Opinion
E043124
9-29-2008
ELSIE KAREN DEMERS, Plaintiff and Respondent, v. TINA L. ALLEN, Defendant and Appellant.
Lewis, Brisbois, Bisgaard & Smith, Lisa W. Cooney, Allison Ann Arabian and Jeffrey A. Miller for Defendant and Appellant. Fullerton, Lemann, Schaefer & Dominick, Thomas W. Dominick, Michael R. Schaefer and Aric M. Davison for Plaintiff and Respondent.
Not to be Published
This is an appeal from an interlocutory judgment in a partition action. The parties are Elsie Karen DeMers (Karen), whose 18-year marriage to Ben Allen (Ben) was dissolved in 1975, and Tina Allen (Tina), who was married to Ben from 2001 until his death in 2004. The underlying circumstances, although somewhat unusual, are not complicated. Shortly after their divorce was finalized, Karen and Ben resumed living together, ostensibly as husband and wife. In 1980, they purchased a home in Highland, California, taking title in both of their names as "husband and wife, as Joint Tenants." Early in 1985, Karen decided to move out. She and Ben verbally agreed they would not sell the house at that time, but rather, they would wait until market conditions improved, at which time it would be sold and the proceeds equally divided. In the interim, Ben would reside in the house, pay all related expenses, and not seek reimbursement from Karen. Both parties thereafter married, Karen once and Ben twice, and Karen moved out of the state. Ben resided in the house until his death, during which time he paid all expenses and made various improvements, without ever asking Karen for reimbursement or contribution. Shortly before his death, Ben recorded a grant deed severing the joint tenancy. Karen filed her lawsuit approximately one year after Bens death, asking that the property be partitioned by sale and the proceeds divided. Judgment was awarded in Karens favor.
In partition actions, the trial court first orders the property be sold or divided and later, following such sale or property division, enters a final judgment stating the binding effect of any conveyances. (Code Civ. Proc., § 874.210; 12 Witkin, Summary of Cal. Law (10th ed. 2005) Real Property, § 84, p. 133.)
At the core of Tinas appeal is her claim that Ben never viewed Karen as a joint owner. However, challenging the judgment on five grounds, she contends (1) the right to partition should be denied because Karen is guilty of laches; (2) the trial courts finding that Ben and Karen intended equal ownership is not supported by substantial evidence; (3) the trial court erred in relying upon an oral contract made in violation of the statute of frauds; (4) the trial court abused its discretion in disallowing Tinas claims for reimbursement and/or contribution; and (5) the trial court abused its discretion in admitting and relying upon unreliable expert testimony as to the houses fair rental value. Finding no merit to any of these contentions, we affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In 1975, after 18 years of marriage, Karen and Ben divorced. Karen was awarded the family residence, while Ben received his automotive business. Two weeks after the divorce became final, Ben moved back into the family home with Karen, and the two resided there together for another five years, along with their two daughters.
In 1980, Karen and Ben determined that they needed a larger home, as one of their daughters, who was still residing with them, would soon be having a baby. Together, they acquired a house in Highland (the house), at a purchase price of $140,000, taking title in joint tenancy as husband and wife. Although they were no longer married, Ben still referred to Karen as his wife and, according to Karen, "wanted to make sure that [her] name was on [the house] if something happened to him and [they] were going to live there together, make the payments, it was a family." They paid $25,000 down, assumed an existing loan for $68,600, and executed a promissory note to the sellers secured by a second trust deed for $46,400, with both being obligated on the loans. The $25,000 down payment consisted of $1,000 to open escrow and $24,000 by a cashiers check payable to escrow, drawn on Security Pacific Bank, the location of Bens business accounts; however, the precise source of the funds is unknown. Karen contributed more than $5,000, but could not recall if it was more than $10,000. The source of her down payment was savings and income from her employment as office manager and X-ray technician. She was unable to locate documentation to establish the amount of her contribution, explaining that her records were either at the residence or stored at Bens shop. Tinas review of cartons of documents located at the business turned up nothing relating to Karen. In any event, there was no agreement that their interest would be based upon their respective monetary contributions, and Karen understood that they each owned half of the house.
After moving into the house, Karen and Ben spent between $20,000 and $25,000 on improvements, with each participating in the decision and in the cost. Having agreed to split their expenses, Karen recalled making most of the mortgage payments, using both her earnings and rental income from the former family home, while Ben took care of maintenance and expenses.
In January or February 1985, Karen vacated the house. Before moving out, she and Ben discussed the possibility of selling the house, but they opted to wait until the real estate market improved. They then made a verbal agreement that when the house was ultimately sold, they would divide the net proceeds equally. They also agreed that Ben would stay in the house and take care of all expenses and maintenance, and that Karen would have no obligation to reimburse Ben for any portion of those payments.
After Karen moved out of the house, Ben made all of the payments, consistent with their agreement. At no time did Ben ask her to reimburse him for any of his expenses. In 1992, however, Ben asked Karen to consent to an $87,000 loan against the property. She refused, as she was not to receive any of the money and she "didnt really want that kind of a loan on [her] half of the property."
Thereafter, Karen and Ben never had a discussion as to whether the market was improving. Over the years, she had made no inquiry regarding the property and was unaware that it had increased in value. In response to an inquiry as to why, if she was waiting for the property to increase in value before selling it, she did not make a request of Ben that it be sold, she explained: "Because we always thought of it as a family home that it would probably one day go to the girls. He married three times, I married; it just wasnt an important thing to me."
In 1996, Ben deeded his interest in the property to himself as trustee of the J.B. Allen Family Trust, naming Karen and their daughters as beneficiaries. Also in 1996, Tina and Ben started dating, and later that year or early the next, Tina moved in with Ben. Beginning in 1999, Tina worked for Bens automotive business, paid bills related to his personal accounts, and maintained his personal records. They eventually married on April 1, 2001, and Ben ultimately named Tina as primary beneficiary under his family trust.
In July 2004, Karen received a letter from Bens attorney, asking her to sign a quitclaim deed to the house. Prior to this, Ben had never claimed that she had no ownership interest in the house. Nor was she aware that Ben had borrowed first $80,000 (in 2002) and then $129,000 (in 2004) against the property. When she received the letter, Karen contacted her attorney, who responded to Bens counsel by a letter dated July 29, 2004, indicating that Karen refused to quitclaim the house "without payment . . . for her interest." Meanwhile, by grant deed signed July 12 and recorded July 27, 2004, Ben severed the joint tenancy. Ben died two months later.
Tina contends the evidence shows that Karen did not believe she had an interest in the property until after Ben asked her to sign a quitclaim deed. Tina has not provided us with a record reference, and we find nothing in the record to support her assertion. Pointing to her own deposition testimony, she also asserts that Ben did not believe that Karen had an interest in the property.
Karens complaint was filed in November 2005. Tina filed an answer in December 2005, asserting correction and reformation of deeds as an affirmative defense, which mirrored her cross-complaint for reformation and cancellation of deeds. In both instances, Tina asserted that the 1980 deed did not reflect Bens true intent and the 2004 grant deed severing the joint tenancy was not intended to affirm or ratify the earlier deed. On April 28, 2006, approximately one month after the court heard and sustained Karens demurrer with leave to amend, Tina dismissed her cross-complaint with prejudice. On May 15, 2006, pursuant to a stipulated order, Tinas affirmative defense of correction and reformation of deeds was stricken.
Also named as defendants were Wells Fargo Bank and Bank of America. The register of actions appearing in the clerks transcript indicates that judgment was entered in favor of both of these defendants. The interlocutory judgment indicates that, pursuant to stipulation, Bank of America neither appeared nor participated at trial; however, the judgment recognized the existence of "[a] deed of trust securing the principal sum of $129,000 in favor of Bank of America," and ordered the referee appointed to sell the property to pay to Bank of America any sums due under its deed of trust. The complaint refers to a deed of trust securing the sum of $80,000 in favor of Wells Fargo Bank. However, other than being named as a defendant in the caption, Wells Fargo Bank is not referenced in the interlocutory judgment.
The courts minute order states, apparently inadvertently, "Demurrer is Overruled[.] [¶] 30 days to amend."
A five-day trial was held in December 2006. Both parties submitted closing briefs. During closing argument, counsel for Karen asserted there was no dispute that the parties each owned a one-half interest in the property; the only issues presented were whether Tina was entitled to reimbursement for expenses paid while she and Ben lived in the house and the extent to which a rental offset should be permitted. It was Karens position that Tina was not entitled to any reimbursement in light of Karens and Bens agreement that, while Ben lived there, he would pay for everything until the property was sold. Counsel further argued that, even if there was no agreement, Tina would at most be entitled to a credit of one-half of the principal paid towards the mortgages, or about $51,000.
Counsel for Tina argued that his client was entitled to be reimbursed for all of the expenses paid and improvements made while she and Ben resided in the house, as well as Bens contribution to the down payment. Counsel also challenged the sufficiency of the evidence to support the existence of an oral contract between Karen and Ben and claimed that because Tina had no knowledge of the purported contract it would be unfair to hold her to it.
In January 2007, the court issued its tentative decision. Karens counsel submitted a proposed statement of decision, to which Tinas counsel filed opposition. A hearing was held on February 21, 2007. At the courts direction, counsel for Karen submitted a corrected statement of decision, which was signed and filed on February 27, 2007.
The court found that Karen and Ben made two agreements—one at the time the property was acquired in 1980 and the other at the time Karen moved out in 1985. The court found that a true joint tenancy was created between Karen and Ben when they acquired the property in 1980. The court found that when Karen moved out in 1985, the parties had made an oral agreement that Ben could remain in the house provided he pay the expenses and that upon sale the proceeds would be divided equally between them. Citing Milian v. Sanchez (1986) 181 Cal.App.3d 1185 (Milian), the court found that in the absence of an agreement between the parties for reimbursement, Tina was not entitled to reimbursement or contribution on account of differences in the amounts paid by the parties toward the propertys initial acquisition or with respect to payments of mortgage, taxes, insurance, maintenance or improvements made after Karen moved out. For the period following Bens death, however, Tina was entitled to be reimbursed for her contributions to the property to the extent they exceeded the reasonable rental value from the date of Bens death until the present, although the court found that the rental value attributable to the property exceeded the amounts paid by Tina.
An interlocutory judgment was entered on February 27, 2007. It provided, in essence, that Karen and Tina each owned, as tenants in common, an undivided one-half interest in the property; that sale of the property and division of the proceeds would be more equitable than division of the property; and that the appointed referee was authorized to sell the property at either public auction or private sale. The net proceeds, after payment of any expenses relating to the sale and payment to Bank of America under its trust deed, would then be divided with Tina to be charged with the entire amount due to Bank of America under its deed of trust.
DISCUSSION
A. Even if the doctrine of laches was otherwise applicable, the question of whether Karen should be barred from seeking partition on the ground she is guilty of laches was neither raised nor suggested below and thus cannot be asserted for the first time on appeal because to do so would deprive Karen of an opportunity to meet the challenge.
Tina maintains that Karen is precluded by the equitable defense of laches from pursuing her partition action because she waited over 25 years—until after Ben passed away—before doing so. She argues she was unduly prejudiced by Karens unreasonable delay in that she was deprived of Bens availability as a key witness to refute Karens claimed ownership interest.
""Laches is an unreasonable delay in asserting an equitable right, causing prejudice to an adverse party such as to render the granting of relief to the other party inequitable. [Citation.]" (Nicolopulos v. Superior Court (2003) 106 Cal.App.4th 304, 312.) As a general rule, "the existence of laches is a question of fact to be determined by the [fact finder] in light of all of the applicable circumstances, and in the absence of manifest injustice or a lack of substantial support in the evidence its determination will be sustained. [Citations.]" (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624.) Thus, "[a] party may not present a new theory for the first time on appeal that ` . . . contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial. . . . [Citations.] An exception has been recognized where the theory presented for the first time on appeal involves only a legal question determinable from facts which are not only uncontroverted in the record but could not be altered by the presentation of additional evidence. [Citations.]" (City of Newport Beach v. Sasse (1970) 9 Cal.App.3d 803, 812; see also San Bernardino Valley Audubon Society v. City of Moreno Valley (1996) 44 Cal.App.4th 593, 608.)
Tina acknowledges that she did not raise the issue below. However, she contends the aforementioned exception applies because laches appears both on the face of Karens complaint and from the evidence itself. Moreover, she maintains that resolution of the issue does not contemplate a factual situation that could have been addressed differently had it been raised in the trial court. That is, she is emphatic that Karen should have taken action sooner, e.g., when Ben remarried, when he sought to refinance the property, when she remarried and left the state, or when he asked her to sign a quitclaim deed, and insists "[t]here is no way [Karen] could have proved she acted diligently to protect her alleged ownership rights." (Italics added.) We cannot agree.
Tina points to the third paragraph of the complaint alleging that Karen holds a 50 percent ownership interest based on a 1980 grant deed and that Ben died in 2004. She offers no explanation, however, as to why this language should excuse her from expressly pleading laches as an affirmative defense.
Tina contends Karen could have taken some action to exert her interest when Ben finally confronted her with a quitclaim deed. Perhaps, but Ben, who was then represented by counsel, could also have done something—other than severing the joint tenancy—to resolve any issue as to ownership.
Initially, we note that the record reflects that Karen demurred to Tinas cross-complaint for reformation and cancellation of deeds on the ground, among others, that the action was barred by laches. Karen argued that Bens death deprived her of a witness to acknowledge the existence of her interest in the property. We find it curious that Tinas counsel was not thereby prodded to raise the defense of laches in the main action instead of waiting until now to do so.
In any event, we reject Tinas position that Karen was required to take action to protect her alleged ownership rights. "`[L]aches addresses delay in the pursuit of a right when a party must assert that right in order to benefit from it[.] [Citation.]" (Marriage v. Keener (1994) 26 Cal.App.4th 186, 191.)
For example, in Simon v. Simon (1985) 165 Cal.App.3d 1044, the appellate court upheld a trial court ruling barring a wifes action against her former husband because the wife was guilty of laches for passing up an opportunity to adjudicate a claim to property left unadjudicated by a prior dissolution judgment. In contrast, Karen decided to file her partition action when Ben died, and until then there was nothing required of her to confirm that she held an ownership interest in the house. Indeed, there is no particular time in which an action for partition must or should be brought. (See Code Civ. Proc., § 872.010 et seq.)
Tinas reliance on Rouse v. Underwood (1966) 242 Cal.App.2d 316 is misplaced. In that case, a husband brought an action to reclaim property from his deceased wifes sisters. The husband claimed that the wife used community funds to acquire property and bank accounts that she and her sisters held in joint tenancy. The husband knew about the wifes actions but did not object. Two years after the wife died, the husband sought to impose a trust and to obtain an accounting. He was denied relief based upon his "delay in asserting his claim coupled with the death of one of the principal potential witnesses, . . . the disabilities of old age affecting the other principals, and the loss or destruction of physical evidence [which] unquestionably worked to the severe prejudice of the [defendants]." (Id. at p. 330.) Unlike the husband in Rouse, who had notice that he was wronged but delayed bringing an action to redress the wrong, Karen had neither a reason nor an obligation to do anything until Ben either moved from the house or passed away.
In any event, even if Karen were to be held to explain why she waited so long to take any affirmative action, a determination as to whether laches applied would require the taking of evidence on whether Karens delay was unreasonable and whether Tina suffered prejudice from the delay. Although some of the evidence relevant to Karens alleged delay and Tinas alleged prejudice may have been presented, we will not presume Karen would have had nothing more to present on those issues if laches had been raised. The very reason for requiring that claims be raised in the trial court in the first instance is that permitting a party to present a claim for the first time on appeal would be unfair to the trial court and manifestly unjust to the opposing party. (North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 29.) It is simply unfair to decide an issue on which the opposing party had no opportunity to develop the facts favoring its position.
B. Substantial evidence supports the trial courts finding that Karen and Ben each owned an equal undivided interest in the house; we reject Tinas newly-asserted theory that the evidence gave rise to a presumption of a resulting trust in Bens favor.
The trial court found that a "true joint tenancy" was created between Karen and Ben when they acquired the house. Tina contends there is no substantial evidence to support that finding.
A deed conveying title to property as joint tenants creates a rebuttable presumption the property is held in joint tenancy. (Machado v. Machado (1972) 58 Cal.2d 502, 506 (Machado).) This presumption, however, "may not be rebutted solely by evidence as to the source of the funds used to purchase the property. [Citations.] Nor can the presumption be overcome by testimony of a hidden intention not disclosed to the other grantee at the time of the execution of the conveyance. [Citations.]" (Gudelj v. Gudelj (1953) 41 Cal.2d 202, 212.) Rather, it may be overcome "only by evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy." (Machado, at p. 506.)
Challenging the sufficiency of the evidence to support the courts finding, Tina contends, for the first time on appeal, that the evidence gave rise to a presumption of a resulting trust in Bens favor, thereby overcoming the Evidence Code section 662 presumption; and that in the absence of evidence that Ben intended equal ownership, the presumption of a resulting trust prevails.
Evidence Code section 662 states: "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."
In response, Karen contends Tina never raised the issue of a resulting trust in the trial court, nor did she even argue that Karen did not own a one-half interest in the property. Rather, she maintains that Tina conceded at trial that Karen had an ownership interest, and that Tinas only claim was that she was entitled to substantial reimbursement for expenses incurred while Ben and Tina lived in the house. As Karen appropriately points out, counsel for Tina wrote, in objecting to the courts tentative decision: "Tina does not contend, and never has contended, that the disparity in the down payments gives rise to a larger ownership interest in the property on Bens part. Rather, as [Tinas] counsel explained during the course of the trial and as is explained in [Tinas] Closing Argument Brief, Tina merely contends that Bens $24,000.00 down payment should be included in the monetary contributions which form the basis for an equitable compensatory adjustment following sale." The courts statement of decision was thereafter modified to reflect Tinas position.
Nonetheless, Tina maintains, as she did with regard to her laches argument, that an issue of law may be presented for the first time on appeal if it arises on undisputed facts. She cites Martin v. Kehl (1983) 145 Cal.App.3d 228, 239 for the proposition "`a change in theory is permitted on appeal when a question of law . . . is presented on the facts appearing in the record [and the] theory [does] not contemplate any factual situation different from that established by the evidence in the trial court." As the court there said: "Although a resulting trust theory of recovery was not advanced by plaintiff in the trial court, it is settled that a change in theory is permitted on appeal when a question of law only is presented on the facts appearing in the record. [Citation.] `The general rule confining the parties upon appeal to the theory advanced below is based on the rationale that the opposing party should not be required to defend for the first time on appeal against a new theory that "contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial." [Citation.]" (Id. at p. 239.)
Thus, Tina contends there is undisputed clear and convincing evidence that Ben was the sole source of the down payment on the property. In taking this position, she ignores Karens testimony that she (Karen) contributed to the down payment and the fact that documentation was not needed to substantiate her contribution. Indeed, testimony of a single witness can constitute substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.) Nor, contrary to Tinas assertion, was Karen required to produce evidence to show that Ben intended a gift. Rather, the burden was on Tina to present clear and convincing evidence to rebut the Evidence Code section 662 presumption, which she failed to do. "[O]ne who claims a resulting trust in property has the burden of proving the facts establishing his [or her] beneficial interest by clear and convincing evidence." (Gomez v. Cecena (1940) 15 Cal.2d 363, 366-367.)
It seems to us self-evident that because Tina did not take the position in the trial court that a resulting trust had been created in Bens favor, she would not have made any effort to produce evidence to rebut the title presumption.
Nonetheless, to support her resulting trust theory, Tina points to Karens testimony that Ben wanted her on title in the event he predeceased her. She contends that this factor "mirrors" that in Rowland v. Clark (1949) 91 Cal.App.2d 880, a case having "a special relevancy to this appeal." There, a grandmother who furnished all of the consideration for a piece of property, but took title in her name and that of her granddaughter, was presumed to have created a resulting trust in her favor. At the time of the purchase, the grandmother was supporting her granddaughter and put her name on the title with the understanding the granddaughter would take title only if the grandmother predeceased her. The granddaughter eventually sought to partition the property while the grandmother was still living in the house. Said the court: "[T]he right to partition property is not always absolute and may be defeated by reason of an agreement between the cotenants, permitting a variance from the ordinary incidents of such cotenancy. [Citations.] . . . [¶] We conclude that where, as here, the title to the property was taken in the name of one party and the consideration for the transfer furnished by the other, a trust is presumed to result in favor of the latter. [Citation.] While there must be clear and convincing proof to establish a trust, such proof may be indirect, consisting of acts, conduct and circumstances, the question whether the showing is clear and convincing being primarily one for the trial court. [Citation.]" (Id. at pp. 882-883.) The court continued: "The evidence here presented indicates clearly that [the grandmother] did not intend to relinquish her right to occupy the property in question during her lifetime. It was her only home during her declining years, purchased and improved from her limited earnings over a period of several years." (Id. at p. 883.)
Tina contends that unlike the trial court in Rowland, the court here failed to consider all of the circumstances, opting instead to base its conclusion on the absence of a contrary writing to rebut the presumption of joint ownership. She maintains that had the court considered all of the circumstances, it would have found that the presumption of ownership was rebutted by clear and convincing evidence, including the following: (1) the source of funds used to acquire the house came from Ben; (2) the lack of documentary evidence that Karen made the bulk of the mortgage payments; (3) the lack of evidence that Karen lived in the house between 1980 and 1985; (4) the deeds erroneous designation of the parties as husband and wife; and (5) the parties conduct during the 25 years after the house was acquired, which she asserts "speaks volumes." We cannot agree. Even if we were to consider Tinas resulting trust theory, what she characterizes as clear and convincing evidence does not meet that standard.
At trial, in an effort to show that Karen was not living at the residence soon after the parties acquired it, Tina offered the testimony of a neighbor, Robert Pettit, who stated that at no time after Christmas in 1980 did he ever see Karen or her car parked anywhere on the property. He believed that by January 1981, at which time he obtained a stipulated judgment prohibiting Karen from parking in a specific area, she had already moved out. The relevance of this evidence, if any, is that if Karen did not live in the house after 1980 it is unlikely that she and Ben made an oral agreement in 1985 at the time she purportedly moved out. In light of its findings, we presume the court either did not believe or simply gave no weight to Pettits testimony.
To the contrary, the deed in the names of Ben and Karen created a rebuttable presumption that the property was held in joint tenancy, which was not rebutted by clear and convincing evidence. Ben and Karen both signed the purchase contract and obligated themselves to repay the mortgage. The court credited Karens testimony that she and Ben agreed that they would each own one-half of the property regardless of their financial contributions, thereby concluding that a true joint tenancy was created when the property was acquired and eliminating any possibility that it would have seen fit to impose a resulting trust. The court also credited Karens testimony that she made mortgage payments from her income while she lived in the house, while Ben paid other expenses. In sum, the courts finding is supported by substantial evidence.
C. The trial court did not err in enforcing the oral agreement between Karen and Ben.
During her testimony, Karen was asked if she and Ben, prior to her leaving the house, made "any kind of agreement as to what was going to happen with regard to the property." Counsel for Tina objected on the ground the proffered testimony would violate the statute of frauds. The objection was sustained. After the noon recess, however, the court reversed its ruling. Citing Civil Code section 1624, subdivision (a)(1), which makes invalid "[a]n agreement that by its terms is not to be performed within a year from the making thereof," the court said "as long as the contract can be performed within a year, even though it may not be, it is not within the statute of frauds." Karen thereafter testified as to her oral contract with Ben, and based upon the terms of that contract, particularly Bens promise to make all payments associated with the house without any contribution by Karen, the court later found that Tina was not entitled to any credit for payments made by Ben towards the mortgage, taxes, insurance or improvements.
Counsel for Tina cited Civil Code section 1624 and Code of Civil Procedure section 1731, contending that the purported oral agreement is unenforceable under either statute. When the court later reversed itself, counsel said he had previously cited the court to Code of Civil Procedure section 1721, and later referred to Code of Civil Procedure section 1621 as the statute cited. In fact, the Code of Civil Procedure contains neither a section 1621 nor a section 1731. Code of Civil Procedure section 1721 was apparently misquoted as well, as it pertains to the statute of limitations on an action to recognize a judgment from a foreign country.
On appeal Tina contends the trial court erred in using a purported 20-year-old oral contract to deny her an accounting in that the contract was barred by the statute of frauds. As we shall explain, Tinas position is meritless.
"A contract is invalid under subdivision 1, section 1624 of the Civil Code only where by its very terms it cannot be performed within a year from the date it is made. [Citations] [¶] The fact that it is not probable or likely to be performed within a year from the date it is made does not make it invalid if by its terms it is possible that the contract may be performed within a year after it is made. [Citation.]" (El Rio Oils (Canada), Ltd. v. Pacific Coast Asphalt Co. (1949) 95 Cal. App. 2d 186, 194.) Thus, the test to determine whether an oral contract is not to be performed within a year lies wholly within its terms. (Lacy v. Bennett (1962) 207 Cal.App.2d 796, 800; White Lighting Co. v. Wolfson (1968) 68 Cal.2d 336, 343.) "Even though a promise may not by its terms be performed within a year, yet, it is not inhibited by the statute if there is a possibility that it may be. The contract itself must contain language whose reasonable interpretation shows a clear intention that it cannot be performed within the year[.]" (Keller v. Pacific Turf Club (1961) 192 Cal.App.2d 189, 195-196.)
Tina contends the oral contract was unenforceable because, "by its terms, [it was] not to be performed within the year . . . ." She relies primarily on Karens testimony that she had no intention of selling the house within one year. We disagree with Tinas interpretation of that testimony. Karen testified that it was her and Bens intention to wait until the market got stronger before selling the house. She said she had no recollection as to how long she might have expected him to stay after she moved out, and it would have been acceptable if the property remained in the family for a number of years before being sold. Nonetheless, there was nothing in the agreement precluding a sale of the house within a year. Karen apparently did not anticipate a change in the market within a year after she moved out. Thus, when she testified that she had no intention of selling it within one year, what she seemed to be saying is that, in light of the real estate market, she did not anticipate selling the house within that time period. In any event, Karens intention was not a term of the contract, and if market conditions permitted a profitable sale, the house could still have been sold during the coming year. The parties did not agree as to a specific date—only that the house would not be sold until the real estate market showed some improvement. To make the statute applicable, the contract must show a clear intention that it cannot be performed within a year. (Hollywood Motion Picture Equipment Co. v. Furer (1940) 16 Cal.2d 184, 185-186.) The contract here did not meet this requirement.
Tina relies on Tostevin v. Douglas (1958) 160 Cal.App.2d 321, 327 (Tostevin) for the proposition an oral contract is invalid under the statute of frauds where there is evidence the parties contemplated a period longer than one year for performance. In Tostevin the parties entered into an oral agreement for services to be rendered in connection with the production of a television series, but did not specify the time for performance. The court surmised, however, that because "it is clear from the pleadings that payment was to continue so long as the program was broadcast throughout the world, the parties must have contemplated that the continued performance of the contract was to last more than one year from the date of making, as indeed it did." (Id. at p. 328.)
The present case is distinguishable. Even if Karen did not deem it likely that a sale would occur within the coming year, it was still entirely possible that one would actually take place. Indeed, the fact that performance is not likely to occur within a year does not render the contract invalid if performance within a year remains a possibility. Here, it cannot be said that it is evident from the subject matter of the contract that the parties had contemplated a longer period than one year as its time for performance. All that can be said is that Karen did not anticipate a sale within a year. Unlike the situation in Tostevin, the time for performance of the contract depended upon outside forces—it could occur in less than a year or more than a year. Time would tell.
Nor does Lacy v. Bennett (1962) 207 Cal.App.2d 796 support Tinas position. There, the parties entered into an oral agreement for a $2,500 loan that "was understood to be `a long-term loan although there was no definite date for repayment." (Id. at p. 800.) The defendant argued, "this is an agreement which by its subject matter evidences that the parties had in contemplation a period longer [than] one year." (Ibid.) The appellate court disagreed, explaining that the subject matter "is merely an agreement to repay money sometime in the future. `Long-term does not of itself denote any specific length of time. It is possible within the terms of such an agreement that the money might be repaid within one year. [¶] The fact that performance within one year is not probable under the terms of the agreement does not bring it within the statute of frauds. [Citation.]" (Id. at pp. 800-801.)
Tina also cites Hollywood Motion Picture Equipment Co. v. Furer, supra, 16 Cal.2d 184, for the proposition the contract must contain language whose reasonable interpretation shows a clear intention that it cannot be performed within one year from its making. The contract in this case does not contain such language. Thus, the statute is inapplicable.
Furthermore, Tina contends the court erred in finding that the contract was enforceable under the "joint venture" exception to the statute of frauds. This is a nonissue, as the court made no such finding. The fallacy in Tinas argument is that she relies on the fact the court, in revising its ruling, indicated that it had considered Coward v. Clanton (1889) 79 Cal. 23 and Kaljian v. Menezes (1995) 36 Cal.App.4th 573 (Kaljian), and that the parties could revisit the issue later if they wished. The court also indicated that those cases dealt with two parties agreeing to profits rather than title to property and that the proscription against orally agreeing to sell property was inapplicable. Inferring that the contract here was to divide proceeds from the sale of the house, the court found that it was outside the statute of frauds. The court said nothing about a joint venture exception, nor do we find any decision that makes such a reference. The fact that the summary of the opinion in Kaljian, supra, refers to a "joint venture exception" does not make it so. Simply stated, the parties agreed to divide the proceeds of the sale of the house. There was no agreement to transfer property. The statute of frauds thus does not apply.
Finally, contrary to Tinas assertion, substantial evidence supports the courts finding as to the existence of the oral contract. After hearing Karens testimony, the court found that she and Ben had agreed that Ben could stay in the house until it was sold, at which time they would share the proceeds equally; and until then, Ben would be responsible for making all payments, without any contribution by Karen. We reject Tinas contention that Karens testimony alone was not enough because it was not corroborated by documents or other testimony. "Even the uncorroborated testimony of a single witness may constitute substantial evidence. [Citation.]" (Casella v. SouthWest Dealer Services, Inc. (2007) 157 Cal.App.4th 1127, 1144.)
Nor is there merit to Tinas contention, "[w]here there is no evidence of an oral contract other than a partys testimony, the parties conduct following execution of the contract and before the dispute arose may be considered to ascertain intent." Her reliance on Oceanside 84, Ltd. v. Fidelity Federal Bank (1997) 56 Cal.App.4th 1441 is inapt. That case stands for the proposition that where both parties offer reasonable interpretations of a contract, the court must look to other objective manifestations of intent, such as the conduct of the parties after the execution of the contract, and before any controversy arose. (Id. at p. 1449.) In light of Karens testimony, which was sufficient in itself and which the court believed, there is no need to look anywhere else.
D. The trial court acted within its discretion in disallowing a portion of Tinas claims for contribution and reimbursement and in determining that the legitimate claims were offset by the propertys reasonable rental value.
In ruling that Tina was not entitled to a credit for the payments made by Ben during his lifetime, the court stated: "Milian, supra, instructs that upon finding the existence of a joint tenancy and an agreement to own and divide property equally, after separation of the parties, one joint tenant cannot later claim reimbursement or contribution on account of differences in the amounts the parties have paid toward initial acquisition of the property, in the absence of an agreement between them for reimbursement. This makes further discussion of Karen and Bens contributions to the down payment moot." However, the court found that Tina was entitled to a return of her contributions to mortgage, taxes, insurance and maintenance on the property from and after Bens death. The court did consider two payments made by Tina, i.e., pool repairs and installation of double pane windows and found that they should be offset against the reasonable value of Tinas occupancy. The court then concluded "in comparison to the rental numbers, these together with the amounts Tina paid for mortgage interest, taxes and insurance, in total, do not offset the rental reasonable value attributable for the time of her occupancy." Thus, Tina was not entitled to any reimbursement whatsoever. The court further indicated that even if it did not find that Karen and Ben made an oral agreement for Ben to continue to pay expenses on the house, "the amounts reflected in the accounting still do not exceed the reasonable rental value during the period of occupancy by Ben and Tina."
On appeal, Tina contends the trial court abused its discretion in refusing to credit her for any of the payments made by Ben to maintain and/or improve the house. The essence of her position is that the courts ruling "is based on a misreading or unwarranted extension of Milian." In short, she contends Milian does not apply because even if Karen and Ben were "`true joint tenants in 1980," they were no longer joint tenants at the time the partition action was commenced. She also cites Code of Civil Procedure section 872.140, which gives the court discretion to "`order allowance, accounting, contribution, or other compensatory adjustment among the parties according to the principles of equity."
Milian, supra, involved an action for partition of property acquired by an unmarried couple in joint tenancy. After the man and woman stopped dating, the man filed an action to quiet title and for declaratory relief, and the woman responded with a cross-complaint for partition. The evidence showed that they contributed unequal amounts to the down payment, mortgage payments, taxes, insurance and improvements. Finding that the parties had impliedly agreed to divide the property equally, the court ordered the net proceeds of sale equally without an accounting. On appeal the court observed that the trial court "declined to make an accounting and order reimbursement in this case because it found an agreement between the parties to own and divide the property equally irrespective of the exact dollar contributions of each party to the purchase price or to the subsequent improvement, maintenance, or preservation of the property. The parties were perfectly competent to make such an agreement and the critical question on appeal is whether the courts finding of such an agreement is supported by substantial evidence." (Milian, supra, 181 Cal.App.3d at p. 1194.) The court further stated that "even absent the agreement found by the court, insofar as any disparity in the contributions of the parties to the initial acquisition of the property is concerned, the determination there was a true joint tenancy supports the courts determination that there need be no accounting or contribution." (Id. at pp. 1194-1195.)
And so it is here. While Tina is correct that at the time of Bens death, Karen held an interest in the house as a tenant in common, the fact that the joint tenancy was terminated only meant that it was terminated as to right of survivorship, not as to the extent of each tenants interest. (Civ. Code, § 683.2; 5 Miller & Starr, Cal. Real Estate (3d ed. 2000) § 12:29, pp. 12-71-12-72.) Moreover, the agreement between Karen and Ben governed. Had Ben not severed the joint tenancy, Karen would then have been the surviving owner; however, when the joint tenancy was severed, she became a tenant in common but still with equal ownership—and with the oral agreement still applying.
Citing Demetris v. Demetris (1954) 125 Cal.App.2d 440, 445, Tina contends she should have been credited with the $24,000 down payment made by Ben "under the well-settled rule a cotenant paying more than his proportionate share of the purchase price is entitled to a credit in a partition action." The Milian court distinguished Demetris on the ground that although title to the property was originally taken in joint tenancy, the court had reformed the deed to a tenancy in common. (Milian, supra, 181 Cal.App.3d at p. 1195.)
Further, the Milian court acknowledged that "in a suit for partition all parties interests in the property may be put in issue regardless of the record title [citations], and the court may consider the fact the parties have contributed different amounts to the purchase price in determining whether a true joint tenancy was intended [citations]. If a tenancy in common rather than a joint tenancy is found, the court may either order reimbursement [citation] or determine the ownership interests in the property in proportion to the amounts contributed [citation]. It appears to be otherwise in respect to true joint tenancies, however, where by definition ownership of the property is equal." (Milian, supra, 181 Cal.App.3d at pp. 1195-1196.)
The court went on to find, as we have done in this case, that substantial evidence supported the courts finding as to the existence of an oral agreement and concluded that the parties were each entitled to half of the proceeds of sale without any credit for a disparity in their contributions. (Milian, supra, 181 Cal.App.3d at pp. 1196-1198.) Here too, and notwithstanding the severance of the joint tenancy prior to the filing of Karens partition action, the court was relying on the agreement between Karen and Ben that no reimbursement would be required. Once Ben died, however, that agreement ceased, and Tina was entitled to reimbursement for expenses incurred after Bens death—but this amount was less than rental value, so there is no offset.
Tina contends the court abused its discretion when it offset rental value against mortgage principal, interest, taxes, insurance, and improvements, which provided a windfall to Karen and caused manifest injustice to Tina. She contends she was entitled to the following: $24,000 for Bens down payment, principal mortgage payments of $103,420.64 and improvements of $45,558.79, before applying any offset for the fair rental value of the property.
For the period after Bens death, when the oral contract was no longer in effect, the court credited Tina with the cost of improvements made to the house. However, that amount was offset by rental value. In making its decision, the court relied on Hunter v. Schultz (1966) 240 Cal.App.2d 24, 31. Citing Hunter v. Schultz, Miller and Starr states: "When one cotenant has exclusive possession of the cotenancy property, the rental value of the premises may be offset by the cotenant out of possession against the claims of the cotenant in possession for contribution for interest, taxes, insurance, and loan obligations paid." Furthermore, "[t]he cotenant out of possession is entitled to an accounting of the rents and profits received by the cotenant in possession when it is part of a claim for partition of the property, and the rents and profits are due from the defendant cotenant either: (1) as a tenant of the plaintiff; (2) they were received by the defendant cotenant as the agent or receiver of the plaintiff cotenant; or (3) were the proceeds of their joint labor or expenditures." (5 Miller & Starr, Cal. Real Estate (3d ed. 2000) § 12:4. p. 12-12.)
E. The trial court acted within its discretion in admitting and relying upon expert testimony offered on Karens behalf as to the propertys fair rental value.
Finally, contending that the testimony of expert John Davis (Davis) was based upon unreliable data and speculation, Tina claims the court abused its discretion in relying on that testimony to determine the propertys rental value. She argues Daviss "methodology was flawed [in that h]e based the $349,890 accumulated rental value on classified advertisements containing not leases but listings, material found in his own files and telephone calls to property managers." We disagree.
As a general rule, a trial court has broad discretion to admit or exclude expert testimony, and unless that discretion is abused an appellate court may not interfere with the decision. (People v. Garcia (2007) 153 Cal.App.4th 1499, 1512.)
"`The value of opinion evidence rests not in the conclusion reached but in the factors considered and the reasoning employed. [Citations.] Where an expert bases his conclusion upon assumptions which are not supported by the record, upon matters which are not reasonably relied upon by other experts, or upon factors which are speculative, remote or conjectural, then his conclusion has no evidentiary value. [Citation.]" (In re Lockheed Litigation Cases (2004) 115 Cal.App.4th 558, 563.)
Turning to Daviss testimony, we note that he was first licensed as a real estate sales agent in 1977 and has owned his own brokerage business since 1980. He had been involved in leasing both residential and commercial properties but had more experience with residential leases. He had been a resident of Highland, where the property is located, for nearly 20 years. He testified as to the propertys rental value between 1985 and 2006. He had considered data from the United States Census, which reflected a rental increase of 167 percent between 1985 and 2006; thus, he estimated that the rental value of the house had increased by 150 percent during that period. He also spoke to other property managers, identifying the properties by such factors as number of bedrooms, square footage, location, and amenities. He testified that these factors determine rental value.
Davis had twice viewed the property from the outside. He searched the archives of past transactions in his office to find comparable properties and also looked at newspaper classified advertisements. Based on this information, he determined that the rental value of the property was $850 per month in 1985. And in 2006, the monthly rental value was, in his opinion, $2,200.
Davis defended his use of rental listings as opposed to actual rental agreements, stating that in his experience renters never negotiate the rental down from the listed price. He further explained that, in his view, because there is a demand for rental properties, renters generally pay the asking price if the house fits their needs. Further, he testified that in his 29 years of experience, he had never seen a decline in rental rates as compared to sales prices.
Davis essentially used three sources—his own files relating to rentals with which he had experience in the past, real estate listings, and other property managers. He acknowledged that classified ads often do not list addresses, but he will still rely on them for a general opinion. He does not regard as a factor the condition of the property; presumably all of the properties are in good condition as they would not be available for rental if they were not. He admitted that it is purely speculation on his part, but said it does not make sense that someone would list a house for rent which is not in rental condition. The factors he considered are location, number of bedrooms, number of bathrooms, number of cars which can be accommodated, whether it has a pool, square footage, and whether the property either has a view or is located on a mountain top. There is a 10 percent margin of error—up or down. Based on his experience, and because there is a high demand for rental properties, renters typically do not negotiate and do not ask for a discount; they pay the asking price because it is essential that they move. He explained that the rental market is a tighter market than the sales market, and that it has always been so, since 1980. If he represented the owner of the property, he would feel comfortable recommending a rental value of $2,000 today. Other than two of his own properties, he had no personal knowledge if the listings he compared actually resulted in lease agreements.
Tinas expert testified that it is preferable to use actual rental prices rather than listings, and that if an appraiser relies on listings there is a possibility of error on the high side. It is also preferable to start with current rental values and work backwards rather than working forward from 1985 values. In his opinion, Daviss method is inadequate to support an opinion as to either market value or rental value. In his opinion, rental values cannot be ascertained from the documents utilized by Davis. Instead, he would purchase data from a property management firm or interview actual renters to determine lease rates. Tinas expert failed to give his own opinion as to either market or rental value.
As for Daviss testimony, the court viewed it as "convincing evidence," noting that it "was not seriously challenged by [Tinas] efforts." Based on that evidence, the court concluded that the reasonable rental value during the period of occupancy by Ben and Tina is $348,890, which exceeded the total claimed by Tina for reimbursement.
Tina faults Davis for acknowledging that using actual rental data is preferable, while at the same time relying on rental listings for which he knew nothing about the condition of the properties. She also contends he improperly used United States Census statistics to confirm an annual rental increase of 150 percent; used data from property managers in other areas; was unable to identify a single specific property relied on to form his opinion as to the period between 1985 and 1990; and instead of starting with readily available data, he determined rental value in 1985 and worked forward. In short, Tina contends Daviss estimate of rental value was speculative and should be rejected in its entirety. She asserts that if the evidence is rejected, she is entitled to a total credit of $335,021.
Tina relies on Evidence Code sections 816 and 822 (pertaining to the admissibility of comparable sales and offers to purchase in determining fair market value) to support her position Daviss testimony lacked foundation. She acknowledges that those sections pertain to valuing property, but argues they also apply equally to a lease. She also points to the absence in Evidence Code sections 815 through 821, of any mention of rental listings, contending they may therefore not be used in calculating fair rental value. However, Evidence Code section 814 provides that an opinion of value may be based upon any matter which may be reasonably relied upon by an expert in formulating an opinion of value.
Tina is correct that offers to sell property are inadmissible to prove a propertys value. (Evid. Code, § 822, subds. (a)(2) & (b); see Mears v. Mears (1960) 180 Cal.App.2d 484, 505, disapproved on another point in See v. See (1966) 64 Cal.2d 778, 785-786.) Indeed, actual sales of comparable property, not offers to sell (which arguably may be inflated), are competent evidence of fair market value. (Evid. Code, § 816.) However, we reject her contention that, because listings are inadmissible to prove market value, they should unequivocally not be permitted as a basis to determine a propertys rental value. As previously indicated, Davis offered a viable explanation for doing so and we discern no error in allowing it. We therefore conclude that Tina has failed to establish the court abused its discretion in admitting and/or relying upon Daviss testimony to determine fair rental value.
DISPOSITION
The judgment is affirmed. Respondent is awarded her costs on appeal.
We concur:
McKINSTER, Acting P. J.
GAUT, J.