Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County, Super. Ct.No. RFL 042076John A. Crawley, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.
Law Offices of Tuckerman & Thompson and Daniel W. Rinaldelli for Appellant.
Law Office of Noelle M. Halaby, Noelle M. Halaby and Diane Jurdi for Respondent.
OPINION
Gaut Judge.
Robert Gonzales, Jr. transferred his ownership interest in his marital home to his wife, Tamarra, as her sole, separate property. Tamarra Gonzales appeals, challenging a judgment setting aside the interspousal transfer deed. Tamarra argues that there was insufficient evidence that she breached her fiduciary duty owed to Robert by requesting him to transfer his interest in the family residence; there was a valid transmutation of Robert’s property interest under Family Code section 852 ; the trial court erroneously applied the preponderance of the evidence standard, rather than the clear and convincing evidence standard, in determining whether Robert rebutted Tamarra’s title to the property; and the trial court failed to make an express finding as to whether Tamarra rebutted the presumption of undue influence.
We refer in this opinion to the parties by their first names, as a convenience to the reader and do not intend this informality to reflect any lack of respect. (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1513, fn. 2. (Balcof).)
Unless otherwise noted, all statutory references are to the Family Code.
We affirm the trial court ruling setting aside the interspousal transfer deed on the ground there was substantial evidence that Robert was at an unfair advantage when he signed the deed and Tamarra failed to rebut the presumption of undue influence and duress.
1. Factual and Procedural Background
Robert and Tamarra were married in 1999. Before their marriage, in August 1998, Robert purchased solely in his own name the marital residence. Robert and Tamarra agreed not to put Tamarra’s name on the title initially because Tamarra had bad credit due to having recently been involved in bankruptcy proceedings. Tamarra’s sister loaned Robert and Tamarra $8,700 for the downpayment, and during Robert and Tamarra’s marriage, Tamarra’s family provided Tamarra with over $50,000 to prevent the loss of the residence due to defaults on the mortgage.
When Robert and Tamarra refinanced their home in 2003, Tamarra was placed on title to their home as a joint tenant with Robert.
On May 3, 2004, Robert and Tamarra separated and Robert moved out of the family residence.
On May 26, 2004, at Tamarra’s request, Robert signed an interspousal deed, prepared by Tamarra’s attorney, transferring the family residence to Tamarra, as her sole and separate property. Robert testified that he did so because he believed he and Tamarra would reconcile. They “had been talking nice, getting along. She made me believe that we would. The way we were talking.” She told him that, if he transferred his property interest to her, went to church, and attended drug rehabilitation classes, she would permit him to see his stepson again and give their marriage another chance.
Robert also said he signed the deed because Tamarra told him he was not losing anything by signing the deed. Although he was removing his name from the title, they would get back together and he would not lose anything. He also would get to see his stepson. In addition, Tamarra’s brother had threatened and intimidated him. Tamarra’s brother told Robert he could have Robert “set up and put away for a while.” Robert testified this scared him into signing the deed.
Robert acknowledged that, after signing over the house to Tamarra, he did not comply with Tamarra’s conditions. He did not go to drug rehabilitation and only went to church a few times.
Tamarra testified that, between the time of Robert and Tamarra’s separation and when Robert signed over the house to her, Robert had stopped taking drugs and was going to rehabilitation classes. When he pleaded to come back home and said he would do anything to save the marriage, Tamarra told him he had to go to drug rehabilitation before he could see his stepson and asked him to sign the family home over to her because it would protect the home.
According to Tamarra, Robert told her their home would be in jeopardy while he was working in Las Vegas if he was on the title, and it was the right thing to transfer title to her because the home actually belonged to her family. Tamarra feared that Robert would borrow money against the house to pay off drug and gambling debts, especially while he was working in Las Vegas.
On June 11, 2004, Tamarra filed a petition for divorce, which Tamarra signed on June 3, 2004, eight days after Robert signed the deed transferring ownership of the family home to Tamarra.
During the dissolution proceedings, Tamarra claimed the family home was her separate property pursuant to the interspousal transfer deed. Robert claimed it was his separate property on the ground he purchased it in his own name prior to marriage.
The trial court ordered a bifurcated trial and tried the issues of characterization and disposal of the family residence separately. The court found that, while the purchase of the home was premarital, both parties intended that it be community property and thus it became community property. The trial court further found that Robert was not fully aware of the legal consequences of signing the interspousal transfer deed. Also, Tamarra conditioned giving Robert another chance at marriage and allowing him to see his stepson on Robert executing the deed. As a consequence, the trial court ordered the interspousal transfer deed set aside, and that Robert and Tamarra held the family residence in joint title. Tamarra appeals the order.
2. The Presumption of Undue Influence
Tamarra argues that under section 852, subdivision (a), Robert legitimately transferred his interest in the property to her by executing the interspousal transfer deed. She claims that, because she presumptively held sole title, as evidenced by the interspousal transfer deed, Robert had the burden of proving by clear and convincing evidence that the title was not valid, and he failed to meet this burden.
Section 721, subdivision (b), states that husbands and wives “are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. . . .” If one spouse secures an advantage from an interspousal transaction, such as transfer of an interest in real property, “a statutory presumption arises under section 721 that the advantaged spouse exercised undue influence and the transaction will be set aside. [Citation.]” (In re Marriage of Mathews (2005) 133 Cal.App.4th 624, 629 (Mathews); see also In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 729 (Burkle) and In re Marriage of Delaney (2003) 111 Cal.App.4th 991, 996-997.) “Generally, a spouse obtains an advantage if that spouse’s position is improved, he or she obtains a favorable opportunity, or otherwise gains, benefits, or profits. [Citation.]” (Mathews, supra, at p. 629.) The spouse who acquired an advantage or benefit from the transaction has the burden of rebutting the presumption of undue influence. (Id. at p. 630; Burkle, supra, at p. 729.)
Here, Tamarra secured the unfair advantage of receiving Robert’s interest in the family home, by means of persuading him to sign an interspousal transfer deed, resulting in Tamarra obtaining sole, separate ownership. This created a statutory presumption under section 721 that Tamarra exercised undue influence in obtaining Robert’s interest in the home. (Mathews, supra, 133 Cal.App.4th at pp. 628-629.) Tamarra had the burden of rebutting the presumption of undue influence, by a preponderance of the evidence, by showing that Robert freely and voluntarily signed the interspousal transfer deed with a complete understanding of its effect. (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1529.)
Relying on Burkle, supra, Tamarra argues that there was insufficient evidence that she gained an unfair advantage over Robert when he signed the deed, and therefore the burden did not shift to her to refute the presumption of undue influence. Burkle is distinguishable since it involves a comprehensive marital transaction involving the division of community assets, in which both parties were represented by counsel. The instant case involves the isolated transaction of Robert transferring to Tamarra his interest in the family home. Tamarra had retained an attorney to prepare the deed, whereas Robert did not have counsel.
In Burkle, the court noted that the presumption of undue influence generally applies under circumstances such as those in the instant case: “The presumption of undue influence is regularly applied in marital transactions in which one spouse has deeded property to the other, . . . In such cases, it is evident one spouse has obtained an advantage--the deeded property--from the other.” (Burkle, supra, 139 Cal.App.4th at p. 730.)
The Burkle court further stated that in instances, such as in Burkle, involving “other more comprehensive marital transactions involving the division of community assets, the nature of the ‘advantage’ required to raise a presumption of undue influence . . . must necessarily be an unfair advantage.” (Burkle, supra, 139 Cal.App.4th at p. 730.) The court added, “The existence of unfair advantage--or lack of consideration--as a predicate to the presumption of undue influence in a marital transaction has been frequently suggested in precedents over the years, both before and after the enactment of section 721 and its predecessor. Thus: [¶] . . . [¶] numerous cases apply the presumption of undue influence when the marital transaction is one in which one spouse deeds his or her interest in community property to the other spouse, for no consideration or for clearly inadequate consideration. (E.g., Weil v. Weil (1951) 37 Cal.2d 770, 787-789 [husband who secures a property advantage from his wife has the burden to show the absence of undue influence; wife’s deed to husband was voluntary where the wife was aware that the spouses’ interests were in conflict and she had ample opportunity to obtain independent advice].) Cases . . . involving property transfers without consideration, necessarily raise a presumption of undue influence, because one spouse obtains a benefit at the expense of the other, who receives nothing in return. The advantage obtained in these cases, too, may be reasonably characterized as a species of unfair advantage.” (Burkle, supra, 139 Cal.App.4th at pp. 730-731.)
Tamarra asserts there is no evidence that she gained an unfair advantage over Robert because, in return for his property interest, he “secured his interest to his family . . . and [it] allowed him the opportunity to attempt to save his marriage and to obtain the motivation needed, if any, to repair his life.” She also states in her appellant’s reply brief, that “he himself gained the advantage of security for his children and peace of mind that associated with the absence of the obligation resulting from the signing of the deed and agreement with TAMARRA.”
Yet, Tamarra provided no guarantees of anything, including making any commitment on her part to making a whole-hearted attempt to restore the marriage. In all likelihood, because of Robert’s past history of drug addiction, she believed there was little, if any, possibility that she and Robert would ever reconcile, and certainly not within eight days. Eight days after Robert transferred his property interest to Tamarra, she filed for divorce. Under these circumstances, a reasonable person would conclude Tamarra took an unfair advantage over Robert, which was “not merely a gain or benefit obtained in a mutual exchange.” (Burkle, supra, 139 Cal.App.4th at p. 731.) The burden thus shifted to Tamarra to rebut the presumption of undue influence.
Under facts similar to those in the instant case, in Balcof, the court set aside the husband’s agreement to transfer to his wife his ownership interest in the family home and stock in his separate property corporation in anticipation of dissolving their marriage. (Balcof, supra, 141 Cal.App.4th at pp. 1513-1514.) The trial court held that the agreement was unenforceable due to duress and undue influence. The Balcof court reasoning that the wife secured an advantage through the agreement, because she obtained her husband’s share of the marital home, along with a 20 percent interest in the husband’s separate property corporation. The court concluded the statutory presumption of undue influence arose under section 721, subdivision (b), and the agreement should be set aside. (Balcof, supra, at p. 1519.) The Balcof court further concluded that substantial evidence supported the trial court’s implied finding that the wife did not rebut the presumption by a preponderance of the evidence. (Id. at p. 1520.)
In reaching its ruling, the Balcof court relied in part on evidence that the wife threatened the husband with divorce and obstruction of his relationship with their children if he did not sign the agreement. She also “harangued and berated” the husband during the marriage in an effort to force him to change their prenuptial agreement to provide more security for her. (Balcof, supra, 141 Cal.App.4th at p. 1520.) The trial court found that the husband reasonably believed the wife’s threats, and these circumstances constituted duress and undue influence such that the agreement was not freely and voluntarily made. (Ibid.)
The Balcof court further noted that the husband testified he did not know the legal effect of the writing and had not had an opportunity to discuss the effect with counsel when the husband signed the writing. (Balcof, supra, 141 Cal.App.4th at p. 1521.) The lack of independent advice is a factor to be weighed in determining if a party acted voluntarily and with understanding of a transaction. (Ibid., citing In re Marriage of Baltins (1989) 212 Cal.App.3d 66, 85.) The court in Balcof concluded the husband’s testimony provided substantial evidence that he did not sign the writing with a complete understanding of the effect of doing so. (Balcof, supra, at p. 1521.)
Even though the husband was a successful business man, who had access to lawyers and was not likely to succumb to the wife’s threats, the trial court concluded his testimony was credible, whereas the wife’s was not. The Balcof court concluded there was substantial evidence supporting the trial court’s finding, noting, “The power of a reviewing court begins and ends with a determination of whether there is in the record substantial evidence, contradicted or uncontradicted, which supports the result reached; and we must also assume in favor of the determination below the existence of every fact which the trier of facts could have reasonably deduced from the evidence. [Citation.]” (In re Marriage of Gonzalez (1976) 57 Cal.App.3d 736, 745; Balcof, supra, 141 Cal.App.4th at p. 1521.) The Balcof court thus held the agreement was unenforceable as the product of undue influence. (Balcof, supra, 141 Cal.App.4th at pp. 1521-1522.)
Likewise in the instant case, we conclude there was substantial evidence supporting the setting aside of the interspousal transfer deed due to Tamarra failing to meet her burden of rebutting the presumption of undue influence. Tamarra argues she met her burden of refuting the presumption of undue influence by showing that Robert freely and voluntarily signed the interspousal transfer deed and fully understood he was transferring over to her his entire interest in the marital home.
But there was also substantial evidence that Tamarra pressured and coerced Robert into signing the deed by threatening to prevent him from seeing his stepson, refusing to reconcile with Robert, refusing to allow him to return home, and threatening to file for divorce unless he signed the deed. Tamarra testified that Robert begged to return home and that he would do whatever she asked him to do to save the marriage. There was also evidence that Tamarra’s brother had threatened Robert and Tamarra had told him he was not losing anything by signing the deed because, although he was removing his name from the title, they would get back together.
Under these circumstances, in which Robert was susceptible to being persuaded to do almost anything Tamarra requested in the hope of saving his marriage, returning home, and seeing his stepson, we conclude Tamarra failed to rebut the presumption of undue influence.
Relying on In re Marriage of Broderick (1989) 209 Cal.App.3d 489 (Broderick), Tamarra argues that, because Robert fully understood the legal consequences of executing the interspousal transfer deed, Tamarra presumptively held title to the property and thus Robert had the burden of rebutting the presumption by clear and convincing evidence. But Broderick is controlling only where there is no evidence of duress or undue influence. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 292.) Here there was substantial evidence of duress and undue influence.
As defined in Broderick, duress is the intentional use of “‘threats or pressure to induce action or nonaction to the other party’s detriment.’” (Broderick, supra, 209 Cal.App.3dat p. 499, quoting In re Marriage of Stevenot (1984) 154 Cal.App.3d 1051, 1073, fn. 6.) In the instant case, Tamarra threatened and pressured Robert into signing the deed to his detriment.
Tamarra also argues, based on Mathews, supra, 133 Cal.App.4th 624, that, even if she had the burden of rebutting the presumption of undue influence, she rebutted it by showing that Robert understood and voluntarily and freely executed the interspousal transfer deed. In Mathews, the wife quitclaimed to her husband her interest in their residence in order to obtain a more favorable interest rate on their mortgage. Later, the couple separated and their home was sold. The Mathews court held that the husband met his burden of rebutting by a preponderance of the evidence the presumption of undue influence by showing that the wife entered into the interspousal transfer transaction freely, voluntarily and with a full understanding of the quitclaim deed. (Mathews, supra, 133 Cal.App.4th at pp. 631, 632.)
Unlike in the instant case, in Mathews, no pressure was placed on the wife to sign the quitclaim deed. (Mathews, supra, 133 Cal.App.4th at p. 631.) The purchase of the home was not dependent on the wife signing the quitclaim deed, and the wife had full knowledge of all the facts surrounding the execution of the quitclaim deed and the reasons for it. Also, the quitclaim deed benefited both the wife and husband in allowing a lower interest rate on the mortgage. (Ibid.)
Here, Tamarra had seen an attorney who prepared the interspousal transfer deed the same day she asked Robert to sign it. A reasonable inference can be made that she anticipated divorcing Robert and therefore, before doing so, she retained a lawyer to assist her in obtaining sole title to the property before filing for divorce. There is also substantial evidence Tamarra pressured and coerced Robert into signing the deed.
Also, unlike in Mathew, the transfer of title to Tamarra was far more advantageous to her than to Robert (if at all); there was evidence Robert did not fully understand the permanent nature of the title transfer; and Robert was pressured into signing the deed by means of threats that, if he did not sign it, he would not see his stepson again and there would be no possibility of reconciling with Tamarra. Given these facts, the trial court was justified in finding that Robert signed the deed under undue influence and duress, and Tamarra failed to refute this by a preponderance of the evidence.
Tamarra complains the trial court made no actual finding of fraud, duress, coercion, conspiracy, or any other ground that would support a finding the deed was void. Rather, the trial court merely found that it was not convinced Robert understood the full legal effect of the deed. But the record shows that the trial court impliedly made such a finding. The court stated right before ordering the deed set aside that Tamarra conditioned giving Robert another chance at marriage and allowing him to see his stepson on Robert executing the deed. An express finding of undue influence was not required. (Balcof, supra, 141 Cal.App.4th at p. 1520.)
3. Disposition
The judgment it affirmed. Robert is awarded his costs on appeal.
We concur: Hollenhorst, Acting P. J., Richli J.