Opinion
G057017
02-10-2020
MAUREEN RHODES et al., Plaintiffs and Respondents, v. MARK MONACELL, Defendant and Appellant.
Charles E. McClung, Jr., for Defendant and Appellant. York|Tabucchi and Celinda Tabucchi for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2016-00875392) OPINION Appeal from a judgment of the Superior Court of Orange County, Craig L. Griffin, Judge. Reversed with directions. Charles E. McClung, Jr., for Defendant and Appellant. York|Tabucchi and Celinda Tabucchi for Plaintiffs and Respondents.
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I. INTRODUCTION
This is a sad case. Brooke Monacell died of alcoholism at age 46, alone in a motel room. As a consequence of Brooke's death, her mother and sister sought reimbursement from her husband under Family Code section 914 for certain expenses they had incurred on Brooke's behalf. They recovered two separate amounts for those expenses. However, recovery under section 914 is limited by Probate Code section 13551 to the property the surviving spouse receives from the deceased spouse, and here the trial court found there wasn't any. The mother and sister have not challenged that finding by way of a protective cross-appeal, and, following what our Supreme Court said, in Collection Bureau of San Jose v. Rumsey (2000) 24 Cal.4th 301 (Collection Bureau), about the limit put on section 914 by Probate Code section 13551, we are forced to reverse the judgment and direct the trial court to enter a defense judgment in favor of the husband.
All further statutory references are to the Family Code unless otherwise indicated.
II. FACTS
Brooke Monacell died September 16, 2015. She was survived by her husband Mark Monacell, her teenage son Carter, her father Fred Rhodes, her mother Maureen Rhodes, and her married sister Jackie Mayhan. Fred died six weeks after his daughter, adding to the heartbreak visited upon these people.
In better days Brooke had worked as a marketing coordinator. But she lost her job in the recession that began in 2007. She and Mark had kept separate finances throughout their marriage, and so, with no job, DUI's on her record, and no ability to drive, Brooke was left with no income of her own. She was dependent on Mark and whatever her family might give her.
Mark and her family had somewhat different approaches to the issue of Brooke's addiction - and her expenses. It was Mark's lot to play the stricter role. He didn't want Brooke spending money on alcohol. He didn't trust her with cash or credit cards, kept her on a tight budget, and did all the shopping. Brooke had to write down what she wanted and ask Mark to buy it for her. The trial court impliedly found Mark was too strict with the budgeting. He gave her no money, for example, for a hairdresser, or clothing, and Brooke never had cash to go to lunch with friends.
Brooke's family - Fred, Maureen and Jackie - stepped in to fill much of the resultant gap. Beginning in May 2011 and continuing until her death, Brooke's family paid for additional food, clothing and transportation - among other things. But they also supplied alcohol to her. In fact, they supplied alcohol on a daily basis. Fred would buy "little wines in the four pack for her and bring it in," against Mark's requests he not do so. Fred's approach to Brooke's alcoholism was that he wanted to ween her off her addiction gradually.
Brooke's behavior in the last years of her life led to her being removed from the family home in Laguna Beach several times for domestic violence against Mark. In one instance she lunged at Mark with a knife as he was moving away from her after she had used her fists to hit him. She literally stabbed him in the back. Fortunately, Mark's wounds were only superficial.
Upon being removed on such occasions, Brooke's family would put her up in a hotel room. Brooke's family's house was already overcrowded, so when Brooke had to be removed from the Laguna Beach house, they would put her up in a hotel room. But Brooke's parents experienced their own financial troubles beginning in 2010 when they lost their house. They moved in with sister Jackie and her husband, but Jackie's husband found having Brooke around to be too stressful. So again, it was simply easier to pay for a modest hotel or motel.
On September 28, 2016, after Fred had died, mother Maureen and sister Jackie brought this suit against husband Mark. Jackie's claim was for $17,379. This amount was made up of money Jackie herself had paid for Brooke's hotel stays, plus amounts paid to a family law attorney to begin the dissolution action in 2014. Jackie personally made those payments, and was able to testify to them as embodied in trial exhibits 11 and 12.
Maureen's claim was for $74,180. The amount was derived from a set of green-paper accountant's ledgers prepared by Fred in his lifetime. Fred had been a CPA by profession, and his record keeping was a life-long habit. He kept meticulous records of his and Maureen's household expenses, notating any which were specifically on Brooke's behalf.
At trial, Maureen and Jackie's primary contention was that under Probate Code sections 13550 and 13551, a surviving spouse's non-exempt community property is liable for all of a deceased spouse's debts. According to them, Mark possessed two assets that constituted non-exempt community property: A house on Skyline Drive in Laguna Beach (the Skyline property) and two retirement accounts at Vanguard. Maureen and Jackie asserted both assets were available to pay for Brooke's debt to them. As an independent ground for Mark's liability, they argued that under Family Code section 914 a surviving spouse is liable for those debts incurred for the "necessaries" of life.
Mark countered that the Skyline property was his separate property from the beginning, since title was only in his name, and the Vanguard accounts were exempt as retirement accounts. Thus, Mark asserted, neither asset was available to pay for Brooke's debt to her family under Probate Code sections 13550 and 13551. As to Maureen and Jackie's Family Code section 914 claim, Mark asserted there was no "independent right of action" under that statute, citing the Collection Bureau case. Further, he argued, even if there was an independent right of action, the Collection Bureau decision had limited his liability to only such separate property as he might have inherited from Brooke, and there wasn't any of that.
The trial judge issued a comprehensive statement of decision. He agreed with Mark's basic theory regarding his liability under Probate Code sections 13550 and 13551. The judge found that the Skyline property was indeed Mark's separate property and the Vanguard accounts were indeed exempt.
But the trial judge also found that Maureen and Jackie's ability to recover money loaned Brooke for necessaries of life was not limited by Probate Code section 13551. The trial judge disagreed with Mark's reading of Collection Bureau, reasoning that Probate Code sections 13550 and 13550 do not limit the liability of a surviving spouse under Family Code section 914 to the property inherited from the deceased spouse, thus Mark's separate property was vulnerable as well. The result was a judgment awarding Jackie $17,379 and Maureen $74,180.
III. DISCUSSION
A. The Ambit of Family Code Section 914
Section 914 makes a married person "personally liable" for a list of debts incurred by that "person's spouse during marriage." These debts are divided into two categories - debts incurred for the "necessaries of life" before separation and debts incurred for the "common necessaries of life" after separation. The difference between "necessaries" and "common necessaries" is that "common necessaries of life" are confined to those items required "'for the sustenance'" of all human beings - the bare necessities as it were - while the unadorned phrase "necessaries of life" includes "'many of the conveniences of refined society'" appropriate to the marital standard of living. See Direct Capital Corp. v. Brooks (2017) 14 Cal.App.5th 1168, 1173-1175, quoting Ratzlaff v. Portillo (1971) 14 Cal.App.3d 1013, 1015-1016.)
In pertinent part the statute in its entirety provides: "(a) Notwithstanding Section 913, a married person is personally liable for the following debts incurred by the person's spouse during marriage: [¶] (1) A debt incurred for necessaries of life of the person's spouse before the date of separation of the spouses. [¶] (2) Except as provided in Section 4302, a debt incurred for common necessaries of life of the person's spouse after the date of separation of the spouses." (Italics added.)
But we must bear in mind that the case before us involves the liability of a surviving spouse for debts of a deceased spouse. Thus, to understand Mark's exposure under section 914 for his liability for the debts of his deceased spouse, we must turn to the Probate Code.
Probate Code section 13550 first provides that a surviving spouse's property is, to the "extent" provided by Probate Code section 13551, liable for the debts of a deceased spouse. That "extent" is then delimited in Probate Code section 13551 to the property the surviving spouse receives by way of intestacy or inheritance from the deceased spouse.
The statute in its entirety provides: "Except as provided in Sections 11446, 13552, 13553, and 13554, upon the death of a married person, the surviving spouse is personally liable for the debts of the deceased spouse chargeable against the property described in Section 13551 to the extent provided in Section 13551 ." (Italics added.)
Here is the full language: "The liability imposed by Section 13550 shall not exceed the fair market value at the date of the decedent's death, less the amount of any liens and encumbrances, of the total of the following: [¶] (a) The portion of the one-half of the community and quasi-community property belonging to the surviving spouse under Sections 100 and 101 that is not exempt from enforcement of a money judgment and is not administered in the estate of the deceased spouse. [¶] (b) The portion of the one-half of the community and quasi-community property belonging to the decedent under Sections 100 and 101 that passes to the surviving spouse without administration. [¶] (c) The separate property of the decedent that passes to the surviving spouse without administration." (Italics added.)
In Collection Bureau our Supreme Court had occasion to address the relationship between section 914 and Probate Code section 13551. The case arose out of a deceased spouse's debt to the hospital where she died. Her medical bills were about $103,000. Four years after the deceased spouse's death, the hospital's assignee sued the surviving spouse for the unpaid debt. He defended on the ground the statute of limitations had run.
The trial court agreed with the surviving spouse. It ruled the statute of limitations on the hospital's claim was one year, based on former Code of Civil Procedure section 353 (replaced without substantive change in section 366.2 of the same code) which is a statute specifically oriented to the liabilities of deceased persons. (Collection Bureau, supra, 24 Cal.4th at p. 303, fn. 1, & pp. 304-305.)
But the intermediate appellate court viewed it differently. It thought the hospital's claim could be saved by holding the surviving spouse's liability was pursuant to Family Code section 914. After all, there was no doubt the expenses of the deceased spouse's last illness qualified as "necessaries of life" under Family Code section 914. (See Collection Bureau, supra, 24 Cal.4th at p. 313.) And, since the hospital's claim was also based on an open book account, and open book accounts carry a four-year limitations period under section 337 of the Code of Civil Procedure, the hospital's claim was timely. (See Collection Bureau, supra, 24 Cal.4th at p. 304.)
The Supreme Court granted review to determine which statute of limitations governed: the one "specifically applicable to surviving causes of action on the liabilities of decedents," or the one "generally applicable to open book accounts[.]" (Collection Bureau, supra, 24 Cal.4th at p. 306.) The Supreme Court majority reversed the Court of Appeal and held the applicable statute was the more specific one: the one-year statute incorporated by reference in Probate Code section 13554. Family Code section 914 derived from a statute passed in 1984; Probate Code section 13554 was enacted in 1990. It was both "more specific" and "more recent." (Collection Bureau, supra, 24 Cal.4th at p. 311.) It therefore prevailed. (Ibid.) The applicable statute of limitations was the one year incorporated by reference in the Probate Code.
In the process of finding the one-year statute to be the right one, the high court made it clear that recovery under section 914, in the case of deceased spouses, is indeed limited to the property specified in Probate Code section 13551: "We agree that Family Code section 914, subdivision (a)(1), on its face, made Mr. Rumsey 'personally liable' for any debts incurred by Mrs. Rumsey for 'necessaries of life,' and the parties do not contest that expenses of last illness are a subcategory of such debts. We further agree that, pursuant to Family Code section 914, subdivision (b), Mr. Rumsey's separate property could be applied to satisfaction of that debt, subject to his right of reimbursement spelled out in that subdivision (and any applicable limits set forth in Prob . Code, § 13551 [internal citation to Collection Bureau, supra, 24 Cal.4th at p. 307] . . . . Although section 914 makes a married person personally liable for such category of debts of his or her spouse, that liability is plainly derivative of the marital relationship between the two." (Collection Bureau, supra, 24 Cal.4th at p. 313, italics added.) The trial judge in the case before us thought this passage mere dicta that should not be followed on the theory it made section 914 redundant. We disagree.
To quote from the Statement of Decision: "In other words, Probate Code sections 13550 and 13551 create liability on the part of the debtor's spouse for all debts of the deceased, whether for the 'necessities of life' or not, with the limitation that they not exceed the decedent's community property and separate property inherited by the surviving spouse. Under defendant's view of Collection Bureau, Family Code section 914 could never add a dollar of liability beyond Probate Code section 13551. This view does nothing to harmonize the two statutes, but rather reads one completely out of existence where the debtor spouse is deceased."
It is easy to mistake section 914 for part of California's laws establishing duties of marital support. But we think that's what we have section 4300 et seq. for. ("Subject to this division, a person shall support the person's spouse.")
Rather, section 914 is part of a statutory scheme setting out a hierarchy of exposure of marital property for a spouse's debts. That exposure is: first, community property; second, the separate property of the spouse incurring the debt; and third - and only then - the separate property of the other spouse.
The main difference between section 914 as construed in Collection Bureau and today's version is the addition of a separate statute of limitations provision if the debtor spouse dies. But that difference does not, as Maureen and Jackie attempt to persuade us, somehow undo what Collection Bureau said about the statute. To be sure, adding a separate statute of limitations does suggest the Legislature was treating section 914 as its own independent right of action. But it did not affect the prioritization of exposure of marital property addressed by Collection Bureau.
Time to quote section 914 as it now exists in its entirety:
"(a) Notwithstanding Section 913, a married person is personally liable for the following debts incurred by the person's spouse during marriage:
"(1) A debt incurred for necessaries of life of the person's spouse before the date of separation of the spouses.
"(2) Except as provided in Section 4302, a debt incurred for common necessaries of life of the person's spouse after the date of separation of the spouses.
"(b) The separate property of a married person may be applied to the satisfaction of a debt for which the person is personally liable pursuant to this section. If separate property is so applied at a time when nonexempt property in the community estate or separate property of the person's spouse is available but is not applied to the satisfaction of the debt, the married person is entitled to reimbursement to the extent such property was available.
"(c)(1) Except as provided in paragraph (2), the statute of limitations set forth in Section 366.2 of the Code of Civil Procedure shall apply if the spouse for whom the married person is personally liable dies.
"(2) If the surviving spouse had actual knowledge of the debt prior to expiration of the period set forth in Section 366.2 of the Code of Civil Procedure and the personal representative of the deceased spouse's estate failed to provide the creditor asserting the claim under this section with a timely written notice of the probate administration of the estate in the manner provided for pursuant to Section 9050 of the Probate Code, the statute of limitations set forth in Section 337 or 339 of the Code of Civil Procedure, as applicable, shall apply.
"(d) For purposes of this section, "date of separation" has the same meaning as set forth in Section 70."
In light of section 914's history and purpose, we cannot agree with the trial judge that the Supreme Court's statement section 914 is subject to Probate Code section 13551's limits somehow renders the statute "nugatory" in the event of the debtor spouse's death. Prioritizing the marital property available to satisfy the debtor spouse's debts has been the whole point of section 914 from the beginning. Making it subject to the limits Probate Code 13551, as the California Supreme Court dictated in Collection Bureau, seems perfectly consonant with the legislative intent. We include in the margin a brief history of section 914 to demonstrate that.
The initial 1849 version provided a husband's separate property would not be liable for the debts of the wife contracted for prior to marriage. (See Stats. 1850, ch. 103, pp. 254-255.) The 1872 version provided that a wife would not be liable for the debts of her husband. (Civ. Code (1874), § 171 [available on HeinOnline].) The 1905 amendments to former Civil Code section 171 kept the idea of a wife not being liable for her husband's debts, but added the proviso that a wife's separate property would be liable for debts contracted by either spouse for necessaries of life furnished while they were living together. (Stats. 1905, ch. 217, § 1, p. 206.) In 1969, when California changed over to a system of no-fault divorce in 1969, former Civil Code section 171 became new Civil Code section 5121, but the new statute tracked the 1905 version in protecting a wife's separate property from being liable for her husband's debts, except for necessaries of life furnished either of them while living together. (Stats. 1969, ch. 1608, § 8, p. 3341.) Then in 1973 the statute became gender-neutral. It said the separate property of either spouse would not be liable for the other spouse's debts, either before or after marriage, except those debts contracted for necessaries of life. (Stats. 1973, ch. 987, § 10, p. 1900.)
Things began to get a bit convoluted in 1984, when former Civil Code section 5121 became former Civil Code section 5120.140. The new statute changed the structure of liability, to allow separate property to be subject to the other spouse's debts, but explicitly create a de facto order of exposure, so that community property and the other spouse's separate property should be touched first. Thus a married person would have a right to reimbursement for any separate property applied to a debt if there were nonexempt community property or separate property of the debtor spouse available to satisfy the debt at the time. (Stats. 1984, ch. 1671, § 9, pp. 6020-6021.)
That order of priorities would carry over when the Family Code was created in 1992. New section 914 tracked the changes made by former Civil Code section 5120.140, including retaining the notion that the nondebtor spouse was entitled to reimbursement if there were community property or the debtor spouse's separate property available to satisfy the debt. (Stats. 1992, ch. 162, § 10, p. 493.) The current version of section 914 retains the same approach - liability for all debts, but a right of reimbursement that puts a spouse's separate property last in line in exposure.
In the case at hand, the trial judge determined (1) there was no non-exempt community property available to satisfy Brooke's debt to her family; and (2) no separate property of Brooke's to satisfy that debt either. Maureen and Jackie made no attempt to establish community property available other than the Laguna Beach house - found to be Mark's separate property - and the Vanguard retirement accounts - found to be exempt community property. Following what the Supreme Court said about section 914 being subject in the case of a deceased spouse to the limits set down by Probate Code section 13551, we conclude that the judgments in favor of Maureen and Jackie, based on the vulnerability of Mark's separate property for Brooke's debt to them, cannot stand.
IV. DISPOSITION
The judgment is reversed with directions to enter a defense judgment in favor of defendant Mark Monacell. Appellant shall recover costs.
BEDSWORTH, J. WE CONCUR: O'LEARY, P. J. ARONSON, J.