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Nichols v. Nichols

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE
Nov 4, 2011
B227306 (Cal. Ct. App. Nov. 4, 2011)

Opinion

B227306

11-04-2011

In re Marriage of FRED C. and JAMS M. NICHOLS. FRED C. NICHOLS, Appellant, v. JANIS M. NICHOLS, Respondent.

Fred C. Nichols, in pro. per., for Appellant. Linda S. Gross for Respondent.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. SD025295)

APPEAL from a judgment of the Superior Court of Los Angeles County, David J. Cowan, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed as modified.

Fred C. Nichols, in pro. per., for Appellant.

Linda S. Gross for Respondent.

Appellant Fred C. Nichols (Husband) appeals from a judgment of dissolution. Husband contends: 1) the trial court erred by awarding prejudgment interest to respondent Janis M. Nichols (Wife) under Civil Code section 3287 on her share of Husband's Hughes Aircraft Company pension plan; 2) the trial court should have calculated Husband's share of Wife's 401k savings plan as of March 2007 when it was rolled over into an individual retirement account (IRA), rather than at the date of separation; 3) the trial court failed to account for principal payments that Husband will make after the entry of judgment and prior to the sale of the community residence; 4) the trial court's findings concerning Husband's withdrawal of funds to purchase a truck are not supported by substantial evidence; 5) the trial court abused its discretion by ordering Husband to pay half the amount of certain credit card debt in Wife's name at the time of separation; and 6) the trial court should have stated the amount awarded to Husband as his separate property out of a particular account.

All further statutory references are to the Civil Code, unless otherwise stated.

We agree that the amount of the community's interest in Husband's Hughes pension plan was not ascertainable until trial, and therefore, Wife is not entitled to prejudgment interest on the amount awarded to her for this asset in the dissolution judgment. We find no abuse of discretion as to the valuation dates used by the trial court for the pension and savings plans. We also determine that the court's method for determining the community equity in the residence provided Husband with the benefit of any post-separation payments toward principal. The court's findings with respect to Husband's purchase of the truck are supported by the evidence. The court did not abuse its discretion by ordering Husband to pay half of the credit card debt in Wife's name, nor did the court abuse its discretion by awarding Husband any funds remaining in the IRA in excess of the community's interest rather than a specific amount. Based on these findings, we modify the judgment to deduct the award of prejudgment interest, and as modified, we affirm.

FACTS AND PROCEDURAL BACKGROUND

History of the Marriage

Husband was hired by Hughes Aircraft Company in August 1973. He contributed to a Hughes Aircraft Defined Benefit Pension Plan (the Hughes pension plan) and a 401k plan known as the California Thrift and Savings Plan (CTSP). He had an IRA at a company that later became Morgan Stanley Dean Witter (the Morgan Stanley IRA) which he funded with $7,000.

The parties married in November 1986. Wife was 38 years old and Husband was 50 years old. They did not have any children together. Wife was hired by either The Boeing Company or Rockwell in 1988. She participated in a Boeing pension plan that was not discovered until the time of trial in this case. She also contributed to the Rockwell Automaton Salaried Retirement Savings Plan (the Rockwell plan). In 1991, the parties purchased a residential property at a probate sale with an 800 square-foot house in need of repair. Wife's employment was terminated in 1995 or 1996.

Raytheon purchased Hughes and terminated the CTSP in December 1997. In January 1998, Raytheon started its own savings and investment plan (the Raytheon plan) and Husband made contributions. In March 1998, Husband rolled over the balance of his CTSP of $96,965 into his Morgan Stanley IRA. Husband made two withdrawals from the CTSP/Morgan Stanley IRA totaling $20,500 in order to purchase a used truck. He did not know at the time that he withdrew the money that the parties would soon separate. On April 30, 1998, the total balance of the CTSP/Morgan Stanley IRA was $86,164.07.

Husband used the funds he had withdrawn to purchase the truck on May 3, 1998. The parties separated that day, after a marriage of more than 11 years, and Wife moved to Rhode Island. Wife was 50 years old and Husband was 63 years old. On the date of separation, the balance of Husband's Raytheon plan was approximately $1,642.32. The balance of Wife's Rockwell plan was approximately $26,613.50. Wife had balances on credit cards in her name as follows: $3,174 on a Citibank Visa; $4,351 on a Citibank MasterCard; and $1,366.92 on a Macy's charge card.

Fifteen months after the parties separated, at the end of July 1999, Husband's employment terminated. He elected to receive his pension benefits over a period of ten years commencing on August 1, 1999. Wife signed paperwork before a notary in Rhode Island which listed Husband's options for receiving his retirement benefits and showed that Husband was electing to receive his pension benefits over ten years through July 1, 2009. She initialed and signed a paragraph stating that she had reviewed the Retirement Option Election Form and agreed with the option selected by her spouse, including a withdrawal decision that may provide her with either no benefit or a reduced benefit after Husband's death. The paragraph stated that if she did not initial and sign the form, Husband would automatically receive a type of annuity that would provide her with a monthly benefit of $437.99 after Husband's death. Husband sustained losses on some of the investments that he made with the Hughes pension funds and he also withdrew funds for his support.

In March 2007, Husband rolled over the balance of his Raytheon plan, which was $19,284.11, into an IRA with Fidelity Investments. Wife became disabled in May 2007. In June 2007, Rockwell rolled over the balance of Wife's Rockwell plan, which was $58,723.90 into an IRA with Fidelity Investments. Wife began withdrawing money from the Rockwell/Fidelity IRA for expenses.

On August 9, 2007, Husband filed a petition for dissolution of marriage. Wife's default was entered. Wife appeared through her attorney at the default prove-up hearing on April 2, 2009, and the parties stipulated to set aside the default. The parties stipulated to allow Commissioner David J. Cowan to hear the proceedings. The trial date was continued several times. By the time of trial, Wife had withdrawn almost all of the funds in her Rockwell/Fidelity IRA, leaving a balance of $1,750.

The parties stipulated that Husband's funds on deposit in Kinecta accounts at the time of separation, which totaled $5,448, and his expense account debt of $4,367 would be awarded to Husband. Wife's funds on deposit at Bank of America at the date of separation were awarded to Wife. Wife was awarded an inoperable 1979 Toyota Corolla and a 1999 Mercury Sable without offset. A paragraph awarding Husband his truck, but reserving the issue of the withdrawal of funds to purchase the truck, was crossed out and initialed by the parties.

Pertinent Evidence and Rulings at Trial

A bench trial commenced on April 22, 2010. The trial was held on multiple dates, months apart. Husband was 74 years old at the time of trial, and Wife was 62. The parties agreed that the present value of Wife's Boeing pension plan, which was community property discovered during litigation, was $33,396. Husband agreed to accept a credit of $16,698 for his share.

With respect to Husband's Hughes pension, Husband relied on the value of the pension at the date of separation to argue that Wife was entitled to $55,508.60 as her share of the community's interest. Wife used the value of the pension at the time that Husband elected to receive it, which was 15 months after the date of separation, to argue that the community's interest was $117,906.62. Based on Wife's calculations, her share of the community's interest was 58,953.31. The trial court accepted Wife's calculation of the community and separate property interests. Husband argued that he had paid taxes on the pension funds that he received. The court ultimately reduced the community's share of the Hughes pension plan to $54,041.80 to reflect the tax payments.

Wife's attorney argued that Husband should be charged with interest on her share of the Hughes pension plan, because it was a breach of his fiduciary duty to have her sign papers giving up her interest in his pension plan without telling her that she was entitled to a share. Wife testified that she discussed the different options to receive the payouts with Husband. Husband had decided to take the ten-year payment option before she even left California, because the payments were larger. They spoke about his retirement plan as if it were his decision. Wife mentioned the other options available to him, such as payments over his lifetime and survivor benefits, but he said he wanted to take the ten-year payout and if she would not sign the form, he would sign her name. Wife did not think there was much that she could do about it, other than to hire an attorney, which she could not afford at the time. The trial court asked whether Wife understood during her discussion with Husband that any of his retirement plan belonged to her. Wife answered, "[I] did not look at it as a gift that I was giving him the whole thing. I looked at it as I'm signing it so he'll get the payment over ten years. Because I knew he was paying on the house and so forth, so he would get the [] money for that. [¶] Whether or not I had any interest in it, I didn't - - I mean, I may have thought I had some interest in it, but I wasn't going to dispute it then because - - without having an attorney - - but I didn't say - - you know, I didn't say by signing it I'm giving it to you. [¶] By signing it, I said I'm agreeing that the company can pay it out in ten years. That's how I looked at it." Wife's attorney argued that Wife was entitled to some rate of return on the investment that Husband misappropriated, because he took the money and she did not have the use of it.

The trial court asked Wife's attorney to explain why interest would accrue on an unliquidated, disputed claim under section 3287. Wife's attorney argued the interest was analogous to spousal support. Wife's attorney later argued that each payment to Husband was a liquidated amount, so Husband should have to pay interest on Wife's share of the amounts he received as of the date he received it. The court ultimately awarded five percent interest under section 3287, a total of $16,995.56, for "the improper use of the retirement monies" by Husband.

The parties disputed the treatment of the funds that Husband withdrew to purchase the truck and the amount of Wife's share of the CTSP/Morgan Stanley IRA. In March 1998, Husband rolled over the balance of the CTSP of $96,965 into his Morgan Stanley IRA and withdrew $20,500 to purchase a truck. Wife's attorney made an offer of proof that Husband told Wife he was borrowing $20,500 from himself to purchase the truck and she did not consent to his simply withdrawing the funds. Wife testified that Husband said he "could take the money out of his account and pay himself back, versus getting a loan and paying all the interest, and so forth. So he would more or less be paying himself back interest on that money." Husband still owns the truck. Husband noted that Wife purchased a car during the marriage with community money. The trial court noted that Husband might be entitled to a separate credit for the vehicle that she kept, but the present issue was the CTSP funds. Based on the amount of the CTSP funds as of March 1, 1998, the court determined the community property interest in the CTSP was $45,574 and Wife was entitled to payment of $22,786.89.

Husband argued that his active management of the Raytheon plan created the appreciation in the account. The trial court used the amount of the plan at the date of separation to value the community's interest, rather than the balance that was rolled over into the Raytheon/Fidelity IRA in March 2007.

As to Wife's Rockwell/Fidelity IRA, Wife stated that she withdrew funds from 2007 to 2010 for her living expenses because she did not have any other available assets. She argued that Husband was entitled to half of the balance remaining at the time of trial. The trial court found that Wife simply used Husband's portion of the community funds for purposes other than the division of assets. Consistent with the treatment of funds that Husband received from his Hughes pension plan, the court relied on the balance in the Rockwell account as of the date of separation to calculate Husband's share. Husband argued that he was entitled to the amount of the Rockwell/Fidelity IRA at the time that Wife began making withdrawals in 2007, in the same manner as Wife's share of his pension plan had been calculated. The court found the treatment of Wife's Rockwell/Fidelity IRA was identical to the treatment of Husband's Raytheon/Fidelity IRA, because neither party received appreciation earned by the other in the account.

With respect to the calculation and division of equity in the house, Wife testified she was aware at the time they purchased the house that the $15,000 down payment came from Husband's separate property. Husband provided a copy of the cashier's check drawn on a bank account in which he had deposited savings prior to their marriage. However, the trial court noted that Husband's paycheck appeared to have been deposited into the account. Therefore, the court concluded that Husband failed to show the funds in the account consisted entirely of funds saved prior to the marriage and no community property funds earned during the marriage were used for the down payment. Therefore, the court stated the house would be treated as community property.

At the time of separation, Husband had wanted to repair and improve the house and refinance the mortgage. An appraiser estimated the value of the residence was $237,000. At the time of separation, the amount of the principal remaining on the mortgage was $130,409.28. Husband made mortgage payments of $1,467 per month. As of April 1, 2010, the balance remaining on the mortgage was $97,783. The amount of principal that Husband had paid after the date of separation was $32,626.

The parties agreed that after their separation, Husband provided $5,310 on behalf of Wife with the agreement that the funds would be deducted from her share of the equity in the home. Therefore, the trial court found that Wife owed $5,310 as against her share of the equity.

Over the years of their separation, Husband informed Wife that he was making improvements and repairs, such as putting in new windows. He provided receipts for improvements that he paid for totaling more than $13,654. Husband called a realtor to testify that the house had no rental value in its current condition. Wife argued that the rental value was the amount of the mortgage.

To determine the community's equity in the residence, the trial court used the amount of the principal balance at the time of separation, rather than the amount of principal remaining at the time of trial. Using the amount of the principal at the time of separation gave Husband credit for payments of principal that he made with separate property after the separation. The trial court determined that the community equity was $106,591. The court divided the community equity, then subtracted $5,310 from Wife's share and concluded that Wife's share of the equity was $47,950. The court credited Husband with $11,000 for improvements, as opposed to regular maintenance costs, and deducted $5,500 from Wife's share of the equity to determine Wife's share was $42,485.50. Husband objected to the subtraction of the amount of the improvements from the total equity, as opposed to Wife's share of the equity. The court explained that by taking the amount from the total equity, each side contributed half the cost of the improvements.

After hearing argument on the issue of spousal support, the trial court denied Wife's request for spousal support and provided findings on the factors required to be considered under the law.

Husband argued that Wife's credit card debts at the time of separation were not an issue for trial, because the parties had already stipulated that the amounts in their bank accounts were their separate property. Wife's attorney argued that the stipulation covered the parties' bank accounts, but not credit card debts. Husband stated the credit card debts at issue have never been paid. No payments have been made on the accounts in 12 years. Husband has received collection notices on the accounts, but he never considered them to be his responsibility. Husband claimed he had his own debts for which he was not requesting contribution. Wife's attorney noted the parties' stipulation had subtracted Husband's expense account debt from his bank balance in dividing the bank accounts, but did not take Wife's debts into account. The trial court granted Wife's request to be reimbursed for half the credit card debts.

The trial court continued the trial to May 14, 2010, to allow Wife's attorney to calculate the amount owed to Wife based on the court's rulings on principal amounts and allow Husband to seek financing to purchase Wife's interest in the home. Wife's attorney informed the trial court that Wife had incurred attorney fees of approximately $45,000 and was requesting contribution from Husband of $15,000 for Wife's attorney fees. The court continued the issue of fees until Husband's remaining assets could be determined. At the next hearing, Wife withdrew her request for payment of attorney fees from Husband, based on the amount of the final judgment that Husband would owe to Wife and his limited financial resources. Husband was unable to obtain financing and the court ordered the property sold.

Judgment

On July 14, 2010, the trial court entered a dissolution judgment containing several findings, including the following findings in pertinent part. The court found, pursuant to the parties stipulation, that the present value of Wife's Boeing pension plan was $33,396. The court awarded the Boeing plan entirely to Wife and credited Husband $16,698 in the property division.

The trial court also found that Husband elected a ten-year payout of the Hughes pension plan, including the community's interest. The Hughes plan had a value of $117,906.62. Wife's share of the community's interest in the plan was $58,953.31. Her share was reduced by $4,111.52 for her proportionate share of the income taxes that Husband paid. Therefore, Husband was ordered to pay Wife $54,041.80 as her share of the community interest in the Hughes pension plan. The court found that Wife was entitled to interest pursuant to section 3287 at the rate of five percent, totaling $16,995.56.

The community property interest in the CTSP, which was rolled over to the Morgan Stanley IRA, was $45,574. Husband was ordered to pay Wife the amount of $22,786.89 as her share.

The community property interest in the Raytheon/Fidelity IRA was $1,642.32. Husband was ordered to pay Wife the amount of $821.16 for her share.

The trial court found the community property interest in the Rockwell plan was $26,613.50. Wife was ordered to pay $13,306.75 to Husband for his share.

The fair market value of the family residence in Los Angeles was $237,000. The outstanding mortgage balance at the date of separation is $130,409. The trial court used the mortgage balance as of the date of separation in order that Husband would receive a partial credit for payments he made after the date of separation. The court found that one-half of the fair rental value of the property is not equal or in excess of the principal payments. The equity in the family residence was $106,591. Husband failed to document his claim that he used $15,000 of his separate property for the down payment at the time of purchase, and therefore, the court denied his request for reimbursement.

The trial court found that, pursuant to the stipulation of the parties, Husband spent $11,000 for improvements to the family residence after the date of separation. After subtracting the amount of the improvements from the equity amount, the court divided the net equity in half and found Wife's share was $47,795.50. However, Wife owed Husband $5,310 for funds spent on her behalf around the time of separation which she agreed to repay from her share of the equity. Therefore, the court ordered Husband to pay $42,485.50 to Wife for her share of the home equity.

The trial court awarded to Husband the truck which he owned on the date of separation. The court denied Husband's request to reconsider his withdrawal of $20,500 from the CTSP/Morgan Stanley IRA to purchase the Dodge Ram. The court found Husband told Wife that he was going to "self-finance" the purchase. However, he removed the funds, purchased the truck outright, and never repaid the funds. Wife did not know or consent to Husband's unilateral withdrawal of $20,500 to purchase the truck. Based on these findings, the court disregarded the withdrawal when calculating Wife's portion of the CTSP/Morgan Stanley IRA. Wife was awarded a 1999 Toyota Corolla and a Mercury Sable.

The trial court found that Wife assumed three community debts as of the time of separation: Citibank Visa in the amount of $3,174; Citibank MasterCard in the amount of $4,351; and Macy's in the amount of $1,366.92. Husband owes Wife $4,445.96 for his share of these debts.

Husband testified without contradiction that he had separate property funds in the CTSP/Morgan Stanley IRA. Therefore, the trial court awarded Husband any funds in the account as of the date of separation in excess of the CTSP funds.

Based on all of the findings and offsets, the trial court ordered Husband to make an equalization payment of $111,572.12 to Wife. The court denied Wife's request for spousal support and directed each party to pay his or her own attorney fees. Husband filed a timely notice of appeal from the judgment.

DISCUSSION

Standard of Review

"In dividing the community estate as part of a marital dissolution, the court must generally effect an equal division. [Citation. Fn. omitted.] In particular regard to retirement plans, the 'court shall make whatever orders are necessary or appropriate to ensure that each party receives the party's full community property share in any retirement plan . . . .' [Citation.] And when the court concludes that property contains both separate and community interests, the court has very broad discretion to fashion an apportionment of interests that is equitable under the circumstances of the case. [Citations.] The court is not bound by a particular method of allocation. Rather, the court should divide the property '"by whatever method or formula will 'achieve substantial justice between the parties.'" [Citation.]' [Citation.]" (In re Marriage of Gray (2007) 155 Cal.App.4th 504, 514, fn. omitted.)

Prejudgment Interest on Hughes Pension Plan

Husband contends the trial court erred by awarding prejudgment interest under section 3287 on Wife's share of the Hughes pension plan for two reasons. First, Husband argues that because Wife "signed over" her share of the Hughes pension plan and never demanded payment of her share, he did not know that there was a debt. Therefore, her actions as a creditor prevented him from paying the debt. Second, he argues that the amount he owed to Wife could only be ascertained by a judicial determination based on conflicting evidence, and therefore, he cannot be held to have known the amount owed and is not subject to prejudgment interest. We agree that the amount owed to Wife as her share of the Hughes pension plan was not capable of being made certain until the issue was decided by the court in this case.

Section 3287 provides in pertinent part: "(a) Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt."

"'"Damages are deemed certain or capable of being made certain within the provisions of subdivision (a) of section 3287 where there is essentially no dispute between the parties concerning the basis of computation of damages if any are recoverable but where their dispute centers on the issue of liability giving rise to damage." [Citations.]' [Citation.]" (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729.) "The test for recovery of prejudgment interest under section 3287, subdivision (a) is whether defendant (1) actually knows the amount of damages owed plaintiff, or (2) could have computed that amount from reasonably available information. [Citation.] 'If the defendant does not know or cannot readily compute the damages, the plaintiff must supply him with a statement and supporting data so that defendant can ascertain the damages. [Citation.]' [Citation.]" (KGM Harvesting Co. v. Fresh Network (1995) 36 Cal.App.4th 376, 390-391.) "'"'The statute . . . does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, "depends upon a judicial determination based upon conflicting evidence and it is not ascertainable from truthful data supplied by the claimant to his debtor." [Citations.]' [Citation.] Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate. [Citation.]" [Citation.]' [Citations.]" (Duale v. Mercedes-Benz USA, LLC, supra, at p. 729.) When the facts are not in dispute, "we independently review whether and when buyer's damages were certain or capable of being made certain by calculation." (KGM Harvesting Co. v. Fresh Network, supra, at p. 391.)

In this case, the amount that Husband owed to Wife as her half of the community's interest in his Hughes pension plan was disputed and could not be computed until issues were resolved by the dissolution judgment. The community had an interest in only a portion of the Hughes pension plan. Prior to trial, Wife never requested payment of any amount as her share of the Hughes pension plan. In fact, she signed paperwork relinquishing any interest that she had. After a separation of nine years, it was Husband who filed dissolution to obtain a division of the community's assets and liabilities. Wife initially failed to appear and Husband stipulated to set aside Wife's default. At trial, Husband asserted that Wife was entitled to an amount based on the value of the Hughes pension plan at the date of separation. Wife claimed that the community's interest should be calculated based on Husband's entire period of employment. Under Wife's calculations, the community benefited from Husband's additional post-separation contributions and service, resulting in more than $7,000 being credited to the community than under Husband's calculations. We conclude that Wife's share of the community's interest in Husband's Hughes pension plan was not certain until it was determined by the trial court in this case. Therefore, it was error to award prejudgment interest pursuant to section 3287 and the equalization payment ordered in the judgment must be reduced by $16,995.56.

Rockwell Plan

Husband contends the trial court abused its discretion by calculating his share of Wife's Rockwell plan based on the value of the account at the date of separation, rather than the amount that was rolled over into a Fidelity IRA in 2007. We find no abuse of discretion.

In calculating the community's interest in 401k savings plans, the trial court used the balances in the accounts as of the date of separation. The trial court concluded that neither party should bear the burden of losses or benefit from appreciation generated by the other party's investment decisions. Therefore, the court used the balances in the Raytheon plan, the Rockwell plan, and the CTSP/Morgan Stanley IRA as of the date of separation.

Husband argues that the trial court used the balance of the CTSP plan as of March 1, 1998, rather than the date of separation, as evidence that the parties' savings plans were not treated equally. This is incorrect. The trial court found that after March 1, 1998, Husband withdrew $20,500 from his Morgan Stanley IRA without Wife's consent to his unilateral withdrawal without repayment. Therefore, the trial court disregarded these withdrawals in calculating the balance of the CTSP funds as of the date of separation. Husband did not show that he incurred any losses to the CTSP/Morgan Stanley IRA between March 1 and May 3, 1998, other than his withdrawal of funds. Based on the trial court's findings, there was no change in the community's interest between March 1 and May 3, 1998.

Husband supports his argument that the pension and savings plans were divided inequitably by noting that his Hughes pension plan was valued as of the date of withdrawal 15 months after the parties' separation, rather than the date of separation. However, the trial court was consistent in its treatment of the pension plans. Both Husband's Hughes pension and Wife's Boeing pension were valued as of the date of withdrawal, or in the case of the Boeing pension, the present value. Neither pension plan was valued as of the date of separation. We find that the trial court was consistent and fair in the valuation dates selected for the pension plans and the savings plans. No abuse of discretion has been shown.

Equity

Husband contends the trial court failed to give him credit for the additional principal payments that he will make on the mortgage between the date of the judgment and the date the property is sold. This is incorrect. In calculating the community's equity in the property, the court deducted the amount of the principal at the date of separation from the present value of the property. Under this method, any payments of principal that Husband makes after the date of separation reduces the amount required to pay off the mortgage, while Wife's share of the equity remains fixed. Therefore, Husband will receive the benefit of the difference in the increased proceeds of the sale.

Purchase of Truck and Valuation of CTSP

Husband contends there is no substantial evidence to support the trial court's finding that the parties agreed Husband would repay the funds withdrawn from the CTSP/Morgan Stanley IRA to purchase the truck. He further argues that the court should have calculated the community's interest in the CTSP/Morgan Stanley IRA based on the amount in the account on the date of separation. We disagree.

Wife testified that Husband took funds out of the CTSP/Morgan Stanley IRA for a truck purchase which he said he would repay with interest instead of taking out a bank loan. The trial court found Wife's testimony to be credible. Therefore, Wife's testimony was sufficient to establish that she did not consent to Husband's unilateral withdrawal of funds to purchase a truck without any repayment of the community's interest. On the date of separation, Husband received an asset worth $20,500. If Husband repaid the funds, it was his burden to prove that fact. The court did not abuse its discretion by disregarding withdrawals for the purchase of the truck and relying on the amount of the CTSP on March 1, 1998, as the amount of the community's interest in the CTSP/Morgan Stanley IRA on the date of separation, as if the withdrawals had not occurred.

Community Debts

Husband contends the trial court abused its discretion by ordering him to pay half the amount of Wife's credit card debts as of the date of separation, because Husband had an equal amount of debt. The evidence at trial does not support Husband's contention. Husband refers to an expense account balance that he owed to Kinecta at the date of separation. However, this debt was expressly accounted for in the parties' stipulation concerning the division of funds in their bank accounts at the time of separation. Wife's debts at the time of separation are not covered by the stipulation. Wife incurred the credit card debts during the marriage and there is no evidence suggesting that they are not community debts. We find no abuse of discretion in the court's ruling requiring Husband to contribute half the amount owed for credit card debts in Wife's name as of the date of separation.

Morgan Stanley Account

Husband contends that he was awarded $6,760.61 in the CTSP/Morgan Stanley IRA as his separate property. This is incorrect. The trial court calculated and divided the community property interest in the CTSP/Morgan Stanley IRA. The court awarded any remaining funds in the account to Husband as his separate property. Therefore, Husband's separate property funds were the amount remaining in the account, if any, after the community's interest was accounted for.

DISPOSITION

The judgment is modified to reduce the equalization payment that Fred C. Nichols owes to Janis M. Nichols by $16,995.56 to $94,576.56. As modified, the judgment is affirmed. Appellant Fred C. Nichols is awarded his costs on appeal.

KRIEGLER, J.

We concur:

TURNER, P. J.

MOSK, J.


Summaries of

Nichols v. Nichols

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE
Nov 4, 2011
B227306 (Cal. Ct. App. Nov. 4, 2011)
Case details for

Nichols v. Nichols

Case Details

Full title:In re Marriage of FRED C. and JAMS M. NICHOLS. FRED C. NICHOLS, Appellant…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

Date published: Nov 4, 2011

Citations

B227306 (Cal. Ct. App. Nov. 4, 2011)