Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Kern County Ct. No. S-1501-FL-574340. James L. Compton, Temporary Judge, Jerold L. Turner, Judge.
Pursuant to the California Constitution, article VI, section 21.
Law Offices of Edward J. Quirk, Jr., and Edward J. Quirk, Jr., for Appellant.
Law Offices of Marjorie G. Fuller, Marjorie G. Fuller; Edward J. Thomas for Respondent.
OPINION
CORNELL, J.
Cathy L. Rother and Carl B.A. Lange III separated in June of 2000 after six years of marriage. During the marriage, they entered into a community property agreement and a trust agreement. In the dissolution of marriage action, Lange challenged the effectiveness of these two agreements to transmute his separate property interest in his state retirement to community property and, if there was a valid transmutation, Lange claimed a right of reimbursement. The trial court ruled against him on both issues. Lange also sought to set aside the trial court’s statement of decision eight months after its entry. That request was denied. After entering into a stipulation regarding the value of real property awarded to Rother, Lange sought to set aside the stipulation and the trial court denied the request. Lange challenges these rulings. We will affirm the judgment.
FACTUAL AND PROCEDURAL SUMMARY
Rother and Lange married on June 14, 1994. Each had been married previously, had children from prior marriages, and owned separate property. Rother had been a legal secretary and worked for the Kern County Superintendent of Schools. Lange also worked for the county superintendent of schools as a union negotiator.
On May 2, 1996, Rother and Lange went to an estate planning attorney, Nancy Oehler, and asked her to prepare the necessary documents to carry out their intentions regarding ownership of their property and to create an inter vivos trust. Oehler suggested a community property revocable trust, to which the parties assented. During the May 2 meeting, Oehler provided a detailed explanation of the effects of the documents. The following day Oehler wrote to Lange and Rother confirming the substance of their discussion. In part, Oehler’s letter stated:
“During our conference we reviewed the characterization of all of your separate and community property assets. You have advised me that it is your intention to recharacterize your separate properties to community property interests for your benefit now and the later benefit of each of your heirs. You should understand that such transmutation to community property could affect each of your property rights upon dissolution of this marriage or at your deaths.”
In her letter, Oehler also advised the parties of their right to seek separate, independent counsel. She stated she would not prepare the documentation until the parties acknowledged in writing the inherent conflict from a transmutation of their separate property to community property and specifically waived that conflict. Both Lange and Rother signed and returned the letter acknowledging that they wanted to transmute their separate property to community property and waiving the right to obtain independent counsel.
Initially, Oehler planned to place all the property into a living trust. On June 18, 1996, Oehler sent Lange and Rother a letter and enclosed a proposed living trust document. In this letter, Oehler again confirmed that it was their intent to transmute all of their properties to community property. Oehler’s letter also specifically stated, “It is not possible at the same time to provide for the return of any such property to its separate property nature in the event of a dissolution of your marriage.”
The proposed living trust provided that Lange and Rother acknowledged that the assets in the trust were community property in which each of them had an equal interest, and that any property not held as community property when acquired was transmuted to community property. The proposed living trust also specified that upon dissolution of the marriage, the real and personal property owned by them at that time would be divided equally. There also was a proviso that, in the event of a dissolution of the marriage, Rother be allocated the property on Velda Court as part of her one-half interest in the community property.
Lange wrote to Oehler on September 3, 1996, stating he had read the documents. He also asked 30 separate specific questions about the provisions of the living trust. None of the questions indicated any confusion regarding the effect the proposed trust would have on his then separate property. Oehler responded to Lange’s letter in writing and answered each specific question.
Although the estate planning process began in 1996, the process did not conclude until 1998, after the parties had been married for four years. The living trust documents finally were signed on July 8, 1998, in Oehler’s office. Prior to signing, Oehler again informed the parties that they would be waiving any right to reimbursement or to claim assets were separate property in the event of a subsequent marital dissolution action.
As of July 1998, Rother contributed the only real property in the living trust. Lange expressed concern that there had been unequal contributions to the living trust. Oehler asked Lange if she should prepare a community property agreement, in addition to the living trust, confirming that all the parties’ assets were transmuted and held as community property. Lange agreed.
Lange faxed Oehler a list of all property he and Rother owned, along with an estimate of value for each item. Oehler prepared a community property agreement based upon the information provided by Lange and discussed the agreement with the parties. Lange and Rother signed the community property agreement on September 6, 1998.
The community property agreement included two life insurance policies that were expressly excepted from transmutation to community property. The community property agreement also contained an exhibit A, which listed real and personal property being transmuted to community property. Among the items listed in exhibit A was Lange’s California Public Employees’ Retirement System (CalPERS) account.
The community property agreement also specified that the parties’ interests in the transmuted assets shall be “equal as provided in section 751 of the California Family Code.” Lower on the same page, the community property agreement contained language indicating that any separate or community property payments made would be deemed a gift for the benefit of the community “with respect to the above-referenced properties, without right of reimbursement to the payor.”
In June 2000, the parties separated and Rother filed for dissolution of the marriage. Lange challenged the effectiveness of the community property agreement and the living trust agreement to transmute his interest in his CalPERS retirement acquired before marriage to community property. Lange claimed that pursuant to Family Code section 852, the community property agreement was insufficient to transmute the retirement account and that Rother breached her fiduciary duty in acquiring an interest in his assets acquired before marriage. Alternatively, Lange claimed that if the asset was transmuted, he had not waived his right to seek reimbursement pursuant to section 2640.
All further statutory references are to the Family Code unless otherwise noted.
Rother responded that the requirements of section 852 had been met and that section 2640 did not apply.
A hearing to determine the effectiveness of the community property agreement commenced on October 31, 2001, and continued on December 3, 2001, and February 27, 2002. At the hearing, only Oehler, Lange, and Rother were called as witnesses. The parties stipulated that if called to testify, Rother would testify to the facts as set forth in her trial brief and to the same facts as Oehler.
Oehler testified that at the May 2, 1996, meeting, the subject of transmutation came up in the context of a possible dissolution of the marriage. Oehler advised the parties that in the event of a dissolution of the marriage, the transmuted property would be divided equally between them and that neither could make a claim for reimbursement or claim that the property was separate property. Oehler testified that it was the parties’ intent to transmute all property, with limited exceptions, to community property from the very first meeting.
Lange made several claims in his testimony, including (1) he did not remember signing the community property agreement; (2) he did not understand it; (3) it was not his signature on the document; (4) the exhibits had been manipulated; and (5) it was never his intent that his CalPERS retirement be transmuted to community property.
Lange testified it was his intent to create a trust that would take care of their children and grandchildren, not to transmute any property. He testified he understood what “transmutation” meant, but denied he ever intended to transmute his retirement. Lange acknowledged, however, that he never mentioned in any letter or conversation to Oehler, or to Rother, that he intended to keep his retirement as separate property.
When asked if it had been explained to him that “in the event of a divorce this was not going to be redone and each of you would get 50/50,” Lange responded, “That is the way I understood it.” Lange claimed he did not remember any meeting in Oehler’s office when the community property agreement was signed and he did not remember Oehler telling him he could not make a reimbursement claim. Lange conceded, however, that he understood from Oehler’s June 18, 1996, letter that no reimbursement claims could be made.
Finally, Lange testified that he negotiated labor agreements for a living and had no difficulty understanding agreements. Lange also acknowledged he understood what “transmutation” meant and that he had intended to transmute his separate property, except for his retirement.
The trial court issued its ruling on August 15, 2002, finding that the community property agreement was entered into freely and voluntarily by both parties. The trial court found that the community property agreement was enforceable and directed Rother’s counsel to prepare a statement of decision.
A proposed statement of decision was served on Lange on August 28, 2002; it was signed by the trial court on August 29 and filed September 6, 2002. The statement of decision contained numerous findings, including (1) each party had made a conscious decision to transmute their separate property into community property; (2) the process of preparing the documentation and transmuting the property took place over a two-year period; (3) the parties had discussed the possibility of a dissolution of marriage during the document preparation stage; (4) the parties were aware that in the event of a dissolution of their marriage, they would have no claim to reimbursement; and (5) Lange’s CalPERS retirement account had been transmuted into community property.
On May 5, 2003, eight months after the statement of decision was filed, Lange moved to set aside the statement of decision to allow him to file objections. The trial court denied the motion, stating that Lange could not “come in months later to attempt to challenge the court’s [findings] after expressing no initial objection to the statement of decision.” (Capitalization omitted.)
On September 26, 2003, an order was filed stating (1) Lange’s CalPERS retirement benefits were transmuted to community property; (2) there was no right of reimbursement; (3) section 2640 was not applicable; and (4) Lange had no right to reimbursement.
Trial on the remaining issues was held on July 14, 2003, at which time the parties stipulated to the value and distribution of a number of assets. By stipulation, the McNutt property was awarded to Rother at a value of $144,000. For a variety of reasons the matter was continued several times and eventually came on for further hearing on December 6, 2004.
At the commencement of the December 6 hearing, Lange requested that the trial court allow a reevaluation of the McNutt property because he believed it had increased in value since the date of the stipulation. The trial court refused, stating that “the matter was established as [a] matter of legal agreement in court” and both parties were bound by the agreement.
The trial court issued judgment on June 15, 2006. The trial court found that Lange’s interest in his CalPERS retirement plan was community property up to the date of separation, with no right of reimbursement. The McNutt property was confirmed to Rother at the stipulated value. Both parties signed the judgment, acknowledging that they understood and agreed to its terms.
DISCUSSION
Lange contends that the community property agreement did not transmute his separate property interest in his CalPERS retirement to community property and, alternatively, that he is entitled to reimbursement under section 2640. He further argues that the trial court erred in denying his request to (1) set aside the statement of decision, and (2) revalue the McNutt property.
I. CalPERS Retirement
Transmutation
Lange contends that the community property agreement was insufficient to transmute his CalPERS retirement separate asset into community property because the document did not contain an express declaration that he and Rother were each giving up their separate property interest in their retirement accounts.
Section 852 does require an express writing for there to be a valid transmutation. (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1100 (Benson).) Section 852, subdivision (a) provides that “A transmutation of real or personal property is not valid unless made in writing by an express declaration.” An “‘express declaration’” means language expressly stating that a change in the character or ownership of the asset is being made. (In re Marriage of Starkman (2005) 129 Cal.App.4th 659, 664 (Starkman).)
In deciding whether a transmutation has occurred, we interpret the written instrument without resort to extrinsic evidence. (Starkman, supra, 129 Cal.App.4th at p. 664.) Furthermore, an appellate court is not bound by the trial court’s determination and exercises its independent judgment in interpreting the written instrument. (Ibid.) Proof of transmutation is not difficult to meet. (In re Marriage of Barneson (1994) 69 Cal.App.4th 583, 593.)
The community property agreement provided:
“all real and personal property presently owned by either of us or in which we may have any interest, in whatever record form, and regardless of when the same may have been acquired, is our community property, as that term is defined under California law.”
The community property agreement also specifically provided that the parties’ “community assets shall expressly include those properties described in Exhibit ‘A’ attached hereto and incorporated herein by this reference.” Exhibit A specifically listed Lange’s and Rother’s CalPERS retirement accounts. The community property agreement further provided that all after-acquired assets, except those acquired by gift, devise, or inheritance, were deemed to be community property. Assets acquired by gift, devise, or inheritance could be “the subject of one or more separate agreements transmuting such property to our community property, but shall not be so transmuted by this agreement.”
A written instrument transmuting separate property to community property need not use the terms “‘transmutation,’” “‘community property,’” or “‘separate property’” to be effective. (Starkman, supra, 129 Cal.App.4th at p. 664.) Here, however, the community property agreement specifically provided that all property, with limited exceptions, was “our community property.” The community property agreement also expressly stated that property acquired by gift, devise, or inheritance may be the subject of future “agreements transmuting such property to our community property, but shall not be so transmuted by this agreement.”
The community property agreement is clear and unambiguous regarding the intent of the parties to transmute all their real and personal property, with limited specified exceptions, to community property. Lange’s interest in his CalPERS retirement account was not identified as an exception to transmutation; rather, it was listed expressly in exhibit A as one of the assets being transmuted to community property. As of the date the community property agreement was signed, September 6, 1998, all interest in Lange’s CalPERS retirement account was transmuted to community property.
Lange claims the Starkman decision supports his position that there was no valid transmutation. He is mistaken. In Starkman, the appellate court noted that the wife asserted that a trust instrument had effected a transmutation of the husband’s considerable separate property. In support of her position, wife relied upon the trust instrument itself and a letter. In ruling against wife’s position, the appellate court noted that the letter was inadmissible extrinsic evidence and that the trust instrument contained numerous provisions referencing the continued separate property nature of assets transferred to the trust. (Starkman, supra, 129 Cal.App.4th at p. 665.)
We conclude the community property agreement here constituted an express writing transmuting Lange’s separate property interest in his CalPERS retirement to community property.
Right to Reimbursement
Having concluded that Lange’s CalPERS retirement was transmuted to community property, we address his contention that he has a right to reimbursement for the value of his separate property contribution to the community pursuant to section 2640, subdivisions (a) and (b). We disagree.
Section 2640 addresses the right of reimbursement. The parties disagree on the application of this statute, however, with Rother claiming section 2640 applies only to real property and therefore is inapplicable to a CalPERS retirement account. The language of section 2640, subdivision (b), however, is not so restricted. Regardless, assuming section 2640 applies to personal property transmutations, like the CalPERS retirement account, the evidence establishes that Lange specifically waived any right to reimbursement that may have existed under that code section.
Subdivision (b) of section 2640 provides in part that 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 separate property contributions to the community.
A waiver of the legal right to reimbursement requires an intentional act with knowledge of the right being waived. (In re Marriage of Carpenter (2002) 100 Cal.App.4th 424, 428 (Carpenter).) The requirement under section 2640, subdivision (b) that there be a written waiver of the right to reimbursement does not require a document with the magic words “‘I waive reimbursement.’” (Carpenter, at p. 427.) What is required is a writing that has the effect of a waiver. (Ibid.)
The community property agreement that Lange signed provided that the separate property was transmuted to community property, with the parties’ interests thereafter deemed to be “equal.” The community property agreement also contained language providing that any further contributions or payments to or for the benefit of the transmuted property was “without right of reimbursement.”
Furthermore, Oehler consistently informed Lange in writing that entering into the agreement could affect his rights upon dissolution of the marriage. Oehler testified that prior to obtaining the parties’ signatures on the community property agreement, she specifically informed the parties they would have no right to reimbursement if they signed that document. Lange even conceded during his testimony that he understood the documentation would preclude any right to reimbursement with respect to any transmuted property.
Lange has the burden of establishing error in the trial court’s ruling. (In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1056 (Cochran).) Lange has failed to meet that burden. The evidence supports the trial court’s finding that the right to reimbursement was waived by Lange. (Carpenter, supra, 100 Cal.App.4th at pp. 428-429.) Clearly, Lange signed the community property agreement with knowledge that it constituted a waiver of any right to reimbursement. Lange’s contention that his CalPERS retirement account was to be an exception to that waiver fails.
We conclude Lange waived any right to reimbursement from transmutation of his CalPERS separate property interest to community property.
II. Statement of Decision
Lange contends the trial court erred in not granting his request to set aside the statement of decision because it failed to address section 2640. Lange’s request was made some eight months after the statement of decision was filed. Furthermore, Lange initially did not request a statement of decision in the trial court.
We do not need to decide whether there was any error on the part of the trial court in failing to set aside the statement of decision. Lange suffered no prejudice because of our conclusion that the CalPERS retirement was transmuted and that Lange waived any right to reimbursement. (Cochran, supra, 87 Cal.App.4th at p. 1062.)
III. Value of McNutt Property
Lastly, Lange claims the trial court erred when it refused to set aside the stipulation regarding the value of the McNutt property. We disagree.
At the beginning of the continued trial on the remaining assets, Lange sought to rescind the stipulation as to one item, the McNutt property. The value was agreed to as part of a larger stipulation in which the parties agreed to the value of numerous properties, their distribution, and certain liabilities. Lange asserted there had been a change in value, but offered no specifics or any evidence of the current value.
Rother objected, noting that a number of assets had been allocated with agreed values, and Lange was not seeking to reevaluate the assets allocated to him, only an asset allocated to her.
The trial court ruled that “the matter was established as [a] matter of legal agreement in court.” The trial court further noted that the stipulation was entered into at trial on the asset, agreed to by both parties, and accepted by the trial court at that time.
Whether to permit a reevaluation of one asset after trial on the asset and after it has been awarded to one party, but before entry of judgment, and where there is no intervening sale, is purely a discretionary call for the trial court. (In re Marriage of Hahn (1990) 224 Cal.App.3d 1236, 1240 (Hahn).) The trial court cannot be required to “take new evidence and to continually redistribute community assets until the moment a judgment is formally entered.” (Id. at p. 1241.)
Lange essentially wanted to reevaluate one asset awarded to Rother because of a lapse in time from the start of trial to the continued trial date. He wanted to reap the benefit of the vagaries of the marketplace without subjecting himself to any of the liabilities. The market for real property as of this writing might cause him to reconsider his position on this issue. Under the circumstances, the trial court did not abuse its discretion in refusing to set aside the stipulation as to one asset. (Hahn, supra, 224 Cal.App.3d at p. 1241.)
DISPOSITION
The judgment is affirmed.
WE CONCUR: WISEMAN, Acting P.J., HILL, J.