Opinion
B297778
01-24-2022
In re the Marriage of MICHAEL and SHARON STONE. v. SHARON STONE, Appellant. MICHAEL STONE, Appellant,
Trabolsi Levy Gabbard, Nathan W. Gabbard and Avi Levy for Appellant Michael Stone. Gary J. Cohen for Appellant Sharon Stone.
NOT TO BE PUBLISHED
APPEALS from a judgment of the Superior Court of Los Angeles County No. BD514763, Christine W. Byrd, Judge. Affirmed.
APPEAL from an order of the Superior Court of Los Angeles County granting mistrial, Carl H. Moor, Judge. Affirmed.
Trabolsi Levy Gabbard, Nathan W. Gabbard and Avi Levy for Appellant Michael Stone.
Gary J. Cohen for Appellant Sharon Stone.
LUI, P. J. 1
Michael (Michael) and Sharon (Shari) Stone litigated the dissolution of their marriage for 10 years and at considerable expense as a result of two trials. Judge Kenneth Black presided over the first trial, which ended in a mistrial when he died before entering a statement of decision. Shari's motion to enter judgment on the notice of intended decision was denied, and a second trial ensued. Judge Christine Byrd presided over the second trial. For both trials, a sizeable estate and complicated characterization and tracing issues were involved. The parties' forensic accountants presented opposing analyses. Judge Black favored Shari's valuations; Judge Byrd favored Michael's valuations.
At the conclusion of the second trial, Judge Byrd entered judgment on March 21, 2019, dissolving the marriage, identifying and dividing community property, confirming separate property, and ordering certain reimbursements and equalizing payments.
The parties each appeal from the judgment, raising numerous issues. Shari's appeal challenges the order granting a mistrial. Shari also disputes Judge Byrd's findings that Shari failed to rebut the community property presumption, should not be reimbursed for her separate property contributions, and did not merit Michael's contribution to her attorney fees. Shari further challenges Judge Byrd's finding that Michael did not breach his fiduciary duties.
Michael's appeal contests Judge Byrd's failure to find Shari breached her fiduciary duties and violated the automatic temporary restraining orders (ATROs). Michael also contests the award of an IRA account to him at cash value and the denial of one or more of his motions in limine made during the second trial. 2
In affirming the judgment, we first address the issues Shari raises in her appeal from the order granting a mistrial following the first trial before Judge Black. We then address the substantive issues both parties raise involving the second trial before Judge Byrd.
Michael has also moved to dismiss Shari's appeal for violating court orders. Having reviewed the motion, we find his arguments devoid of merit and deny the motion.
THE FIRST TRIAL BEFORE JUDGE BLACK
I. Factual and Procedural Background
Michael and Shari were married in 1993 and separated on November 3, 2009. Michael petitioned for dissolution of marriage the following day. In January 2015, Michael and Shari stipulated that retired Judge Black would preside over a bifurcated trial: The first phase was to resolve custody, support, and property issues; the second phase was to address attorney fees and sanctions. Pursuant to the stipulation, the superior court appointed Judge Black, ordering that he" 'shall hear and determine all disputed issues in the case . . . and shall continue to act in said capacity until the conclusion of all matters which may be determined within the trial jurisdiction of the Superior Court related thereto.' "
When the first phase concluded on September 24, 2015, Judge Black issued an oral tentative decision, which Shari's counsel agreed to prepare in writing. At the time, Judge Black advised the parties that his intended rulings" 'can change. Until after I actually sign a ruling, they are just tentative.'" Judge Black added he "intended 'to make rulings as we go, and the ruling will be in essence a notice of intended decision.'" Between 3 September 30, 2015, and November 11, 2015, at Judge Black's request, the parties filed proposed statements of decision on specific issues litigated in the first phase and later filed objections to each other's proposed statements.
On January 15, 2016, Judge Black held a hearing to discuss: (1) settling the language of his proposed notice of intended decision; (2) the language of counsels' proposed statements of decision concerning tracing, Watts charges and disposition of the family residence; and (3) already litigated support and support arrearages issues for which no tentative decision had been announced. However, the entire hearing was devoted to settling the language of Judge Black's notice of intended decision.
Watts charges refers to the holding of In re Marriage of Watts (1985) 171 Cal.App.3d 366 that the community may have a right to reimbursement for one spouse's exclusive use of a community asset (e.g. residence or automobile) between postseparation and the date of trial. (Id. at pp. 372-374.)
As a result of the hearing, counsel for each party agreed to the language of Judge Black's notice of intended decision, which he signed on March 10 and filed on March 14, 2016. Judge Black included in the intended decision a suggested method for calculating child support without resolving any outstanding child support issues. Instead, he ordered a schedule for the parties' forensic accountants to meet and confer" 'to determine support arrearages for 2014 and 2015 and for support moving forward.'" Judge Black reserved jurisdiction over any disputes and set a hearing to resolve support issues.
Judge Black's final ruling before his death was an oral order concerning attorney fees and sanctions made during a 4 telephonic hearing on March 23, 2016. He passed away on May 11, 2016, without issuing any further rulings.
In June 2016, Michael requested an order declaring a mistrial and scheduling a long cause trial. Shari moved for entry of judgment of dissolution based on the March 14, 2016 intended decision. Following a hearing, Judge Carl H. Moor denied Shari's request, declared a mistrial, and scheduled a trial setting conference.
II. Discussion
Shari contends Judge Black's March 14, 2016 notice of intended decision constituted a statement of decision and Judge Moor erred by declining to enter judgment and granting a mistrial.
A. Standard of Review
"Though the standard of review from a mistrial order is abuse of discretion, our Supreme Court has a 'substantive preference against them' that restricts the deferential abuse standard to orders denying mistrials." (Petrosyan v. Prince Corp. (2013) 223 Cal.App.4th 587, 593.) Thus, where a mistrial has been granted, the standard of review is "abuse of discretion with elevated scrutiny." (Blumenthal v. Superior Court (2006) 137 Cal.App.4th 672, 682.)
B. Judge Black's Notice of Intended Decision
Section 635 of the Code of Civil Procedure permits a presiding judge to sign a judgment in specific situations: "In all cases where the decision of the court has been entered in its minutes, and when the judge who heard or tried the case is unavailable, the formal judgment or order conforming to the minutes may be signed by the presiding judge of the court or by a judge designated by the presiding judge." Indeed, the statute 5 "authorizes the signing of a formal judgment by the presiding judge only where (1) no statement of decision has been requested or (2) the judge who has heard the evidence has already provided the parties with a statement of decision upon their request for it. The statute does not . . . authorize the presiding judge to enter a formal judgment whenever the judge who has heard the evidence has orally entered a tentative decision, or tentative findings . . . in the minutes." (Armstrong v. Picquelle (1984) 157 Cal.App.3d 122, 127.)
Code of Civil Procedure section 635 must be read together with section 632, which requires the trial court to "issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial." (See also Cal. Rules of Court, rule 3.1590(a).) Rule 3.1590(b) of the California Rules of Court states the "tentative decision does not constitute a judgment and is not binding on the court."
Shari argues Judge Moor's finding that Judge Black's signed notice of intended decision did not amount to a statement of decision was erroneous for four reasons: First, according to Shari, under People v. Casa Blanca Convalescent Homes (1984) 159 Cal.App.3d 509 (Casa Blanca) (disapproved on another ground in Cal-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 184-185), the notice of intended decision "clearly qualified as a statement of decision" because "[i]t listed all of the ultimate facts and discussed all the material issues raised at trial." However, that case is distinguishable on its facts. In Casa Blanca, the trial court issued a statement of decision. The question in dispute was whether it was sufficient in the absence of findings concerning 6 detailed evidentiary facts or individual items of evidence. (Casa Blanca, at p. 523.) The appellate court held the statement of decision was sufficient in that it listed all the ultimate facts necessary to decide the issues in controversy; nothing more was required. (Id. at p. 525.) Our case is entirely different.
Second, relying principally on Estate of Lock (1981) 122 Cal.App.3d 892, Shari maintains the substance of the notice of intended decision, rather than its label, makes it the functional equivalent of a statement of decision or final judgment. In Estate of Lock the trial court's memorandum of intended decision was considered a final and appealable order when it was signed and filed, reflected the determination of the merits, and contemplated no further judicial action. (Id. at pp. 896-897.) That is not the case here; the intended decision did not dispose of all issues between the parties. As Judge Moor found, the parties' child support issues were not yet entirely resolved and there was no proposed ruling on them in Judge Black's notice of intended decision.
Third, Shari quotes various comments by Judge Black at the January 15, 2016 hearing, which was held to discuss settling the language of his proposed notice of intended decision. In particular, Shari points to portions of colloquies with counsel in which Judge Black asked, "Do you agree that once this [intended decision] is done that the statement [of] decision, really falls into place?" Both counsel voiced agreement. And, later, near the close of the hearing, Judge Black expressed his desire that counsel make no comments on the intended decision in light of their discussion. "We have spent a lot of time going through every word here." In response, Michael notes that at the same hearing Judge Black repeatedly advised counsel that he had the 7 authority to reconsider his tentative decisions until a statement of decision was issued.
The law on this point is quite clear:" '[A] court is not bound by its statement of intended decision and may enter a wholly different judgment than that announced.' [Citation] 'Neither an oral expression nor a written opinion can restrict the power of the judge to declare his [or her] final conclusion in his [or her] findings of fact and conclusions of law. [Citation] The findings and conclusions constitute the final decision of the court and an oral or written opinion cannot be resorted to for the purpose of impeaching or gainsaying the findings and judgment. [Citation.] . . . [We] are concerned with the correctness of the decision and judgment rather than with the reasons . . . which motivated the trial court in reaching its conclusions.'" (In re Marriage of Ditto (1988) 206 Cal.App.3d 643, 646-647, italics omitted.)
Finally, Shari argues this case is akin to Leiserson v. City of San Diego (1986) 184 Cal.App.3d 41 (Leiserson), in which the trial judge filed an" 'Intended Decision.'" The plaintiff filed objections to the intended decision. A hearing on the objections was commenced and then continued. (Id. at p. 47) Before the hearing was scheduled to resume, the trial judge died. Over the plaintiffs objection, the acting presiding judge entered judgment in conformity with the intended decision. (Id. at pp. 47-48.) The appellate court held the judgment was properly entered, where there was no indication that the trial judge had contemplated any modification in his decision, and where the proposed statement of decision provided a complete and adequate basis for appellate review. Thus, the acting presiding judge had the authority 8 pursuant to Code of Civil Procedure section 635 to sign and enter the judgment. (Id. at p. 48.)
We agree with Judge Moor's reasoning that the record here falls short of the showing in Leiserson to justify the entry of judgment on the intended decision. In Leiserson, before the hearing was continued, the trial judge indicated his" 'decision would remain the same' although he '. . . would entertain argument with respect to changing some of the language in the intended decision.'" (Leiserson, supra, 184 Cal.App.3d at pp. 47- 48.) As discussed, Judge Black made no such definitive statement. Judge Moor also concluded that, unlike the intended decision in Leiserson, Judge Black's notice of intended decision did not" 'provide[] a complete and adequate basis for appellate review'" (quoting Leiserson, supra, 184 Cal.App.3d at p. 48) because there were no rulings "on the issues of child support arrears and prospective child support." Additionally, Judge Black directed the parties to consider a method for calculating child support and ordered their forensic accountants to meet and confer for the purpose of stipulating to the support amounts. In such circumstances, a presiding judge does not have the authority to sign the judgment. When the trial judge becomes unavailable before the entire process contemplated in Code of Civil Procedure section 632 and California Rules of Court, rule 3.1590(b) has been completed, the parties have been deprived of a full and fair trial. (Raville v. Singh (1994) 25 Cal.App.4th 1127, 1132.)
Judge Moor requested supplemental briefing on whether European Beverage v. Superior Court (1996) 43 Cal.App.4th 1211 (European Beverage) applies here. That case held "in a court trial, absent a waiver or a stipulation to the contrary, a party is 9 entitled to have the same judge try all portions of a bifurcated trial that depend on weighing evidence and issues of credibility, and that if that judge is unavailable to do so, a mistrial must be declared." (Id. at p. 1213.) Shari argued European Beverage was inapplicable for various reasons and urged the trial court to declare a partial mistrial on the prospective child support and arrearages issues and set them for a separate trial. Judge Moor observed this was contrary to Shari's original position that these issues could simply be resolved before a different judge who would apply Judge Black's suggested methodology.
In light of European Beverage, Judge Moor concluded that because pending issues were dependent upon evidence already heard by Judge Black and, absent the parties' waiver of their stipulation of his assignment to this matter for all purposes and of their prior agreement that Judge Black would preside over child support and other issues, a single judicial officer should hear all the evidence and decide all the issues.
In making his ruling, Judge Moor explained why Valentine v. Baxter Healthcare Corp. (1999) 68 Cal.App.4th 1467, in which a partial mistrial was properly declared on a "distinct and severable" negligence claim and set for retrial, did not apply here. Shari's assertion that Judge Moor "fail[ed] to distinguish" Valentine is belied by the record.
Under the abuse of discretion heightened scrutiny standard of review, the mistrial was properly granted.
THE FIRST PHASE OF THE SECOND TRIAL BEFORE JUDGE BYRD
I. Factual and Procedural Background
Michael was an insurance agent and a certified public accountant. During the marriage, he decided to facilitate 15 life 10 insurance settlement transactions (LSTs). An LST involves brokering the sale of an existing life insurance policy by the insured policy holder to another party. By selling the policy, the policyholder receives an immediate cash payment. The purchaser acquires ownership of the policy, is required to pay all future premiums, and receives a cash payment from the policy's death benefits upon the insured's death. (See Living Bens. Asset Mgmt., L.L.C. v. Kestrel Aircraft Co. (In re Living Bens. Asset Mgmt., L.L.C.) (5th Cir. 2019) 916 F.3d 528, 530.) Michael earned a commission for selling the insurance policies to the original policy holders, a commission from reselling the policies to hedge funds and the profits from the resales to the hedge funds. Michael and Shari considered the commissions and resale profits as community property and deposited them into a community bank account.
It appears Michael originally sold 13 insurance policies, from which he brokered 15 LSTs.
As an incentive for policy holders to engage in LSTs, Michael agreed to cover their premium payments (premium financing) with funds from a specific bank account (7057 account). The 7057 account was a successor to an account Shari had funded prior to the marriage. The parties agreed that in 2002, the 7057 account became a commingled account, but it remained solely in Shari's name. For each policy holder, Michael directed Shari to write a check in the policy holder's name on the 7057 account. Shortly thereafter, Michael would replenish the 7057 account with a deposit in the same amount from a community bank account. Michael and Shari followed this process of premium financing for all 15 LSTs. Although there 11 were sufficient funds in other accounts to cover all premium financing, the 7057 account alone was used for this purpose.
Michael's name never appeared in conjunction with the premium financing and the LSTs for two reasons based on the evidence. First, to avoid any perceived conflict of interest, Michael did not want it to be known to the insurance companies that he was receiving profits on a sale he was brokering for which he was also receiving a commission. The second reason was to allow the profits to be seen as capital gains rather than as ordinary income to reduce any tax liability.
Michael sold four insurance policies to Shari's father Robert Kahn (Kahn policies) in 2005. In January 2007, Shari used $200,000 from the 7057 account and a promissory note for the $514,457 balance to purchase two of four Kahn policies. At the same time, Shari's sister purchased the two remaining Kahn policies. The four policies each had a $5 million face value, but Kahn sold them to his daughters for $1,428,914, the amount of the premiums he had paid to date. Michael brokered the resale of the Kahn policies to a hedge fund (Kahn transaction). The profits from the Kahn transaction, totaling more than $4, million, were deposited into the 7057 account and another account in Shari's name. Michael received commissions for both the original sale of the four policies to Kahn and the Kahn transaction. The parties agreed that Michael's commissions were community property. Michael did not charge a commission for the sale of the Kahn policies to Shari and her sister.
Shari claimed at trial that all the Kahn transaction profits were her separate property. Shari's theory was that the 7057 account was her separate property account (although the parties stipulated it was a commingled account). For the premium 12 financing, Shari had agreed to use her separate funds by writing checks on the 7057 account only because Michael had promised to repay her. Michael consistently repaid her separate funds as promised. Over time, Shari accumulated more than $200,000 of separate funds in the 7057 account to purchase the Kahn policies, although the parties' joint accounts held over $715,000 in community funds. And the Kahn transaction profits were deposited in accounts in her name.
To support Shari's theory, her forensic accountant used a "specific identification" method of tracing for the expenses and acquisitions at issue. He "suspended" each of Shari's 15 premium financing payments from her separate funds, looked for Michael's later deposit in a matching amount, and determined the payment and deposit were a "wash." According to the accountant, during this time the amount of Shari's separate funds increased to over $236,956.33 and the amount of community funds decreased to $810.24. Thus, the $200,000 used to purchase the Kahn policies came entirely from her separate funds in the 7057 account.
In contrast to the expenses and acquisitions at issue, the tracing method used by Shari's forensic accountant for earlier expenses and acquisitions involving the 7057 account nearly matched the method used by Michael's forensic accountant for all expenses and acquisitions involving the account.
Shari testified in purchasing the Kahn policies, she believed them to be her separate property. Following the purchase, Shari and her sister were listed on the policies as the new owners. Michael had promised that her separate accounts would remain separate during the marriage, so she did not need to designate them as such. He also explained the Kahn 13 transaction profits would be in the separate estates of Shari and her sister to avoid estate tax. Shari also introduced evidence that her father intended the sale of the Kahn policies to be part of his estate planning and the Kahn transaction profits to be his daughters' separate property. Shari denied telling Michael that she would give him part of her separate property.
Michael claimed the profits from the Kahn transaction were community property-community and Shari's sister's property. Michael's forensic accountant buttressed this claim by tracing Shari's premium financing to both separate and community funds in the 7057 account. The accountant used what he called a "direct tracing" method, but appears to have been combined with the family-living-expense tracing method (see In re Marriage of Mix (1975) 14 Cal.3d 604, 612), and he applied slightly different rules for community expenses and the acquisition of community assets. The accountant explained the premium financing was a community expense. For each of Shari's 15 premium financing checks drawn on the 7057 account, the accountant first exhausted the amount of community funds, and then deducted the remaining balance, if any, from Shari's separate funds. Shari's separate funds were deemed a gift to the community during the marriage with no reimbursement obligation. Michael's 15 deposits replenished the community funds only. Over time, the amount of community funds increased and the amount of separate funds decreased.
Michael's forensic accountant calculated that by December 29, 2006, the amount of community funds had increased to $73,990.48 and the amount of separate funds had decreased to $163,776.09 in the 7057 account. Thus, both community funds and Shari's separate funds were the source of 14 the $200,000 payment for the Kahn policies. After exhausting the community funds, the accountant deducted $126,009.52 from Shari's separate funds to satisfy the $200,000 purchase price. The accountant considered Shari's $126,009.52 in separate funds would be subject to later reimbursement.
Michael denied having any conversations with Shari that the Kahn policies and her bank and brokerage accounts would be her separate property during the marriage. Michael testified he and Shari owned the Kahn policies together because they had an oral understanding that all property acquired during their marriage was jointly owned. Shari had agreed what she received from the Kahn transaction was going to be her contribution to the marriage, because she did not work. Michael testified the same financial structure was used in the LSTs and Kahn transaction at issue; the 15 LSTs and Kahn policies were acquired and sold in the same manner. Kahn also invested or provided funds for the premium financing of LSTs. On cross-examination, Michael acknowledged Kahn also engaged in LSTs with him.
Following the first phase of the second trial, the trial court made several findings in its interim decision. First, the court found the evidence showed the parties "engaged in a community effort-the financing of premiums for, and the purchase and sale of, life insurance policies-that generated profits for the community." The court also found the community effort relied on the same financial structure to bring about the LSTs and the Kahn transaction. The court accepted Michael's tracing analysis and rejected Shari's tracing analysis that her separate funds in the 7057 account were the sole source of the premium financing. As a result, the court further found that "at the time of the Kahn transaction, the account held $163,776.90 in separate funds and 15 $73,990.48 in community funds." This meant the purchase of the Kahn policies was made with "a mixture of separate and community funds." Finally, the court found Shari failed to overcome the community property presumption with respect to the Kahn transaction profits. The interim decision was subsequently incorporated into the statement of decision.
II. Discussion
Shari contends the trial court erred in determining the Kahn transaction profits were not her separate property. She argues the evidence established she rebutted the community property presumption.
A. Standard of Review
The trial court's characterization of property as community or separate determines the division of the property between spouses in a dissolution of marriage. (In re Marriage of Valli (2014) 58 Cal.4th 1396, 1399-1400.) Generally, we review the trial court's finding that a particular item is separate or community property for substantial evidence. (In re Marriage of Lafkas (2015) 237 Cal.App.4th 921, 931-932.) Likewise, whether a spouse has adequately traced a separate property interest to its source is a question for the trial court, and its finding shall be upheld if supported by substantial evidence. (In re Marriage of Braud (1996) 45 Cal.App.4th 797, 823.)
Here, Shari had the burden to prove by a preponderance of the evidence the Kahn transaction profits were her separate property. (In re Marriage of Valli, supra, 58 Cal.4th at p. 1400.) The trial court found she failed to meet this burden. In such an instance, the question on appeal is not whether substantial evidence supported the court's finding." '[W]here the trier of fact has expressly or implicitly concluded that the party with the 16 burden of proof did not carry the burden and that party appeals, it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment. . . . [¶] Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding." '" (Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838.) Accordingly, we apply this standard to Shari's sufficiency of evidence claim.
We also presume the trial court's judgment is correct (In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 670), are bound by the court's credibility determinations, and construe the findings of fact liberally to support the judgment (Estate of Young (2008) 160 Cal.App.4th 62, 75-76).
B. Community Property Presumption
Property acquired during the marriage is presumed to be community property under Family Code section 760, while property acquired before marriage or after separation or at any time by gift, bequest or devise is separate property (§§ 770, subd. (a), 771, subd. (a))." 'This is a rebuttable presumption affecting the burden of proof; hence it can be overcome by the party contesting community property status.'" (In re Marriage of Ciprari (2019) 32 Cal.App.5th 83, 91.) 17
Undesignated statutory references are to the Family Code.
Both parties traced the Kahn transaction profits to the premium financing made from the commingled 7057 account. Where funds are paid from a commingled account, the presumption is that the funds are community funds. (In re Marriage of Frick (1986) 181 Cal.App.3d 997, 1010.) To overcome the presumption, a party must trace the expended funds to a separate property source. (In re Marriage of Rossin (2009) 172 Cal.App.4th 725, 734.)" '[Separate] funds do not lose their character as such when commingled with community funds in a bank account so long as the amount thereof can be ascertained.'" (In re Marriage of Mix, supra, 14 Cal.3d at p. 612.) Apart from tracing, the party must also present evidence of an intent to use separate funds rather than community funds in making the investment. (Ibid.; In re Marriage of Ciprari, supra, 32 Cal.App.5th at pp. 95-96.)
The evidence does not compel a finding that Shari traced all funds used for the premium financing to a separate property source. The tracing method upon which Shari relied, while seriously considered by the trial court, was clearly premised entirely on Shari's belief that all the funds in the 7057 account, or at least all the funds used for the premium financing, were her separate property. Yet there was no evidence of Shari's intent to preserve those funds as her separate property during the marriage. She never placed them in a separate account. Nor did she agree in writing to lend the funds as separate property to the community on condition they would be repaid in kind. Shari also failed to follow Kahn's advice that she take certain steps to protect her separate property interests during the marriage. The trial court reasonably found that Shari's conduct was inconsistent with an intent to safeguard a separate property interest. 18
In a separate argument, Shari maintains she rebutted the community property presumption with respect to the Kahn transaction profits because the evidence demonstrated the Kahn transaction was "significantly different" from the LSTs. In making this argument, Shari points to various aspects of her purchase of the Kahn policies as proof of her separate property claim: the lack of premium financing, the existence of a loan (Shari's promissory note), Shari's ownership of the Kahn policies, and the deposit of the Kahn transaction profits into accounts in Shari's name only. But none of these distinctions surmounts Shari's inability to trace the $200,000 payment to an entirely separate property source.
Shari makes much of her testimony that she and Michael agreed if her separate funds were used for the premium financing, then her separate funds would be repaid. We find no evidence of such a written agreement. To the extent Shari meant there was an oral agreement, the court was free to discount her testimony. "As the trier of fact, the trial court is the sole judge of the credibility and weight of the evidence; we do not judge credibility on appeal." (In re Marriage of Brewster and Clevenger (2020) 45 Cal.App.5th 481, 500.) Indeed, the trial court found Shari was pleased with the huge profits generated by the community effort. It was only when the marriage failed and the community estate was being divided that Shari had regrets about failing to preserve her separate property interest.
Finally, Shari urges she established her separate property ownership of the Kahn transaction profits because Kahn intended for her to benefit from the proceeds as a gift, bequest, or devise, thereby making them separate property (§ 770, subd. (a)(2)). However, Kahn's expressed intent was contradictory. As 19 the trial court noted: "What [Kahn] intended on the tax side was the benefits of a purchase and sale and not inheritance or gift, but what he intended for his daughter, in the context of a bitter divorce, was the exact opposite-benefits of inheritance or gift and not a purchase and sale." Regardless of her father's "true" intent, the inescapable fact is the policies were not given, bequeathed, or devised; they were sold to Shari and her sister, as Shari, herself, testified. There was insufficient evidence to rebut the statutory presumption.
THE SECOND PHASE OF THE SECOND TRIAL BEFORE JUDGE BYRD
I. Factual and Procedural Background
During the first phase of the second trial, the parties had agreed to be bound by the interim decision's characterization of the 7057 account and the Kahn transaction profits. The accountants would then meet and confer to resolve postseparation accounting differences, while the parties litigated, in written form, the remaining issues of breach of fiduciary duty, attorney fees, violations of ATROs, and sanctions during the second phase of the second trial.
In the wake of the unfavorable interim decision, however, Shari asked the trial court to reconsider its interim decision by seeking reimbursement of her separate funds under either In re Marriage of Bonvino (2015) 241 Cal.App.4th 1411 (Bonvino) or section 2640. In addition, Shari's forensic accountant violated the pretrial stipulation, discovery statutes, and the court's orders by presenting a new postseparation accounting in rebuttal on the eve of the second phase of the trial.
The trial court excluded the analysis that Shari presented in support of her new Bonvino reimbursement claim. The court 20 advised the parties that they would be allowed to provide additional financial analyses if, after reconsidering the interim decision, the court found that Bonvino was applicable. The court decided against excluding Shari's new postseparation accounting, but granted Michael a continuance to prepare a response without prejudice to seeking sanctions. The court later granted Michael's request to impose monetary sanctions.
The forensic accountants' opposing postseparation valuations were, not surprisingly, more favorable to each accountant's respective client. In the end, as discussed post, the trial court rejected the "community first doctrine" or "community opportunity doctrine" underlying Michael's valuations and relied instead on the belated valuations of Shari's accountant as largely correct.
At the conclusion of the second trial, the trial court determined, as pertinent here, that Bonvino did not apply and Shari was not to receive her requested reimbursement of her separate funds. Nor was Shari entitled to a contribution from Michael to her attorney fees. The court further found neither party breached their respective fiduciary duties, and Shari did not violate the ATROs. Although both parties sought sanctions, the court sanctioned only Shari for her forensic accountant's failure to timely produce a rebuttable accounting.
II. Discussion
A. Shari's Separate Property Reimbursement Claims
The trial court reconsidered its interim decision and expressly found Bonvino, supra, 241 Cal.App.4th 1411, did not apply in this case. Shari claims the court erred because she was entitled to a pro rata reimbursement-that is, to be repaid in 21 proportion to the separate funds she contributed to the LSTs and the Kahn transaction.
In Bonvino, husband purchased a family home during the marriage with a deed held solely in his name. (Bonvino, supra, 241 Cal.App.4th at p. 1419.) The purchase was funded with a down payment of husband's separate property and loan proceeds attributable to the community. (Id. at pp. 1418-1420.) The trial court determined the family home was community property and husband had a right to be reimbursed under section 2640 for his original contribution of the down payment. (Id. at pp. 1420- 1421.)
Our colleagues in Division Five disagreed, noting that under section 2640 a spouse is entitled to reimbursement for separate property contributions made to the acquisition of community property. (Bonvino, supra, 241 Cal.App.4th at pp. 1431-1432.) However, the Bonvino court held when a spouse uses both separate and community property to purchase real property during marriage, but it is held in separate title, the section 852 conditions for transmutation must be met before the 22 section 2640 reimbursement provisions apply. (Bonvino, at p. 1432.) "By the plain language of the statute, section 2640 applies to contributions to the acquisition of community property. In other words, it applies to separate property contributions that are traceable from a community property asset at dissolution. Section 2640 does not purport to apply to separate property used during marriage to acquire an asset that retains its character as separate property. In order for section 2640 to apply, the asset purchased during marriage must be characterized as community property, and in order for separate property to become community property, the transmutation provisions must be satisfied." (Id. at p. 1433.)
Section 2640 provides in part: "In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party's contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source." (§ 2640, subd. (b).) Generally, the reimbursement is a dollar-for-dollar amount. (In re Marriage of Koester (1999) 73 Cal.App.4th 1032, 1034.)
The Bonvino court concluded when the section 852 conditions are not met, the spouse who contributed separate property to acquire real property held in separate title during marriage retains a separate property pro rata interest in the property. (Bonvino, supra, 241 Cal.App.4th at pp. 1434-1435.)
We agree with the trial court's reasoning that Bonvino is inapplicable here because it is factually distinguishable and Shari has provided no authority to the contrary.
Alternatively, Shari faults the trial court for not reimbursing her pursuant to section 2640 for her separate property contributions to the LSTs and the Kahn transaction. The LSTs, however, involved a series of expenses rather than acquisitions of community property. The premium financing did not acquire the 15 policies and thus did not fall within the purview of the statute.
As for the Kahn transaction, Michael pointed out that although in reconsidering its interim decision the trial court denied Shari's section 2640 reimbursement claim, it appears 23 Shari actually was reimbursed in accordance with the statute as a result of the court's adoption of her forensic accountant's postseparation accounting. Shari does not dispute this in her reply brief.
B. Michael's Alleged Breach of Fiduciary Duties
Section 721, subdivision (b) "recognizes the confidential relationship held by spouses. That relationship is a fiduciary relationship 'impos[ing] a duty of the highest good faith and fair dealing on each spouse.'" (In re Schleich (2017) 8 Cal.App.5th 267, 276.) Generally, the spouse claiming a breach of fiduciary duty bears the burden of proof as to that claim. (In re Marriage of Ciprari, supra, 32 Cal.App.5th at p. 100.) However, any interspousal transaction that advantages one spouse to the disadvantage of the other gives rise to a presumption that the transaction was the result of undue influence. The advantaged spouse has the burden to show there was no undue influence. (In re Marriage of Delaney (2003) 111 Cal.App.4th 991, 996.)
Shari contends that in concluding Michael did not breach his fiduciary duties, the trial court erred by failing to consider and apply the presumption of undue influence. We note that Shari did not argue in favor of this presumption and its burden on Michael in her trial brief or before the court. Rather, Shari argued Michael breached his fiduciary duties by having her separate funds used for premium financing, which enriched the community while depleting her separate funds. Shari's theory that Michael "trick[ed] her into spending all of her separate property as part of his design to make money" may have suggested Michael exercised undue influence, but Shari never argued such alleged conduct gave rise to a presumption requiring 24 Michael to produce evidence to overcome." 'It is fundamental that a reviewing court will ordinarily not consider claims made for the first time on appeal which could have been but were not presented to the trial court.' Thus, 'we ignore arguments, authority, and facts not presented and litigated in the trial court.'" (Newton v. Clemons (2003) 110 Cal.App.4th 1, 11.) Accordingly, Shari has forfeited this argument on appeal.
C. Shari's Alleged Breach of Fiduciary Duties
1. Additional facts
No one disputes that Shari made various investments primarily based on her father's advice during the marriage and postseparation. Shari did not solicit Michael's advice concerning the investments. There is no evidence that Michael was unaware of or objected to Shari's investment activities pre- or postseparation. The trial court found that, at the time, Shari reasonably believed the investments were her separate property. The court explained that before its interim decision was issued nine years postseparation, the community property component of the investments was only theoretical. Only in the wake of that decision was there a basis for determining the accounts bankrolling those investments consisted of commingled separate and community funds. Thereafter, the parties' forensic accountants each produced a postseparation accounting, which included schedules listing Shari's various investments, their dispositions, distributions, and income generated by the investments. These documents were updated during trial.
Shari maintained during the second phase of the second trial that she should be required to reimburse the community for the community funds used, which should then be divided between the parties. She would also be subject to an equalizing payment. 25 Michael urged the court to find Shari's investments were a breach of her fiduciary duties in violation of sections 721, subdivision (b) and 1100, subdivision (e). Relying on the community opportunity or community first doctrine, Michael claimed Shari owed the community a $1,152,240 reimbursement, but in closing argument he also asked the court to sanction Shari under section 1101, subdivision (g) for failing to disclose assets or the transfer of assets in breach of her fiduciary duties. Accordingly, Michael is now asserting he is entitled to a "$905,200" reimbursement "for his one-half share of the 13 community assets in Shari's name or control on the date of separation." To buttress this claim, Michael argues that Shari should have been made to account for managing "millions of dollars of community funds in such a way that the value plummeted."
Half of the $1,152,240 or $576,120 would be Shari's share.
2. Applicable law
As discussed, the starting point for defining the fiduciary relationship between spouses is section 721, subdivision (b). The statute also sets forth their mutual obligations. Spouses are accountable to each other for the management and control of community assets and have an obligation to disclose relevant information concerning transactions affecting community property. Section 1100 further delineates the scope of each 26 spouse's management and control of community personal property, including requiring each spouse "to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest." (§ 1100, subd. (e).) These fiduciary duties do not end upon separation, but continue "until such time as the assets and liabilities have been divided by the parties or by a court." (Ibid.; see also § 2100, subd. (c).) The duty under both section 721 and 1100 to make full disclosure turns on a request by the other spouse. (See In re Marriage of Walker (2006) 138 Cal.App.4th 1408, 1421.)
Section 721, subdivision (b) provides in relevant part that the confidential relationship between spouses "is a fiduciary relationship subject to the same rights and duties of nonmarital business partners, as provided in Sections 16403, 16404, and 16503 of the Corporations Code, including, but not limited to, the following: [¶] (1) Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying. [¶] (2) Rendering upon request, true and full information of all things affecting any transaction that concerns the community property. Nothing in this section is intended to impose a duty for either spouse to keep detailed books and records of community property transactions. [¶] (3) Accounting to the spouse, and holding as a trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse that concerns the community property."
Section 1101 creates a right of action and certain remedies for the breach of a spouse's fiduciary duties "that results in impairment to the claimant spouse's present undivided one-half interest in the community estate." (§ 1101, subd. (a).) Under section 1101, subdivision (g), the remedies "shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney's fees and court costs." 27
3. Trial court's findings
The trial court determined Michael failed to establish Shari's alleged breach of fiduciary duties and denied Michael's claimed amount of reimbursement and request for section 1101, subdivision (g) sanctions. Relying on Shari's postseparation accounting, the court ruled she was to reimburse $828,410 to the community, which was the portion of her investments constituting community property. We review a judgment on claims of a spouse's breach of fiduciary duties for substantial evidence. (In re Marriage of Ciprari, supra, 32 Cal.App.5th at p. 102.)
In its statement of decision, the trial court made three significant findings concerning Michael's claim. First, Shari did not breach her fiduciary duties by failing to disclose information concerning pre- and postseparation investments. The court discounted Michael's declaration that Shari never discussed making the investments with him or provided any information about the incomes or distributions from the investments. Michael's testimony was contradicted by their preseparation joint tax returns and Shari's postseparation separate tax returns, which were provided to Michael and contained all the relevant financial information. The court also found Michael failed to identify a single incident in which he requested Shari's investment information and was refused access to it at the time. As for the sale of Texas Energy Holdings, Michael did not cite any legal authority requiring Shari to discuss with him the sale of an investment beforehand; it does not fall within the purview of section 1100.
Second, contrary to Michael's assertions, Shari's postseparation accounting showed her investments performed 28 well; there was no impairment to Michael's "present undivided one-half interest in the community estate" within the meaning of section 1101, subdivision (a) to warrant sanctions under section 1101, subdivision (g).
The third finding dealt with Michael's community first or community opportunity doctrine underlying his postseparation accounting. As framed by Michael's forensic accountant, the community opportunity doctrine obligates each spouse to first offer an investment opportunity to the community before investing with separate property. Only after the non-investing spouse has refused to use community property may the investing 29 spouse proceed using separate property. As applied here, Michael's theory was because Shari invested using community property without first consulting him, she breached her fiduciary duties, which meant all investment income must be deemed community property to be divided between them. As observed by the trial court, "while saying that [Shari] breached her fiduciary duties to the community by investing the funds without his permission, at the same time [Michael] argues that he is entitled to participate in the gains on her investments."
The community opportunity doctrine is thought to be derived from the Corporations Code. (See In re Marriage of Leni (2006) 144 Cal.App.4th 1087, 1092-1094.) There is a principal known as the "doctrine of corporate opportunities." (See Kelegian v. Mgrdichian (1995) 33 Cal.App.4th 982, 988; Industrial Indem. Co. v. Golden State Co. (1953) 117 Cal.App.2d 519, 533.) It forbids a person, like an officer or director, who has a fiduciary relationship to the corporation, from acquiring, to the detriment of the corporation, assets in which the corporation has an interest or prior claim. The remedy is the corporation may seize all the benefits obtained as a result of the breach of fiduciary duty. (Industrial Indem. Co., at p. 533.) In the decision of In re Marriage of Leni, the appellate court held while section 721 refers to certain sections of the Corporations Code in defining the scope of fiduciary duties owed between spouses, it does not expand those duties beyond the Family Code, and, in particular, to encompass the Corporations Code. Thus, the reference to those discrete sections of the California Corporations Code by no means broadens spouses' mutual obligations to include those of the officers and directors of a corporation beyond providing access, information, and an accounting. (In re Marriage of Leni, at pp. 1092-1094.)
The trial court held the community opportunity or community support doctrine was without factual and legal support. The court noted the cases on fiduciary duties in connection with investments involved conduct during the marriage. (Citing In re Marriage of Brandes (2015) 239 Cal.App.4th 1461; Patrick v. Alacer Corp. (2011) 201 Cal.App.4th 1326; In re Marriage of Frick, supra, 181 Cal.App.3d 997; Somps v. Somps (1967) 250 Cal.App.2d 328.) Michael produced no authority for applying the community opportunity doctrine postseparation. The court found that "[e]ven if such a doctrine were applicable after separation, it would not be applicable to the unique facts of this case, the heart of which involves the investment of [Shari's] separate property, not community." The court reasoned because the fiduciary duty owed to the community does not prevent a spouse from using separate funds for separate property investments during marriage, the spouse cannot be restricted from making such investments postseparation. 30
Reinforcing Shari's belief was Judge Black's 2016 finding "the assets transferred or sold were [Shari's] separate property."
4. Michael's challenges to trial court's findings
On appeal, Michael first responds with an attempt to relitigate the facts of this case and to undermine adverse credibility determinations in his opening brief. In particular he attacks Shari's credibility. However, the role of a fact finder belongs to the trial court, not to the appellate court. (In re Marriage of Smith (1990) 225 Cal.App.3d 469, 493-494.) Where the trial court has weighed the credibility of witnesses, we "cannot make a new determination as to which witnesses were most worthy of belief" (Blue v. Watson (1957) 147 Cal.App.2d 582, 590), nor may we express a preference in conflicting testimony, inferences, or theories (Whitcomb v. Emerson (1941) 46 Cal.App.2d 263, 270).
Otherwise, Michael responds with what boils down to two arguments: First, he contends the trial court erred by assigning him the burden of proving his breach of fiduciary duties claim against Shari. As discussed, generally, the spouse contending a breach of fiduciary duties bears the burden of proof as to that claim. (In re Marriage of Ciprari, supra, 32 Cal.App.5th at p. 100; see Evid. Code, § 500 ["Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting"].) Michael argues, however, that pursuant to In re Marriage of Prentis-Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1274, the court should have shifted the burden to Shari to account for the various investments as the managing spouse. However, Michael has not cited any portion 31 of the record showing that he objected or otherwise raised this burden shifting argument in the trial court. Consequently, the argument is now forfeited. (California Interstate Tel. Co. v. Prescott (1964) 228 Cal.App.2d 408, 411 [party forfeited argument regarding shift of burden of proof by failing to object in trial court].)
Michael also referenced In re Marriage of Hein (2020) 52 Cal.App.5th 519. Significantly, this decision held trial courts must consider altering the burden of proof when, unlike the present case, a litigant argues the standard burden of proof is not appropriate and the allocation of the burden of proof for that specific issue has not yet been resolved by existing case law. (Id. at pp. 537-538.)
Second, Michael faults the trial court for adopting Shari's postseparation accounting. Shari's forensic accountant testified he used a "charging schedule" or a running calculation of the balances of community and separate property in each account postseparation. He also used reimbursements as a method of allowing the purchase of separate property when the amount of separate funds to make the purchase was insufficient. This method of postseparation accounting can be explained with the following example: If there were $100,000 in community funds and $75,000 in separate funds available at one point to purchase a $150,000 separate property asset, rather than use community funds, the accountant calculated a negative $75,000 balance in separate funds to be reimbursed later to the community. 32
Michael's forensic accountant testified he used a tracing method for postseparation accounting that embodied the community opportunity doctrine. He assumed that all postseparation assets were community property. Using the above example, if there were $100,000 in community funds and $75,000 in separate funds available at one point to purchase a $150,000 community asset, the community funds would be exhausted first before using separate funds, if necessary. If there were sufficient community and separate funds available, only community funds would be spent on the asset.
Without challenging its admissibility, Michael questions the evidentiary value of Shari's postseparation accounting. In particular, Michael insists her forensic accountant's method was "speculative, unreasonable, and unsupported." In much of his opening brief on this issue, Michael once again reargues the evidence and asks this court to reweigh it. As explained, that is not our role under the substantial evidence standard of review. (Estate of Beard (1999) 71 Cal.App.4th 753, 778-779.) Nonetheless, because the parties' opposing methods were at the center of the second phase of the second trial, we address whether Shari's postseparation accounting constituted substantial evidence." '[W]hen an expert bases his or her conclusion on . . . "assumptions . . . not supported by the record," the expert's opinion "cannot rise to the dignity of substantial evidence." '" (Johnson & Johnson Talcum Powder Cases (2019) 37 Cal.App.5th 292, 314; accord, Wise v. DLA Piper LLP (US) (2013) 220 Cal.App.4th 1180, 1191.)
Shari's postseparation accounting was substantial evidence. For her postseparation investments, Shari was indebted to the community as reflected in the interim decision. Her forensic accountant's method involved calculating the amount Shari would have to reimburse the community for her postseparation use of community property for the investments. As Shari's accountant explained, the use of charging schedules and negative amounts attributed to Shari's separate property was an easy way of making that calculation. The accountant 33 further testified he was not aware of any prohibitions against employing this method. The trial court questioned the accountant about this method and asked for certain information and clarification. The court did not err in relying on the accountant's testimony and postseparation accounting.
D. Shari's alleged violation of ATROs
In every dissolution action, four statutory ATROs take effect upon the filing of a petition for dissolution and issuance of the summons and upon personal service of the petition and summons or the respondent's waiver and acceptance of service. (§ 2040.) The ATROs are in effect until the final judgment is entered or the petition is dismissed or until further order of the trial court. (§ 233, subd. (a).) Among other things, the ATROs preclude the parties from disposing of any property, whether community or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life. (§ 2040, subd. (a)(2)(A).)
At trial, Michael contended Shari's investment activities were in violation of the ATROs in the summons. He argued the" 'usual course of business'" exception was inapplicable because Shari" 'doesn't conduct any business.'" The trial court found Shari's investment activities fell within the statutory exception. All of her tax returns, both joint and separate, reflected she paid self-employment taxes and reported income from a partnership or S corporation and sale of business property. The court thus concluded Shari's continued management of her preseparation investments after separation did not violate section 2040, subdivision (a)(2)(A). Both parties testified Shari did not work outside the home during marriage, although Michael indicated 34 she worked briefly in 2007 but earned only approximately $1,000 annually.
As expressed by Michael, his argument that Shari violated the ATROs depends not on whether her postseparation investment activities were "in the usual course of business," but instead on whether those activities were in fact a "business." Neither party has cited to a statutory, regulatory, or case law definition of "business." Our research has revealed the term "business" is liberally defined. (Advance Transformer Co. v. Superior Court (1974) 44 Cal.App.3d 127, 134 ["The term 'business,' therefore, embraces any activity engaged in for profit or for gain"]; Los Angeles v. Cohen (1954) 124 Cal.App.2d 225, 228 [" 'Business is defined as that which occupies the time, attention, or labor of men for the purpose of profit or improvement' "]; Rev. & Tax. Code, § 6013 [" 'Business' includes any activity engaged in by any person or caused to be engaged in by him with the object of gain, benefit, or advantage, either direct or indirect"].) Similarly, Revenue and Taxation Code section 23101 defines "[d]oing business" as "actively engaging in any transaction for the purpose of financial or pecuniary gain or profit." Nearly a century ago, the California Supreme Court observed in Marin Municipal Water Dist. v. Chenu (1922) 188 Cal. 734, 738, that the word "business," broadly defined, means" 'that which busies, or engages time, attention, or labor, as a principal serious concern or interest.'" (See also Curran v. Mount Diablo Council of the Boy Scouts (1983) 147 Cal.App.3d 712, 727-728.) There is no question that Shari's investment activities were for the purpose of financial gain or profit. And, as the trial court found, her tax returns substantiated that her investment activities were a business. 35
Michael relies principally on two cases, neither of which helps him: In Gale v. Superior Court (2004) 122 Cal.App.4th 1388 (Gale), the issue was whether an ATRO prevented a spouse who owned and operated a family-owned real estate management company from selling one of the properties in the" 'usual course of business.'" The appellate court held the company was "a bona fide business entity" and the statutory exemption applied to enable the sale of the property. (Id. at p.1393.)
Michael also relies on In re Marriage of Quay (1993) 18 Cal.App.4th 961 (Quay), which concerned the predecessor statute to section 2040, but the restraining order at issue included a usual-course-of-business exemption. (Id. at p. 971.) The husband had control of approximately $7 million in community funds from the sale of stock. The appellate court agreed the husband violated the restraining order when he lent a portion of the funds to a start-up company, whose owner was a friend, and the company later defaulted on the loan. (Id. at p. 972.) As Michael points out, the appellate court in Gale observed the husband in Quay "was not in the 'business' of turning a profit with the community funds entrusted him; by profession he was a medical doctor who founded a drug company, and after the sale of the community's stock in that company he had been entrusted with the proceeds of the sale pending trial." (Gale, supra, 122 Cal.App.4th at p. 1394.) The Gale court remarked that if the husband's occupation or means of earning a living in Quay had been full-time investing, the result may have been different. (Ibid.) Such is the case here; the trial court reasonably inferred Shari's investments were her means of earning a living postseparation. 36
E. Denial of Shari's Attorney Fees
During the pendency of a dissolution proceeding, the trial court may order that one party pay some or all of the other party's legal fees and costs in an amount that is just and reasonable under the circumstances. (§§ 2030, 2032.) The goal is to ensure parity between the parties in their ability to have access to effective legal representation, based on a consideration of their relative circumstances. (In re Marriage of Falcone & Fyke (2012) 203 Cal.App.4th 964, 974-975.) In deciding what is just and reasonable, the court may consider assets, debts, and earning ability of both parties, ability to pay, duration of the marriage, and the age and health of the parties. (§ 4320.)
The trial court rejected Shari's request that Michael contribute $1,625,000 to her attorney fees. We review the court's attorney fees determination for an abuse of discretion. (In re Marriage of Ciprari, supra, 32 Cal.App.5th at pp. 111-112.) The findings will be upheld if supported by substantial evidence. (Ibid.)
The trial court found Shari had incurred approximately $3 million in attorney fees, a reasonable and appropriate sum in light of the length and complexity of the litigation and unexpected delays in the proceedings. The court found both parties were in their mid-50's with no material health issues. The court found there was a large disparity in the parties' incomes with Michael earning more, and a large disparity in the parties' net worth, with Shari's total assets worth roughly four times that of Michael's. The court also observed that Shari's assets were not liquid and did not generate significant income.
Shari is not contending the trial court failed to consider the statutory factors. Instead, she argues, as she did before the lower 37 court, that her assets are not liquid and the focus should be on Michael's greater income. Given the amount of funds at Shari's disposal postseparation, we consider her argument rather disingenuous. This is clearly not a case in which Shari lacked "access" to funds to pay her attorney fees "during the pendency of the proceeding." (§ 2030.) The court observed Shari's "financial circumstances did not appear to restrict her ability to retain counsel at the outset of the case or to maintain legal representation throughout this lengthy litigation." On this record, we cannot say the court abused its discretion in denying Shari's requested attorney fees. (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 631 ["Both [husband] and [wife] had adequate resources to litigate the controversy. Thus, the court acted well within its discretion in denying [wife's] request for attorney fees"].)
F. Alleged Improper Award of Schwab IRA to Michael at Cash Value
Michael objected to the trial court's statement of decision that certain accounts be divided in kind or by qualified domestic relations order, contending the ruling failed to identify the value of each account and the date of that valuation. The court noted that Michael's proposal, however, was that only the accounts in Shari's name be valued and divided, but that the account in his own name, Charles Schwab SEP IRA xx2502 (Schwab IRA), not be treated in the same fashion.
In accepting the objection, the trial court agreed to provide the value and date of valuation for both parties' accounts. As a result, the court valued Michael's Schwab IRA account at $670,480 and Shari's 11 accounts, which included her Charles Schwab IRA account, at a total of $795,673. The court then 38 ordered that Michael be awarded an equalizing payment of $62,596.50.
Michael now contends the valuation created an unequal division of property in violation of section 2550 as a matter of law. Michael complains the award of his Schwab IRA created an "unjust burden," "as the eventual withdrawals will be taxed, plus if he needed to withdraw funds to use them presently, he would be penalized with early withdrawal fees."
Section 2550 reads: "Except upon the written agreement of the parties, or on oral stipulation of the parties in open court, or as otherwise provided in this division, in a proceeding for dissolution of marriage or for legal separation of the parties, the court shall, either in its judgment of dissolution of the marriage, in its judgment of legal separation of the parties, or at a later time if it expressly reserves jurisdiction to make such a property division, divide the community estate of the parties equally."
The general rule under California law is courts need not consider potential tax consequences that might arise after a property division, but must consider immediate, specific tax consequences. (In re Marriage of Fonstein (1976) 17 Cal.3d 738, 748-749 & fn. 5.) The distinction is between a tax liability that might arise in the future if an awarded asset is sold or liquidated and a taxable event that occurs immediately in connection with the property division. For example, taxes actually paid as the result of a court-ordered sale of a community residence must be accounted for in the community property division. (In re Marriage of Epstein (1979) 24 Cal.3d 76, 87.) Michael's Schwab IRA is not an immediate taxable event within the meaning of In re Marriage of Fonstein. 39
G. Denial of Motions in Limine
During trial, Michael made multiple motions in limine. Without citing to the extensive record or to any authority or presenting a legal analysis, he claims the trial court improperly denied one or more motions in limine.
"To prevail on appeal, an appellant must establish both error and prejudice from that error. [Citation.] In order to demonstrate error, an appellant must supply the reviewing court with some cogent argument supported by legal analysis and citation to the record. Rather than scour the record unguided, we may decide that the appellant has forfeited a point urged on appeal when it is not supported by accurate citations to the record. [Citations.] Similarly, we may disregard conclusory arguments that are not supported by pertinent legal authority." (WFG National Title Ins. Co. v. Wells Fargo Bank, N.A. (2020) 51 Cal.App.5th 881, 894.) Such is the case here; Michael has forfeited this argument on appeal. 40
DISPOSITION
The order granting mistrial is affirmed. The judgment is affirmed. The parties are to bear their own costs on appeal.
We concur: ASHMANN-GERST, J., CHAVEZ, J. 41