defendants and Appellants.
Law Offices of Robert G. Johnson, Jr., and Robert G. Johnson, Jr., for Plaintiff, Defendant and Appellant Lorraine Lori Livacich. Ritchie, Klinkert & McCallion and James E. Klinkert for Defendants and Appellants Catherine Alyce Catsouras, Anastasia Catsouras, Lori Ann Livacich, individually and as guardian ad litem for Lindsey Livacich, and Joseph Anticevich, individually, as successor trustee of the John R. Livacich Trust. Law Offices of Randall S. Waier and Randall S. Waier for Defendant and Appellant Jane Lorenz as Special Administrator of the Estate of John Livacich.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. Nos. 07CC12383, 30-2007-00100092)
OPINION
Appeals from a judgment of the Superior Court of Orange County, Kirk H. Nakamura, Judge. Affirmed in part, reversed in part, and remanded with directions. Motion for sanctions denied.
Law Offices of Robert G. Johnson, Jr., and Robert G. Johnson, Jr., for Plaintiff, Defendant and Appellant Lorraine Lori Livacich.
Ritchie, Klinkert & McCallion and James E. Klinkert for Defendants and Appellants Catherine Alyce Catsouras, Anastasia Catsouras, Lori Ann Livacich, individually and as guardian ad litem for Lindsey Livacich, and Joseph Anticevich, individually, as successor trustee of the John R. Livacich Trust.
Law Offices of Randall S. Waier and Randall S. Waier for Defendant and Appellant Jane Lorenz as Special Administrator of the Estate of John Livacich.
* * *
This case involves multiple appeals arising out of an incomplete marital dissolution proceeding and consolidated civil suits filed after the death of the husband, John Livacich (decedent). The gist of the fight is the ownership of the proceeds of two whole life insurance policies on the life of decedent. The appeals challenge different aspects of a judgment awarding the proceeds of one policy, the Aurora policy, to decedent's estate, and awarding fractional interests in another policy, the Transamerica policy, 23.76 percent to the wife of decedent, Lorraine Livacich (Lorraine), and 38.12 percent each to the two daughters of decedent. One group of appellants challenges the award of the Aurora policy proceeds to decedent's estate and the award of the 23.76 percent interest in the Transamerica policy to Lorraine. Lorraine, in her cross-appeal, challenges the award of the two 38.12 percent interests in the Transamerica policy proceeds to the daughters. Decedent's estate, in its cross-appeal, claims it was entitled to receive the entirety of the proceeds of the Transamerica policy.
We refer to decedent's wife by her "first name[], as a convenience to the reader. We do not intend this informality to reflect a lack of respect. [Citation.]" (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1513, fn. 2.)
Decedent's estate is correct with respect to part of the analysis. According to the language of the Transamerica policy provisions, the policy proceeds were payable to decedent's estate upon his death. However, if Lorraine is unhappy with the share she would be entitled to receive through decedent's estate, she may claim her 23.76 percent community property share of the proceeds of the Transamerica policy instead. She does not challenge the portion of the judgment pertaining to the Aurora policy proceeds and we reject other appellants' many assertions of error pertaining to the treatment of those proceeds. We affirm the portion of the judgment pertaining to the Aurora policy proceeds and reverse the portion of the judgment pertaining to the Transamerica policy proceeds.
In addition, we deny the motion for sanctions filed by the special administrator of decedent's estate.
I
FACTS
Lorraine and decedent were married on November 28, 1987. On February 1, 1996, Lorraine filed a petition for dissolution of marriage. (In re Marriage of John R. and Lorraine C. Livacich (Super. Ct. Orange County, 1996, No. 96D000991).) The dissolution proceedings were not completed and Lorraine and decedent were still married at the time of decedent's death on May 1, 2007.
On November 28, 2007, Aurora National Life Assurance Company (Aurora) filed a complaint in interpleader, naming Lorraine, Lori Ann Livacich, Catherine Alyce Catsouras, the executor of the estate of John Livacich, the trustee of the John R. Livacich Family Trust dated September 2, 2005, and others as defendants. (Aurora National Life Assurance Company v. Livacich (Super. Ct. Orange County, 2010, No. 07CC12383).) In its complaint, Aurora stated that decedent purchased a life insurance policy with a face value of $1,000,000 on or about June 24, 1982. Aurora recited the history of the beneficiary designations for the policy and provided a description of competing claims to the policy. It sought to deposit the proceeds of the policy with the court and to compel the various claimants to the proceeds to litigate entitlement amongst themselves.
A couple of weeks later, Lorraine commenced a separate lawsuit, filing a complaint for declaratory relief and reformation against numerous defendants. (Livacich v. Transamerica Occidental Life Insurance Company (Super. Ct. Orange County, 2010, No. 30-2007-00100092).) In her lawsuit, she asserted a claim against the proceeds of the Aurora policy as well as a claim against the proceeds of a life insurance policy on the life of decedent issued by Transamerica Occidental Life Insurance Company (Transamerica). She sought, inter alia, a determination of the proper beneficiaries under the two policies.
Transamerica filed a cross-complaint in interpleader in the suit commenced by Lorraine. Transamerica stated that it had deposited with the court clerk $1,019,214.60—the proceeds of its policy on decedent's life. It sought to be discharged from any further liability in connection with the policy.
In January 2007, the two lawsuits were consolidated. In February 2009, Fresher By Far doing business as All Fresh Produce (Fresher By Far) filed a cross-complaint against Lorraine and decedent's two daughters. Fresher By Far sought a determination that it was entitled to all the proceeds of the Transamerica policy.
Aurora and Transamerica, having deposited the proceeds of their policies with the court, were dismissed from the litigation before trial. The court determined that the proceeds of the Aurora policy were owned by decedent's estate. It determined that the proceeds of the Transamerica policy should be paid 23.76 percent to Lorraine, and 38.12 percent each to Catherine Catsouras and Lori Ann Livacich. In addition, the court found that Fresher By Far was equitably stopped from asserting an interest in the proceeds of the Transamerica policy.
On March 8, 2010, Attorney David G. Jimenez filed a notice of appeal from the judgment on behalf of Catherine Catsouras, Anastasia Catsouras, Lori Ann Livacich, individually and as guardian ad litem for Lindsey Livacich, and Joseph Anticevich, individually, as successor trustee of the John R. Livacich Declaration of Trust, and as executor of the estate of John R. Livacich. (Hereinafter, we refer to this group of appellants, with the exception of Joseph Anticevich as executor of the estate of John R. Livacich, as the "Descendant Appellants.")
Ritchie, Klinkert & McCallion and James E. Klinkert have filed briefs on behalf of the Descendant Appellants only, not on behalf of Joseph Anticevich as executor of decedent's estate. The Law Offices of Randall S. Waier and Randall S. Waier have filed briefs on behalf of Jane Lorenz as special administrator of decedent's estate.
On March 29, 2010, Lorraine filed a notice of appeal from the judgment. Fresher By Far did not file a notice of appeal.
Somewhere along the way a special administrator was appointed for decedent's estate. On October 29, 2010 a motion for sanctions was filed on behalf of Jane Lorenz as special administrator. In that motion, the special administrator pointed out that the appeal filed by Attorney Jimenez, challenging the judgment, was filed on behalf of the Descendant Appellants and purportedly on behalf of decedent's estate as well. However, decedent's estate did not authorize a challenge to the judgment, to the extent the judgment was in its favor with respect to the Aurora policy. Moreover, the interests of the Descendant Appellants and decedent's estate conflicted.
In the declaration of attorney filed in support of the special administrator's motion for sanctions, a representation was made that decedent's estate viewed itself as a respondent with respect to the appeal of the Descendant Appellants, and a cross-appellant. Consequently, a request was made to treat the appeal filed by Attorney Jimenez as a cross-appeal with respect to the interests of decedent's estate, and for the court to accept for filing a combined respondent's brief and cross-appellant's opening brief, on behalf of the special administrator of decedent's estate. By order of December 27, 2010, this court granted the request.
II
DISCUSSION
A. POLICY INFORMATION:
(1) Aurora Policy
Decedent purchased the Aurora whole life insurance policy in 1982. Decedent's estate was the named beneficiary of the policy. Decedent married Lorraine in 1987 and she filed marital dissolution proceedings in 1996. The family law court issued standard restraining orders.
In 1997, decedent changed the beneficiaries of the policy to Lori Ann Livacich, his daughter, Catherine Catsouras, also his daughter, and Anastasia Catsouras and Lindsey Eleanore Livacich. A month later, decedent changed the beneficiaries again, this time to Lori Ann Livacich and Catherine Catsouras only.
The court in the insurance litigation found that an automatic restraining order issued by the family law court in the marital dissolution proceedings prohibited decedent from changing the beneficiary of the policy and from changing the ownership of the policy. Consequently, the court held that the proceeds of the policy should be paid to the one who was the beneficiary of record before decedent improperly changed the beneficiary designation. In other words, the court held that the proceeds should be paid to decedent's estate.
(2) Transamerica Policy
The Transamerica whole life insurance policy was also purchased in 1982, five years before decedent married Lorraine. At the time of purchase, decedent named his daughters Lori Ann Livacich and Catherine Catsouras as the beneficiaries.
Decedent thereafter changed the beneficiary designation many times, in favor of various combinations of family members, including Lorraine, and businesses with whom he did business. As of 1993, the designated beneficiaries were Fresher By Far, as to 50 percent, and Triangle Farms, Inc., as to 50 percent. This was the beneficiary designation in effect at the time the marital dissolution proceedings were commenced. However, the beneficiaries were repeatedly changed, and ownership of the policy was changed, after the family law court issued its restraining order in 1996. As of 2005, Lori Ann Livacich and Catherine Catsouras were reflected on the records of Transamerica as the owners of the policy. As of 2007, they were designated as the beneficiaries of the policy as well.
Following trial, the court in the insurance litigation concluded that the key issue was who owned the policy at the date the family law court restraining order was entered. It found that decedent owned the policy on that date and that he was restrained from transferring ownership of the policy.
Ownership issues were especially complex because at one point decedent had purported to transfer ownership to Fresher By Far and Triangle Farms, Inc. and those companies had paid certain premiums. However, the court concluded that the transfer was not done in the usual course of business and was made in violation of the restraining order. The court found that the policy had value and was paid for in part by community funds. It held that the proceeds of the life insurance policy should be apportioned based upon the community contribution and decedent's premarital separate property contribution.
With respect to the calculations, the statement of decision provides: "The Transamerica policy was in effect for approximately 5 years prior to the marriage. (60 mos.; Nov. 82 to Nov. 87) The community paid for the premiums . . . until April of 1992 when Fresher by Far was 50% beneficiary and it paid for half of the premiums. (53 mos; Nov 87 to April 92) In March of 1993 Lorraine was taken off the policy completely and Fresher by Far and Triangle Farms began to pay for all of the premiums. (64 mos.; Nov. 87 to Mar 93.) The community interest in the half assumed by Fresher by Far is 53 mos./113 mos. or 47%; the community interest in the half assumed by Triangle Farms [is] 64 mos./124 mos. or 51.6%, for a total of 47.5% community interest in the policy. Lorraine Livacich's portion of the proceeds is therefore half of 47.5% or 23.76% of the policy payout."
The court awarded Lorraine 23.76 percent of the proceeds of the policy. It awarded the remaining 76.24 percent of the proceeds to Lori Ann Livacich and Catherine Catsouras, or 38.12 percent apiece.
B. APPEAL OF DESCENDANT APPELLANTS:
(1) Jurisdiction
By order of November 19, 2007, the family law court abated the marital dissolution proceedings. The order stated: "IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the dissolution proceedings based on the February 1, 1996 petition by the petitioner Lorraine C. Livacich against Respondent John R. Livacich, who died on May 1, 2007, Case No. 96D000991, is abated and as of the date of Respondent's death, this Court has no further jurisdiction."
The Descendant Appellants contend that in light of this abatement order, the trial court was without jurisdiction to determine whether there was a violation of the restraining order entered in the family law proceedings. They cite Bevelle v. Bank of America (1947) 80 Cal.App.2d 333, which states: "The law is settled in California that the death of one of the parties to a suit for divorce or separate maintenance abates the action and terminates the jurisdiction of the court to proceed with the action or to make any further determination of property rights, alimony, costs or attorney's fees. [Citations.]" (Id. at p. 334.)
We certainly agree that the marital dissolution proceedings were abated upon decedent's death and that the family law court had no jurisdiction to make any further determinations in those proceedings. However, the judgment at issue in the matter before us was not entered in the marital dissolution proceedings. It was entered in the consolidated insurance litigation proceedings.
In support of their position, the Descendant Appellants also cite Family Code section 233, subdivision (a), which provides that a temporary restraining order "shall be in effect against the parties until the final judgment is entered or the petition is dismissed, or until further order of the court." They construe this statute as meaning that only while marital dissolution proceedings are still pending can any court determine whether a restraining order issued in those proceedings has been violated. We don't see it that way. Section 233, subdivision (a) indicates that a restraining order terminates when the marital dissolution proceedings are abated. However, the statutory provision does not say either that (1) no court can determine, after the marital dissolution proceedings have been abated, whether a restraining order in effect prior to abatement was violated prior to abatement, or (2) a restraining order becomes retroactively void upon abatement of the marital dissolution proceedings.
The Descendant Appellants further state that neither Family Code section 233 nor various other Family Code provisions permit a restraining order to be enforced after the death of a spouse. However, after the death of the spouse the issue is not whether the restraining order can then be enforced, but rather whether the spouse, during his or her lifetime, made transfers in violation of the then effective restraining order.
The Descendant Appellants also say that the purpose of a restraining order is to protect property during the marital dissolution proceedings (see Estate of Mitchell (1999) 76 Cal.App.4th 1378, 1394), not after death. By so stating, they disprove their own position. The court here found that decedent violated the restraining order by, for example, changing the ownership of the Transamerica policy during the pendency of the marital dissolution proceedings. If that transfer of ownership were allowed to stand, Lorraine's community property interest in the Transamerica policy would have been put beyond her reach both during the pendency of the marital dissolution proceedings and after the abatement of those proceedings.
We have reviewed the Descendant Appellants' other statutory and decisional authorities and find them inapposite. We note that Thomas v. Thomas (Ala.Civ.App. 2010) 54 So.3d 363, which is based on Alabama law, and Briece v. Briece (8th Cir. 1983) 703 F.2d 1045, which is based on Illinois law and is factually distinguishable in any event, do not govern the matter before us.
In conclusion, the Descendant Appellants cite no California authority for the proposition that a restraining order, valid when entered in a marital dissolution proceeding, becomes retroactively void upon the death of one of the spouses and that no court ever has jurisdiction to determine whether one spouse violated the order. Were we to adopt the Descendant Appellants' viewpoint, one spouse could violate every order entered by a family law court, and secrete away all the marital assets, and there would be nothing the other spouse could do about it if the offending spouse happened to pass on before the violations could be addressed by the family law court. This cannot be the case.
(2) Disposition of Community Property Interest
Next, the Descendant Appellants contend that decedent did not violate the restraining order when he changed beneficiary designations inasmuch as Lorraine had no interest in the policies. We disagree.
The summons contained the following standard family law restraining order: "Starting immediately, you and your spouse are restrained from [¶] . . . [¶] 2. cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage including life, health, automobile, and disability held for the benefit of the parties and their minor child or children; and [¶] 3. transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life." (Italics added.) The language of this standard restraining order is taken nearly verbatim from Family Code section 2040, subdivision (a)(2),(3).
The Descendant Appellants state that Family Code section 2040 (and impliedly the restraining order as well) pertains only to marital property in which the spouse has an interest. Because Lorraine had no interest in the insurance policies, and they were not held for her benefit, decedent was not restrained from either transferring ownership or changing the beneficiaries. The Descendant Appellants further state that Lorraine was not a beneficiary of the policies at the time the restraining order was issued, and even if she had been, a beneficiary of a life insurance policy has a mere expectancy in the policy, not a vested right. The Descendant Appellants are wrong on several points.
Although they cite Blethen v. Pacific Mut. Life Ins. Co. (1926) 198 Cal. 91, they miss the important points in that case. As the court in Blethen explained: "An insurance policy . . . is property. 'It [can] be sold, assigned or bequeathed by the owner thereof. Its pecuniary value to its owners [is] as great as though they held a promissory note of the company for that amount, payable upon the same conditions. It [is] a chose in action and upon its satisfaction by a payment of the amount specified the title to the money so paid follow[s] the title to the policy.' [Citation.]" (Id. at p. 98.) "The proceeds of an insurance policy, the premiums on which have been paid out of the community assets, are community property. [Citation.]" (Id. at p. 99.)
As stated more recently in In re Marriage of O'Connell (1992) 8 Cal.App.4th 565, 577: "Acquisition by community funds does affect life insurance. Both spouses ordinarily have a community interest in the proceeds of an insurance policy to the extent it was acquired with community funds. [Citations.]" (Id. at pp. 577-578.)
The court in the matter before us found that the Transamerica policy premiums had been paid in part with community property funds and that, therefore, Lorraine had a community property interest in that policy. The Descendant Appellants simply ignore this finding and assert that the policy was not held for Lorraine's benefit because she was not a named beneficiary. Whether she was a beneficiary is not what is key. The focal issue is the ownership of the policy.
Furthermore, the Descendant Appellants address only the second paragraph of the restraining order, and the parallel language of Family Code section 2040 itself. They fail to address the third paragraph of the restraining order. That paragraph makes clear that no property, whether community property or otherwise, may be disposed of "without the written consent of the other party or an order of the court . . . ." By changing the beneficiary designations under each of the Aurora and Transamerica policies, decedent attempted to dispose of the proceeds of those policies, and those proceeds were property to which the restraining order applied.
We have reviewed the Descendant Appellants' other statutory and decisional authorities and subarguments with respect to this topic and find them to be unpersuasive. We need not detail each one of them here.
(3) Statute of Limitations
In its statement of decision, the court addressed whether Lorraine's claims were barred by the statute of limitations. It answered that question in the negative. The court explained: "As stated in the case law, '. . . [it's] settled that even though the insured husband has the power to change the beneficiary without her consent . . . the substitution of beneficiaries is [voidable], and after the death of the husband the wife may maintain an action for her community share of the proceeds of the policy.' Grimm v. Grimm (1945) 26 Cal.2d 173. In Estate of Mendenhall (1960) 182 Cal.App.2d 441 the court stated that a spouse has no cause of action arising from an insurance beneficiary change until the insured's death."
The Descendant Appellants maintain on appeal that Lorraine's claims were barred by Code of Civil Procedure sections 337 and 338. In particular, they cite section 337, paragraph 3, which establishes a four-year statute of limitations for actions based on rescission of a written contract. Paragraph 3 provides that "[t]he time begins to run from the date upon which the facts that entitle the aggrieved party to rescind occurred." (Code Civ. Proc., § 337, para. 3.) Section 338 establishes a three-year statute of limitations for "(a) An action upon liability created by statute . . . . [¶] . . . [¶] (c)(1) An action for taking, detaining, or injuring any goods or chattels, including actions for the specific recovery of personal property. . . ."
The Descendant Appellants argue that either the three-year or the four-year statute of limitations began to run as of the date Lorraine knew or should have known decedent violated the restraining order. They contend decedent violated the restraining order as early as 1997 with respect to the Aurora policy and as early as 1997 or 1998 with respect to the Transamerica policy, but Lorraine did not file her declaratory relief action until 2007. Applying the statute of limitations under either section 337 or section 338 of the Code of Civil Procedure, Lorraine's declaratory relief action was barred, they say.
In her complaint for declaratory relief, Lorraine alleged that decedent had violated the restraining orders when he changed beneficiaries of the insurance policies, and she claimed a community property interest in the policies. In her trial brief, her lead argument was that she had a community property interest in the policies. Her second argument was that decedent violated the restraining orders.
It is true that neither Grimm v. Grimm (1945) 26 Cal.2d 173 nor Estate of Mendenhall (1960) 182 Cal.App.2d 441, cited in the statement of decision, involved the violation of a restraining order or had to do with a situation where one spouse died while marital dissolution proceedings were pending. However, that does not make the general rule stated in those cases any less valid. A "wife's right to maintain an action to set [a beneficiary designation] aside as to her one-half interest accrues at the time of the husband's death. [Citation.]" (Estate of Mendenhall, supra, 182 Cal.App.2d at pp. 445-446.)
Here, Lorraine's complaint sought relief on two grounds (1) her right to claim a community property share in the insurance proceeds, and (2) decedent's violation of the restraining orders. Clearly, her complaint was timely at least as to the first ground. The court's ruling on the Transamerica policy was based in significant part on that ground—Lorraine's right to assert a community property interest in the policy. Interestingly, the court chose the alternative ground, violation of the restraining order, as the basis of its ruling with respect to the Aurora policy. It is not apparent to us why Lorraine does not challenge that ruling and continue to assert a community property interest in the Aurora policy proceeds. Presumably, the share she will take through decedent's estate will be at least as large as any community property share she would have taken had the same analysis been applied with respect to each of the two policies.
In any event, the restraining order was intended to protect the marital assets so they were not dissipated before the asset division could be made, and each party could claim his or her rightful community and separate property shares, through a judgment in the dissolution proceedings. In other words, Lorraine's alternate ground, pertaining to the restraining order, was still aimed at protecting her rights in the community property. Those rights were timely asserted at decedent's death.
The Descendant Appellants cite E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, for the proposition: "The applicable statute of limitations depends on 'the nature of [the] cause of action, i.e., the "gravamen" of the cause of action.' [Citations.]" (Id. at p. 1316.) They also cite Maguire v. Hibernia S. & L. Soc. (1944) 23 Cal.2d 719, which provides "that the nature of the right sued upon and not the form of action nor the relief demanded determines the applicability of the statute of limitations . . . . [Citations.]" (Id. at p. 733.) "[T]he period of limitations applicable to ordinary actions at law and suits in equity should be applied in like manner to actions for declaratory relief. Thus, if declaratory relief is sought with reference to an obligation which has been breached and the right to commence an action for 'coercive' relief upon the cause of action arising therefrom is barred by the statute, the right to declaratory relief is likewise barred." (Id. at p. 734.)
The Descendant Appellants say the gravamen of Lorraine's claim is that she was a beneficiary under the insurance contracts, who was damaged when decedent violated the restraining order by changing beneficiaries. They assert that whether her claim is styled as a breach of the insurance contract or a violation of the restraining order, her cause of action accrued long before her complaint was filed in 2007.
While Lorraine certainly did complain about the fact that decedent changed the beneficiary designations after the restraining order was issued, Lorraine was not a named beneficiary under either policy at the time the restraining order was issued. The gist, or gravamen, of her claim was that she had a community property interest in the proceeds of the policies, proceeds that were not payable until decedent's death. When those proceeds became payable, her cause of action accrued. (Estate of Mendenhall, supra, 182 Cal.App.2d at pp. 445-446.) The court did not err in its statute of limitations analysis.
(4) Laches
The Descendant Appellants maintain: "[They] requested the trial court [to] rule on the issue of laches and estoppel and it did not do so. . . . The trial court did not address or make any findings on controverted issues of (1) [Lorraine's] delay or (2) the prejudice to [the Descendant Appellants]." They say that Lorraine claimed to have no actual knowledge of the changes in the beneficiary designations and the ownership of the policies until decedent's death, but that there is substantial evidence to the contrary. Consequently, she should be estopped from seeking relief. (See Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 67-68 [laches based on unreasonable delay plus plaintiff's acquiescence or prejudice to defendant].)
The Descendant Appellants are in error with respect to their claim that the court did not rule on the matter. In its statement of decision, the court said: "The claims of Lorraine Livacich are not barred by laches or estoppel. Lorraine Livacich did not know of the change in beneficiary of either policy until the death of John Livacich; there was no prejudice to the defendants."
The Descendant Appellants fare no better with their argument that "there was substantial evidence presented [Lorraine] had actual and constructive knowledge in 1996 and at the latest in a meeting with [decedent] that she was to be removed from a life insurance policy." The Descendant Appellants' only record reference is to volume 2, page 297 of the reporter's transcript. That page of the reporter's transcript contains an excerpt of a deposition of Lorraine taken in 2000 in connection with a lawsuit she filed with respect to certain real property. The area of questioning had to do with certain documents decedent asked Lorraine to sign. She said the documents included some paperwork in connection with certain real property and one document taking her "name off the life insurance policy."
The Descendant Appellants claim this shows Lorraine knew of the changes to the beneficiary designation no later than the time she met with decedent. Hardly. We located on our own the following exchange, appearing on page 298 of volume 2 of the reporter's transcript: "[Attorney:] And so at least as of 2000, when I asked you the question about the Poway property, interspousal deed, you were referring to a change that [decedent] was going to make or wanted to make in the life insurance policy; correct? [¶] [Lorraine:] No. He brought some documents he wanted me to sign. This is when I started saying no, I wasn't going to sign documents without having the attorneys look at them." All this shows is that at some point in time decedent asked Lorraine to sign a document pertaining to a life insurance policy and that she refused to sign it. It does not constitute evidence that Lorraine knew that decedent had actually removed her name as a beneficiary on any life insurance policy, let alone the Aurora policy or the Transamerica policy in particular. Furthermore, the excerpt from the reporter's transcript provides no context as to the date of Lorraine's meeting with decedent. Consequently, it provides no evidence at all as to the date from which a statute of limitations would begin to run.
"'It is well established that a reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact.' [Citations.] Defendants' contention herein 'requires defendants to demonstrate that there is no substantial evidence to support the challenged findings.' (Italics added.) [Citations.] A recitation of only defendants' evidence is not the 'demonstration' contemplated under the above rule. [Citation.] Accordingly, if, as defendants here contend, 'some particular issue of fact is not sustained, they are required to set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error is deemed to be waived.' (Italics added.) [Citations.]" (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881-882; accord, Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 749.)
(5) Presumptions
The Descendant Appellants contend the court erred in failing to apply certain statutory presumptions regarding title. They explain that decedent purchased the Aurora and Transamerica policies before marriage and, consequently, held title as his separate property. They say there is a rebuttable presumption that the policies were decedent's separate property, consistent with the way he held title, and that Lorraine failed to provide clear and convincing proof that the policies were not in fact his separate property.
In support of their position, the Descendant Appellants cite Family Code section 2040, subdivision (c), which provides: "In all actions filed on and after January 1, 1995, the summons shall contain the following notice: [¶] 'WARNING: California law provides that, for purposes of division of property upon dissolution of marriage . . . , property acquired by the parties during marriage in joint form is presumed to be community property. If either party to this action should die before the jointly held community property is divided, the language of how title is held in the deed (i.e., joint tenancy, tenants in common, or community property) will be controlling and not the community property presumption. You should consult your attorney if you want the community property presumption to be written into the recorded title to the property.'" The Descendant Appellants also cite In re Marriage of Lucas (1980) 27 Cal.3d 808, which addressed Civil Code former section 5110, to the same general effect. (In re Marriage of Lucas, supra, 27 Cal.3d at pp. 814-815, superseded by statute.)
The rule set forth in both Family Code section 2040, subdivision (c) and Civil Code former section 5110 is inapplicable on its face. It applies to property acquired in joint form during marriage. The parties here all agree that the insurance policies in question were purchased before marriage.
The Descendant Appellants also cite Evidence Code section 662, which provides: "The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof." They also cite In re Marriage of Weaver (1990) 224 Cal.App.3d 478, in which the court held that Evidence Code section 662 applies where one spouse alleges that the other spouse has made an oral transmutation of the real property he or she acquired before marriage from separate property to community property. (In re Marriage of Weaver, supra, 224 Cal.App.3d at pp. 486-487.) However, in this case, Lorraine does not allege that decedent transmuted his separate property to community property. As Family Code section 852, pertaining to transmutations, provides: "Nothing in this section affects the law governing characterization of property in which separate property and community property are commingled or otherwise combined." (Fam. Code, § 852, subd. (d).)
Where the combination of separate and community property is concerned, we find certain language from In re Marriage of Weaver, supra, 224 Cal.App.3d 478, which the Descendant Appellants overlook, to be instructive. As the Weaver court stated: "'"Property purchased with separate property funds is . . . the separate property of the acquiring spouse. [Citation.] Such separate property does not change its character as a result of the marriage or of its mere use in the marital relationship. [Citation.] Nor does separate property lose its character as such merely because of a change in form or identity. [Citations.] [¶] If property is separate at the time of its acquisition, 'it remains so with the exception of such increase thereof as may have been due to the contribution of the community by virtue of capital or industry.' [Citation.]"' [Citations.]" (Id. at p. 484, criticized on a different point in In re Marriage of Haines (1995) 33 Cal.App.4th 277.)
Here, it is undisputed that decedent acquired the policies before marriage and that they were his separate property at the time of marriage. However, the court held that Lorraine nonetheless had acquired a community property interest in the Transamerica policy by virtue of premiums having been paid with community property during the marriage. The court applied the correct legal principles. "Where community funds are used to make payments on property purchased by one of the spouses before marriage 'the rule developed through decisions in California gives to the community a pro tanto community property interest in such property in the ratio that the payments on the purchase price with community funds bear to the payments made with separate funds.' [Citations.]" (In re Marriage of Moore (1980) 28 Cal.3d 366, 371-372.)
As an aside, the Descendant Appellants note that Lorraine and decedent signed a cohabitation agreement before marriage. They say that, pursuant to that document, Lorraine agreed that all decedent's separate property would remain his separate property. In support of their position, they cite the first page of a 19-page document executed in 1984, without discussion of a single sentence or paragraph thereof. It is the burden of the Descendant Appellants to demonstrate error by providing record references to any particular pages they wish us to consider. (Del Real v. City of Riverside (2002) 95 Cal.App.4th 761, 768.) Inasmuch as they have not cited any language they desire us to consider, we disregard their reference to that document. In any event, since the parties were not married when they executed the cohabitation agreement, we do not see the relevance of that document in construing community interests acquired after marriage.
(6) Improper Gift
Next, the Descendant Appellants argue that the court erred in awarding relief to Lorraine because it did not find that decedent had made an improper gift of community property. Under the topic heading of improper gifts, the Descendant Appellants acknowledge the statement contained in In re Marriage of O'Connell, supra, 8 Cal.App.4th at page 577: "Acquisition by community funds does affect life insurance. Both spouses ordinarily have a community interest in the proceeds of an insurance policy to the extent it was acquired with community funds. [Citations.]" (Id. at pp. 577-578, fn. omitted.) The court here specifically found that Lorraine had "proved that a portion of the premiums paid for the life insurance policies [were] community property." Consequently, Lorraine demonstrated that she had a community interest in the proceeds of the policies.
However, the Descendant Appellants emphasize the following sentence from In re Marriage of O'Connell, supra, 8 Cal.App.4th 565: "Any community interest in an insured's right to change beneficiaries is limited to avoiding gifts of community personal property." (Id. at p. 580.) They construe this sentence to mean that unless there is a specific finding that one spouse has made an improper gift of community personal property, the other spouse cannot claim a community property interest in the life insurance proceeds. They read too much into the sentence in question, just as they read too much into the court's findings.
In its statement of decision, the court addressed "[w]hether the actions of [decedent] in changing the beneficiary designations on the Transamerica policy prior to February 2, 1996 were improper gifts of community property" and held that they were not. It explained: "The beneficiary designations were simply expectancies, not vested rights."
At the outset, we observe that the court's language addressed only changes to beneficiary designations made before the marital dissolution proceedings were initiated, not to the many changes to beneficiary designations made after that date. In any event, the court concluded that the mere act of designating a beneficiary did not vest a right to the insurance proceeds in that beneficiary, because the owner of the policy could change the beneficiary designation before death. That is not the same as saying that once decedent died and the entitlements to the insurance proceeds became fixed, a determination could not then be made as to whether decedent had improperly disposed of any portion of the insurance proceeds derived from community property.
As In re Marriage of O'Connell, supra, 8 Cal.App.4th 565 also provides: "Life insurance proceeds are subject to the general rule that a spouse cannot dispose of community personal property without either the other spouse's written consent or consideration. [Citation.] Thus, it is established that after the insured's death the surviving spouse can bring an action to set aside any unauthorized gift of insurance proceeds to the extent of his or her community interest, if this right has not been waived or released. [Citations.]" (Id. at p. 578.) To the extent decedent disposed of Lorraine's community share of the insurance policies without either her consent or consideration, he made an improper gift of her share of the insurance proceeds and she had a right to challenge such improper gifts.
We have reviewed the Descendant Appellants' related arguments concerning invalid remedies and find them unpersuasive. We need not detail each of those arguments here.
(7) Award to Estate
The Descendant Appellants further contend that the court erred in awarding the proceeds of the Aurora policy to decedent's estate for several reasons. First, they say in summary fashion that the award was outside the scope and purpose of Family Code section 2040. We have already addressed section 2040 and do not reiterate that discussion here.
The Descendant Appellants also contend Lorraine's claim that the Aurora policy should be awarded to decedent's estate should have been rejected because it was unsupported by the evidence and contrary to the court's findings, and because decedent's estate never claimed an interest in the policy. However, the court found that the restraining order prohibited decedent from changing the beneficiary designation on the Aurora policy after the marital dissolution proceedings had been filed. And, the parties stipulated that whereas decedent's estate was the designated beneficiary of the policy as of 1993, decedent changed the beneficiary designation in 1997, after the restraining order had been issued. Consequently, the court's conclusion that the proceeds of the policy should be paid to decedent's estate, as the designated beneficiary prior to the issuance of the restraining order, is supported by both the stipulated facts and the court's findings.
As for the argument that decedent's estate never made a claim to the proceeds, we observe that decedent's estate was a defendant in both the complaint in interpleader filed by Aurora and the complaint for declaratory relief filed by Lorraine. Moreover, Lorraine argued at trial, inter alia, that the change in beneficiary designation, in contravention of the restraining order, was void, so that decedent's estate was the proper beneficiary of the Aurora policy proceeds. Presumably, Lorraine made this argument because she is a beneficiary of decedent's estate. Whether this is correct or not, the Descendant Appellants do not challenge Lorraine's standing to make this argument.
We find it interesting that the Descendant Appellants raise the point that decedent's estate made no claim to any interest in the policy. Attorney Jimenez undertook to represent not only the Descendant Appellants, but also decedent's estate, at trial. On behalf of his collective clients, Attorney Jimenez argued against Lorraine's contention that decedent violated the restraining order by removing his estate as the designated beneficiary. Attorney Jimenez argued instead that the change in beneficiary designation was proper.
Attorney Jimenez filed an amended answer of defendant Joseph Anticevich as trustee of the John R. Livacich Family Trust dated September 2, 2005 and as executor of the estate of John R. Livacich, which stated: "Defendant Joseph Anticevich, trustee of the John R. Livacich Family Trust dated September 2, 2005 as Doe 3, hereby amends his Answer to include his capacity as one of the named executors of the Estate of John R. Livacich . . . and for purposes of accepting notice only for the Estate, and answers the unverified Complaint as follows: [¶] 1. Pursuant to Code of Civil Procedure § 431.30(d), the defendants enter a general denial to each allegation contained in the Complaint, except that, since 1997 Lori Ann Livacich, Catherine Catsouras, Anastasia Catsouras and Lindsey Livacich were named owners, or beneficiaries, under the life insurance policy of the insured John R. Livacich, and only they have a vested right to the policy proceeds." That an attorney purportedly representing decedent's estate could make such a concession can only be explained by a blatant conflict of interest, which would not appear to be cured by contending that the representation of decedent's estate was for the sole purpose of accepting notice. While the conflict of interest explains why decedent's estate made no claim of its own, this does not change the fact that the Descendant Appellants have failed to challenge Lorraine's standing to argue that the proceeds of the Aurora policy properly belonged to decedent's estate.
(8) Amended Complaint
The trial took place from May 18, 2009 to June 3, 2009. The statement of decision states: "After testimony had been concluded, plaintiff moved to amend her complaint. The court grants Plaintiff's Motion to Amend the Complaint. Absent prejudice to the adverse party, the court is bound to a policy of liberality in granting amendments. Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739. The court finds [no] prejudice to responding party."
The Descendant Appellants maintain that the court erred in this ruling. They say that "[t]he amendment raised claims well beyond the scope of the underlying complaint. Discovery over two years was limited to the allegations in the complaint." They further complain that they "effectively tried the case in the dark when the trial court did not timely identify the controverted legal issues upon which it would later base its decision or allow additional discovery or evidence. During the trial [they] did not expect [to] try the community property interests under the Family Law Code." In short, they claim prejudice, particularly with respect to decedent's trust, which filed no cross- complaint because it was not named as a beneficiary of either of the life insurance policies.
In their discussion, the Descendant Appellants do not cite either the original complaint or the amended complaint. Apparently, they expect this court to locate the two pleadings, compare them, and seek out any supporting evidence presented at trial. This is not the function of the appellate court.
"[T]he failure to provide citation to the record is a violation of California Rules of Court, rule 15(a). A violation of the rules of court may result in the striking of the offending document, the waiver of the arguments made therein, the imposition of fines and/or the dismissal of the appeal. [Citations.] In addition, it is counsel's duty to point out portions of the record that support the position taken on appeal. The appellate court is not required to search the record on its own seeking error. Again, any point raised that lacks citation may, in this court's discretion, be deemed waived. [Citation.]" (Del Real v. City of Riverside, supra, 95 Cal.App.4th at p. 768.)
(9) Admission of Improper Character Evidence
Continuing on, the Descendant Appellants claim the court erred in admitting improper and inadmissible character evidence pertaining to decedent and his daughter Lori Ann Livacich. The evidence purportedly had to do with whether the two of them had engaged in certain fraudulent acts and whether decedent was a convicted felon. However, the Descendant Appellants fail to cite to the record in making their arguments. Consequently, their arguments on this point are waived. (Del Real v. City of Riverside, supra, 95 Cal.App.4th at p. 768.)
(10) Scope of Judgment/Rulings on Motions
The judgment decreed that the proceeds of the Aurora policy belonged to decedent's estate, that Fresher By Far was estopped from claiming an interest in the Transamerica policy, and that the proceeds of the Transamerica policy belonged 23.76 percent to Lorraine and 38.12 percent each to Lori Ann Livacich and Catherine Catsouras. The Descendant Appellants complain about the scope of the judgment.
They say that decedent's trust and Joseph Anticevich were prevailing parties and that "Lori Ann" and "Cathy" were prevailing parties as to the cross-complaint of Fresher By Far. They state that the court erred in overruling objections to the decision and in denying motions for a new trial and to vacate the judgment. They fail to cite to the record and their only citation to legal authority, Family Code section 2040, subdivision (c), has nothing to do with the required scope of judgments or with rulings on new trial motions or motions to vacate. Their arguments are waived for failure to cite to the record and failure to cite legal authority. (Roden v. AmerisourceBergen Corporation (2010) 186 Cal.App.4th 620.)
(11) Evidence of Community Interest
Finally, the Descendant Appellants claim the court's determination that there was a community interest in the insurance is unsupported by either the evidence or the law. They complain that the court failed to cite specific evidence of community contributions, but that there was credible evidence that decedent's daughters made premium payments for 10 years.
As the statement of decision itself recites, a tentative decision was issued on July 30, 2009, "Plaintiff requested clarification thereof on August 10, 2009, and "Defendant and Cross-Defendant 'requested' a Statement of Decision on August 14, 2009." The court ultimately issued its final statement of decision on December 1, 2009. The Descendant Appellants do not cite any portion of the record to show what issues arising out of the statement of decision they drew to the attention of the trial court and whether or not the trial court responded to any such issues.
Code of Civil Procedure section 632 provides in part that a "request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision." If a party fails to specify a particular issue to be addressed, he or she "is deemed to have waived [his or her] right to object to the failure of the statement of decision to do so. [Citations.]" (City of Coachella v. Riverside County Airport Land Use Com. (1989) 210 Cal.App.3d 1277, 1292.) By failing to cite to the record regarding these issues on appeal, the Descendant Appellants have left us unable to determine whether they preserved their right to object to the statement of decision.
Furthermore, "In rendering a statement of decision under Code of Civil Procedure section 632, a trial court is required only to state ultimate rather than evidentiary facts; only when it fails to make findings on a material issue which would fairly disclose the trial court's determination would reversible error result. [Citations.] Even then, if the judgment is otherwise supported, the omission to make such findings is harmless error unless the evidence is sufficient to sustain a finding in the complaining party's favor which would have the effect of countervailing or destroying other findings. [Citation.] A failure to find on an immaterial issue is not error. [Citation.] The trial court need not discuss each question listed in a party's request; all that is required is an explanation of the factual and legal basis for the court's decision regarding the principal controverted issues at trial as are listed in the request. [Citation]" (Hellman v. La Cumbre Golf & Country Club (1992) 6 Cal.App.4th 1224, 1230.) As Hellman shows, any failure on the part of the court to itemize all the evidence upon which it relied is not grounds for reversal per se.
As for the Descendant Appellants' argument that there was credible evidence to show decedent's daughters paid premiums for 10 years, we have two comments. First, the court, in its statement of decision, specifically rejected the testimony of the daughters as lacking in credibility. "The Court of Appeal is not a second trier of fact . . . ." (James B. v. Superior Court (1995) 35 Cal.App.4th 1014, 1021.) It does not reweigh evidence or reassess the credibility of witnesses. (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622.) Second, as previously stated above, "'It is well established that a reviewing court starts with the presumption that the record contains evidence to sustain every finding of fact.' [Citations.] Defendants' contention herein 'requires defendants to demonstrate that there is no substantial evidence to support the challenged findings.' (Italics added.) [Citations.] A recitation of only defendants' evidence is not the 'demonstration' contemplated under the above rule. [Citation.] Accordingly, if, as defendants here contend, 'some particular issue of fact is not sustained, they are required to set forth in their brief all the material evidence on the point and not merely their own evidence. Unless this is done the error is deemed to be waived.' (Italics added.) [Citations.]" (Foreman & Clark Corp. v. Fallon, supra, 3 Cal.3d at p. 881.)
Having cited no evidence other than their own, the Descendant Appellants' claim of lack of sufficient evidence is deemed waived. However, they are not the only ones who claim the court erred with respect to the characterization of the insurance proceeds, at least with respect to the Transamerica policy.
C. CROSS-APPEALS:
(1) Introduction
Lorraine and decedent's estate also claim the court erred in dividing the proceeds of the Transamerica policy. In her cross-appeal, Lorraine claims that she should have been awarded the entirety of the proceeds of the policy, or in the alternative, that the entirety of the proceeds should have been awarded to decedent's estate. In its cross-appeal, decedent's estate argues that the entirety of the Transamerica policy proceeds should have been awarded to it.
(2) Analysis of Policy Provisions
The parties stipulated that, in 1993, decedent made Fresher By Far and Triangle Farms, Inc. the beneficiaries of the Transamerica policy. They further stipulated that various other transfers of ownership and changes in beneficiary designation took place after 1996, the year the restraining order was issued. When decedent died, his daughters, Lori Livacich and Cathy Catsouras, were the designated beneficiaries of record.
The court found that decedent owned the policy as of the time the restraining order was issued and that he violated the restraining order when he transferred ownership of the policy. However, the court also found that the insurance proceeds were not payable to Fresher By Far and Triangle Farms, Inc.—the designated beneficiaries of record as of the date the restraining order was issued. This was because Fresher By Far was equitably estopped from asserting an interest in the policy proceeds and Triangle Farms, Inc. had waived any claim to them. Neither Fresher By Far nor Triangle Farms, Inc. has filed an appeal.
The question then becomes: Who is entitled to the policy proceeds if the beneficiaries of record prior to the issuance of the restraining order are not entitled to them? The court specifically rejected the contention that the Transamerica policy provisions should dictate the outcome. It held instead that the proceeds should be apportioned between community property and separate property interests. Interestingly, the court fashioned a formula by which it concluded that Lorraine was entitled to 23.76 percent of the proceeds as her community property share and that the daughters were entitled to the remainder. It is unclear how the court determined that the daughters should receive the remainder. However, it appears that it may have concluded that they should receive the remainder as the designated beneficiaries of record as of the date of decedent's death, even though they were designated as such years after the restraining order had been issued.
Both Lorraine and decedent's estate contend the court erred in allocating the proceeds of the Transamerica policy. We agree.
In reaching this conclusion, we look at the "BENEFICIARY PROVISIONS" of the Transamerica policy. The first paragraph thereof states in pertinent part: "Who Receives the Proceeds — Any Proceeds payable because of the death of the Insured will be paid to the beneficiary. . . ." The second paragraph provides: "If the Beneficiary Dies — The interest of any beneficiary who dies before the Insured will terminate at the death of the beneficiary. The interest of any beneficiary who dies at the time of, or within 30 days after, the Insured's death will also terminate if no proceeds have been paid to that beneficiary. If the interest of all designated beneficiaries has terminated, any proceeds payable will be paid to the Owner of this policy. If the Owner is not living at that time, any proceeds payable will be paid to the executor or administrator of the Owner." (Italics added.)
Decedent's estate argues, as does Lorraine in her alternate argument, that the proceeds of the policy were payable to decedent's estate pursuant to the italicized language. The court rejected this argument in its statement of decision. It construed the second paragraph of the "BENEFICIARY PROVISIONS" as being applicable only to human beings who are deceased, not to legal entities incapable of suffering death. It concluded that to construe the italicized sentences to apply to beneficiaries that are not human would be to disregard the preceding language of the paragraph.
This interpretation would appear to thwart the purpose of the paragraph in question. The obvious intent of the paragraph is to specify who should take the policy proceeds if the designated beneficiary of record has died or otherwise has no remaining interest in the proceeds. Here, neither Fresher By Far nor Triangle Farms, Inc. had died, but their interests in the policy proceeds had terminated. In that event, the italicized language provides that the proceeds are to be paid to the owner, or if the owner is then deceased, to his or her executor or administrator.
The court found that decedent was the owner of the policy when the restraining order was issued and that he was under court order not to divest himself of ownership. Consequently, pursuant to the terms of the insurance contract, and specifically the above-quoted "BENEFICIARY PROVISIONS," the policy proceeds should have been paid to the executor or administrator of decedent's estate.
The Descendant Appellants contend that decedent's estate cannot raise the foregoing arguments because it abandoned its appeal and because it did not make these arguments at the trial level. We find these arguments disturbing. First of all, when Attorney Jimenez filed a notice of appeal, it was on behalf of the Descendant Appellants and decedent's estate collectively. How it came about that a special administrator was appointed to protect the interests of decedent's estate, we do not know. However, the conflict of interest in one attorney undertaking the representation of both the Descendant Appellants and decedent's estate at the same time is blatantly obvious. The attorney cannot effectively represent decedent's estate when his other clients' position is that decedent's estate has no interest in the insurance proceeds. Once the special administrator was appointed, she hired an attorney to file a motion and declaration in the appellate proceedings, stating that decedent's estate abandoned its appeal to the extent the appeal challenged the judgment in its favor with respect to the Aurora policy and asking that the court treat it as a cross-appellant with respect to other portions of the judgment. That request was granted. Decedent's estate has not abandoned a challenge to the part of the judgment pertaining to the Transamerica policy.
The Descendant Appellants brazenly carp that decedent's estate raised the conflicts of interest issue for the first time on appeal. How was it that decedent's estate could have raised the issue at the trial level when the attorney that was supposed to be asserting its interests was also representing the Descendant Appellants? Not until a special administrator was appointed and a new attorney was hired could the issue be raised. It appears that this happened only after judgment had been entered and it was too late then for decedent's estate to take a position in the trial court.
In any event, the Descendant Appellants pose what amount to rhetorical questions. It matters not that decedent's estate did not assert a claim to the Transamerica proceeds in the trial court and that it raises its issues only on appeal. As it happens, Lorraine took the same positions and made the same arguments at the trial level. We need only analyze the court's response to Lorraine's points. We simply observe that, on appeal, decedent's estate proffers many of the same arguments as does Lorraine.
(3) Lorraine's Additional Arguments
That is not the end of our analysis, however. That the proceeds of the Transamerica policy should be declared to be payable to decedent's estate is Lorraine's alternate argument. It is not her first argument.
Lorraine's first argument is that the court should have awarded her the entirety of the proceeds of the policy. She raises several points in support of this position. First, she maintains that the court should have declared that the proceeds belonged to the beneficiaries of record prior to decedent's actions taken in violation of the restraining order. Since those beneficiaries were Fresher By Far and Triangle Farms, Inc., neither of which had a continuing right to the policy proceeds, the court should have declared that the beneficiary of record prior in time to Fresher By Far and Triangle Farms, Inc. should take the proceeds. Lorraine claims she was the prior beneficiary, so she should take all the proceeds.
This argument is completely contrary to the language of the insurance contract, as discussed above. The insurance contract provides that if the beneficiary of record cannot take, then the policy proceeds are paid to the owner of the policy or the owner's estate. It does not state that the proceeds should be paid to one whose prior designation as a beneficiary had been revoked—one for whom the policy owner had ultimately decided not to provide, for whatever reason. We reject Lorraine's first argument.
Lorraine also argues that all of the Transamerica proceeds should be paid to her on equitable grounds. She says the evidence showed that both of decedent's daughters aided and abetted decedent in making the "illegal" beneficiary designation changes after the restraining order had been issued. She also emphasizes that the court found the testimony of decedent's daughters at trial to be unbelievable. In addition, Lorraine claims that decedent deprived her of substantial community property by selling his interests in Fresher By Far and Triangle Farms, Inc. after the restraining order was issued and "pocketing $1,472,000 in stock sale proceeds" without her knowledge. She further asserts that decedent was more than $1,000,000 in arrears in spousal support payments at the time of his death.
Lorraine argues that the trial court had broad discretion to fashion equitable remedies and that it should have exercised its discretion to award all of the Transamerica policy proceeds to her in order to offset these losses. However, Lorraine cites no authority for the proposition that where the insurance contract provides that policy proceeds shall be paid to certain persons, the court should ignore those contract provisions and order the proceeds to be paid to different persons, in the interests of equity. Having failed to support her argument with legal authority, it is deemed waived. (Roden v. AmerisourceBergen Corporation, supra, 186 Cal.App.4th at pp. 648-649.)
As stated above, the "BENEFICIARY PROVISIONS" of the insurance contract required, under these circumstances, that the proceeds be paid to decedent's estate. This outcome is one of the two possible outcomes Lorraine desires, even though it is not her first choice. Presumably she will be happier to take whatever share is available to her through decedent's estate than to take the 23.76 percent community property share the trial court awarded to her. However, just because we conclude the insurance contract requires the proceeds to be paid to decedent's estate, that does not mean we also conclude Lorraine's community property rights may be defeated by decedent's estate. To be clear, we are not saying that Lorraine must sit back and accept whatever share she may be entitled to through decedent's estate even if that is less than 23.76 percent. Lorraine may chose to reject the share of the policy proceeds she would receive through decedent's estate and to claim instead her community property share of the policy proceeds. (Blethen v. Pacific Mut. Life Ins. Co., supra, 198 Cal. at pp. 99-101.)
That being said, we have a few closing comments. We are unclear on Lorraine's bottom line with respect to the formula the court utilized to determine that community property share. On the one hand, she says the court arrived at the formula through "exhaustive dissection of the origin of premium payments made." On the other hand, she complains that the court failed to give the community credit for the period of time that Fresher By Far and Triangle Farms, Inc. paid policy premiums and that it should have considered her community interest in those two companies. She also quips that the court performed "mathematical gymnastics" to arrive at the formula, and that it would have been more equitable to just give her everything.
However, Lorraine fails to address either the size of her community share in Fresher By Far and Triangle Farms, Inc. or why it would have been appropriate to credit the payments those companies made to the community interest. Inasmuch as she fails to support her argument with either evidence or legal authority, it is deemed waived. (Roden v. AmerisourceBergen Corporation, supra, 186 Cal.App.4th at pp. 648-649.) We have already addressed her equitable arguments.
The long and the short of it is that neither Lorraine nor the Descendant Appellants are satisfied with the court's formula. In reading the formula, we too wonder whether the court took into consideration all of the factors that it should have. However, the trial clearly involved evidence concerning multiple complex transactions and we will not search the record on our own to find facts that might support a different formula or raise on our own arguments the parties have not. (Niko v. Foreman (2006) 144 Cal.App.4th 344, 368; Del Real v. City of Riverside, supra, 95 Cal.App.4th at p. 768.) Neither Lorraine nor the Descendant Appellants having met their burden to demonstrate reversible error, the court's formula for the determination of Lorraine's community property share of the Transamerica policy proceeds stands. If Lorraine chooses to take a community property share of those proceeds, instead of taking whatever amount she would be entitled to receive through decedent's estate, she shall be entitled to 23.76 percent.
D. MOTION FOR SANCTIONS:
As we have mentioned, Jane Lorenz as special administrator of decedent's estate has filed a motion for sanctions against the Descendant Appellants, their attorney of record James E. Klinkert, and their former attorney, Attorney Jimenez. They seek $32,487.50 in fees as sanctions, for two basic reasons: (1) the Descendant Appellants' appeal is frivolous, their briefs are riddled with inaccurate representations of fact and law and violate the rules of appellate procedure in many respects, and their record also fails to comply with appellate rules; and (2) the Descendant Appellants and their current attorney capitalize upon the unethical actions of their prior attorney, who still appears to have some involvement in the appellate proceedings.
We agree that the Descendant Appellants have made inaccurate representations of fact and law and that their briefs and record fail to comply with rules of appellate procedure in too many ways to mention. We accept the representation of the special administrator that this caused an undue expenditure of time and effort to respond to the Descendant Appellants' appeal, because it caused an undue expenditure of time and effort on the part of this court to consider the Descendant Appellants' briefs, and the citations to the record and to legal authority contained therein, and to evaluate their appeal. That notwithstanding, we do not conclude that "any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.]" (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.)
We are far more disturbed, as noted previously, by the position in which Attorney Jimenez has put decedent's estate. That does not mean, however, that the Descendant Appellants should have to pay sanctions for the conduct of their former attorney.
We are also disturbed that the Descendant Appellants' current attorney has sought to capitalize on the actions of Attorney Jimenez. Attorney Klinkert has argued that decedent's estate can make no arguments on appeal because it made none in the trial court. Yet it is perfectly clear that Attorney Jimenez, who was the one responsible for asserting the interests of decedent's estate at the trial level, undermined those interests in favor of his other clients, the Descendant Appellants. Attorney Klinkert had to know that by making the argument he did, he was capitalizing on the inappropriate conduct of Attorney Jimenez. At the same time, Attorney Klinkert was not the trial attorney who boxed in decedent's estate.
As for Attorney Jimenez himself, the proof of service attached to the motion for sanctions does not show service upon him. Consequently, we decline to award sanctions against him.
III
DISPOSITION
The portion of the judgment awarding the Aurora policy proceeds is affirmed and the portion of the judgment awarding the Transamerica policy proceeds is reversed. On remand, the trial court shall enter a new and different judgment consistent with the views expressed herein. The motion for sanctions is denied. However, in the interests of justice, Lorraine Livacich, and Jane Lorenz as special administrator of the estate of John Livacich, shall be entitled to their costs on appeal.
MOORE, J. WE CONCUR: BEDSWORTH, ACTING P. J. FYBEL, J.