Opinion
C085825
06-29-2020
IN RE the MARRIAGE OF Carolyn MULLONKAL AND Sithaj KODIYAMPLAKKIL. Carolyn Mullonkal, Respondent, v. Sithaj Kodiyamplakkil, Appellant.
Stephanie J. Finelli, Sacramento, for Appellant. Downey Brand, LLP, Jay-Allen Eisen, Alexandra K. LaFountain, Sacramento, and Dougherty & Associates, Frank E. Dougherty for Respondent.
Certified for Partial Publication.
Pursuant to California Rules of Court, rules 8.1105 and 8.1110, this opinion is certified for publication with the exception of parts II – VI of the Discussion.
Stephanie J. Finelli, Sacramento, for Appellant.
Downey Brand, LLP, Jay-Allen Eisen, Alexandra K. LaFountain, Sacramento, and Dougherty & Associates, Frank E. Dougherty for Respondent.
MURRAY, J.
When a spouse pays off student loans for education attained before the marriage with funds from salary earned during the marriage, does a trial court have discretion under Family Code section 2641 to deny reimbursement to the community because the nonstudent spouse did not contribute to the repayment of the loans or otherwise contribute to expenses during the marriage? In the published portion of this opinion, we conclude that section 2641 does not permit such discretion.
Undesignated statutory references are to the Family Code.
Wife Carolyn Mullonkal and husband Sithaj Kodiyamplakkil were married for three years and five months. Husband appeals from judgment of dissolution, as well as post judgment orders. He contends: (1) the community is entitled to reimbursement, under section 2641, for community funds spent repaying wife's educational loans; (2) reimbursement is also required for community funds used to pay wife's non-educational loans; (3) wife breached her fiduciary duty by transferring community property to family members; (4) the trial court abused its discretion in awarding only $10,000 of the over $108,000 in attorney's fees he incurred; (5) the court also abused its discretion in denying a new trial; and (6) the trial court erred in finding a bank account of husband's was community property. We agree with husband as to every contention except the fifth.
We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Trial Evidence
Husband and wife were married on August 27, 2011. Three years and five months later, wife petitioned for divorce. They have one child, born shortly before the dissolution petition was filed.
The couple met in India. When they married, wife was living with her parents in Michigan, completing her medical residency program, and earning around $45,000 to $50,000. Husband was then living and working in India.
After finishing her residency, wife worked for a Michigan hospital from July 2012 to May 2013, earning around $225,000 a year. She continued to live with her parents, and paid them for expenses, increasing the amount she paid as her salary increased.
In May 2013, wife moved to California and began working for a different health care provider. That month, husband moved from India to California, and they began living together. Husband obtained his residency card in July 2013. Wife recalled paying "a couple of immigration fees," for husband which she testified was not "very much."
Until wife filed for dissolution on January 27, 2015, the couple lived together in a two bedroom, two bath apartment, which they rented for roughly $1,200 a month. They shared one car, which they leased from wife's brother for around $350 or $400 a month. Wife was then earning around $200,000 a year. She paid the rent and all expenses. Wife testified that beyond rent, utilities, and food, there were no other significant expenses other than education loan payments.
The couple lived together during this time period, except for a two- or three-month period in 2014 when husband went to India.
Wife had started paying off her medical school loans when she began her residency in 2009, approximately two years before the marriage. She had taken out roughly $120,000 in institutional education loans, and her parents, who had loaned her money for college, also paid for her first year of medical school. By early 2014, wife had paid off her institutional education loans. With interest, she paid around $153,000 to satisfy those loans — $130,000 of that was paid during marriage.
In early 2014, wife began paying off her loans from her parents. She paid them $2,000 a month and finished the payments with two lump-sum payments: $48,080.37 in December 2014 and $60,000 in January 2015. The last lump sum payment was made two days before wife met with a certified family law specialist, and 18 days before she filed for dissolution in January 2015. Wife did not tell husband about the $60,000 payment, though she testified she told him she was paying off her student loans and loans from her parents, and husband did not object.
Between September of 2011 and July of 2013, wife also wrote checks to her family amounting to more than $75,000. She testified that these included $9,500 to her brother: $500 as a gift and $9,000 to repay a loan he had given her during medical school. The checks also included $12,000 to her parents, as a gift and to pay for a new roof. Other checks were to her parents as gifts and to repay them for living expenses they had covered.
Wife also paid for travel for her parents and various family members. She paid for a trip to India for them. She paid for a cruise for her parents and her uncle in 2012. She flew her brother to Las Vegas in 2012 for his birthday. She paid for a cruise for her brother in 2013. She paid her parents’ and brother's airfare to visit at Christmas 2013. And she paid for her parents to accompany her and husband on a cruise in 2014. Wife testified that she told husband about these payments and he did not object. Wife and husband went on several trips during the marriage. In 2013, they went to Hawaii for a work conference. Her employer paid for part of the trip; she paid the rest. The next year, they went to Hawaii twice. She paid for those trips, as well as husband's trip to India.
The Trial Court's Statement of Decision
After the parties submitted proposed statements of decision, the trial court issued its final statement of decision. As pertinent to this appeal, the court denied husband's request to reimburse the community for community funds used to pay wife's education expenses. It also declined to find wife breached her fiduciary duty in payments made to family members for "rent, costs of living, reimbursement or for nominal gifts of money" and denied reimbursement to the community for those expenditures. The court awarded husband $5,000 in attorney's fees, which was on top of $5,000 in fees awarded pre-trial. It declined to rule on husband's request for support under federal immigration law. And the court determined one of the bank accounts in husband's name contained $4,500 in community property.
Husband subsequently moved for a new trial, raising inter alia , the court's refusal to rule on his request for support based on federal immigration law. Husband relied on In re Marriage of Kumar (2017) 13 Cal.App.5th 1072, 220 Cal.Rptr.3d 863 ( Kumar ), which was published after the trial. The Kumar court held an immigrant spouse has standing to enforce in state court the support obligation created by a federal I–864 affidavit. ( Kumar, at p. 1075, 220 Cal.Rptr.3d 863.) The trial court denied the motion.
Husband also moved for a change in attorney's fees awarded, requesting an additional $41,874.50. The trial court denied the request.
DISCUSSION
I. Reimbursement for Community Funds Spent on Education Loans
Husband contends the community is entitled to reimbursement, under section 2641, for community funds used to pay wife's education loans, both from lending institutions and from her parents. Wife maintains the trial court acted within its discretion in denying reimbursement. We must agree with husband. A. Section 2641
Section 2641 addresses community contributions to education or training. It directs that on dissolution, "[t]he community shall be reimbursed for community contributions to education," including education loan repayments. ( § 2641, subd. (b)(1), italics added.) But reduction or modification of reimbursement is allowed, "to the extent circumstances render such a disposition unjust ...." ( § 2641, subd. (c).) Exceptions rendering such disposition unjust include, but are not limited to : (1) where the community has "substantially benefited" from the education; (2) where the education of one party is offset by the education of the other party, for which the community also contributed; and (3) where the party's education substantially reduces that party's need for support payments. ( § 2641, subd. (c).)
Section 2641 provides: "(a) ‘Community contributions to education or training’ as used in this section means payments made with community or quasi-community property for education or training or for the repayment of a loan incurred for education or training, whether the payments were made while the parties were resident in this state or resident outside this state. [¶] (b) Subject to the limitations provided in this section, upon dissolution of marriage or legal separation of the parties: [¶] (1) The community shall be reimbursed for community contributions to education or training of a party that substantially enhances the earning capacity of the party. The amount reimbursed shall be with interest at the legal rate, accruing from the end of the calendar year in which the contributions were made. [¶] (2) A loan incurred during marriage for the education or training of a party shall not be included among the liabilities of the community for the purpose of division pursuant to this division but shall be assigned for payment by the party. [¶] (c) The reimbursement and assignment required by this section shall be reduced or modified to the extent circumstances render such a disposition unjust , including, but not limited to , any of the following: [¶] (1) The community has substantially benefited from the education , training, or loan incurred for the education or training of the party. There is a rebuttable presumption, affecting the burden of proof, that the community has not substantially benefited from community contributions to the education or training made less than 10 years before the commencement of the proceeding, and that the community has substantially benefited from community contributions to the education or training made more than 10 years before the commencement of the proceeding. [¶] (2) The education or training received by the party is offset by the education or training received by the other party for which community contributions have been made. [¶] (3) The education or training enables the party receiving the education or training to engage in gainful employment that substantially reduces the need of the party for support that would otherwise be required. [¶] (d) Reimbursement for community contributions and assignment of loans pursuant to this section is the exclusive remedy of the community or a party for the education or training and any resulting enhancement of the earning capacity of a party. However, nothing in this subdivision limits consideration of the effect of the education, training, or enhancement, or the amount reimbursed pursuant to this section, on the circumstances of the parties for the purpose of an order for support pursuant to Section 4320. [¶] (e) This section is subject to an express written agreement of the parties to the contrary." (Italics added.)
For the first exception — where the community has substantially benefited from the education — a rebuttable presumption applies. ( § 2641, subd. (c)(1).) If community contributions to the education costs are made less than 10 years before commencement of the dissolution proceeding, it is presumed that the community has not substantially benefited. ( § 2641, subd. (c)(1).) For contributions made more than 10 years before proceedings, the opposite presumption applies. (Ibid .)
The statute is also "subject to an express written agreement of the parties to the contrary." ( § 2641, subd. (e).)
B. Additional Background
At trial, husband argued that during their marriage, they maintained a relatively low standard of living, which wife took advantage of to "accelerate" her student loan payments. And "other than a few family vacations," he did not enjoy a standard of living commensurate with the salary wife brought to the community, while wife enjoyed the benefit of paying off her student loans.
The trial court denied the request for reimbursement as "contrary to law and unjust." It noted that section 2641, "remedies the injustice that may occur when a married couple separates shortly after graduation but before the community is benefitted by the education when payments are made related to the education." The court went on to find that wife began repaying her institutional education loans before marriage and continued to pay them during marriage. She had also repaid the "significant amount" of money and other support her parents had provided her to complete her education and training. And there was an expectation that wife would repay her family despite the absence of documentation between the family members.
The court also found that before husband moved to the U.S., he earned income in India and held assets. Yet, he contributed nothing to wife's education and loan repayments. And after moving to California, husband did not work and provided no financial support toward community living expenses or wife's educational expenses.
The court continued: "After weighing and balancing the facts in this case, the court finds the evidence established in this matter is a departure from the remedy envisioned by the legislature ... this case does not present with a student spouse who has devoted substantially all their time and effort to an educational pursuit while the other spouse (Husband in this case) devotes substantially all their time and work earning income to support the expenses of the community and to support the education of the student spouse." Rather, "during this marriage there was a strong understanding the parties would work diligently to avoid accumulated debt and the evidence establishes they engaged in the disciplined avoidance of accumulated debt." The trial court further found that any presumption that the community had not substantially benefited from wife's education had been rebutted. It reasoned that wife's enhanced earning capacity was a result of her education. And her salary "substantially benefitted the community" by paying the family's daily living expenses, paying some of husband's immigration fees, and supporting the post-separation expenses of both parties. C. Analysis
1. Standard of Review
At the outset, the parties disagree over the applicable standard of review. Husband maintains review is de novo , arguing the trial court's ruling involved statutory interpretation. Wife responds that abuse of discretion applies, pointing to the statute's expansive language, "including, but not limited to," and arguing the Legislature intended to afford the trial court "broad discretion." The answer is somewhere in the middle.
"An abuse of discretion occurs when the ruling exceeds the bounds of reason. [Citation.] But, the exercise of discretion is not unfettered .... [Citation.] ‘All exercises of discretion must be guided by applicable legal principles, ... which are derived from the statute under which discretion is conferred. [Citations.] If the court's decision is influenced by an erroneous understanding of applicable law or reflects an unawareness of the full scope of its discretion, the court has not properly exercised its discretion under the law.’ " ( Eneaji v. Ubboe (2014) 229 Cal.App.4th 1457, 1463, 178 Cal.Rptr.3d 162 ( Eneaji ))
Accordingly, in determining whether the trial court has abused its discretion, we first determine de novo whether the trial court applied the correct legal standard when exercising discretion. ( Eneaji v. Ubboe, supra, 229 Cal.App.4th at p. 1463, 178 Cal.Rptr.3d 162 ; see also, Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 773, 149 Cal.Rptr.3d 614, 288 P.3d 1237 [to determine if a court abused its discretion, we must consider "the legal principles and policies that should have guided the court's actions"]; City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297-1298, 255 Cal.Rptr. 704 ( City of Sacramento ) [actions that transgress the confines of the applicable principles of law are outside the scope of discretion; reviewing court determines at the outset whether the trial court applied the correct legal standards to the issue in exercising its discretion].)
2. The "Including But Not Limited To" Exception
In arguing the trial court acted within its discretion, wife maintains substantial evidence supports the trial court's finding that reimbursement would be "unjust" under the circumstances. We, however, conclude the trial court relied on improper criteria and an incorrect legal assumption in concluding the community was not entitled to reimbursement. (See Eneaji, supra , 229 Cal.App.4th at p. 1463, 178 Cal.Rptr.3d 162.)
As husband notes, caselaw interpreting section 2641 and its predecessor, Civil Code section 4800.3, is "sparse." Indeed, no case addresses the "including, but not limited to" language in subdivision (c) of section 2641. Wife argues that because husband did not pay for any living or educational expenses while she acquired her degree and repaid her education debt, denying reimbursement was within the trial court's broad discretion. She maintains that the "including but not limited to" language signals legislative intent to confer "broad discretion" in circumstances not specifically enumerated.
Section 2641 continued former Civil Code Section 4800.3 without substantive change. (Recommendation: 1994 Family Code (Nov. 1993) 23 Cal. Law Revision Com. Rep. (1993) p. 292.)
Wife points to husband's degree in mechanical engineering and status as a "highly-skilled" business analyst, noting that defendant was employed during the first two years of marriage, and held stocks worth more than $100,000 but did not financially support her in any way. She also notes that husband ceased working when he came to live with wife, contributing no financial support. And his efforts to find work were "minimal at best." Regarding earning ability for purposes of spousal support, the trial court found husband did not have the legal ability to work in the U.S. and found insufficient evidence to impute income to him.
We agree that section 2641 ’s exception can apply to unenumerated circumstances, but we disagree that the scope of the court's discretion is as broad as wife suggests.
a. Ejusdem Generis
In construing expansive general language in a statute, we apply the principle that where a particular class of things modifies general words, we construe those general words to apply only to things of the same general nature or class as the enumerated items. ( Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116, 141, 96 Cal.Rptr.2d 485, 999 P.2d 718 [interpreting the scope of an "including, but not limited to" clause]; People v. Arias (2008) 45 Cal.4th 169, 180, 85 Cal.Rptr.3d 1, 195 P.3d 103 ( Arias ) [same].) Accordingly, any unenumerated exception to reimbursement under section 2641 must be " ‘ " ‘of the same kind,’ " ’ " as the enumerated exceptions. (See Arias, at p. 180, 85 Cal.Rptr.3d 1, 195 P.3d 103.) This rule of construction, known as "ejusdem generis," is " ‘based on the obvious reason that if the Legislature had intended the general words to be used in their unrestricted sense, it would not have mentioned the particular things or classes of things which would in that event become mere surplusage.’ " ( Ibid . ; Kraus, at p. 141, 96 Cal.Rptr.2d 485, 999 P.2d 718.)
Wife cites Arias, supra , 45 Cal.4th 169, 85 Cal.Rptr.3d 1, 195 P.3d 103 for the proposition that the phrase "including, but not limited to" in subdivision (c) of section 2641 " ‘connotes an illustrative listing, one purposefully capable of enlargement.’ " (Arias, at p. 181, 85 Cal.Rptr.3d 1, 195 P.3d 103.) But wife does not address the Arias court's discussion of the ejusdem generis doctrine and how it applies to limit the scope of the enlargement. Wife similarly cites Major v. Silna (2005) 134 Cal.App.4th 1485, 36 Cal.Rptr.3d 875, for the proposition that "including, but not limited to" signals the Legislature's intent that the statute apply to items not specifically listed. But again, wife ignores the Major court's discussion of ejusdem generis, a doctrine that court referred to as "of ancient vintage." (Major, at p. 1494, 36 Cal.Rptr.3d 875.) In short, wife has not explained in her briefing why the doctrine does not apply here or alternatively, how it should apply to support her position.
Viewing section 2641 ’s enumerated exceptions, a pattern of purpose emerges. In all three exceptions warranting reduction or modification of community reimbursement, both spouses, as members of the community, derive commensurate benefits from one spouse's education. No one spouse receives a windfall.
In the first exception, subdivision (c)(1), the community has "substantially benefited." As the Law Revision Commission observed "[if] the marriage endures for some time with a high standard of living and substantial accumulation of community assets attributable to the medical training, it might be inappropriate to require reimbursement." (Recommendation Relating to Reimbursement of Educational Expenses (Sept. 1983) 15 Cal. Law Revision Com. Rep. (1983) p. 242.) In the second exception, subdivision (c)(2), one party's education offsets the other's. In the third exception, subdivision (c)(3), one party's education relieves the other party's obligation to provide support payments.
Mutual benefit is the common denominator in these exceptions, and no one spouse receives a windfall. Thus, applying the doctrine of ejusdem generis to the phrase "including, but not limited to" in section 2641, subdivision (c), we conclude a court is limited to circumstances that are similar in nature to those enumerated — circumstances in which both parties benefit and no one party receives a windfall.
Here, however, no such mutual benefit appears. Wife's education paid off her separate education debts and enhanced her post-dissolution earning potential. And had those education debts not been paid, she would have been assigned them upon dissolution. ( §§ 2627, 2641 ) Husband, on the other hand, received no such commensurate benefits, nor did he enjoy the standard of living the community could have achieved during the marriage.
The trial court relied on husband's failure to contribute to wife's education or loan repayments or family expenses, but nothing in the statute contemplates denying reimbursement to the community where the student spouse pays for her own education or where the nonstudent spouse did not somehow earn an entitlement to an equal share of the community. Indeed, the statute refers to "community contributions to education," and makes no reference to the source of the community contribution. ( § 2641, subd. (a).)
b. Ejusdem Generis and Statutory Intent
We are mindful that "[m]axims of statutory construction, including the doctrine of ejusdem generis , are not immutable rules but instead are guidelines subject to exceptions." ( Wishnev v. The Northwestern Mutual Life Ins. Co. (2019) 8 Cal.5th 199, 213, 254 Cal.Rptr.3d 638, 451 P.3d 777.) As such, if application of ejusdem generis would frustrate the statute's underlying intent, the doctrine must be overridden by our fundamental objective of ascertaining and effectuating the statute's underlying intent. ( Id . at pp. 213-214, 254 Cal.Rptr.3d 638, 451 P.3d 777.)
The trial court, here, reasoned that reimbursement would be "a departure from the remedy envisioned by the Legislature" apparently because "this case does not present with a student spouse who has devoted substantially all their time and effort to an educational pursuit while the other spouse ... devotes substantially all their time and work earning income to support the expenses of the community and to support education of the student spouse ." (Italics added.)
In considering legislative intent, we note that the trial court's reasoning violates a basic tenant of community property law: income earned during the marriage belongs equally to the community regardless of who earned it. (§ 760 [property acquired during marriage is community property unless it comes within a specified exception]; see also In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850-851, 21 Cal.Rptr.2d 642 ["Acquisitions and gains which are directly or indirectly attributable to community expenditures of labor and resources are shared equally by the community"].) We must construe section 2641 with this basic tenant in mind. ( Mejia v. Reed (2003) 31 Cal.4th 657, 663, 3 Cal.Rptr.3d 390, 74 P.3d 166 [" ‘[E]very statute should be construed with reference to the whole system of law of which it is a part, so that all may be harmonized and have effect’ "].)
The trial court's reasoning suggests the Legislature intended the nonstudent spouse would have to earn a right to share in the community assets. We think that had the Legislature intended such a departure from a basic tenant of community property law, it would have said so. We expect it would have expressly provided an exception for where the nonstudent spouse fails to prove he either helped repay the student loan debt or made other contributions to the community. Instead, the statute directs that reimbursement be made to the community and never uses the word "compensation" or in any way suggests the nonstudent spouse must earn his half interest in the community. (See In re Sullivan (1984) 37 Cal.3d 762, 770-771, 209 Cal.Rptr. 354, 691 P.2d 1020, conc. & dis. opn. Mosk, J. [predecessor statute Civil Code section 4800.3 provided for "reimbursement," not "compensation"; the reimbursement is to be made to the community for the use of a community asset].)
A review of the Law Revision Commission comments for former Civil Code section 4800.3 (the predecessor to section 2641 ) similarly shows nothing suggesting nonstudent spouses must work or contribute to the community in order to qualify the community for reimbursement. The commission cited circumstances where reimbursement would be inappropriate, which later became the section 2641, subdivision (c) circumstances. (Ibid .; § 2641, subd (c).) A close reading of those exceptions reveals they were proposed to ensure both spouses benefit equally in the community property and prevent spouses from obtaining a windfall — not to require a spouse to earn reimbursement.
Indeed, the Commission noted it would be equitable "to require the student spouse to reimburse the community for the community expenditures for his or her education and training. [The reimbursement] solution in effect gives the working spouse the same amount the student spouse was given for the education.... It puts the parties on equal footing without generating a windfall for the working spouse or permanently impairing the student spouse's future.[ ] It takes from the student spouse only what was actually given and restores to the working spouse only what he or she actually lost ." (Law Revision Com. (1983) p. 235, italics added.) Thus, the Commission's focus was the community property interest the nonstudent spouse would lose absent community reimbursement — not what that spouse contributed to the community. To be sure, the 1983 Commission referred to the nonstudent spouse as the "working spouse" throughout the commentary. But it did so to describe the relevant party in a typical scenario the proposed legislation was designed to address: where the education was received during the marriage and the nonstudent spouse was the sole worker. (Law Revision Com. (1983) p. 233 ["It is not uncommon for one spouse to work so the other can attend school"].) Notably, it was without referencing to the "working spouse," that the Commission stated, "[t]he community should be reimbursed for expenditures made during marriage regardless when the education was received." (Law Revision Com. (1983) p. 237.) We are sympathetic to the result the trial court apparently sought to achieve here. But we must conclude the ruling that reimbursement was unjust based on the husband's failure to contribute to education debt repayment or community expenses was grounded on improper criteria and an incorrect legal assumption. Therefore it was a misapplication of the law and an abuse of discretion. (See Eneaji, supra, 229 Cal.App.4th at p. 1463, 178 Cal.Rptr.3d 162 ; City of Sacramento, supra , 207 Cal.App.3d at pp. 1297-1298, 255 Cal.Rptr. 704.)
The reference to a windfall for the working spouse relates to the Commission's rejection of the legislative option discussed by legal commentators of making the student spouse's education a community property asset to be divided equally upon dissolution. As the Commission observed, "to give the working spouse an interest in half the student spouse's increased earnings for the remainder of the student spouses's life because of the relatively brief period of education and training received during marriage is not only a windfall to the working spouse but in effect a permanent mortgage on the student spouse's future." (Law Revision Com. (1983) pp. 234-235, italics added.)
The 1993 Commission report did not use the term "working spouse."
Wife similarly relies on In re Marriage of Weiner (2003) 105 Cal.App.4th 235, 129 Cal.Rptr.2d 288. Quoting In re Marriage of Slivka (1986) 183 Cal.App.3d 159, 228 Cal.Rptr. 76, the Weiner court cited the inequity for the working spouse that occurred prior to the passage of section 2641 ’s predecessor: "The injustice of this scheme is evident in that the student spouse acquires an increased opportunity for higher earnings and fulfillment from which the other spouse may derive no benefit." (Weiner, at p. 240, 129 Cal.Rptr.2d 288.) But we do not read Weiner and Slivka to require the nonstudent spouse to contribute to the student spouse's education. In both cases, the nonstudent spouse contributed financially to the "community effort," and both courts held such a situation presented an injustice the Legislature sought to remedy. But neither court suggested contributions to the community effort was a predicate to community reimbursement or that community reimbursement where no financial contribution had been made by the nonstudent spouse would be an injustice warranting denial of reimbursement. Cases are not authority for propositions not considered. (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 900, fn. 7, 80 Cal.Rptr.3d 690, 188 P.3d 629.)
3. Exception where the Community has Substantially Benefited
As noted, section 2641, subdivision (c)(1) provides that if community contributions to education costs are made less than 10 years before commencement of the dissolution proceeding, it is presumed that the community has not substantially benefited. (See fn. 4, ante .) The trial court alternatively rested its ruling on its conclusion that the presumption had been rebutted in this three-year marriage. The court ruled this was so because wife's education paid some of husband's immigration fees and supported their living expenses pre- and post-separation. On appeal, wife also points to the three paid vacations to Hawaii as well as husband's solo trip to India.
We cannot see how the combined benefit of 18 months of modest living expenses along with four trips could reasonably rebut the presumption that the community had not "substantially benefited" from the community contribution toward wife's education loan payments. In making its separate ruling on spousal support, the trial court found the marital standard of living was low. It noted the parties "had not yet reached a comfort level of even a middle-class standard of living by the time they separated." Yet, during the marriage, $130,000 was spent to pay wife's institutional education loans, on top of amounts spent to repay the parents for their contributions to wife's education expenses. Regarding husband's immigration expenses, wife testified, "I don't remember the specific amounts. I don't think it was very much." Given the value of the community benefit (18 months of less than middle class living expenses and four trips) was a relatively small percentage of the value of the community funds expended toward education, we conclude the trial court abused its discretion in concluding that the community "substantially benefited" thereby rebutting the statutory presumption.
4. Oral Understanding between the Parties
Finally, the trial court relied on its finding that the parties had "a strong understanding" that they would work to avoid accumulated debt. But while section 2641 allows for an exception to reimbursement when the parties have an express written agreement ( § 2641, subd. (e), see fn. 4, ante .), merely having a "strong understanding" is insufficient.
With no express written agreement, no exception pertaining to any agreement exists.
The Law Revision Commission suggested the Legislature enact an exception for when the parties have an agreement but recommended the exception require the agreement be in writing, noting "agreements or understandings may not be clearly articulated" and "they may generate substantial litigation." The Commission concluded, "to ensure certainty, the agreement should be in writing." (Law Revision Com. (1983) p. 238.)
5. Conclusion
Based on the above, we direct that the community be reimbursed for community expenditures made during the marriage towards wife's institutional and family-provided education loans. II.-VI.
See footnote *, ante .
DISPOSITION
The judgment is reversed, and the finding that husband's bank account ending in 213 is community property is vacated. The matter is remanded with directions to (1) order wife to reimburse the community for community funds spent during the marriage on wife's institutional and family-sourced education loans, (2) order wife to reimburse the community for community funds spent to repay noneducation loans during the marriage, (3) award husband his share of the community property, under section 1101, (4) redetermine the award of attorney's fees for husband, and (5) reallocate community assets consistent with this opinion. Husband shall recover his costs on appeal. ( Cal. Rules of Court, rule 8.278(a)(1), (2).)
We concur:
BUTZ, Acting P. J.
RENNER, J.