Opinion
NOT TO BE PUBLISHED
Sonoma County Super. Ct. No. FL 966215.
Richman, J.
Fourteen years after petitioner Emerson Stoops sought dissolution of his marriage to respondent Carolyn Stoops, the Honorable Cerena Wong entered judgment dividing their property and awarding Carolyn spousal support. On appeal, Emerson presents six challenges to that judgment, two of which, we conclude, have merit: (1) Judge Wong abused her discretion in denying his motion to amend the judgment to conform to the terms of a stipulation governing the date for termination of temporary spousal support; and (2) Judge Wong abused her discretion in retroactively awarding Carolyn temporary spousal support in the amount of $26,743 per month. We therefore reverse for the limited purpose of recalculating the retroactive modification of temporary spousal support. In all other respects, we affirm.
To avoid confusion and with all due respect, we refer to the parties by their first names.
BACKGROUND
Emerson and Carolyn were married on February 13, 1982. At the time, Carolyn owned an interest in a house in Chatsworth from a prior marriage (the Chatsworth property), while Emerson owned an apartment building on Highland Avenue in Manhattan Beach (the Highland property). In 1985, they purchased an ocean-view home in Palos Verdes Estates (the Palos Verdes property), later moving to a 58-acre ranch on Maddocks Road in Sebastopol (the Maddocks property) when Emerson retired from his career as an astrophysicist. The Maddocks property was vast, with an enclosed birdhouse, a pond, several buildings, and space for a llama business that Carolyn dreamed of starting.
On February 13, 1995—their thirteenth wedding anniversary—Emerson abruptly moved out of the Maddocks property, never to return to either Carolyn or the property.
After the separation, Emerson paid Carolyn $1,916.00 per month as her share of income generated by the Highland property. Despite that Emerson was the breadwinner throughout their entire marriage, he paid her no spousal support from February 1995 to late 1998. In October 1998, however, Carolyn petitioned for temporary spousal support and, by agreement of the parties, Emerson began paying $2,258 per month, comprised of $977 in Highland rental income and $1,281 in temporary spousal support.
As is relevant to section VI, post, Emerson converted the Highland property to a joint tenancy during the marriage.
This arrangement remained in place for the following eight years, with no action taken in the dissolution proceeding. This was so because of a property dispute with a neighbor of the Maddocks property, Damien Custer, who sued the Stoopses over an easement in what proved to be a particularly contentious lawsuit that Carolyn fought with no help from Emerson. As Judge Wong would later describe it in the final statement of decision: “Custer’s meritless lawsuit halted the dissolution because the ranch could not be sold with pending litigation clouding title. Despite the fact that Emerson was still an owner and could have contributed information and at least moral support to Carolyn while she was being terrorized by Mr. Custer, Emerson would not answer letters or phone calls. The photos admitted of Mr. Custer standing and glaring by his driveway or by Carolyn’s car and the testimony of attorney, Mr. Richman were corroborative of Carolyn’s reasonable fears of injury or harm from the unhinged Mr. Custer.” Thanks to Carolyn’s efforts, the Stoopses ultimately prevailed, and the Maddocks property was sold in 2007.
Meanwhile, in February 2006, Carolyn retained new counsel and the dissolution began to move forward. On August 2, 2006, Carolyn petitioned for an increase in temporary spousal support. Her request was granted, and Emerson was ordered to pay $8,000 per month effective August 1, 2006, the order specifically reserving jurisdiction to modify the support order retroactive to August 1, 2006. The matter was set for trial in January 2007, and then subsequently continued to February 16, 2007.
On December 22, 2006, Carolyn moved to continue the trial date due to the unavailability of accountant Darlene Elmore, her forensic expert. Significantly for our purposes, Emerson consented to a continuance on the condition that any modification of temporary support would be limited to the period August 1, 2006 to February 16, 2007 (a period of six and one-half months), with permanent support, if any, to begin effective February 17. Carolyn agreed to this condition, and the parties signed a written stipulation to that effect, which stipulation was subsequently entered as a court order on February 2, 2007.
On May 30, 2007, trial commenced before Judge Wong. On December 19, 2007, after 32 days of trial, Judge Wong entered a status-only judgment of dissolution and took the remaining issues under submission. On February 4, 2008, the parties submitted written closing arguments, Emerson’s a voluminous 122 pages, and Carolyn’s 41.
On December 11, 2008, Judge Wong issued a tentative statement of decision. On February 17, 2009, after further submissions by both parties, Judge Wong entered a final statement of decision. And on April 2, 2009, she entered judgment on the reserved issues that, consistent with the final statement of decision, decided the following issues:
(1) Emerson was to pay Carolyn $8,000 per month in spousal support effective January 1, 2009 until the death of either party or the remarriage of Carolyn.
(2) Carolyn was entitled to reimbursement of $89,583 for her separate property investment in the Maddocks property.
(3) Carolyn was entitled to reimbursement of $15,015 for her separate property improvements to the Maddocks property.
(4) Carolyn was entitled to $100,100 for improvements to the Maddocks property after the date of separation.
(5) Real property in Malibu was confirmed to be Emerson’s separate property.
(6) Emerson owed Carolyn $18,150 for underpayments of her share of the Highland property rental income.
(7) Emerson was entitled to reimbursement of $100,000 for his separate property interest in the Highland property.
(8) Emerson was entitled to reimbursement of $6,723 for improvements to the Highland property.
(9) Emerson had not met his burden of proving that he was entitled to Watts usage charges on the Maddocks property.
In re Marriage of Watts (1985) 171 Cal.App.3d 366 (Watts).
(10) Carolyn was underpaid temporary spousal support from August 1, 2006, to January 2008 in the amount of $318,631.
(11) Carolyn had not met her burden of proving that she was entitled to Watts usage charges on the Highland property.
(12) Emerson was entitled to confirmation of numerous assets as his sole and separate property.
(13) Emerson was entitled to reimbursement from Carolyn for a $22,000 promissory note.
(14) The Highland property was confirmed as Emerson’s sole and separate property, with an equalizing payment to Carolyn of $1,260,427, based on the parties’ stipulated property value of $2.8 million.
On April 16, 2009, Emerson filed a notice of intention to move for partial new trial or, in the alternative, to vacate the judgment and substitute an amended judgment. As will be discussed in greater detail below, the motion challenged the portion of the judgment dealing with the equalizing payment for the Highland property. Judge Wong did not rule on the motion, which resulted in its denial by operation of law. (Code Civ. Proc., § 660.)
On May 29, 2009, Emerson filed a notice of appeal, appealing from the judgment and subsequent denial of his motion for new trial.
On September 18, 2009, Emerson moved to correct what he deemed a “clerical” error in the judgment pursuant to Code of Civil Procedure section 473, subdivisions (b) and (d). The motion concerned Judge Wong’s retroactive modification of Carolyn’s temporary spousal support, and argued that, according to the express stipulation of the parties and the court’s order, temporary support was only retroactively modifiable up to and including February 16, 2007, after which any support ordered would be permanent. As a consequence, for the period February 17, 2007 through December 2007, when Judge Wong awarded Carolyn $26,743 per month in temporary support, the stipulation in fact limited her to postjudgment support, which Judge Wong ordered in the amount of $8,000 per month. The excess was $18,743 per month, or an overpayment of $196,801.50. Judge Wong denied Emerson’s motion, and he filed a second notice of appeal.
All subsequent statutory references are to the Code of Civil Procedure unless otherwise stated.
On December 28, 2009, we consolidated Emerson’s two appeals for briefing and argument.
CONTENTIONS ON APPEAL
Emerson contends that Judge Wong erred in the following six particulars: (1) she abused her discretion in denying his section 473 motion to modify the judgment to conform to the stipulation governing the retroactive modification of spousal support, an error that resulted in an overpayment to Carolyn of $196,801.50; (2) she abused her discretion in ordering temporary spousal support in the amount of $26,743 per month; (3) she incorrectly calculated Emerson’s separate property reimbursement for the Highland property; (4) she incorrectly calculated Carolyn’s separate property contribution to the Palos Verdes property; (5) she abused her discretion in denying Emerson’s request for Watts credits; and (6) she erred in denying a new trial on the buyout date for the Highland property. As noted, we agree with Emerson’s first two contentions, and we reject the other four.
DISCUSSION
I
Judge Wong Abused Her Discretion in Denying Emerson’s Section 473 Motion to Modify the Judgment to Conform to the Stipulation and Order
In December 2006 Carolyn sought a continuance of the February 16, 2007 trial date because her accounting expert, Darlene Elmore, was going on maternity leave and would be unavailable to testify. Leading up to the trial date, Carolyn was receiving temporary spousal support of $8,000 per month, which the court had expressly made retroactively modifiable when it was ordered in August 2006. Emerson consented to a trial continuance on one significant condition: that temporary support would terminate as of February 16, 2007, with postjudgment support, if any, commencing on that date. Carolyn agreed to this condition, and the resulting stipulation—signed by both parties—confirmed “that any order for post-judgment spousal support shall be made retroactive to February 16, 2007.” The stipulation was entered as an order of the court on February 2, 2007.
Evidently, however, by the time the parties submitted closing arguments—not incidentally, more than a year after the stipulation was signed—the provision had been forgotten. As a result, in her final statement of decision, Judge Wong modified temporary support from August 1, 2006 (the date to which the court reserved jurisdiction to retroactively modify Carolyn’s temporary support) through December 2007 (the end of trial). She determined that for that period of 17 months, Carolyn had been underpaid support in the amount of $318,631. She based this amount on a calculation by accounting expert Elmore who, using the DissoMaster program, calculated that for the 17 month period when Emerson had been paying Carolyn $8,000 per month, he should have been paying her $26,743 per month, a shortfall of $18,743 per month. In calculating support for the 17-month period, Ms. Elmore disregarded the parties’ stipulation that temporary support was to terminate on February 16, 2007.
DissoMaster is a software program used to generate California child and spousal support calculations. (www.childsupportca.com/dissomaster.htm, accessed on July 19, 2011.)
Judge Wong’s order appeared to cover the entire 29-month period from August 2006 through her December 2008 tentative decision. The actual time frame covered by Elmore’s calculation was the 17-month period from August 2006 through the end of trial in December 2007.
On September 18, 2009—five and a half months after Judge Wong entered judgment—Emerson moved pursuant to section 473, subdivisions (b) and (d) to “To correct clerical and inadvertent error appearing in statement of decision (final), incorporated into judgment of dissolution of marriage on reserved issues regarding post judgment spousal support and retroactive temporary spousal support....” The motion was prompted by his counsel’s realization that the stipulation should have limited any retroactive increase in temporary support to the period August 1, 2006 through February 16, 2007, an error that resulted in an overpayment to Carolyn of $196,801.50.
In the appended memorandum of points and authorities, Emerson argued two alternative grounds for amending the judgment. First, he contended that section 473, subdivision (b), authorized the court to relieve him from an error in the judgment resulting from mistake, inadvertence, surprise, or excusable neglect. He suggested that both parties, as well as the court, “inadvertently or mistakenly forgot” about the terms of the stipulation and order. Counsel’s oversight, he contended, was excusable neglect, given the “lengthy and complex” nature of the case and the lapse of two years between the date of the stipulation and the entry of judgment.
Alternatively, Emerson argued that section 473, subdivision (d), authorized Judge Wong to correct a clerical mistake in the judgment. According to Emerson, the stipulation and order “definitively resolved the issues of the commencement of post judgment spousal support and the period for retroactive modification of temporary spousal support.” Thus, in not complying with the stipulation and order when retroactively modifying temporary support, Judge Wong made a clerical error that must be corrected.
In a supporting declaration, Maureen Faria, Emerson’s counsel, explained that on August 6, 2006, the court increased Carolyn’s temporary spousal support to $8,000 per month, while reserving jurisdiction to retroactively modify that amount to August 1, 2006, should proof at the time of trial establish there had been an underpayment or overpayment. She explained that when Carolyn later requested a continuance of the February 16, 2007 trial date, Emerson consented on the condition that any order for postjudgment spousal support be retroactive to February 16, 2007 (effectively terminating temporary spousal support on that date). The parties reduced the agreement to a signed stipulation, which was then entered as an order of the court on February 2, 2007. According to Ms. Faria, “This order was neither a pendent lite order nor an interlocutory order. The order was intended to be, and is clear on its face to be, a final resolution and order as to two of the contested issues for trial.”
Ms. Faria noted that in Emerson’s separate statement of issues for trial as well as his opening trial brief he acknowledged the stipulation and order, “specifically request[ing] modification of temporary spousal support retroactive to the February 2007, date pursuant to the terms of the Stipulation and Order.” And at the conclusion of trial, he “specifically requested the court take judicial notice of the February 2, 2007, Stipulation and Order, which the court granted.”
Ms. Faria further testified, however, that when the parties submitted closing arguments—one year after the stipulation was signed and entered—neither party addressed the stipulation. Instead, Carolyn, based on the calculation by Ms. Elmore, argued she had been underpaid support in the amount of $18,742 per month retroactive to August 2006. Emerson, on the other hand, argued he had overpaid temporary support and was entitled to reimbursement dating back to August 2006.
Ms. Faria candidly testified that in preparing Emerson’s closing argument, “a document consisting of over 122 pages, covering 68 issues and sub-issues, ” she “inadvertently forgot” to incorporate the terms of the stipulation into her calculation of the temporary support overpayment. She explained that, rather than seeking reimbursement for overpayments for the 20-month period from August 1, 2006 to May 4, 2008, she should have broken down the reimbursement request into two separate time periods: one for the period between August 1, 2006 and February 16, 2007, as a retroactive modification of temporary spousal support, the other for the period after February 16, 2007, as a reimbursement of spousal support paid due to a postjudgment spousal support order (if any) of less than $8,000 per month.
Ms. Faria also acknowledged that the “terms of the Stipulation and Order continued to slip [her] mind during the time the terms of the Statement of Decision were being addressed by counsel.” She explained that “it was not until the first week of September 2009, in re-reviewing the pleadings in this case in preparation of the pending attorney’s fees and costs hearing, that [she] discovered the Stipulation and Order and realized that an inadvertent clerical error had been made.”
On October 16, 2009, Carolyn opposed the motion, asserting three bases justifying denial of Emerson’s motion. First, she argued that Judge Wong had the power to modify the February 2007 order, which she submitted was interlocutory and thus modifiable by the court. Because both parties argued in closing for retroactive modification from August 2006 through the close of trial, Judge Wong could, and properly did, rely on this time period in rendering her final judgment.
Second, Carolyn argued that there was no clerical error to correct pursuant to section 473, subdivision (d), because the judgment conformed to the intentions of the parties and the court. She rejected attorney Faria’s assertion that she made a mistake in not incorporating the terms of the stipulation into her evidence and closing argument, but also argued that even if she did make a mistake, it was not a clerical error because the court entered its judgment as it intended to do.
Lastly, Carolyn argued that Emerson was not entitled to relief under section 473, subdivision (b), for multiple reasons. First, she noted that “Emerson did not file this motion until a few days before the expiration of the six-month deadline of [section 473, subdivision (b)], and has offered no reason for his dilatoriness.” Second, she argued that his motion was not accompanied by the requisite “answer or other pleading proposed to be filed therein” as mandated by the statute. Third, she argued that Emerson’s counsel’s error was not the kind of error that should be excused under the statute because it was “not a mistake of law in a complicated, unsettled area” nor was “it a mistake of fact material to causing a default.” It was instead “[m]ere neglect or ignorance” that “ ‘a reasonably prudent person under the same or similar circumstances’ ” would not have made and thus should not be excused. Fourth, Carolyn contended she had suffered prejudice in the form of “substantial fees in the preparation of post-trial pleadings (preparation of the Proposed Final Statement of Decision; Opposition to Motion for New Trial, etc.).” Finally, Carolyn argued that “the public policy against default judgments and in favor of a hearing on the merits [was] fully satisfied” because Judge Wong heard extensive argument on the issues of temporary and permanent spousal support.
On October 28, 2009, Emerson’s motion came on for hearing before Judge Wong. On his behalf, Ms. Faria argued that the stipulation and order were binding on the parties at the time the final statement of decision was entered. The stipulation, she claimed, made it “very clear that permanent spousal support was supposed to start on February 16, 2007, and that the Court’s jurisdiction to award retroactive modification of the temporary spousal support was for five and a half months, August 1, 2006 to February 16, 2007.”
Ms. Faria misspoke in this regard, since the period in question spans six and a half months.
Consistent with her declaration in support of Emerson’s motion, Ms. Faria acknowledged her oversight: “I did the math wrong, and I am going to say that that was my error, but this stipulation just flat slipped my mind. I had had 30 days to try and put together a huge brief closing argument, which the Court I am sure will never want to ever recall again but is forced to momentarily. [¶] [One-hundred, twenty-two pages]; I tried to be as exhaustive as I could. I had to review 3, 500 pages of court transcripts, depositions. I had to review thousands and thousands of pages of exhibits. And I slipped up and missed and forgot the stipulation, so I didn’t do the calculation right. But this slip-up in the calculation was not in any way, shape or form an affirmative statement by [Emerson] or myself that we were arguing that the retroactivity that was set forth in the 2007 order was anything other than what was said in that order.”
In opposition, Carolyn first argued that Emerson’s error was not a clerical one that could be corrected pursuant to section 473, subdivision (d), because Judge Wong intended to sign the judgment the way it was written. In his closing argument, she noted, Emerson argued that temporary spousal support was modifiable retroactively to August 2006, which was exactly the ruling Judge Wong made. Carolyn also pointed out that the dissolution proceeding had dragged on for over 14 years, which undermined her “comfort and confidence that she [could] survive in [the] economy, ” a lack of security that was being compounded by Emerson’s belated attempt to modify the temporary support award. Lastly, Carolyn argued that the stipulation and order was an interlocutory order that did not bind the court on its final statement of decision.
Following argument, Judge Wong denied Emerson’s motion, stating:
“The situation is that there were so many opportunities during the lengthy trial, during the briefing period, during the tentative, during the objections to the tentative, during the time after the Court issued its final order. [¶] There were so many opportunities to argue and to bring up this issue. It is, as far as the Court is concerned, waived. Waived by word and nonaction, on the part of both parties.
“I mean, an order only has effect by somebody bringing it up. Nobody brought it up. Nobody brought it up. [¶] And the time for it to have been brought up—I mean, especially since the issue of retroactivity was argued, briefed, written about, and the fact that you now, Ms. Faria, are saying, ‘Mea culpa, mea culpa; it is all my fault; it just slipped my mind and I only thought of it a couple of months ago, ’ I don’t believe that there is any authority by statute or by case law that allows this Court to resurrect, exhume from the grave what the Court’s orders are. It is too little, too late.
“And this has nothing to do with the violin-playing of Mr. Johnson on behalf of his client, saying it is so sad for her to be living in uncertainty. That has nothing to do with my decision today. My decision today is, everything was about support; everything was about the start and finish dates; everything was, you know, when is it effective; how much are we talking about.
“And that the stipulation was [never] mentioned in a 121-page brief, come on. Never again mentioned, orally or in writing ever again?
“With so much opportunity and so much time, for it to now try to come up like some kind of undead, no.
“Motion is denied.”
This, we conclude, was an abuse of discretion.
As a preliminary matter, Carolyn contends that we should not consider Emerson’s argument that the stipulation was binding on the trial court because he failed to raise it below and thus waived his right to argue it on appeal. In support, she claims that in his section 473 motion, Emerson “argued only that the stipulation was a final, non modifiable order, ” an argument purportedly not made here, while “[h]is current argument, that a stipulation is binding upon the trial court, was not raised prior to judgment, nor in his motion for new trial..., nor in his motion to correct clerical error....” We fail to discern a meaningful distinction. In both his motion before Judge Wong below and his appeal before us now, Emerson has consistently argued that he and Carolyn entered into a stipulation regarding the termination date for retroactive modification of temporary spousal support, the court entered the stipulation as an order of the court, and the agreement was binding and should have been enforced. There was no waiver.
Turning to the merits, we look first at stipulations and their effect on the trial court. A stipulation is an agreement entered into between counsel, relating to business before the court. (See Spindell v. State Bar (1975) 13 Cal.3d 253, 261, fn. 5.) Section 283 provides, “An attorney and counselor shall have authority: [¶] 1. To bind his [or her] client in any of the steps of an action or proceeding by his [or her] agreement filed with the clerk, or entered upon the minutes of the court, and not otherwise....” Where a stipulation is made in open court, it constitutes “not only [an] agreement[] between the parties, but between them and the Court, which the latter is bound to enforce, not only for the benefit of the party interested in [its] performance, but for the protection of its own honor and dignity.” (Meagher v. Gagliardo (1868) 35 Cal. 602, 605-606.)
There are, of course, certain matters to which parties cannot stipulate. A stipulation that is “ ‘illegal’ or ‘contrary to public policy’ ” is nonbinding. (Estate of Burson (1975) 51 Cal.App.3d 300, 306; T & O Mobile Homes, Inc. v. United California Bank (1985) 40 Cal.3d 441, 451, fn. 11 [unless contrary to law, court rule, or policy, stipulation is binding on the court]; California State Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 664 [stipulation is not binding on the court if it is illegal or contrary to public policy]; Wilson v. Wilson (1873) 45 Cal. 399, 405 [benefits of statutes designed to protect the public interest and welfare cannot be limited or abridged by stipulation].) Further, a stipulation will not bind the court on questions of law, such as interpretations of the federal and California Constitutions, statutes, and ordinances (Fields v. Blue Shield of California (1985) 163 Cal.App.3d 570, 579, fn. 5), nor can a stipulation confer, enlarge, or waive, a court’s jurisdiction. (Norman I. Krug Real Estate Investments, Inc. v. Praszker (1990) 220 Cal.App.3d 35, 47; Harrington v. Superior Court (1924) 194 Cal. 185, 188.)
But where the parties have entered into a stipulation concerning an appropriate subject matter, a court commits reversible error when the stipulation is not honored, unless there is good cause to permit its abandonment or withdrawal. (See, e.g., Roth v. Morton’s Chefs Services, Inc. (1985) 173 Cal.App.3d 380, 385; In re the Marriage of Kerry (1984) 158 Cal.App.3d 456, 465.) The obligation of the court to enforce a stipulation is especially great where one party has already received the benefit that motivated the parties to enter into the agreement. (See Webster v. Webster (1932) 216 Cal. 485, 490 [“ ‘If under the terms of a mutual stipulation, which was only verbal, one party has received the advantage for which he entered into it, or the other party has at his instance given up some right or lost some advantage, so that it would be inequitable for him to insist that the stipulation was invalid, he will not be permitted to repudiate the obligation of his own agreement....’ ”].)
By the stipulation at issue here, Carolyn obtained an extension of the impending trial date—a date when her forensic expert was on maternity leave—to a date when her expert would be available. In exchange for giving up his right to an earlier trial date, Emerson received a guarantee that the delay would not expose him to a potentially longer period of temporary spousal support. But because the final judgment did not conform to the terms of the stipulation, Emerson was deprived of the benefit he should have obtained, while Carolyn, who sought the continuance in the first place, received the benefit she was due. And, contrary to Carolyn’s claim, there was nothing “interlocutory” about the stipulation. This was, undoubtedly, a stipulation that the parties intended to be a final determination of the period over which the court retained jurisdiction to retroactively modify temporary spousal support, and it was binding on the parties and the court.
The question, then, is whether Emerson was entitled to relief on his section 473 motion to amend the judgment to conform to the stipulation. Judge Wong concluded that he was not. Her comments at the hearing on the motion suggest she reached this conclusion for two reasons: first, she believed she lacked the authority to amend the judgment at that late point in the proceeding; second, she believed Emerson waived any right to enforce the stipulation due to the time that lapsed between entry of judgment and his motion. In fact, section 473 provided the authority, and her conclusion that Emerson waived his right to enforce the stipulation constituted an abuse of discretion.
Emerson sought relief under subdivision (b) of section 473, which authorizes the court “upon any terms as may be just, [to] relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” We review a motion for such relief under the abuse of discretion standard. (Ambrose v. Michelin North America, Inc. (2005) 134 Cal.App.4th 1350, 1354 [a ruling on a motion for discretionary relief from judgment shall not be disturbed on appeal absent a clear showing of abuse].) In doing so, we must “ ‘accept as true all evidence tending to establish the correctness of the trial judge’s findings, resolving all conflicts in the evidence in favor of the prevailing party and indulging in all legitimate and reasonable inferences to uphold the judgment.’ ” (In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 82, fn. 5.) “ ‘An abuse of discretion occurs “where, considering all the relevant circumstances, the court has exceeded the bounds of reason or it can fairly be said that no judge would reasonably make the same order under the same circumstances.” ’ ” (In re Marriage of Bower (2002) 96 Cal.App.4th 893, 898 899.)
Emerson also sought relief under section 473, subdivision (d), which allows the court “upon motion of the injured party, or on its own motion [to] correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed....” Emerson argues here, as he argued below, that the failure of the final judgment to conform to the stipulation was a “clerical error.” We need not reach this argument because we conclude it was an abuse of discretion to deny Emerson’s request for relief based on his attorney’s excusable neglect.
“Excusable neglect” is defined as an error a reasonably prudent person under the same or similar circumstances might have made. (Ambrose v. Michelin North America, Inc., supra, 134 Cal.App.4th at p. 1354.) Conduct falling below the professional standard of care, such as failing to timely object to or properly advance an argument, is not excusable. (Ibid.) Here, we can reach no other conclusion but that Ms. Faria’s oversight was one that a reasonably prudent person in the same circumstances might make.
The parties signed the stipulation in January 2007, and Judge Wong entered it as a court order on February 2, 2007. Trial then commenced on May 30, 2007, spanned 32 days over seven months, and concluded on December 19, 2007. The parties submitted written closing arguments on February 4, 2008, an entire year after the stipulation had been signed and entered. And, as Ms. Faria testified in her declaration in support of Emerson’s section 473 motion, Emerson’s closing argument was “over 122 pages, covering 68 issues and sub-issues.” As she further detailed at the hearing on the motion: “I had had 30 days to try and put together a huge brief closing argument.... [¶] [One hundred, twenty-two pages]; I tried to be as exhaustive as I could. I had to review 3, 500 pages of court transcripts, depositions. I had to review thousands and thousands of pages of exhibits.” Further, evidence Carolyn presented at trial concerning the retroactive modification of temporary support was based on Ms. Elmore’s DissoMaster calculation, a calculation that ignored the February 16, 2007 termination date and sought modification through the end of trial. Given the enormity of Ms. Faria’s task, the lengthy period between entry of the stipulation and submission of the closing arguments, the further lapse of time until Judge Wong issued her tentative proposed statement of decision, and then her judgment on reserved issues, all of which was compounded by Carolyn’s omission—whether intentional or otherwise—of the terms of the stipulation from her evidence and closing argument, a reasonably prudent person in the same circumstances might have made the same error.
None of Carolyn’s arguments in opposition compels a contrary result. As a procedural matter, she asserts that Emerson’s motion was properly denied because he failed to submit a proposed amended final judgment along with his motion. This argument is premised on section 473, subdivision (b)’s requirement that an “[a]pplication for... relief shall be accompanied by a copy of the answer or other pleading proposed to be filed....” This requirement makes sense in the classic scenario in which a section 473, subdivision (b) motion is typically made: when defendant is seeking relief from a default judgment entered after he or she failed to answer a summons and complaint. Such a proposed pleading is not required, however, “where the default of the moving party consists of failure to take a step that does not require a pleading.” (8 Witkin, Cal. Procedure (5th ed. 2008) Attack on Judgment in Trial Court, § 180, p. 781; Freeman v. Goldberg (1961) 55 Cal.2d 622, 625 [requirement applies where judgment or order sought to be vacated was entered because of the absence of a pleading].)
Carolyn also contends that Judge Wong had the authority to disregard the stipulation and intentionally did so. In claimed support, she points to the fact that at Emerson’s request, Judge Wong took judicial notice of the stipulation at the close of trial. Additionally, she points to the arguments of counsel for both parties, who “presented written closing argument and proposed statements of decision utilizing temporary support periods through the close of trial and permanent (‘postjudgment’) support periods commencing thereafter—not relying on the February, 2007 stipulation, ” which she contends amounted to an implicit request by both parties to be relieved from the terms of the stipulation. Specifically, she notes that Emerson’s counsel in closing argument “argued unequivocally that the court’s authority to modify support was fully retroactive. (E.g., : ‘... temporary spousal support schedules are only guidelines and not binding...’; the court ‘expressly reserving jurisdiction to modify its order retroactively to August 1, 2006.)’ ”
Indeed, as Carolyn correctly notes, a stipulation may be set aside where fraud, mistake of fact, or other special circumstances render it unjust to enforce the stipulation. (Roth v. Morton’s Chefs Services, Inc., supra, 173 Cal.App.3d at p. 385; In re the Marriage of Kerry, supra, 158 Cal.App.3d at p. 465). But the cited evidence does not in fact establish that Judge Wong intentionally disregarded the stipulation. Nor can Judge Wong’s remarks at the hearing be reasonably understood to suggest that she did so. Rather, the entire scenario suggests that she, like counsel for Emerson, forgot about the terms of the stipulation and relied upon the arguments of the parties, an argument that in Emerson’s case was premised on a mistake by his counsel. Emerson’s closing argument was inconsistent with the stipulation solely because his attorney, as she candidly admits, forgot about the terms of it—not because Emerson wished to be relieved from it.
We note that while Emerson claimed in his motion below that both parties forgot about the stipulation, Carolyn took the position that she did not in fact forget about it. This suggests that Ms. Elmore intentionally ignored its terms when preparing her DissoMaster calculation, and Carolyn likewise intentionally disregarded it when preparing her closing argument. If so, she obtained the benefit of the stipulation due her (continuance of the trial to a date when Ms. Elmore was available), only to intentionally seek to deprive Emerson of the benefit due him (earlier termination of temporary spousal support). We do not look favorably upon this strategy. On the other hand, if Carolyn were to admit that she, too, forgot about the stipulation, she would necessarily have to concede that Ms. Faria’s error was a reasonable one, a concession that would compel amendment of the judgment.
Carolyn also contends that Emerson unreasonably delayed in bringing his section 473 motion, claiming: “counsel was not ‘otherwise diligent in investigating and pursuing the claim’—it was not raised in her motion for new trial, and in fact was not raised until September, 2009.” She concedes that he did file his motion within section 473, subdivision (b)’s six-month time frame, but claims he “offered no reason for his dilatoriness.” In fact, Ms. Faria did offer such justification, explaining at the hearing that she first realized her oversight on or about September 4, 2009, when she was reviewing the file in conjunction with Carolyn’s motion for attorney’s fees. She attempted to obtain ex parte relief on September 9, but was advised by the court to seek relief via a regularly noticed motion. She then filed the motion on September 18. She thus was diligent in seeking relief once she recognized the error, and did so within the six-month time limit established by section 473, subdivision (b).
Finally, Carolyn contends that Ms. Faria’s neglect was not excusable, commenting, “Even a person with no special skill can correctly calculate spousal support based on periods in a court order.” Ms. Faria’s ability to “correctly calculate spousal support” is not in question. The question, rather, is whether it constituted excusable neglect to forget the terms of the January 2007 stipulation when, in January 2008, she prepared a 122 page closing argument addressing 68 issues and subissues. We conclude that the only reasonable answer to this question is “yes.”
II
Judge Wong Abused Her Discretion In Retroactively Modifying Carolyn’s Temporary Spousal Support Upward to $26,743 Per Month
In addition to challenging the time period for which Judge Wong retroactively modified temporary spousal support, Emerson also challenges the amount of the modification. At the time of trial, Emerson was paying Carolyn temporary support of $8,000 per month. He argued at trial that the amount should be modified downward, reasoning that the prior amount was based on perjured testimony by Carolyn that concealed unreported income she was receiving from tenants at the Maddocks property as well as social security income. Carolyn, on the other hand, argued that the amount should be modified upward to $26,743, based on Ms. Elmore’s DissoMaster calculation. Judge Wong ultimately adopted Carolyn’s position, concluding that Emerson had underpaid temporary support in the amount of $318,631, or $18,743 per month.
Family Code section 3600 (former Civil Code section 4357) governs the award of temporary spousal support, authorizing the court to order payment of “any amount” that is “necessary for the support” of the other spouse. (Fam. Code, § 3600.) Temporary awards do not serve the same purpose as postjudgment support, nor are they governed by the same statutory considerations. (See Fam. Code, § 4320, subd. (a)-(n) [setting forth a list of circumstances that the court “shall” consider in calculating the amount of postjudgment support].) As explained by Witkin, “Generally, the amount awarded should be calculated so as to ‘maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations.’ This is in contrast to post-judgment spousal support, the purpose of which is ‘not to preserve the preseparation status quo but to provide financial assistance, if appropriate, as determined by the financial circumstances of the parties after their dissolution and the division of their community property.’ ” (11 Witkin, Summary of Cal. Law (10th ed. 2005) Husband and Wife, § 191, pp. 261-262; accord, In re Marriage of Burlini (1983) 143 Cal.App.3d 65, 68 [“Temporary spousal support is utilized to maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations.”]; In re Marriage of Winter (1992) 7 Cal.App.4th 1926, 1932.)
We review Judge Wong’s decision on this issue under the abuse of discretion standard. (In re Marriage of Murray (2002) 101 Cal.App.4th 581, 594 [“Awards of temporary spousal support rest within the broad discretion of the trial court and may be ordered ‘in any amount ([Family Code section] 3600) subject only to the moving party’s needs and the other party’s ability to pay.”].) Although we discussed that standard in section I, ante, we add to that discussion our elaboration in People v. Jacobs (2007) 156 Cal.App.4th 728, 737, where we explained: “In Concord Communities v. City of Concord (2001) 91 Cal.App.4th 1407, 1417, our colleagues in Division Four of this court observed that ‘Abuse of discretion has at least two components: a factual component... and a legal component. [Citation.] This legal component of discretion was best explained long ago in Bailey v. Taaffe (1866) 29 Cal. 422, 424: “The discretion intended, however, is not a capricious or arbitrary discretion, but an impartial discretion, guided and controlled in its exercise by fixed legal principles. It is not a mental discretion, to be exercised ex gratia, but a legal discretion, to be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice....” ’
“All this is well described in Witkin where, likewise citing the still vital Bailey v. Taaffe, supra, 29 Cal. 422, 424, the author distills the principle as follows: ‘Limits of Legal Discretion. [¶] The discretion of a trial judge is not a whimsical, uncontrolled power, but a legal discretion, which is subject to the limitations of legal principles governing the subject of its action, and to reversal on appeal where no reasonable basis for the action is shown. (See 5 Am.Jur.2d, Appellate Review § 695.)...’ (9 Witkin, Cal. Procedure [5th ed. 2008] Appeal, § [364], pp. [420-421].)” (People v. Jacobs, supra, 156 Cal.4th at pp. 737–738; see also Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 695, quoting People v. Jacobs, supra, at p. 728].)
Applying those principles to the facts before us, we conclude that the order awarding Carolyn $26,743 per month in temporary spousal support constituted an abuse of discretion. That award—which amounted to $320,916 per annum—was based on Ms. Elmore’s DissoMaster calculation that analyzed support figures based on the couple’s 2005 income. Courts have recognized the potential benefits of using temporary spousal support guidelines such as DissoMaster: “[T]heir use should be encouraged to help lawyers and litigants predict more accurately what temporary support order would be issued if the case proceeded to a contested hearing. Although guidelines represent a proportional division of the family income, they are in graph form and easily understood, even by pro per litigants. They promote consistency in the temporary orders issued in a department with a busy domestic relations motion calendar, and are especially valuable in achieving comparable orders under similar financial facts in those courts where multiple departments hear such motions.” (In re Marriage of Burlini, supra, 143 Cal.App.3d at p. 69; accord, In re Marriage of Winter, supra, 7 Cal.App.4th at p. 1933; In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327-1328.)
The Burlini court, however, went on to make an observation that is critical here: “Although the adoption of guidelines for temporary support is to be encouraged, it should be emphasized that they are only guidelines to be utilized in cases with no unusual facts or circumstances.” (In re Marriage of Burlini, supra, 143 Cal.App.3d at p. 70.) After providing examples of such potential “unusual facts or circumstances, ” the court observed, “Indeed, the facts or circumstances of a particular case might well be so unusual that a court’s guidelines for temporary support would be totally inapplicable.” (Ibid.) Such was the case here, as the guidelines resulted in a temporary support calculation for Carolyn that vastly exceeded the Stoops’s marital standard of living.
We are aware of no evidence in the record—and Carolyn does not identify any—suggesting that she needed upwards of $26,000 per month to maintain the status quo pending conclusion of the dissolution trial. All estimates of her need were far lower. In fact, in the final statement of decision, Judge Wong cited the opinion of Carolyn’s own expert that her “need, as established during the marriage, was approximately $10,000 per month.” And while Carolyn does not identify any evidence suggesting she needed over $26,000 to maintain the marital standard of living, Emerson cites extensive evidence that she did not. For example, as he explains it in his opening brief: “[I]n arguing for ongoing spousal support, Carolyn stated that her ‘need, ’ based on the year prior to separation, was from $12,667 to $14,714 per month, resulting in a support order of between $6500 per month and $13,000 [citation]. In her closing brief, she argued that if one assumed she bought a home on a 30-year mortgage, she would have a ‘need’ of $18,500 per month, and after considering her investment and other income, would require support of $8645 per month based on an averaging of five methodologies used by Elmore [citation]. In its decision, the court relied on Elmore’s calculations, and determined that $8000 per month was proper.
“If one takes her attorney’s figures at face value, her basic need from August, 2006 to December, 2007 while living on Maddocks Road, with no rent to pay and only modest property tax and upkeep expenses, cannot have been more than the $4132 a month the court found to be her future need with no mortgage [citation]. Subtracting $664 in social security, $176 in pension income, and over $1850 per month in Highland rental income, her net ‘need’ was $1442 per month [citation]. And, as we know, this ‘need’ was further reduced by the receipt of substantial rental income from Maddocks.”
Emerson explained it another way in his closing argument: “[D]uring the last four years of marriage the parties were living on under $100,000 per year (without a mortgage). Adjusted by the CPI to reflect today’s dollars, that would be less than $150,000 for the two of them. Assuming the marital lifestyle could be maintained by one party with a 60% share of $150,000, each party would need $90,000 per year (without a mortgage), or $7,500 per month. The interim order gave [Carolyn] $8,000 per month over and above her other income, declared as only $1,317 per month. At $7,500, $8,000 in support was $500 per month more than she would need to maintain the parties at the status quo. However, [Carolyn] additionally had undeclared income of another $5,528 per month ($66,332 annually, leaving her with $162,000 annually or $13,500 per month to meet the $7,500 per month marital standard. This is more than the total marital standard for both parties. The interim order has enabled [Carolyn] to live substantially better than the marital standard.”
In opposition, Carolyn argues not that the evidence showed her need to be $26,743, but rather that Judge Wong did not abuse her discretion by awarding support in that amount—an argument, we note, that tacitly admits the award exceeded her need. But Family Code section 3600 authorizes the court to order “any amount” that is “necessary” for the support of the recipient, clearly contemplating a nexus between need and temporary support. Judge Wong was by no means bound by the figures calculated by Emerson’s expert. She was, however, bound to follow Family Code section 3600 to order temporary support consistent with Carolyn’s needs. This, she did not do.
The inflated figure ordered by Judge Wong apparently resulted from Ms. Elmore’s inclusion of two sources of funds in her DissoMaster calculation: capital gains and income Emerson received from a Family Limited Partnership that he then reinvested in the Family Limited Partnership. For purposes of remand, we note that to the extent Emerson treated the capital gains as disposable income rather than reinvesting the proceeds, they were income available for support purposes. (See In re Marriage of Pearlstein (2006) 137 Cal.App.4th 1361, 1363, 1372, 1376.) And, as Emerson concedes, it was “legally correct” to include the FLP income as income available for support.
III
Judge Wong Properly Exercised Her Discretion In Ordering Emerson Reimbursed $100,000 for His Separate Property Interest in the Highland Property
Emerson purchased the Highland property in 1981 for $580,000. In 1985, during his marriage to Carolyn, he converted it to a joint tenancy and refinanced the mortgage. At trial, he sought reimbursement for his separate property contribution, calculated by his expert as follows: $60,000 for the down payment, $60,000 in mortgage payments prior to the marriage, and $57,000 paid into escrow at the time of the refinance, for a total of $177,000. Judge Wong rejected this calculation, however, accepting instead that offered by Ms. Elmore, who calculated Emerson’s reimbursement as $100,000, computed as follows: In 1981, Emerson purchased the Highland property for $580,000. However, at the time of conversion in 1985, the property had decreased in value to $520,000. At the same time, the community assumed $390,000 in new debt, leaving $130,000 in equity. From that, Ms. Elmore deducted $30,000 contributed by the community, leaving $100,000 available for Emerson’s separate property reimbursement. Emerson traced separate property contributions of $160,000 (comprised of the $60,000 down payment, $60,000 in mortgage payments prior to the marriage, and $40,000 paid into escrow as part of a $57,000 check for the 1985 refinance), but he was only entitled to $100,000 because, as noted, the property had declined in value between the time of purchase and conversion.
Family Code section 2640 provides that when separate property is transmuted to community property during a marriage, the spouse contributing the property is entitled to reimbursement. In the “normal reimbursement situation... the measure of reimbursement is the fair value of the residence at the time of conversion to joint tenancy, less outstanding encumbrances and any nongift community property contributions to principal before conversion.” (In re Marriage of Rico (1992) 10 Cal.App.4th 706, 710; see also In re Marriage of Kahan (1985) 174 Cal.App.3d 63, 72.)
Emerson challenges Judge Wong’s reliance on Ms. Elmore’s calculation in three regards, a challenge we review for abuse of discretion. (In re Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1286 [“ ‘As long as the court exercised its discretion along legal lines, its decision will be affirmed on appeal if there is substantial evidence to support it.’ ”].) First, he takes exception to Ms. Elmore’s opinion that at the time of conversion, the property had declined in value to $520,000, an opinion that was based, as Emerson puts it, “entirely... on an unsigned draft mortgage application that was admitted into evidence [citation]. On this draft application, someone other than the parties had listed all of Emerson’s real estate, and put down $520,000 as the value of the Highland property.” He thus contends that the document, which he claims “does not even rise to the level of hearsay, ” was an insufficient basis for Ms. Elmore’s opinion.
Emerson raised an identical objection at trial, where he explained that he had gone through the draft application and put check marks next to any figures that he could vouch for. He put no check marks next to any of the valuations of his properties, and assumed that someone associated with the lender had simply decided that because he borrowed $520,000 when he bought the Highland property, it must be worth at least that much at that time. He noted that the loan application was not even signed by him or Carolyn, nor was it known where the information came from. He protested that the document had been introduced solely to aid him in his testimony, and was in no way intended to verify the numbers that someone else—an unknown someone else, at that—had inserted.
Judge Wong challenged Emerson’s position, stating, “I find this to be a totally contradictory and illogical position to take.... It has [Emerson’s] name on it. It has [Carolyn’s] name on it. It has the loan amount, which [Emerson] has just testified to was the loan amount that he was asking for.... He needed to refi this because there was going to be a balloon payment that needed to be done. That’s why Carolyn’s name is on there. Why we would suddenly now be arguing that these numbers are inaccurate or unreliable [¶]... [¶] and not used by any, you know, for any bona fide businesslike purpose, it just escapes me.”
After further argument on the objection, Judge Wong overruled it, explaining: “Ms. Faria [Emerson’s counsel], you have an ability to rehabilitate when you redirect your client. It is, to me, so simple. When he comes back to be your witness, that you can ask him directly: When you asked for a refi, what was your opinion of the worth of your property at the time that you refi’d. That is totally admissible, and the weight, whatever it is that the trial court gives it, will be in my discretion to accept either this amount, $520,000—that some unfortunate unknown, at this point, typed, or his opinion, or any other person who’s going to be asked it. For all I know, Ms. Stoops will be asked her opinion what it was worth.” Judge Wong further explained that the loan application would not necessarily dictate the value of the property, but it was relevant to whatever she determined the property value to be. During trial, however, Ms. Faria did not solicit Emerson’s opinion of the value of the Highland property at the time of conversion. (See Evid. Code, § 813, subd. (a)(2) [property owner may offer opinion as to value of property].)
An expert may rely on hearsay in formulating his or her opinion. (Evid. Code, § 801, subd. (b).) This includes hearsay that is not otherwise admissible, provided it is reasonably reliable. (People v. Hallquist (2005) 133 Cal.App.4th 291, 296 [“ ‘ “[A]n expert may generally base his opinion on any ‘matter’ known to him, including hearsay not otherwise admissible, which may ‘reasonably... be relied upon’ for that purpose.” ’ ”].) Here, the draft loan application, made in Emerson’s and Carolyn’s names, listed all of Emerson’s real estate holdings along with valuations for the properties. It contained the loan amount Emerson was seeking to refinance the Highland property. It contained other financial information that Emerson confirmed was accurate. Emerson offered no evidence suggesting that at the time of the refinance he disputed that the Highland property had decreased in value. In light of this, Judge Wong was within her discretion in accepting the document as a sufficiently reliable basis for Ms. Elmore’s opinion. And it constituted substantial evidence of the Highland property value in 1985.
Emerson disputes this conclusion, arguing that Judge Wong “should have either accepted the evidence that the Highland property was still worth $580,000 at the time of conversion, or ordered a retrospective appraisal of value at the time of conversion.” This argument misstates the record, however, because there was no “evidence that the Highland property was still worth $580,000 at the time of conversion.” Rather, Emerson is apparently referring to testimony by two experts who testified generally as to the values of real estate in Southern California in the 1980’s. Forrest Bailey, Emerson’s appraiser for the Maddocks property, testified that property values in California were relatively stable from 1981 to 1985, before beginning to soar in 1986. John MacNeil, who appraised the property in Malibu, testified that coastal property there was increasing in value throughout the decade. Neither one, however, testified as to the value of the Highland property in 1985.
Emerson continues, suggesting that if Judge Wong was disinclined to accept the testimony of the real estate experts, then her “only recourse was to appoint an expert appraiser to provide an opinion, ” as the court did in In re Marriage of Hargrave (1985) 163 Cal.App.3d 346, 353-355. That case, however, is not analogous. There, the husband and wife disagreed about the value of the goodwill in a business owned by the couple and operated by the husband. The wife’s expert valued the goodwill at $100,000, while the husband and his experts testified that there was no goodwill asset in the business. The referee valued the goodwill at $35,000. (Id. at pp. 351-352.)
On appeal, the court agreed with the wife that there was no substantial evidence in the record to support the referee’s valuation. (In re Marriage of Hargrave, supra, 163 Cal.App.3d at pp. 352-353.) The court noted that the referee had rejected all of the testimony on the subject of goodwill valuation and was thus “left with a record barren of evidence on this vital issue.” (Id. at p. 355.) According to the court, under these circumstances, the referee should have either required the parties to submit further evidence or appointed its own expert to testify on the issue. (Ibid.) The instant situation differs in one critical aspect: unlike the referee in Hargrave, who had rejected all evidence on the valuation, Judge Wong had evidence of the 1985 Highland property value before her, namely, the draft loan application.
In a final argument on the issue of the Highland property value, Emerson argues that Judge Wong improperly accepted the loan document as a valuation of the property simply because she believed that “once the document had been used to refresh Emerson’s recollection, everything in the document could be used for any purpose.” This is not, in fact, an accurate summary of Judge Wong’s position. Rather, she explained that the draft loan application, which had been relied on by both parties, contained Emerson’s and Carolyn’s names, a loan amount that Emerson confirmed was the amount he was seeking, and other financial information that Emerson confirmed was accurate. In light of this, she concluded, it was incongruous for Emerson to reject the contents of the application when the disputed number was not in his favor. This is a far cry from concluding that the document “could be used for any purpose.”
In addition to the valuation of the property at the time of conversion, Emerson also disputes Ms. Elmore’s attribution to him of only $40,000 of the $57,000 cash that was paid into escrow at the time of the refinance. He claims that he paid the entire amount out of his separate funds, but that Carolyn destroyed the records that would enable him to trace the additional $17,000. Moreover, he asserts that the community did not even have the $17,000 that it was credited. Carolyn does not dispute Emerson’s entitlement to $40,000 but argues that he did not establish his right to the remaining $17,000.
A party claiming reimbursement of separate funds bears the burden of tracing the expense to his or her separate property. (In re Marriage of Braud (1996) 45 Cal.App.4th 797, 822-823.) Here, the money was paid out of a commingled account but Emerson could not account for the $17,000. He claims the community did not have $17,000 in cash at the time of the refinance, but the cited evidence does not actually support this claim. In the referenced transcript, Emerson’s attorney asked him, “Can you recall any kind of a community amount of money that would have been in the neighborhood of $16,383 that you and Mrs. Stoops would have had at that time that would have paid for this?” Emerson responded, “I don’t recall that, no.” This was hardly unequivocal testimony that the community did not have the disputed funds. Similarly, Emerson’s claim that the supporting documents were left at the Maddocks property and destroyed by Carolyn lacks any citation to the record. Since Emerson failed to account for those funds, it was a proper exercise of Judge Wong’s discretion to credit $17,000 to the community rather than to Emerson.
In fact, the record contains evidence suggesting to the contrary. In her closing trial brief, Carolyn responded to the same accusation, explaining that when Emerson left the Maddocks property in February 1995, he took records with him and made no effort to return to retrieve additional records, choosing to never return to the property for, as Carolyn put it, “emotional reasons.” Carolyn attempted to provide him with the items and documents he requested from the property in 1998.
Emerson presents one final argument concerning Ms. Elmore’s calculation, this time arguing that even if one assumes Ms. Elmore’s figures were correct, she nevertheless miscalculated the amount of his reimbursement. The argument runs as follows: “The court ordered both parties to perform a Moore-Marsden analysis. Walker’s was quite simple. Since there was no change in the property value, there was no appreciation in value attributable to the community interest that he assumed to be $13,000. Hence no further analysis was required. However, although Elmore assumed that the property had decreased in value by $60,000, she did not calculate a Moore Marsden adjustment for the decline in value attributable to the community contribution that she assumed was $30,000. This can easily be done. Using the Moore Marsden formula, the community contribution was $30,000 divided by the original purchase price of $580,000, 3/58 or 5.17%. Just as, under In re Marriage of Witt (1987) 197 Cal.App.3d 103, 105, Emerson had to bear the burden of any decrease in the value of his separate property investment, so any community interest had to bear a proportionate burden. Therefore, if Elmore was correct that the community had contributed $30,000, and in the meantime the property had lost $60,000 in value, then the community should have been charged 3/58 of $30,000, or $1551. It follows that using Elmore’s figures, the reimbursement should have been $101,551.” (Fns. omitted.) As this entire argument is presented without any citation to the record, we decline to address it. (Cal. Rules of Court, rule 8.204(a)(1)(C); Dominguez v. Financial Indemnity Co. (2010) 183 Cal.App.4th 388, 391, fn. 2; Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2010) ¶ 9:36, pp. 9-11 to 9 12.1.)
IV
Judge Wong Properly Exercised Her Discretion in Ordering Carolyn Reimbursed $89,583 For Her Separate Contribution to the Palos Verdes Property
At the time she married Emerson, Carolyn had an ownership interest in a house in Chatsworth from a prior marriage. She and Emerson jointly bought out the interest of her ex-husband, but Emerson quitclaimed his interest to Carolyn, making it her separate property. The property sold in 1985, and the net proceeds of $137,172.98 were placed in a joint account. The couple then jointly purchased the Palos Verdes property, with the down payment funded from two different sources. First, $79,922.93 was paid from the account containing proceeds from the sale of the Chatsworth residence which, both sides agreed, were Carolyn’s separate property. The remainder of the down payment ($79,000) was paid by two separate checks, one for $10,000, the other $69,000, both drawn on a commingled account at Manhattan Savings. The funds in that account consisted of community property funds, as well as separate property funds belonging to both Emerson and Carolyn, including $30,000 from the Chatsworth sale that had been transferred to that account.
At trial, Ms. Elmore calculated Carolyn’s separate property contribution to the Palos Verdes purchase to be $89,583, comprised of the undisputed $79,922.93, plus $9,660 of the $10,000 check paid out of the Manhattan Savings account into which the $30,000 in Chatsworth proceeds had been transferred. Ms. Elmore reasoned that although from a commingled account, Carolyn was entitled to reimbursement of the $9,660 because both parties intended the Palos Verdes purchase to be funded by Carolyn’s Chatsworth proceeds. Judge Wong adopted Ms. Elmore’s analysis, ordering Carolyn reimbursed $89,583 for her separate property contribution to the Palos Verdes purchase.
Although the check was for $10,000, Ms. Elmore reduced Carolyn’s reimbursement claim to $9,660 because that was all that remained of the $30,000 at the time of escrow, the rest having been spent on community expenses.
Emerson contends, however, that because his separate property share of the Manhattan Savings account so far exceeded Carolyn’s, the entire $10,000 should have been credited to him, with none going to Carolyn. We reject the contention as the evidence indicated that the parties intended for Carolyn to use the Chatsworth proceeds to fund the Palos Verdes purchase. Indeed, Emerson acknowledged that Carolyn used approximately $113,000 of her separate property to fund the purchase. Further, Ms. Elmore traced $30,000 of the proceeds from the Chatsworth house to the Manhattan Savings account from which the $10,000 check was written, and accounted for $9,660 of that $10,000. This constitutes substantial evidence supporting Judge Wong’s conclusion that Carolyn was entitled to reimbursement of $89,583. (In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1057-1058 [whether the spouse claiming a separate property interest has adequately met his or her burden of tracing to a separate property source is a question of fact, and the trial court’s holding on the matter must be upheld if supported by substantial evidence].)
Carolyn stated in her closing argument that despite this, she was only claiming reimbursement of $89,583 because of the difficulty in tracing the funds so many years later.
V
Judge Wong Did Not Abuse Her Discretion in Denying Emerson’s Request for Watts Credits
In Watts, supra, 171 Cal.App.3d 366, the court of appeal recognized the authority of trial courts to order reimbursement to the community of the reasonable rental value of a family home occupied postseparation by only one spouse, reimbursement that has come to be known as Watts credits or charges. Emerson requested Watts credits based on the fact that after he and Carolyn separated on February 13, 1995, he left the Maddocks property while she remained there until it was sold in August 2007. As Emerson explains it, the parties’ joint appraiser estimated the reasonable rental value of Carolyn’s occupancy to be $469,700. During that time period, however, Carolyn had paid taxes and other expenses in the amount of $148,713, leaving a balance due to the community of $320,987. Because each spouse is entitled to half of the credit (In re Marriage of Jeffries (1991) 228 Cal.App.3d 548, 554-555), Emerson claimed entitlement to $160,493.50.
Judge Wong rejected Emerson’s Watts claim, identifying the following facts in support:
“i) Emerson left Carolyn in charge of the Ranch. Emerson left without any explanation, leaving Carolyn alone in the huge house and in charge of 58 acres and many animals.
“ii) Carolyn’s efforts in defending against the Custer v. Stoops lawsuit preserved the value of the property. Although there was no testimony on this point, since Mr. Custer considered all his neighbors interlopers and trespassers, Mr. Custer lived at his home, while Emerson lived at the ranch. Emerson had to have had some knowledge of the neighborhood and the neighbors. Even if Emerson did not know personally that Mr. Custer was a frightening neighborhood nut, Emerson would have known how isolated and remote the house is from other neighbors who could have come to Carolyn’s aid if she was accosted by Mr. Custer. The Court observed during the trial that Carolyn is a woman of small stature and frame. How could she defend herself? During the reign of terror waged by Mr. Custer, Carolyn experienced substantial emotional distress and anxiety while dealing with Damien Custer from 1997 to the completion of the lawsuit in or around 2005. Under the circumstances, it would be unfair to charge Carolyn usage charges in light of her efforts, at great emotional cost to her. Additionally, had the Custer lawsuit not been successfully defended, the value of the Ranch could have been adversely affected.
“iii) The Court finds that in weighing the equities and the situations of both parties during the time that Carolyn lived at the residence, it would be unjust and unreasonable to award Watts credits. Much was made in Emerson’s counsel’s argument papers about Carolyn’s ‘destruction of evidence’ and her ‘cherry picking’ of evidence. These statements to malign Carolyn’s character and credibility are unfair and unreasonable. Emerson testified at trial that when he left the ranch, he left with records. He never returned despite letters, phone calls from Carolyn that she was going to get rid of the records. No one ever denied Emerson access to the ranch or to his records at any time. Emerson never testified that Carolyn refused to let him on to the property after he left in 1995. He also admitted on the stand that he made no attempt to recreate some of the records from other sources.
“iv) Although the Court has no jurisdiction to award spousal support back to the date of separation, given what the Court knows about the financial differences between Carolyn and Emerson during the first several years of their separation, Carolyn was underpaid support from January, 1999 to August, 2006. The funds available for support during this time frame... warranted substantially more support than Respondent received. The support Respondent was underpaid from 1996 to 2005 exceeds the amount Petitioner is claiming in Watts charges, which independently justifies denying Petitioner’s request.”
As to Judge Wong’s first justification—the time and energy Carolyn invested in defending the Custer lawsuit while maintaining the vast ranch and the emotional distress she suffered during that time period—Emerson contends that it “could have justified a reduction of reasonable rental value, but no evidence established what that reduction should be. During much of the time she was on the ranch, Carolyn shared the property with male tenants and guests, who were capable of protecting her. Carolyn insisted on remaining at the Maddocks ranch during the Custer lawsuit [citation] where she continued to lead a happy social life, maintained a steady stream of tenants and guests, and continued to raise llamas [citation], leading to the conclusion that the hostile neighbor was not a major factor in reducing fair rental value.”
There are no specific guidelines determining when Watts credits should or should not be awarded. Rather, the trial court has broad discretion and may consider all the circumstances when determining whether it is equitable to order reimbursement in a particular case. (See Watts, supra, 171 Cal.App.3d at p. 374; In re Marriage of Braud, supra, 45 Cal.App.4th at pp. 818-819.) Watts charges may be denied if, after taking into account all of the circumstances, the court determines that it would be unfair or unreasonable to charge the party for use of the community asset. (Watts, supra, at pp. 373-374.) We review a challenge to the trial court’s Watts credits ruling for abuse of discretion (In re Marriage of Hebbring (1989) 207 Cal.App.3d 1260, 1272), and conclude that Judge Wong was well within her discretion in denying Emerson’s request.
Evidence presented at trial supports Judge Wong’s description of the Custer situation as a “reign of terror.” Carolyn testified that due to Custer’s threatening behavior after he filed the lawsuit, she no longer felt safe walking or driving down the road from the ranch. According to Carolyn, any time Custer saw her, he would approach and harass her. Often times, he would come out from behind bushes or otherwise suddenly appear out of nowhere. He called her names, swore at her, and physically threatened her, one time yelling at her while holding a hammer, another time threatening her with a screwdriver. On one occasion, he wrote “fat broad-ass bitch” on a fence on his property.
Carolyn testified that after starting her llama business, she enjoyed walking her llamas down the road to a cluster of mailboxes. However, she stopped doing so after a while because she was scared of encountering Custer. The confrontations became so frightening that whenever she traveled on the road near his property, she carried a Mugger Alert Siren with her. She eventually obtained a restraining order against Custer, and often times resorted to calling the sheriff for help.
Carolyn also described how when she was driving down the road, he would stand in front of her car, blocking her access; other times, he would block her passage with an object, such as a wheelbarrow. As Carolyn sat in her car waiting for him to remove the roadblock, he would approach the car and threaten her.
Carolyn also testified that when she or other neighbors attempted to do cleanup work on the vegetation surrounding the disputed property, Custer would impede the work. One time he put his foot on the tractor being used so the worker could not proceed, spitting on the tractor driver during the confrontation. On another occasion, Carolyn hired a contractor to remove a fence that Custer had improperly installed. When Custer learned of the work being done, he came out and struck one worker with a pipe while ripping the shirt of another. Because of such confrontations, any time Carolyn had someone on the property to do work, she made it a point not to leave them alone. Instead, she stayed nearby with a camera and a telephone.
Carolyn eventually rented a post office box in town because she feared that Custer would break into her mailbox and steal personal papers, such as bank statements. Her mailbox down the road from the ranch had been damaged, and she suspected Custer was responsible, although she had no proof. On a number of occasions when she went to the post office to check her box, she saw Custer sitting in his car, waiting for her.
Carolyn also believed that Custer started a fire on her property in an attempt to burn the house down. It was prompted by a conflict that occurred when Carolyn hired someone to plant some vegetation to obscure a spot where Custer was dumping his garbage. When Custer noticed what was going on, he came outside with his pit bull, took the chain off the dog, and started swinging it. Carolyn left without planting anything. At 2:00 a.m. the following morning, Carolyn was awakened by a fire burning on the property line between Custer’s property and the ranch. The investigating fire captain advised Carolyn that she believed it was arson, although it was never proven.
Custer’s threatening behavior did not stop at the property. The evidence showed that he continued to harass Carolyn during depositions, where he would, according to Carolyn’s attorney in the property dispute, “sneer, stick his tongue out, make offensive remarks towards Carolyn, stare her down....”
This and other evidence in the record confirms that during the pendency of the Custer lawsuit, Carolyn was indeed subjected to a “reign of terror, ” significantly diminishing the value of Carolyn’s occupation of the property. Emerson’s assertion that Custer “was not a major factor in reducing fair rental value” is simply contrary to the record. Further, Carolyn’s successful defense of the Custer lawsuit resulted in a clear title to the Maddocks ranch, absent which the value of the ranch would likely have been negatively affected. Instead, thanks to Carolyn’s efforts in the Custer lawsuit, as well as the time and energy she invested in preparing the ranch for sale, the property sold for $2,175,000, $425,000 more than the joint appraisal of $1,750,000—this in a depressed real estate market. In light of all this, it cannot be said that Judge Wong abused her discretion in reducing the fair rental value of Carolyn’s use of the Maddocks ranch to zero and rejecting Emerson’s request for Watts credits.
As to Judge Wong’s second justification—the underpayment of spousal support—Emerson submits that that factor was not one the court could properly take into consideration. He reasons that during the time period in question, he and Carolyn, who was represented by counsel, entered into a stipulation regarding the amount of support. The court retained jurisdiction to modify the amount of support, and did so in 2006, but it did not, according to Emerson, retain jurisdiction to modify support prior to 2006 nor to deny Watts credits as a way of retroactively modifying support. As Judge Wong indicated in her statement of decision, however, this was an independent justification for denying Emerson’s Watts request. Because Judge Wong was within her discretion in denying the request solely based on Carolyn’s efforts in defending the Custer lawsuit and maintaining the ranch, we need not consider whether the second, independent justification was also an appropriate basis for denying Emerson’s request.
VI
Judge Wong Properly Denied Emerson’s Motion for New Trial
Lastly, Emerson contends that Judge Wong erred in denying his motion for new trial as to the buyout date for the Highland property. On May 30, 2007, at the beginning of trial, the parties stipulated on the record as follows concerning the valuation and division of the Highland property: “On Highland, the parties have agreed that Emerson will buy out Mrs. Stoops’ interest in Highland Avenue at the appraised value of $2.8 million, and we can eliminate the necessity of one of the appraisers having to come up from Southern California who assessed the value of the property.” As Emerson correctly points out, “[t]he stipulation was silent as to everything else regarding the property, including whether the division would be nunc pro tunc as of the date the value was agreed to.”
In the April 2, 2009 judgment on reserved issues, Judge Wong subtracted the amount owed on the mortgage as of the date of entry of judgment and the credit to Emerson for the property’s value at the time of conversion, and arrived at a net figure of $2,520,854. She then awarded Carolyn an equalizing payment of half that amount, or $1,260,427. Meanwhile, between the date of the stipulation (May 30, 2007) and the entry of judgment (April 2, 2009), Emerson had continued to pay Carolyn her share of the rents from the Highland property and make payments on the existing loan. According to Emerson’s records, during that period, he had paid Carolyn $36,050 as her share of the rental income derived from the property as well as made mortgage payments that reduced the principal due on the mortgage.
After judgment was entered, however, Emerson obtained an appraisal of the property showing that the current market value was then $2,210,000, a decline of $590,000 from the stipulated value. Accordingly, on April 16, 2009, Emerson moved for partial new trial under sections 656 and 657, requesting the following relief: that the equalizing payment be based on the mortgage balance as of May 30, 2007, instead of the date of the judgment; that Carolyn receive no credit for principal reductions of the mortgage paid after May 30, 2007; and that Carolyn reimburse Emerson all rents and profits she received from him after May 30, 2007. Alternatively, Emerson requested that Judge Wong vacate the statement of decision and judgment as to the Highland property and reopen the matter for further proceedings pursuant to section 662 to allow Emerson to introduce evidence regarding the property’s current value.
Emerson’s motion was brought on two grounds. First, he argued, “as a result of surprise, that ordinary prudence could not have guarded against, the valuations arrived at in this case are inconsistent with current reality.” This was so, he posited, because “no one could have reasonably foreseen that it would take nearly two years for judgment to be entered after [Emerson] agreed to buy out [Carolyn’s] community interest in Highland at the then current value of $2.8 million.” And, he “reasonably believed that the buy-out would be effective as of May 30, 2007, and that he would be entitled to all rents and profits thereafter including any reduction in the mortgage principal, not two years later after property values had dramatically declined.” This surprise, Emerson contended, resulted in an unequal division of the of the community asset.
Second, Emerson argued newly discovered evidence, claiming that he could not have with reasonable diligence known, discovered, and produced at trial evidence demonstrating that the value of the Highland property had dropped $590,000 since the commencement of trial.
Judge Wong did not rule on Emerson’s motion, and it was thus denied by operation of law. (§ 660.) He now contends Judge Wong erred in refusing to grant a new trial on this issue. Her failure to do so, he submits, contravened her obligation to divide the marital property equally. (See Family Code, § 2550.)
Section 657 provides that a trial court may, on motion of an aggrieved party, modify or vacate, in whole or in part, any verdict or decision that resulted from, as pertinent here, “[a]ccident or surprise, which ordinary prudence could not have guarded against” or “[n]ewly discovered evidence... which [the moving party] could not, with reasonable diligence, have discovered and produced at the trial.” (§ 657, subds. (3), (4).) We review denial of such a motion de novo. (City of Los Angeles v. Decker (1977) 18 Cal.3d 860, 871 872; Ajaxo, Inc. v. E*Trade Financial Corp. (2010) 187 Cal.App.4th 1295, 1307.) Having conducted such a review, we conclude there was no error.
As to the first ground for Emerson’s motion, we see no evidence of a surprise that warrants a new trial. In this context, surprise “denote[s] some condition or situation in which a party to a cause is unexpectedly placed, to his injury, without any default or negligence of his own.” (Kauffman v. De Mutiis (1948) 31 Cal.2d 429, 432.) Emerson’s “surprise” argument falls short for two reasons.
First, at no point did Emerson ever express his purported belief that the buyout would be made effective as of May 30, 2007. Not at the time the parties stipulated to the Highland property value. Not during trial. Not in his closing argument. Not in his objection to the tentative statement of decision. Instead, as Judge Wong noted in her final statement of decision, the stipulation governed one fact and one fact only: that the Highland property would be valued at $2,800,000. If Emerson wanted other terms included in the stipulation—such as the buyout date being the date of the stipulation rather than entry of judgment—then he could have requested such a stipulation. His failure to do so does not amount to a surprise that justifies a new trial.
In fact, in his closing argument, Emerson requested that Carolyn receive an equalizing payment of $1,310,427, more than she was ultimately awarded.
Second, Emerson was aware early on that the Highland property value was declining, yet he nevertheless continued to rely on the $2,800,000 stipulated value. Emerson knew from his own appraisals that the value of the Highland property had decreased from $3,100,000 in March 2006 to $2,800,000 in January 2007, yet in his closing brief (filed on February 4, 2008—nearly nine months after the stipulation) he continued to use the $2.8 million appraisal value. Certainly, and especially given the global economic climate and real estate market during that time period, Emerson had reason to be aware that between the May 2007 stipulation and his February 4, 2008 closing argument the value had likely further declined. Further, given the complexities of the case and the numerous issues to be decided—as evidenced by his own 122-page closing argument—the parties had to expect that there would be a certain time lapse between the close of trial and entry of judgment. None of this was a surprise.
Likewise, Emerson has failed to demonstrate the existence of any newly discovered evidence justifying a new trial. Again, he knew that in the months preceding the stipulation the Highland property had depreciated at least $300,000 in appraised value, and he had no reason to believe property values had stabilized or rebounded. He may not have known how long it would be before entry of judgment, and he may not have known the precise value to which the Highland property would decline by the time judgment was entered, but decline in the property’s value since the stipulation was evidence that Emerson could have introduced at trial.
Emerson also presents an argument grounded in equity, namely, that if he was to bear the burden of the decline in the value of the Highland property after the May 30, 2007 stipulation, then he should also have been entitled to the profits from the property after that date. While Emerson situated himself so as to bear the burden of any decline in the value poststipulation, he was similarly poised to benefit from any appreciation in the property value during the same time period. And Carolyn likewise took a risk that the property value would increase, in which case Emerson would have financially benefited. This was not a “Heads I win, tails you lose” situation, as Emerson claimed in his motion for new trial, and he cannot now be heard to complain because this gamble did not pay off in his favor.
DISPOSITION
Those parts of the judgment addressing retroactive modification of the temporary spousal support paid by Emerson to Carolyn are reversed. On remand, the trial court shall recalculate the retroactive modification of such support to comply with the terms of the 2007 stipulation and order governing the court’s jurisdiction to retroactively modify temporary spousal support. Further, the court is to recalculate the amount of modification consistent with the provisions of Family Code section 3600, in an amount that was necessary to maintain the marital standard of living for Carolyn pending final resolution of the dissolution. In all other respects, the judgment is affirmed. Each side shall bear its own costs on appeal.
We concur: Kline, P.J., Haerle, J.