Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County No. RFLRS044527. David A. Williams, Judge.
Law Offices of Daniel W. Rinaldelli and Daniel W. Rinaldelli for Appellant.
No appearance for Respondent.
OPINION
HOLLENHORST Acting P. J.
I. INTRODUCTION
Kimberly Fondario (Kimberly) appeals from judgment awarding her former husband, Gabriel Fondario (Gabriel), the family residence as Gabriel’s separate property on the basis of her execution of a quitclaim deed. She contends Gabriel failed to rebut the applicable presumption of undue influence. She also appeals from the award of $13,000 to Gabriel in attorney fees and costs as a sanction under Family Code section 271. She contends that (1) the trial court abused its discretion by relying on her rejection of settlement offers and by failing to determine her ability to pay the fees, and (2) Gabriel failed to give proper notice of his intention to seek such fees. We find no error, and we affirm.
For clarity and ease of reference, and not intending any disrespect, we will refer to the parties by their first names.
All statutory references are to the Family Code unless otherwise specified.
II. FACTS AND PROCEDURAL BACKGROUND
Gabriel and Kimberly married on June 18, 1988. Gabriel filed a petition for dissolution of marriage on February 1, 2005. The trial court bifurcated the issue of marital status and reserved the property issues for trial. The couple had two children, ages 17 and 20, at the time of trial on the property issues.
The primary asset at issue was the family home. In the fall of 1995 the couple planned to buy a house. Kimberly located a house, and after taking Gabriel to see it, she and Gabriel met with Elia Pirozzi, a family friend and realtor, to discuss a loan for the property. Kimberly had a poor credit score as a result of failing to pay bills before her marriage to Gabriel, and the couple could not qualify for the loan for which they had applied if she were on the loan. The couple and Mr. Pirozzi discussed their options and decided Gabriel would obtain the loan in his name alone and take title to the property in his name alone. By “deed[ing] off” Kimberly, the couple could secure the “‘A’ paper financing” rather than apply for a “CD paper loan,” which would have required more money down and would have had a much higher rate of interest.
Thus, for the loan to close and the title company to insure title, Kimberly had to sign a quitclaim deed relinquishing her interest in the property. Both parties were present when she signed the quitclaim deed. Mr. Pirozzi told Kimberly, “[Y]ou will need to sign off on the house in order for you to get this loan.” Gabriel testified that Kimberly knew she was giving up the property to him and it would be in his name only. Kimberly “seemed normal” and showed no sign of agitation or stress when she signed the quitclaim deed. She signed the deed to get a better loan and ensure that her children would grow up in a house.
When Kimberly executed the quitclaim deed, she had never before purchased a home and had never been divorced. She was not then working outside the home, and she cared for the couple’s two young children. She had previously entered into contracts when purchasing vehicles, and she primarily managed the family finances. She maintained a joint checking account with Gabriel and had separate credit card accounts. English was her primary language.
In June 2003, Gabriel found out the house payments had fallen behind, and he took complete control of the family’s finances. Around that time, Kimberly began to request that her name be put on the title of the house. However, Gabriel did not do so because he needed to re-establish their credit.
Following trial, the trial court entered judgment awarding the family residence to Gabriel as his sole and separate property. The court further ordered Kimberly to pay Gabriel’s attorney fees under section 271, in the amount of $13,000.
In later proceedings, the trial court determined that the community property interest in the residence was $31,249, and Kimberly’s Moore/Marsden interest was half of that. The court ordered that the amount Kimberly owed Gabriel would be deducted from her share of the Moore/Marsden amount.
“When community property is used to reduce the principal balance of a mortgage on one spouse’s separate property, the community acquires a pro tanto interest in the property. [Citations.] This well-established principle is known as the “Moore/Marsden rule. [Citations.]” (Bono v. Clark (2002) 103 Cal.App.4th 1409, 1421-1422.)
III. DISCUSSION
Gabriel has not filed a respondent’s brief, and we will therefore decide the appeal based on the record, Kimberly’s opening brief, and any oral argument. (See Enrique M. v. Angelina V. (2009) 174 Cal.App.4th 1148, 1150, fn. 2; Cal. Rules of Court, rule 8.220(a)(2).)
A. Characterization of Family Residence
Kimberly contends the trial court abused its discretion by characterizing the family residence as Gabriel’s sole and separate property.
1. Standard of Review
This court reviews for an abuse of discretion the trial court’s characterization of property in a dissolution proceeding. (See Marriage of Stitt (1983) 147 Cal.App.3d 579, 586.) We are “bound by the trial court’s findings regarding the separate or community character of assets if those findings are supported by substantial evidence.” (Ibid.) The trial court abuses its discretion when there is a lack of substantial evidence to support its underlying factual findings. (Ibid.)
2. Analysis
Kimberly argues there was a presumption Gabriel exerted undue influence to obtain her signature on the quitclaim deed, he did not rebut that presumption, and the quitclaim deed was therefore ineffective to relinquish her community property interest in the residence.
Spouses have the right to enter into transactions with each other. (§ 721, subd. (a); In re Marriage of Matthews (2005) 133 Cal.App.4th 624, 628 (Matthews).) They may agree during marriage to transmute the ownership status of any property presently owned or thereafter acquired. (§ 850, subds. (a), (b) & (c); § 1500 [marital property rights prescribed by statute may be altered by premarital or other marital property agreements].) However, “[a] rebuttable presumption of undue influence arises when one spouse obtains an advantage over another in an interspousal property transaction.” (Matthews, supra, at p. 630.) In the present case, Gabriel and Kimberly entered into an interspousal transaction when Kimberly signed a quitclaim deed permitting the residence to be acquired in Gabriel’s name alone. Gabriel received an advantage or benefit from that transaction when the residence became his separate property rather than community property. Thus, a rebuttable presumption of undue influence arose.
“The burden of rebutting the presumption of undue influence is on the spouse who acquired an advantage or benefit from the transaction.” (Matthews, supra, 133 Cal.App.4th at p. 630.) “Consequently, it was Husband’s burden to establish Wife’s signing of the quitclaim deed was freely and voluntarily made, with full knowledge of all the facts, and with a complete understanding of its effect of making the residence Husband’s separate property. [Citation.]” (Ibid.) The burden of rebutting the presumption of undue influence is by a preponderance of the evidence. (Id. at p. 631.) The trial court determined that Gabriel established he did not use undue influence to obtain the quitclaim deed. We agree.
In In re Marriage of Brooks & Robinson (2008) 169 Cal.App.4th 176, 190 (Brooks) [Fourth Dist., Div. 2], the evidence showed that title to property had been taken in the wife’s name only so as to facilitate financing. This court held that such evidence did not diminish the inference that the parties intended the property to be her separate property. (See also Matthews, supra, 133 Cal.App.4th at pp. 631-632 [the husband satisfied his burden of proving that a quitclaim deed was freely and voluntarily made when the wife signed a quitclaim deed to obtain a lower interest rate, and the husband placed no pressure on her].)
The facts of the present case are similar to those in Brooks and Matthews. Gabriel and Kimberly agreed she would sign the quitclaim deed to obtain a lower interest rate on the loan. Kimberly freely and voluntarily executed the quitclaim deed to help with the purchase of the residence and to ensure her children would grow up in a house. She understood title to the residence would be taken in Gabriel’s name alone. She had previously entered into contracts and thus was familiar with their function, and she had her own credit card accounts. The primary finances for the residence were entrusted to Kimberly, and she paid all of the household bills. She appeared normal when signing the quitclaim deed, and Gabriel did not place any pressure on her to do so. Finally, the purchase of the residence was not entirely dependent on Kimberly’s signing the quitclaim deed.
We therefore conclude substantial evidence in the record supports the trial court’s conclusion that the quitclaim deed was freely and voluntarily made, with a full knowledge of all the facts and with a complete understanding of the transfer. Gabriel satisfied his burden of rebutting the presumption of undue influence. The trial court did not abuse its discretion in awarding the residence to Gabriel as his separate property.
B. Award of Attorney Fees
Kimberly challenges the trial court’s award of attorney fees to Gabriel under section 271. She contends the trial court abused its discretion by relying on inadmissible testimony about her rejection of settlement offers and by failing to determine her ability to pay the fees, and she argues Gabriel failed to give proper notice of his intention to seek such fees.
1. Standard of Review
We review a trial court’s award of attorney fees and costs in a dissolution proceeding for an abuse of discretion. (In re Marriage of Quay (1993) 18 Cal.App.4th 961, 970.) “In the absence of a clear showing of abuse, its determination will not be disturbed on appeal. ‘The trial court’s order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made.’” (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 769.)
2. Additional Background
In closing argument, Gabriel’s counsel requested attorney fees. She stated she had filed a declaration regarding attorney fees and had attached the docket sheet detailing the numerous court appearances that she attributed primarily to Kimberly’s conduct, including repeated violations of domestic violence restraining orders entered against her, and repeated substitutions of attorneys. Gabriel’s counsel also requested that the trial court deny Kimberly spousal support under section 4325 on the basis of her repeated violation of restraining orders. The trial court declined to apply section 4325 to deny spousal support because the court “still see[s] that there’s a need.” Rather, the court ordered that spousal support would continue until the parties’ younger child turned 18, would then be $650 per month until December 31, 2008, when it would be reduced to $375 per month, and would terminate on May 31, 2010.
The trial court first stated that the parties would each bear their own attorney fees. The trial court then continued: “However, there’s been a claim made under Family Code section 271. All of the evidence-and I have had to go through all of this property. There’s essentially been very little to no agreements on anything except for the worthless vehicles after we had testimony on that. The testimony of [Gabriel] is that he’s sought to reach an agreement on a case that’s dragged on for an extremely lengthy period of time, and he’s had to pay an extremely high matter of attorney’s fees. I’ll award him attorney’s fees pursuant to Family Code section 271 to be paid by [Kimberly] in the amount of $13,000. That matter will be offset against whatever her Moore-Marsden value is....”
3. Analysis
a. Evidence of settlement offers
Section 271, subdivision (a) provides in part that “the court may base an award of attorney’s fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.” The record provides substantial evidence that Kimberly’s conduct increased litigation costs by flouting the policy of promoting settlement and encouraging cooperation. (In re Marriage of Petropoulos (2001) 91 Cal.App.4th 161, 176, 177 (Petropoulos).) The trial court found Gabriel to be a credible witness while finding Kimberly to be “less than credible.” As proof of the unreasonable number of appearances, Gabriel introduced a docket sheet of the number of court appearances, which included numerous show cause hearings. Moreover, the parties had failed to settle anything despite a number of mandatory settlement conferences.. Kimberly had had five different attorneys over the course of the proceedings, and a pretrial substitution required time for the new attorney to be caught up. Gabriel testified that Kimberly had told him, “I will break you and leave you in debt,” and that he was “going down.” The record supports a finding that Kimberly was unwilling to cooperate in good faith.
Kimberly argues, however, that the trial court abused its discretion by relying on inadmissible testimony that Gabriel had attempted to make settlement offers to her. To support her argument, Kimberly relies on the trial court’s statements that Gabriel “‘sought to reach an agreement on a case that’s dragged on for an extremely lengthy period of time,’” and that there had been “‘very little or no agreements on anything except for the worthless vehicles after [having] testimony on that.’”
Evidence Code section 1152, subdivision (a), states: “Evidence that a person has, in compromise or from humanitarian motives, furnished or offered or promised to furnish money or any other thing, act, or service to another who has sustained or will sustain or claims that he or she has sustained or will sustain loss or damage, as well as any conduct or statements made in negotiation thereof, is inadmissible to prove his or her liability for the loss or damage or any part of it.”
The trial court did not, however, as Kimberly suggests, rely on evidence of the reasonableness or adequacy of any offer made by Gabriel. Indeed, the record does not contain evidence of any specific settlement offer, and Kimberly never objected to Gabriel’s testimony about her unwillingness to work toward a resolution. Rather, the trial court used the fact that there had been no meaningful settlement on anything before trial as evidence of Kimberly’s refusal to cooperate altogether. We conclude the trial court’s order was not based on inadmissible evidence of settlement offers, but on the permissible consideration of Kimberly’s refusal to cooperate. (§ 271, subd. (a).)
b. Consideration of financial hardship
Kimberly next contends the award of attorney fees was premature, in that it was made before the determination of her Moore/Marsden interest, and it did not rest upon consideration of her assets and income or the financial hardship she would face.
Section 271, subdivision (a) provides in part: “An award of attorney’s fees and costs pursuant to this section is in the nature of a sanction. In making an award pursuant to this section, the court shall take into consideration all evidence concerning the parties’ incomes, assets, and liabilities. The court shall not impose a sanction pursuant to this section that imposes an unreasonable financial burden on the party against whom the sanction is imposed.” Section 271 is a punitive measure, and attorney fees may be awarded under that section so long as they do not impose an unreasonable burden on the sanctioned party. (In re Marriage of Quay, supra, 18 Cal.App.4th at p. 969.) Section 271, subdivision (c), states that an award of attorney’s fees and costs as a sanction is payable from the sanctioned party’s share of the community property.
In Petropoulos, the court held there was no showing on the record that the attorney fee sanction placed an unreasonable burden on the wife, when the wife had been awarded more than $500,000 in the marital property division, had enjoyed capital gains on her assets since then, and received income from rental properties, employment, and spousal support. (Petropoulos, supra, 91 Cal.App.4th at p. 180.)
As for the claim that the award caused an unreasonable financial hardship, evidence of Kimberly’s income and assets was presented at trial, and we presume the trial court considered that evidence. The trial court specifically found that Kimberly was “working below... her potential.” Moreover, the trial court awarded a sum (less than half of Gabriel’s cumulative attorney fees) in an amount the court believed would be covered by Kimberly’s Moore-Marsden interest in the residence. Under these circumstances, we conclude the trial court did not abuse its broad discretion in awarding attorney fees and costs to Gabriel. (See In re Marriage of Czapar (1991) 232 Cal.App.3d 1308, 1318; § 271, subd. (c).)
c. Notice and hearing
Kimberly contends the trial court abused its discretion in awarding attorney fees under section 271 because Gabriel failed to give formal notice of his intention to seek attorney fees and provide an opportunity for her to be heard. Section 271, subdivision (b), provides: “An award of attorney’s fees and costs as a sanction pursuant to this section shall be imposed only after notice to the party against whom the sanction is proposed to be imposed and opportunity for that party to be heard.”
Kimberly’s attorney did not argue in the trial court that notice had been insufficient, nor did she request a separate hearing on the issue of attorney fees. We therefore conclude she has forfeited any objections she may have had on those grounds. (Petropoulos, supra, 91 Cal.App.4th at p. 179 [wife waived any objection to the lack of a separate oral hearing on section 271 sanctions by failing to request such a hearing in the trial court].)
IV. DISPOSITION
The judgment is affirmed. Costs shall be awarded to respondent.
We concur: RICHLI J. MILLER J.