Opinion
D073184
04-03-2018
In re the Marriage of LEE and JENNIFER MIHOKY. LEE MIHOKY, Appellant, v. JENNIFER MIHOKY, Respondent.
Goldberg Jones and Daniel L. Warren for Appellant. No appearance for Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. DN176524) APPEAL from an order of the Superior Court of San Diego County, James A. Mangione, Judge. Reversed and vacated with directions. Goldberg Jones and Daniel L. Warren for Appellant. No appearance for Respondent.
In this marital dissolution action between Lee Mihoky and Jennifer Mihoky, Lee appeals the denial of his request for an order (RFO) to enforce the parties' dissolution judgment and marital settlement agreement (MSA) by awarding him possession and control of the marital residential property (the property) and ordering Jennifer to vacate the property. Lee contends that the trial court erred in finding that the doctrines of waiver and estoppel precluded Lee from enforcing the provision in the judgment that awarded him the property upon Jennifer's failure to refinance the property within a specified time period. We agree that the court erred and accordingly, reverse.
As is customary in family law cases, we will refer to the parties by their first names for convenience and clarity, intending no disrespect.
FACTUAL AND PROCEDURAL BACKGROUND
Lee and Jennifer were married in 2001 and separated in 2013. They had three children during the marriage. Lee filed a petition for dissolution in October 2013 and the parties entered into an MSA in July 2015. The MSA was incorporated and merged into the dissolution judgment, which the court entered on November 6, 2015.
The judgment provided for the disposition of the property, referred to as Lee and Jennifer's "community and co-owned real property," as follows: "As of execution of this Agreement Wife has maintained exclusive use and control of this property. [¶] a. The parties agree that Wife shall have ninety (90) days from execution of this Agreement to attempt [to] refinance the property and all associated encumbrances solely into her name. If Wife is successful in refinancing the property and removing Husband from all liabilities associated with the property, this residence shall be awarded to her as her sole and separate property without any offsets or equalizing payments due to Husband. [¶] b. In the event Wife is not able to successfully refinance the property as described above, the property shall immediately be awarded to Husband as his sole and separate property without offset or equalizing payment due to Wife. Wife's name is not currently on any of the associated loans so Husband will be under no obligation to refinance the property if awarded to him."
In January 2017, Lee filed an RFO regarding "Property Control," noticing a hearing date of May 16, 2017. The hearing date was later continued to June 19, 2017. In the language of the RFO form, Lee requested that he "be given exclusive temporary use, possession, and control of the following property that we own . . . ." In the space where the form called for specification of the property at issue, Lee handwrote: "Need to inforce [sic] written agreement in divorce settlement. Property be relinquished to Lee Mihoky." (Some capitalization omitted.) In a declaration supporting his RFO, Lee stated that Jennifer had refused to leave the property despite his requests and had failed to pay the mortgage on the property for at least six months, which had destroyed his credit and put the house at risk of foreclosure.
Jennifer filed a responsive declaration in which she did not expressly oppose Lee's RFO or request modification of the judgment. She stated that she had been approved for a refinance of the first mortgage on the property in her name, but added: "While we were married[, Lee] and I had a 2nd mortgage on our house. It has not been paid in over 7 years. In order for me to put the first mortgage solely in my name, I have to satisfy and settle the 2nd mortgage. The amount owed on the 2nd is approx[imately] $150,000, and I am due approx[imately] $225,000 from the divorce agreement [qualified domestic relations order], started by [Lee] in February 2017. The QDRO has just been approved by the court on May 10, 2017." Jennifer stated that she thought the QDRO would be "started" by the end of the 90-day period that she had been given to refinance, but "[a]s time went on it fell through the cracks and was not started until almost three years later."
"Under provisions of the federal Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1001 et seq.; hereafter ERISA), private retirement plans may, pursuant to a state court's domestic relations order, pay a portion of an employee participant's retirement benefits directly to the employee's former spouse or dependents, if and only if the state court order meets certain specifications. Such an order is a 'qualified domestic relations order' ( . . . QDRO). (29 U.S.C. § 1056(d)(3).)" (In re Marriage of Oddino (1997) 16 Cal.4th 67, 71.) In the present case, the QDRO that Jennifer referenced concerned Lee's 401(k) plan that had an approximate value of $387,000 as of September 2013.
At the hearing on Lee's RFO, Lee and Jennifer were sworn as witnesses and Jennifer represented that she had successfully refinanced the property. She explained that she was waiting to receive her share of Lee's 401(k) account, which she believed was "around 200-something-thousand dollars." She told the court that she would use that money to pay off the second mortgage on the property and would then be able to put the first mortgage in her name. The court asked her, "The first will be in [your] name, and the [MSA] that [you and Lee] made back in July of 2015 will now be fully performed by [you]; correct?" Jennifer responded, "Correct." The court then asked, "In other words, you have successfully refinanced the property?" Jennifer replied, "Yes. I have been . . . approved in everything. Everything is good. I just need that money to be paid off, and everything will be completely done."
Lee explained to the court that the reason he had not sought to enforce the judgment earlier "was for the kids." He added that he "didn't really address it" because Jennifer had been making the mortgage payments, and that he was pursuing enforcement of the judgment now because she had stopped making payments and the loan was six months behind. Lee testified that the "only reason the house isn't foreclosed is because I performed a loan modification." He stated that he was also dealing with the second mortgage, and had "told the second, I'm not going to start anything with them until I'm in the property."
Jennifer testified that she stopped making mortgage payments because Lee was behind on child and spousal support payments. She later admitted that Lee had not actually stopped making support payments, but said that she had obtained a wage assignment against him to collect his support payments because "[h]e was continuously late and late and later." She stated, "[H]e would always pay, but it was always—I had to beg, or I had to ask for it, and it would end up on my driveway two days later. It was never on time and whatnot. So it was just a trickling effect."
The court initially indicated that it was going to continue the hearing "to confirm that the QDRO has been paid and that [Jennifer has] renegotiated the loan." However, after Lee told the court that his credit had been damaged from January 2013 because the second mortgage had not been paid and that he knew that there had not been any payments since January 2013 when he signed the MSA in July 2015, the court changed its mind and stated to Lee: "I'll give you two, legal terms. After the 90-day period ended and then, for right or wrong, kids, no kids, from, I'll call it, July, August, September—from October of 2015, which is the 90 days, up to the time that you filed this request, I would rule that you have—it's an estoppel, that you have led [Jennifer] to believe that [as long] as she continued to make her payments, then you wouldn't assert [your] rights under that agreement. I think she was entitled to do that because you didn't—you—it's what's called 'sleeping on your rights,' although I understand why you did it, because of the kids."
The court asked Lee whether he would have pursued his RFO if Jennifer had made the February, March, and April mortgage payments. Lee responded, "Yes. Because the house is technically mine. We had an agreement." The court again asked, "[If s]he would have made all the payments?" Lee replied, "I would still be here." The court responded, "Okay. Then I will deny the motion. I'm not doing that to punish you. The reason I was putting it out was to take into consideration more factors, but I appreciate your honesty. If you would be here today, even if she had made every payment on time, because she—in your terms, did she breach the contract?" Lee replied, "Yes." The court ruled: "I'm going to find that there was a waiver and estoppel on your part. So I'm going to deny the motion."
The court later issued a written order stating: "[Lee's] motion for enforcement of the written agreement in the divorce settlement is denied. The court finds that from October 2015[,] which is the expiration of the 90 days, up until the time [Lee] filed this request, failure to take action and [led Jennifer] to believe that if she kept making payments [Lee] wouldn't assert his rights under the agreement. [Lee] admitted that he 'waited too long to address this'. The court finds that there is waiver and estoppel on the part of [Lee] in seeking enforcement of the judgment."
DISCUSSION
I. The Record Does Not Support a Finding of Estoppel or Waiver
Lee contends that the trial court erred in finding that the doctrines of estoppel and waiver precluded him from enforcing the provision in the judgment awarding him the property upon Jennifer's failure to refinance the property within the 90-day time period. We conclude that the record does not support the court's finding of either estoppel or waiver.
"[T]he general elements for equitable estoppel [are]: (1) the party to be estopped was apprised of the facts, (2) the party to be estopped intended by conduct to induce reliance by the other party, or acted so as to cause the other party reasonably to believe reliance was intended, (3) the party asserting estoppel was ignorant of the facts, and (4) the party asserting estoppel suffered injury in reliance on the conduct." (Chaidez v. Board of Administration etc. (2014) 223 Cal.App.4th 1425, 1431 (Chaidez).)
"Although . . . the application of the doctrine of equitable estoppel to controversies centered upon title to land involves the same basic factors of the doctrine as are brought into play in other areas of the law, the courts in California and other jurisdictions have proceeded with considerable caution and restraint when the effect of raising an estoppel would be to take the title to land from one person and vest it in another, for such a result would be essentially contrary to the intent and purpose, if not the letter, of the statute of frauds." (Long Beach v. Mansell (1970) 3 Cal.3d 462, 489 (Mansell).) "[T]he doctrine of equitable estoppel applied to questions of land title in [California] differs from that applied to questions involving other matters only in that the culpability of the party to be estopped must be of sufficient dimension that actual or constructive fraud would result if the estoppel were not raised." (Id. at p. 491.) Thus, " 'the doctrine should be carefully and sparingly applied [to divest title to real property], and only on the disclosure of clear and satisfactory grounds of justice and equity.' " (Pacific Gas & Electric Co. v. Hacienda Mobile Home Park (1975) 45 Cal.App.3d 519, 532.)
"The existence of an estoppel is generally a factual question. [Citation.] Therefore, we review the trial court's ruling in the light most favorable to the judgment and determine whether it is supported by substantial evidence. [Citations.] ' "Substantial evidence" is evidence of ponderable legal significance, evidence that is reasonable, credible and of solid value. [Citation.] . . . [Citations.] . . . [Citation.] Inferences may constitute substantial evidence, but they must be the product of logic and reason. Speculation or conjecture alone is not substantial evidence. [Citations.]' " (Feduniak v. California Coastal Com. (2007) 148 Cal.App.4th 1346, 1360.)
The material facts in this case are undisputed and do not support application of the doctrine of equitable estoppel. As noted, the doctrine applies where the party to be estopped is apprised of facts of which the party asserting the estoppel was ignorant. (Chaidez, supra, 223 Cal.App.4th at p. 1431.) There is no evidence that Lee was apprised of facts of which Jennifer was ignorant. (See In re Marriage of Kalinawan (2017) 15 Cal.App.5th 1265, 1273.) Nor is there evidence that Lee engaged in any particular conduct that he intended Jennifer to act upon, or that Jennifer relied to her detriment on Lee's conduct. Rather, Jennifer benefited by remaining in the property for a substantial time period after it became Lee's sole and separate property, including a six- month period during which she made no mortgage payments. To borrow the words of another appellate court: "There is no pleading or evidence that [Lee] was apprised of facts of which [Jennifer] was ignorant; that [Lee] intended that [his] conduct be acted upon or acted in such a manner that [Jennifer] had a right to believe [Lee] so to intend; or that [Jennifer] relied upon [Lee's] conduct to [her] prejudice. [Citations.] There are simply no facts shown to which the elements of the doctrine [of equitable estoppel] relate." (San Francisco v. Meyer (1962) 208 Cal.App.2d 125, 132-133, italics added.) Moreover, because applying the doctrine of estoppel here interferes with Lee's title to real property, there must be a showing of culpability, on Lee's part, of sufficient dimension that actual or constructive fraud would result if the estoppel were not applied. (Mansell, supra, 3 Cal.3d at p. 491.) There was no evidence of either actual or constructive fraud in this case.
In addition, there were no facts before the court to support a finding that Lee waived his right to acquire the property upon Jennifer's failure to refinance the property within the 90-day period that the judgment provided. "California law defines waiver as the intentional relinquishment or abandonment of a known right or privilege. [Citation.] Under this definition, waiver always is based upon intent and, thus, presents a question of fact. [Citation.] The intent to waive may be expressed in words, either oral or written, or implied by a party's conduct." (Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 745.) However, absent an express waiver of a contractual provision, application of the waiver doctrine requires a showing of prejudice. (Applera Corp. v. MP Biomedicals, LLC (2009) 173 Cal.App.4th 769, 791.) " 'In no case will a waiver be presumed or implied contrary to the intention of the party whose rights would be injuriously affected thereby, unless by his conduct the opposite party has been misled, to his prejudice, into the honest belief that such waiver was intended or consented to.' " (Ibid.) " ' "The burden . . . is on the party claiming a waiver of a right to prove it by clear and convincing evidence that does not leave the matter to speculation, and 'doubtful cases will be decided against a waiver' [citation]." ' [Citation.] 'Whether a waiver has occurred depends solely on the intention of the waiving party.' " (In re Marriage of Turkanis & Price (2013) 213 Cal.App.4th 332, 352.)
We recognize, as the California Supreme Court has noted, that "cases have used the word ['waiver'] loosely to describe two related, but distinct, concepts: (1) losing a right by failing to assert it, more precisely called forfeiture; and (2) intentionally relinquishing a known right. '[T]he terms "waiver" and "forfeiture" have long been used interchangeably. The United States Supreme Court [has] observed, however: "Waiver is different from forfeiture. Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the 'intentional relinquishment or abandonment of a known right.' [Citations.]" [Citation.]' " (Cowan v. Superior Court (1996) 14 Cal.4th 367, 371, quoting United States v. Olano (1993) 507 U.S. 725, 733.) The trial court here may have intended to use the term "waiver" to mean "forfeiture" in its finding of waiver and estoppel, as indicated by its explanation to Lee at the hearing that "it's what's called 'sleeping on your rights.' "
There was no evidence before the trial court that Lee intentionally relinquished his right under the MSA and judgment to acquire the property upon Jennifer's failure to refinance the property within the 90-day period. Lee did not expressly waive that right, and because there is no finding that Jennifer was prejudiced by Lee's allowing her to remain in the property after the 90-day period expired, a finding of implied waiver is improper.
Jennifer did not claim that she was prejudiced by making mortgage payments after the 90-day period expired or that she was otherwise prejudiced by Lee's delay in seeking to enforce the judgment provision at issue, and the trial court did not find that Jennifer was prejudiced.
Once the 90-day period expired, Lee could not be equitably estopped from enforcing the judgment provision at issue or be found to have waived its enforcement because the provision was self-executing. A self-executing judgment or order is one that accomplishes the result sought by its mere entry and requires no further exercise of the power of the court to accomplish its purpose. (Estate of Dabney (1951) 37 Cal.2d 402, 409; Feinberg v. One Doe Co. (1939) 14 Cal.2d 24, 29.) The judgment gave Jennifer 90 days to "refinance the property and all associated encumbrances solely into her name" and provides that upon her failure to refinance during that time period, the property would "immediately be awarded to [Lee] as his sole and separate property without offset or equalizing payment due to [Jennifer]." The judgment then acknowledges that Jennifer's name "is not currently on any of the associated loans so [Lee] will be under no obligation to refinance the property if awarded to him."
Thus, upon expiration of the 90-day period with Jennifer not having refinanced the property into her name, the property was "immediately . . . awarded" to Lee as his separate property by operation of the judgment. Because the property and all associated loans were already in Lee's name, no further exercise of the power of the court was required to accomplish the purpose of the provision awarding the property to him, other than to make whatever orders might be necessary to effectuate the transition of possession and control of the property from Jennifer to Lee. The doctrines of estoppel, waiver, and forfeiture could not preclude Lee from acquiring the property under the self-executing provision of the judgment upon Jennifer's failure to refinance the property within the 90-day period.
The order denying Lee's RFO left the parties in an untenable position that the court must resolve. Lee owns the property and the loans on the property are in his name, but the court's order left Jennifer in possession and control of the property with no specified obligation to pay rent or mortgage payments in lieu of rent, and no specified time period to vacate the property and relinquish possession and control of it to Lee. Lee's credit is being harmed as a result of Jennifer's failure to pay, and Lee remains liable for the mortgage payments while being deprived of the benefit of the judgment.
Family Code section 290 gives the court the authority to enforce a divorce judgment "by any . . . order as the court in its discretion determines from time to time to be necessary." (Fam. Code § 290.) Thus, the court has broad discretion to make whatever orders are appropriate to enforce a dissolution judgment, taking into consideration the equities of the circumstances. (In re Marriage of Dancy (2000) 82 Cal.App.4th 1142, 1154; Cal-Western Reconveyance Corp. v. Reed (2007) 152 Cal.App.4th 1308, 1318 [trial court has broad discretion to fashion orders enforcing family law judgments].)
In its order denying Lee's RFO, the court simply ruled that there was "waiver and estoppel on the part of [Lee] in seeking enforcement of the judgment," and left it at that; the court provided no guidance or direction as to how the parties were to proceed with respect to the property.
The court essentially decided that because Lee did not act at the end of the 90-day period to take possession and control of the property or otherwise assert his ownership of the property, the court would not enforce the provision of the judgment awarding him the property. By refusing to enforce that provision, the court effectively rendered it void. However, as we have determined, there was no legal basis for the court to refuse to enforce that provision. But for the judgment's self-executing provision that immediately awarded the property to Lee upon expiration of the 90-day period for Jennifer to refinance the property and the fact that the property and loans encumbering the property are solely in Lee's name, the court's order would have rendered the property an unadjudicated asset.
The court's order raises the question: If the marital residence is not Jennifer's separate property because she was unable to refinance it into her name, and it is not Lee's separate property because he waived, forfeited, or is estopped from asserting his right under the judgment to acquire it by waiting too long to act after the 90-day period expired, who owns the property?
The self-executing judgment provision at issue establishes that the marital residence is Lee's sole and separate property. Because Jennifer is in possession and control of that property, the court must exercise its broad discretion to make whatever equitable orders it deems necessary to effectuate the transition of control of the property from Jennifer to Lee. (See In re Marriage of Cream (1993) 13 Cal.App.4th 81, 88 [trial courts have broad discretion in determining the manner in which marital property is divided].)
DISPOSITION
The September 20, 2017, order denying Lee's RFO filed on January 9, 2017 is reversed and vacated. The court is directed to conduct further proceedings consistent with this opinion to effectuate the transition of possession and control of the marital residential property from Jennifer to Lee. Lee is awarded his costs on appeal.
AARON, J. WE CONCUR: NARES, Acting P.J. HALLER, J.