Opinion
B312121
12-13-2022
In re Marriage of MARY COOK and MARINKO MARKOVIC. v. MARY COOK, Respondent. MARINKO MARKOVIC, Appellant,
Joel S. Seidel for Appellant. Gorman & Miller and Kenneth L. Heisz for Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. 19STFL08962, Doreen B. Boxer, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed in part; reversed in part and remanded.
Joel S. Seidel for Appellant.
Gorman & Miller and Kenneth L. Heisz for Respondent.
1
CHAVEZ, J.
Marinko Markovic appeals from a judgment granting Mary Cook's petition for dissolution of marriage and determining that a July 25, 2013 quitclaim deed (quitclaim deed) was not a valid transmutation of real property under Family Code section 852, subdivision (a) (section 852(a)). We find that the quitclaim deed, on its face, was a valid transmutation of property under section 852(a). As required, our decision is made without consideration of extrinsic evidence. We therefore reverse the portion of the judgment declaring the quitclaim deed void and remand the matter for further proceedings on the question of undue influence and any other relevant factual circumstances.
FACTUAL BACKGROUND
As many of the background facts are not relevant to the issue before us, we keep them brief. Cook and Markovic first met in approximately 2009. Cook was living in Idaho, and Markovic was a traveling salesman who came to Cook's door to sell her meat. Cook was 84 years old at that time, and Markovic is 35 years Cook's junior.
There is a conflict in the evidence as to exactly when the parties met. Cook also testified at different times that they met in 2008 or 2010.
Cook was 95 years old at the time of the October 2020 trial.
Markovic returned to the residence, and eventually Cook offered him employment as an assistant, doing home maintenance, driving her to the doctor, getting groceries and cooking. Cook paid him $5,000 per month. Markovic moved into Cook's Idaho property in approximately 2010. 2
The parties married on June 28, 2013. There was neither a wedding ceremony nor witnesses. Instead, someone came to Cook's Malibu, California residence and had her sign a document that was a marriage certificate. The testimony concerning whether Cook wanted to marry Markovic was disputed. At the time of the marriage, Cook had a sole and separate property interest in real property located on Shearwater Lane, Malibu, California.
On July 25, 2013, Cook and Markovic signed a quitclaim deed. The quitclaim deed provided:
"FOR NO CONSIDERATION, MARY M. COOK, Trustee of The Mary Cook Revocable Trust, dated February 6, 1998, hereby REMISES, RELEASES AND QUITCLAIMS to MARY M. COOK and MARINKO MARKOVIC, Wife and Husband as Community Property, with Right of Survivorship the following described real property in the City of Malibu, County of Los Angeles, State of California:
"SEE LEGAL DESCRIPTION ON EXHIBIT 'A' ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE FOR ALL PURPOSES.
"(commonly known as 6817 Shearwater Lane, Malibu CA 90265)" (Boldface omitted.)
Cook signed the document in her capacity as trustee of the Mary Cook Revocable Trust. Cook and Markovic signed the documents as grantees, accepting delivery of the transfer document.
PROCEDURAL HISTORY
On July 29, 2019, Cook filed a petition for dissolution and nullity of the marriage. The petition included a request for a 3 judicial determination that the July 25, 2013 quitclaim deed did not effectuate a transmutation of Cook's Malibu residence and should be set aside.
The matter proceeded to a one-day bench trial on October 13, 2020.
On January 5, 2021, the trial court issued its "Tentative Statement of Decision After Trial Re: Characterization of Specified Property," which became the "Final Statement of Decision after Trial." The trial court's statement of decision was limited to the issue of whether the quitclaim deed constituted sufficient evidence that the Malibu property was transmuted from Cook's sole and separate property to the parties' community property. The trial court determined that the quitclaim deed did not constitute a valid transmutation because it did not expressly state that Cook intended to change the character of the property as required by section 852(a). Further, the trial court found, the quitclaim deed did not specify what interest the Mary Cook Revocable Trust had in the property before or after the quitclaim deed, and what interest was being transferred. Thus the quitclaim deed was ordered set aside.
The court noted that Cook also argued she was the victim of undue influence and elder abuse. Because it held that the quitclaim deed was not a valid transmutation, the court declined to make findings on these issues, determining that they were moot.
On February 19, 2021, the trial court entered its judgment granting Cook's petition for dissolution of the marriage, determining that the quitclaim deed was not a valid transmutation and was therefore void, and reserving all other issues for trial. 4
Notice of entry of judgment was served on February 19, 2021. On April 1, 2021, Markovic filed a notice of appeal from the judgment.
DISCUSSION
I. Standard of review
The sole question in this case is whether the quitclaim deed met the requirements of section 852(a) and therefore effectuated a transmutation of Cook's interest in the Malibu residence from Cook's separate property to the parties' community property.
"'In deciding whether a transmutation has occurred, we interpret the written instruments independently, without resort to extrinsic evidence.'" (In re Marriage of Begian & Sarajian (2018) 31 Cal.App.5th 506, 512 (Begian & Sarajian).) We are not bound by the trial court's interpretation. (Ibid.) "Thus, we review the question de novo, exercising our independent judgment to determine whether the proffered writing contains the requisite language to effectuate a transmutation under section 852(a)." (Ibid.)
II. Section 852(a)
Section 852(a) provides that "[a] transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." The Legislature enacted the writing requirement "to remedy problems which arose when courts found transmutations on the basis of evidence the Legislature considered unreliable." (Estate of MacDonald (1990) 51 Cal.3d 262, 269 (MacDonald).) 5
In MacDonald, the Supreme Court explained that the transmutation requirements are not satisfied by "just 'any writing.'" (In re Brace (2020) 9 Cal.5th 903, 935 (Brace), quoting MacDonald, supra, 51 Cal.3d at pp. 269, 272.) Instead, "[t]he adversely affected party must make an '"express declaration"' in an instrument that 'contains language which expressly states that the characterization or ownership of the property is being changed.'" (Brace, at p. 935, quoting MacDonald, at p. 272.) In MacDonald, the high court held that a wife's signatures on certain IRA account agreements were insufficient to transmute her community property interest in the accounts to become her husband's separate property. (MacDonald, at pp. 266-267.)
The MacDonald court specified that it was not holding that "use of the term 'transmutation' or any other particular locution" was required. (MacDonald, supra, 51 Cal.3d at p. 273.) Although such a writing "might very well contain the words 'transmutation,' 'community property,' or 'separate property,' it need not." (Ibid.) The high court noted that a sentence as simple as, "'I give to the account holder any interest I have in the funds deposited in this account,'" would suffice to effectuate a transmutation. (Ibid.)
The requirements for a valid transmutation under section 852(a) "can be divided into two basic components: (1) a writing that satisfies the statute of frauds; and (2) an expression of intent to transfer a property interest." (Estate of Bibb (2001) 87 Cal.App.4th 461, 468 (Bibb).) In Bibb, a grant deed conveying real property from a husband to himself and his wife as joint tenants validly transmuted the real property from the husband's separate property into property held in joint tenancy. (Id. at pp. 466-469.) 6
III. The quitclaim deed
There is no dispute in this case that the quitclaim deed, which was signed by Cook both as grantor, in her capacity as trustee, and grantee, was "made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." (§ 852(a).) "Thus, we need only determine whether the deed, independent of extrinsic evidence, contains a clear and unambiguous expression of intent to transfer an interest in the property." (Bibb, supra, 87 Cal.App.4th at p. 468.)
Deeds are commonly used to transfer interests in real property. (See Bibb, supra, 87 Cal.App.4th at pp. 468-469; see also Estate of Stephens (2002) 28 Cal.4th 665, 671-672 ["A deed is a written instrument conveying or transferring the title to real property; it is an executed conveyance and operates as a present transfer of the real property."].) To effectively transfer real property, a deed "'"must be written and must name a grantor and a grantee. It must be subscribed by the grantor or the grantor's agent, and it must be delivered to, and accepted by, the grantee."'" (In re Marriage of Wozniak (2020) 59 Cal.App.5th 120, 133-134.) The quitclaim deed at issue met these "'essential requirements to convey real property [pursuant to a deed] under California law.'" (Id. at p. 133.)
Section 852(a) provides additional requirements to effectuate a transmutation of property between married individuals. Pursuant to section 852(a), the deed must also contain language that expressly states that the characterization or ownership of the property is being changed. (Brace, supra, 9 Cal.5th at p. 935.) The quitclaim deed at issue satisfies this requirement. Cook, in her capacity as trustee, quitclaimed the property to herself and Markovic as community property, with 7 right of survivorship. The quitclaim deed, by which Cook as trustee indicated that the trust "remise[d], release[d] and quitclaim[ed]" the property "to Wife and Husband as Community Property," clearly conveyed that the ownership of the property was being changed. (Boldface and some capitalization omitted.) Therefore, it was sufficient to satisfy the standard set forth in MacDonald .
The words "'"release, remise and quitclaim," are the words commonly used in simple quitclaim deeds. [Citation.]' [Citation.] 'A quitclaim deed transfers whatever present right or interest the grantor has in the property.'" (City of Manhattan Beach v. Superior Court (1996) 13 Cal.4th 232, 239.) The quitclaim deed transferred whatever interest the Mary Cook Revocable Trust had in the property to Cook and Markovic as wife and husband. Cook points out that it was not established what precise interest the trust held in the property at issue. We need not delve into this question, as our task is limited to determining whether the language of the quitclaim deed served as an effective transmutation of whatever interest the Mary Cook Revocable Trust had in the property. If necessary, the question of the precise nature of the interest that was transmuted may be explored on remand.
It is true that the character of the property, as held in the trust, was not explicitly set forth in the quitclaim deed, therefore the document, on its face, is unclear as to whether the character of the property was being changed. However, the writing need not contain the words "transmutation," "community property," or "separate property." (MacDonald, supra, 51 Cal.3d at p. 273.) Thus, a specific characterization of property as separate or community property is not required. Instead, the grantor may expressly state that the ownership of the property is being changed. The Supreme Court made it clear that a sentence as 8 simple as, "'I give to the account holder any interest I have in the funds deposited in this account,'" would suffice to effectuate a transmutation. (MacDonald, at p. 272.) Cook's written statement that she "remise[d], release[d] and quitclaim[ed]" the property to herself and her husband was an express statement that the ownership of the trust's interest in the property was being changed and thus was sufficient to effectuate a transmutation. (Boldface and capitalization omitted.)
Cook points to testimony indicating that she did not understand the meaning of the word "remise." She also points to testimony that she believed the quitclaim deed was a document that was only valid if Markovic continued to work for her. However, in determining whether the quitclaim deed was sufficient to effectuate a transmutation of property on its face, we may not consider such extrinsic evidence. (Begian & Sarajian, supra, 31 Cal.App.5th at p. 512.) We find that the quitclaim deed, on its face, was sufficient to effectuate a transmutation of property under section 852(a). Questions regarding undue influence, or other factual circumstances rendering the quitclaim deed invalid, must be determined on remand.IV. The cases finding no valid transmutation are distinguishable
Cook argues that a valid transmutation requires compliance with both section 852(a) and Family Code section 721, which sets forth the fiduciary duties that exist between spouses. We decline to address this argument, as our task is limited to review of the quitclaim deed on its face. (Begian & Sarajian, supra, 31 Cal.App.5th at p. 512.)
The parties discuss numerous cases concerning the question of whether transfers between spouses effectuated valid 9 transmutations under section 852(a). As they point out, none of the cases cited discuss the precise question of whether the language of a traditional quitclaim deed meets those requirements. As set forth below, we find that the cases holding that no valid transmutation occurred are distinguishable.
In re Marriage of Mathews (2005) 133 Cal.App.4th 624 involved a quitclaim deed. To obtain a more favorable interest rate on a mortgage, the wife quitclaimed her interest in the property to husband, and the residence was acquired in his name alone. (Id. at p. 627.) The Mathews court did not evaluate the language of the quitclaim deed itself, but instead analyzed whether substantial evidence supported the trial court's decision that no undue influence existed and that the residence was therefore husband's separate property. (Id. at p. 626.)
In re Marriage of Barneson (1999) 69 Cal.App.4th 583 involved a husband's transfer of stock into his wife's name. While the husband provided written instructions to his stockbroker to transfer the stock into his wife's name, these instructions were insufficient to cause a transmutation of property. The Barneson court noted that "[n]othing in Barneson's directions to 'transfer' his Marina Oil stock into [his wife's] name or to 'transfer' or 'journal' the stock in his Schwab account into [his wife's] account 'expressly state[d] that the characterization or ownership of the property [was] being changed.'" (Id. at p. 590.) Similarly, in In re Marriage of Starkman (2005) 129 Cal.App.4th 659, a husband's completion of various stock brokerage transfer forms to convey assets into a community trust was insufficient to transmute the stocks to community property. The Starkman court analyzed the language of both the trust and the general assignment and concluded that the language did not support the wife's interpretation that the documents were an agreement to 10 transmute the entirety of the husband's substantial separate property assets into community property. (Id. at pp. 664-665.) Here, in contrast to both Barneson and Starkman, the quitclaim deed expressly remised, released and quitclaimed the trust's interests to Cook and Markovic as community property.
Cook also relies on In re Marriage of Lafkas (2015) 237 Cal.App.4th 921 and Brace, supra, 9 Cal.5th 903. Both are factually distinguishable and do not support Cook's position in this matter. In Lafkas, a modification to a partnership agreement to include the name of the partner's wife did not serve to transmute the husband's separate partnership interest. The partnership documents did not contain an express declaration transmuting the character of the property, thus it remained the husband's separate property upon divorce. (Lafkas, at pp. 940-941.) In Brace, a married couple used community funds to purchase real property but took title as joint tenants. The Brace court held that joint titling of property acquired by spouses using community funds is not sufficient by itself to transmute community property into separate property, given the Family Code section 760 community property presumption. (Brace, at p. 912.) The titling of the deed as joint tenants did not specify that the spouses understood the writing to change the character of the property, which was acquired with community funds. (Id. at p. 937.) Both Lafkas and Brace involved factual scenarios different from the one before us. Here, Cook signed a deed clearly and expressly quitclaiming the property from her trust to herself and Markovic as community property.
Begian & Sarajian, supra, 31 Cal.App.5th 506, 510, involved a document captioned a "Trust Transfer Deed." In June 2001, wife and wife's mother executed a grant deed granting their 11 respective 52 percent and 48 percent interests in certain real property to wife's mother, wife and husband as joint tenants. (Id. at pp. 510-511.) In May 2006, wife's mother, wife and husband executed the contested Trust Transfer Deed, transferring the real property to wife. The wife then executed a deed, transferring the real property into trust. (Id. at p. 513.) The Begian & Sarajian court held that the Trust Transfer Deed was insufficient to change the character of the real property because it contained two critical ambiguities. First, the title of the instrument- "Trust Transfer Deed," suggested that the transfer was associated with a trust. Second, the conveyance language itself did not specify what interest was being transferred. Taken together with the reference to a "Trust Transfer," the document was "reasonably susceptible of the interpretation that [husband] granted his community interest in [the real property] to [wife] to be held in trust, and not to effect a change in the marital character or ownership of the property." (Ibid.) Because the husband's intention as gleaned solely from the face of the Trust Transfer Deed was ambiguous, the writing did not satisfy the requirements of section 852(a). (Begian & Sarajian, at p. 513.)
The writing at issue in this case contains no such ambiguity. It is a simple, straightforward quitclaim deed, in standard form. Such deeds are commonly used and relied upon to transfer interests in real property. The quitclaim deed in this matter contained an express declaration that the ownership of the property was being changed. Under the circumstances of this case, we find that the deed met the requirements to transmute Cook's separate interest in the property into community property. 12
DISPOSITION
The portion of the judgment declaring the quitclaim deed void is reversed. The matter is remanded for further proceedings regarding the issue of undue influence and any other relevant factual circumstances. In all other respects, the judgment is affirmed. The parties shall each bear their own costs on appeal.
We concur: LUI, P. J., HOFFSTADT, J. 13