Opinion
No. C055095.
April 1, 2008. REVIEW GRANTED October 9, 2008
Superior Court of Sacramento County, No. 00FL02239, Peter J. McBrien, Judge.
Codekas Family Law and Katherine Codekas for Appellant. Boyd Kimball and Betsy S. Kimball for Respondent.
OPINION
Appellant Anne E. Montgomery (Wife) appeals from a postjudgment ruling whereby the trial court denied her further payment of proceeds from the sale of the family residence, to which Wife argued she was entitled under the terms of the judgment on reserved issues. Finding the trial court erred, we shall reverse and remand with instructions to the trial court.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Judgment A judgment of dissolution in this matter was entered on June 19, 2000. Incorporated into the judgment was the parties' marital settlement agreement (collectively, the judgment), which awarded the family residence to respondent Earl Bruce Harwood, Jr., (Husband). The judgment also included the following provision: "A. Parties agree that Wife and child shall reside at the family residence located at 4210 54th Street, Sacramento, CA 95820 until Wife is able to reside in another house. Wife shall pay to Husband the full amount of the existing mortgage payment as rent while Wife resides in the family residence. "B. Husband shall either refinance or assume the existing mortgage solely in Husband's name, within sixty (60) days, thus removing Wife's obligation in the family residence mortgage. If the mortgage is not refinanced or assumed within sixty (60) days, the parties agree to sell the residence and divide equally any profit or loss." B. The Family Residence The parties do not dispute that Husband failed to "refinance or assume the mortgage solely in [his] name, within sixty (60) days. . . ." There is no dispute that Wife continued to live with the parties' minor child in the family residence until September 2003, during which time she continued to pay the mortgage directly to the mortgage company. It is also undisputed that from 2002 to 2006, Husband gave Wife money each month in excess of his support obligation, which over that period of time totaled $22,175. In March 2001, Wife executed a quitclaim deed, transferring title to Husband. Wife testified she did so because Husband told her he could not refinance the home unless title was exclusively in his name. Two and one-half years later, in September 2003, Wife and the minor child moved out of the family residence. The home sold shortly thereafter in October 2003. In anticipation of escrow closing, Wife told Husband she expected her equal share of the net proceeds from the sale of the family residence (the proceeds). Husband told her he did not believe she was entitled to half and would not give it to her. Husband testified their discussions regarding the proceeds were "[v]ery minor." In any event, when the house did sell in October 2003, resulting in net proceeds of $89,849.68, Husband paid Wife $25,000 from the escrow account. C. Long Cause Hearing on Wife's Motion to Enforce the Judgment In April 2006, Wife filed a motion seeking to enforce the judgment and obtain her remaining share of the proceeds and to increase child support. Husband filed his own motion to modify custody. Ultimately, both motions were set for a long cause hearing, at which Husband argued the $25,000 payment he made to Wife was an accord and satisfaction of his debt to her under the judgment. Alternatively, he argued that he should receive a credit for the money he voluntarily paid to Wife in excess of his support obligation. In support of his argument that the $25,000 was an accord and satisfaction of the judgment debt, Husband testified that he paid Wife the $25,000 out of escrow "in an effort to resolve their disagreement." He explained that he would not have paid Wife the $25,000 if he knew she would pursue the remainder of her share of the proceeds. Wife testified that when she accepted the $25,000 she had not considered whether she would pursue the remainder of her share; at the time, she believed it was in their son's best interest not to argue about money. Husband also testified that he paid Wife the additional money over the years "because she had expenses that needed to be paid, and one of them primarily was the house at the time she lived in it." Nevertheless, he admitted he would not have given her this money either if he had known she would seek to enforce the provision of the judgment entitling her to half of the proceeds. At trial, he argued that regardless of whether there was an accord and satisfaction, he should be entitled to offset against his judgment debt the more than $22,000 he paid Wife in excess of his support obligation. D. The Trial Court's Ruling After hearing testimony from both parties, the trial court ruled as follows: "I'm going to deny the request for further proceeds from the judgment for the family residence. I think, first of all, both parties waived the sixty days, that the Petitioner has amply been reimbursed for her portion, and whether one wants to call it a satisfaction — an accord and satisfaction or some other construction, there is no equitable grounds upon which the Court could see that further payment from [Husband] would be appropriate under the factual circumstances that this [c]ourt finds. . . ." The court later filed formal findings and order after hearing, prepared by Husband's counsel, which read: "A dispute has arisen over construction of judgment and the family residence. The Family Residence was awarded to Husband in the judgment. Wife was allowed to reside there with the child and upon payment of mortgage. "The judgment gave Husband 60 days to refinance or assume the mortgage to remove Wife's liability. A refinance or assumption did not occur but neither party sought to enforce within a reasonable time. Thus each party waived the 60 day obligation. "The judgment provided the penalty of sale and division of proceeds of property if not performed within 60 days but both waived this provision." Wife stayed in the family residence until 2003. The house was listed for sale, she moved out, but maintained the mortgage. Earlier, Wife had signed a quitclaim to Husband. After the house sold, [Husband] gave Wife $25,000.00 from the sale proceeds[,] which she accepted without objection. Satisfaction of obligation. "During the past 5 years Husband has given Wife about $22,000.00 in excess of his child support obligation. Husband testified had the net proceeds of the Family Residence sale been divided, each would have received $45,000.00. Husband has no further obligation to Wife under the judgment." Wife appeals the court's order.
The trial court initially signed two separate findings and orders after hearing. On March 19, 2007, the court vacated the order filed January 22, 2007, and ruled that the order entered on January 16 is the operative order. It is from the January 16, 2007, order that Wife appeals.
DISCUSSION
A. Accord and Satisfaction "The elements of an accord and satisfaction are: (1) a bona fide dispute between the parties, (2) the debtor sends a certain sum on the express condition that acceptance of it will constitute full payment, and (3) the creditor so understands the transaction and accepts the sum." ( In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058 [ 48 Cal.Rptr.2d 882].) "An accord and satisfaction may be implied. ( Thompson v. Williams, supra, 211 Cal.App.3d at p. 571.) Whether a transaction constitutes an accord and satisfaction depends on the intention of the parties as determined from the surrounding circumstances, including the conduct and statements of the parties, and notations on the instrument itself." ( In re Marriage of Thompson, supra, 41 Cal.App.4th at pp. 1058-1059, citing Wallace v. Crawford (1937) 21 Cal.App.2d 394, 404 [ 69 P.2d 455].) Here, regardless of whether the dispute surrounding the division of proceeds was bona fide, there is no evidence in the record that Husband communicated to Wife his intent that the $25,000 be an accord and satisfaction of his debt to her under the judgment. Therefore, Wife could not have understood the transaction and accepted the sum. ( In re Marriage of Thompson, supra, 41 Cal.App.4th at p. 1058; contra, Thompson v. Williams (1989) 211 Cal.App.3d 566, 574 [ 259 Cal.Rptr. 518] [parties "dickered" over amount due under agreement, payor offered partial payment saying, "take it or leave it," payee accepted the partial payment without objection, and the court found an accord and satisfaction].) Accordingly, on this record, we find no evidence of an accord and satisfaction. B. Waiver Wife notes in her opening brief that, despite the fact that the defense of waiver was not put at issue for the long cause hearing on this matter, the court found that "[t]he judgment provided the penalty of sale and division of proceeds of property if not performed within 60 days but both waived this provision." Because waiver was not at issue in the long cause hearing, it was error for the trial court to deny Wife's motion on that ground. "The rule is well settled in this state that findings on issues not made by the pleadings must be disregarded and cannot furnish support for a judgment." ( Simmons v. Simmons (1913) 166 Cal. 438, 441 [ 137 P. 20], citing Burnett v. Stearns (1867) 33 Cal. 468; Gregory v. Nelson (1871) 41 Cal. 278; Morenhout v. Barron (1872) 42 Cal. 591; Ortega v. Cordero (1891) 88 Cal. 221 [ 26 P. 80]; Reed v. Norton (1893) 99 Cal. 617 [ 34 P. 333]; Elmore v. Elmore (1896) 114 Cal. 516 [ 46 P. 458]; Crescent Lumber Co. v. Larson (1913) 166 Cal. 168 [ 135 P. 502].) Unlike a civil trial, where the issues to be tried are confined to the complaint and answer or a pretrial order, the nature of a family law action is such that the universe of issues that may be considered at a long cause hearing is so vast the Sacramento County Superior Court requires the parties each to "file and serve a statement setting forth each issue in dispute, and the legal and factual basis in support of the party's contentions. . . ." (Super.Ct. Sacramento County, Local Rules, rule 14.03 (rule 14.03).) This pleading, referred to as a "Statement of Issues in Long Cause Cases" (statement of issues), thus becomes the de facto operative pleading for a long cause hearing. Husband did not include the issue of waiver in his statement of issues. Similarly, Husband did not include the issue of waiver in his trial brief. Consequently, waiver was not properly before the trial court at the long cause hearing. Furthermore, rule 14.03 provides that "[f]ailure of any party to specify an issue in dispute in a statement of issues may result in an issue sanction (no evidence may be presented relating to omitted issues). . . ." (Rule 14.03(B).) Thus, as in a civil trial, the trial court here had the discretion to consider the equitable defense of waiver if it had been voluntarily submitted and tried by the parties without objection. ( King v. King (1971) 22 Cal.App.3d 319, 324 [ 99 Cal.Rptr. 200].) The defense of waiver, however, was not litigated by either party at the long cause hearing. Accordingly, it was not submitted for the court's consideration. Finally, although some of the evidence presented in support of Husband's accord and satisfaction defense may have supported a finding of waiver, "evidence which is relevant to an issue actually raised by the pleadings cannot be considered as authorizing the determination of an issue not presented." ( Freeman v. Gray-Cowan, Inc. (1933) 219 Cal. 85, 87 [ 25 P.2d 415].) Thus, the court erred in ruling on the issue of waiver and finding the parties waived their rights under the judgment. C. Laches Husband argues on appeal that Wife is precluded by the equitable defense of laches from pursuing additional money from the proceeds. Husband did not include laches as a defense in either his statement of issues or his trial brief. Regardless of whether Husband raised the issue in his response to Wife's initial motion, as discussed above, omitting the defense from his statement of issues results in a failure to put the defense at issue in the long cause hearing. ( Ante, p. 751.) Because he did not raise the defense below, he cannot raise it here. ( Canal-Randolph Anaheim, Inc. v. J. E. Wilkoski (1980) 103 Cal.App.3d 282, 289 [ 163 Cal.Rptr. 30] [laches may not be raised for the first time on appeal]; Hege v. Worthington, Park Worthington (1962) 209 Cal.App.2d 670 [ 26 Cal.Rptr. 132] [laches may not be raised for the first time on appeal].) D. Credit for Additional Money Paid to Wife Wife argues in her opening brief that the trial court erred in using the approximately $22,000 Husband paid to Wife in excess of his support obligation to offset Husband's debt to her under the judgment. Although Husband argued this issue at the long cause hearing, he did not address the issue in his brief on appeal. However, at oral argument Husband contended the trial court was entitled to set off the $22,000 against Wife's entitlement to her share of the house proceeds. Because this appears to be the primary basis for the court's ruling we will consider it even though Husband did not discuss the issue of setoff in his brief. It is Wife's position that equity demands Husband not receive credit for what he deems an "overpayment of support." However, none of the cases cited by Wife addresses this issue. ( In re Marriage of Trainotti (1989) 212 Cal.App.3d 1072, 1074 [ 261 Cal.Rptr. 36] [payor parent entitled to an offset against child support arrearages for the time that he or she has lived with the child and provided direct support]; In re Marriage of Peet (1978) 84 Cal.App.3d 974, 980 [ 149 Cal.Rptr. 108] [courts have discretion to apply prior overpayment of child support toward child support arrearages]; Williams v. Williams (1970) 8 Cal.App.3d 636, 638-640 [ 87 Cal.Rptr. 754] [payor spouse cannot use debt he or she is owed by payee spouse to offset spousal support obligation].) Here, Husband voluntarily paid Wife money in excess of his support obligation. Husband was under no obligation to give Wife additional support. Thus, absent an agreement to the contrary, the money he gave to her was a gift. He cannot now use that gift to offset his obligation under the judgment. It is true that Wife has now received more cash than she would have received if Husband had not given her the additional money but had given her only half the proceeds. Nevertheless, given that, by Husband's own admission, Wife needed the money to survive, the money cannot accurately be described as a windfall. Wife had primary custody of the parties' minor child, and some portion of the additional money was used to pay the mortgage on the family residence, thereby preserving a community asset. The trial court ruling is reversed.DISPOSITION
The trial court ruling is reversed. The matter is remanded with instructions to the trial court to order Earl Bruce Harwood, Jr., to pay Anne E. Montgomery her remaining share of the proceeds from the family residence pursuant to the terms of the judgment, $19,924.84, plus legal interest as determined by the trial court. Wife is awarded her costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).) Nicholson, J., and Hull, J., concurred.