Filed 11/14/ 22 Marriage of Matkovic CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT
In re Marriage of KATE and PETER MATKOVIC. H047406 (Santa Clara County Super. Ct. No. 2013

- 6

- FL

- 009652)

KATE MATKOVIC,
Appellant,

v. PETER MATKOVIC,
Respondent.

In this dissolution appeal , appellant advances several challenges to the trial court’s award to respondent of her one

- half interest ( valued at approximately $500,000 ) in a community home as a remedy under Family Code section 1101, subdivision (g) , for misappropriating $520,000 in community funds during the marriage . In addition, appellant challenges the trial court’s imposition of attorney fees, expert costs, and a $200,000 monetary sanction u nder Family Code section 2107, subdivision (c) , for
disclosure violations in the underlying proceeding . She also challenges the family court’s denial of her request for attorney fees under Family Code section 271 , and asserts a failure to confirm as her s eparate property a home she purchased with postseparation earnings

.2

As we will explain, the family court incorrectly found that respondent’s one

- half interest in the community estate was impaired in its entirety by appellant’s preseparation fiduciary breaches. Respondent failed to establish that he was impaired by appellant’s
March 2011 $250,000 loan and May 2012 $95,125 gift to the parties’ daughter. Of the remaining $ 174,875 appellant was found to have mis appropr iated in breach of her fiduciary duties, t he trial court lacked authority under Family Code section 1101, subdivision (g) to award respondent more than his community interest in those funds ($87,437.50). W e see no error related to appellant’s other conten tions , but will remand
the matter for the family court to remedy the errors under Family Code section 1101, subdivision (g).
I. BACKGROUND
Kate and Peter married in 1985

. 1 They emigrated to the United States from Croatia, had three children (Ivan born in 1986, Magdalena in 1988, and Andrej in 1995) , and operated a successful Silicon Valley manufacturing business (Accura Precision, Inc.) for nearly 25 years before separat ing in July 2012. Peter managed Accura’s business operations and Kate handled the company’s finances as well as the parties’ personal
finances. The parties acquired several properties during the marriage including a primary residence in Cupertino, commercial and rental properties in the Bay Area , and a home in
Croatia

. They also helped Ivan start his own company (Spendgo , Inc. ) and helped Ivan and Magdalena purchase real estate. When the parties separated in July 2012 , the y executed a transmutation agreement related to their real propert y in California , and they tran sferred ownership of their
company to Ivan and Magdalena. The parties also gifted their children large sums of money, of which approximately $2.5 million was documented in gift declarations

1 We refer to the parties and their adult children by their given names for clarity , intending no familiarity or disrespect.3

executed at the time of separation. Many of those cash gifts wer e made by Kate with community funds she transferred from joint bank accounts to an individual checking account she opened in 2010.
Kate returned to work at Accura after the ownership change

. The company was struggling, and Kate was instrumental in guidi ng its recovery. I n 2013, Kate and Ivan agreed she would receive as compensation “whatever was left” after Accura met its obligations

. Unbeknownst to Peter, Kate was compensated over $6.1 million between 2013 and 2016, an amount comparable to the parties ’ joint earnings during the four years preceding the ownership transfer

. Kate petitioned for dissolution in January 2013. Peter hired an accounting firm to trace preseparation community income and disbursements , and in 2015 Kate engaged an expert to rebut the conclusions of Peter’s expert regarding the preseparation activity. In 2017, Peter’s expert investigated Kate’s postseparation receipt of funds from Accura. Peter moved to Croatia in 2014, where he opened a restaurant in 2016. The marriage wa s dissolved in 2017, and a nine

- day trial on contested issues was held in February 2018.
II. TRIAL COURT PROCEEDINGS Peter alleged Kate breached her fiduciary duties during the marriage by knowingly and willingly receiving $599,465 more funds than he r eceived from the community between January 1, 2010 and July 15, 2012 . He also alleged a fiduciary breach after separation by Kate fraudulently receiving $6

. 13 million from the family business, despite the parties’ agreement to divest themselves of their o wnership interest in the company. He sought 100 percent of the appropriated assets under Family Code section 1101, subdivision (h). (Undesignated statutory references are to the Family C ode.) He sought
sanctions , attorney fees , and costs for Kate’s disc losure violations under sections 271 and
2107. He argued that a judgment in his favor should be satisfied with Kate’s transmuted properties

.4

Kate claimed Peter breached his fiduciary duty by maintaining an apartment for a girlfriend during the marriage with community funds . She sought enforcement of the transmutation agreement ; a n equaliz ing payment ($501,500) for her one

- half interest in
the commu nity home in Croatia ; reimbursement for Peter’s exclusive use of the Croatia residence postseparation ; and confirmation as separate property the house she purchased
in Croatia in 2016.
The family court heard testimony and received evidence from the partie s, their accounting experts, and their children Ivan and Magdalena. I n a partial proposed
statement of decision , the court upheld the transmutation agreement

. It found Kate did not breach her fiduciary duty to Peter by converting $599,465 of community fu nds to her own use, but of that amount found that Kate breached her duty to disclose transfer s of $ 5 0 0,000 to Magdalena and $20,000 to Ivan. The court found Peter was not entitled to exemplary damages because Kate’s fiduciary breach es did not involve oppression, fraud , or malice

. It found Kate failed to prove that Peter breached his fiduciary duty by spending money on a girlfriend during the marriage. The co urt divided equally the community’s liquid assets ($85,000 held by Kate and $2,000 held by Peter).
The court found that Kate did not breach her fiduciary duty by receiving $6.1
million in earnings from Accura between 2013 and 2016, but that she breached her duty
to disclose th o se earnings in the dissolution proceeding. Kate also breach ed her du ty to disclose her 2016 real estate purchase , albeit with separate funds. The court concluded
the disclosure violations warranted sanctions, but not exemplary da mages. After further briefing a n d argument regarding sanctions, the f amily c ourt issued a
p roposed s tatement of d ecision and d ecision in which it awarded Kate ’s interest in the community home in Croatia to Peter under section 1101, subdivision (g) based on Kate’s
failure to disclose the $520,000 she transferred to the children. The court proposed
sanction ing Kate under section 2 10 7, subdivision (c) for failing to disclose her postseparation Accura earnings by awa rding Peter $70,000 in attorney fees , $3,000 in5

costs, $69,0 6 4 in expert fees , and an additional $400,000 to deter repetitive conduct. Other than the attorney fees awarded to Peter under section 2107, the proposed decision declined to award to either part y attorney fees whether as a sanction under section 271 or as a prevailing party. After considering the parties’ objections, the court modified its proposed decision
and issued a 40

- page statement of decision and judgment in August 2019. Specifically,
th e court subjected Peter’s award of the community home in Croatia to a reimbursement claim by Kate for his postseparation use of the home; considered Kate’s nondisclosure of her 2016 real estate purchase in ordering sanctions under section 2107; adjusted the expert fees to $220,952 ( the amount incurred by Peter’s experts before and during trial ) ; and reduced the deterrence sanction from $400, 000 to $200,000 , recognizing that both parties contributed to prolonging the litigation. In total, Kate was sanctioned $493,952 in addition to her interest in the community home in Croatia.
I II
. DISCUSSION
We review the division of community property an d imposition of sanctions in dissolution proceedings for abuse of discretion. ( In re Marriage of Schleich (2017) 8 Cal.App.5th 267, 276 ( Schleich ).) We review questions of law presented on undisputed facts de novo. ( In re Marriage of Blazer (2009) 176 Cal.App.4th 1438, 1443

. ) And we apply an independent standard of review to questions of statutory interpretation. ( People

v
. Johnson (2007) 150 Cal.App.4th 1467, 1481.)
A. “V ALUE OF THE A SSET ” R EMEDY Section 721 recognizes the fiduciary relationshi p in transactions between spouses

. The relationship includes “a duty of the highest good faith and fair dealing on each spouse,” and mandates that “neither [spouse] shall take any unfair advantage of the other.” (§ 721, subd. (b)

. ) The relationship appl ies to the management and control of community assets and liabilities during marriage. (§ 1100, subd. (e).) This duty includes the obligation to full y disclose to the other spouse “ all material facts and information6

regarding the existence, characterizat ion, and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable, and to provide equal access to all information, records , and books that pertain to
the value and character of those assets and debts, upon request. ” ( Ibid .)
Section 1101 creates a right of action for a spouse’s breach of fiduciary duty if it “results in impairment to the claimant spouse’s present undivided one

- half interest in the community estate.” (§ 1101, su bd. (a); In re Marriage of Prentis

- Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1270.) S ubdivisions (b), (c), (g) , and (h) of section 1101 provide remedies for a spouse’s breach of fiduciary duty. Under subdivision (b), the court may determine the ri ghts of ownership in community property and classify all property of the parties to a marriage. Under subdivision (c), a court may order that a spouse’s name be added to community property held by the other spouse. S ubdivision (g) , applied by the trial c ourt here, states: “ R emedies for breach of the fiduciary duty by one spouse, including those set out in Sections 721 and 1100, shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of t he fiduciary duty plus attorney’ s fees
and court costs. ” When the breach constitutes fraud, oppression , or malice, the remedy

“ shall include, but not be limited to, an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty .” (§ 1101, subd. (h).) In December 2010, Kate opened a checking account and began transferring community funds to that account. From th e account , Kate wrote a $250,000 check to Magdalena on March 4, 2011, a $250,000 check to Magdalena on May 22, 2012, and a $20,000 check to Ivan on March 7, 2012

. The court found Kate breached her fiduciary duty under section 110 0 , subdivision (e) by not d isclosing th ose transfer s , “ because it is
clear that [ Peter ] wanted to be kept appraised of the financial dealings of the parties, particularly when the relationship between them began disintegrating, and made re peated7

requests for copies of documents duri ng the marriage which were not voluntarily produced by [ Kate ] to [Peter] or his attorney.” The court found Kate’s interest in the community home in Croatia to be an appropriate monetary sanction for the disclosure
violation under section 1101, subdivision (g). Alt hough Kate’s interest in the home (approximately $500,000) exceeded $260,000 ( 50 percent of the undisclosed transfers) , the court found the award to be within its discretion under section 1101, subdivision (g)

. 2
1. Kate’s Breach of Fiduciary Duty
Kate argues the family court erred by not making a finding under section 1101,
subdivision (a) that Peter’s community interest was impaired by her transfer of community funds (which she characterizes as loans) to the children . She argues Peter’s
interest was not impaired because he had ceded control of the community finances to Kate, and the loans were consistent with his desire to help the children. T he trial court is not required to make an express finding of impai rment under subdivision (a). Kate’s authority, In re Marriage of Sharples (2014) 223 Cal.App.4th 160, 165 , is inapposite as it

2 At oral argument Peter noted a “calculation error” in his brief and , contrary to his briefing, advanced for the first time the position that Kate was not sanctioned under section 1101, subdivision (g) for transferring $520,000 in community funds to the children, but was actually sanctioned for “the failure to disclose and account for the $599,465 she had received” which belong ed t o the community estate , and that the sanction was reflected in the court not ordering a payment from Peter to Kate of approximately $244,000 ( equaliz ing Kate’s receipt of th e converted funds and the award to Peter of the community residence in Croatia valu ed at approximately $1 .3 million)

. We cannot reconcile Peter’s interpretation with the family court’s final statement of decision, in which it specifically found “that Kate did not breach her fiduciary duty to Peter by wrongfully, and without Peter’s knowledge converting $599,465 to her own use, but does find that Kate breached her fiduciary duty, pursuant to Family Code section 1101(e) [ sic ] by not fully disclosing the two $250,000 .00 ‘ loans ’ to Magdalena and the $20,000.00 ‘ loan ’ to Ivan. ” (Underscore in original.) The family court found the loans “should have been specifically disclosed” ; that the “technical breach of the duty to disclose” does not support exemplary damages; and that “the proper remedy for this fiduciary disclosure breach” is “the value of the house the parties jointly own in Croatia” under section 1101 , subdivision (g)

.8

concerned findings required to support an award of attorney fees under a different section of the Family Code

. Kate further a

rgues that the evidence does not support an impairment finding because a person cannot act for the benefit of the community, yet simultaneously breach a fiduciary duty to the community. A spouse’s fiduciary duty extends to the other spouse, not the commun ity. Kate had the duty under section 1100, subdivision (e) to “make full disclosure” to Peter “of all

. . . information regarding the existence

. . . of all

assets ” and to provide access to “all information, records, and books that pertain to the
value an d character of those assets and debts, upon request.” The trial court found that Peter wanted to be kept apprised of the communit y’s financial dealings when the relationship began to disintegrate, and made repeated requests for copies of documents
before separation that were not voluntarily produced to him or his attorney. Th at finding
i s supported by the evidence. Peter’s one

- half interest in the community estate was impaired to the extent the transferred funds were not returned to the community, even i f they were consistent with his desire to help his children. ( Schleich , supra , 8 Cal.App.5th 267, 284 [ husband breached fiduciary duty by failing to disclose money received in repayment of a loan ; breach was not subject to a § 1100, subd

. (g) remedy because the loan proceeds were re ceived by the community ].)
2. Offset Kate argues that Peter was not impaired by the $500,000 transferred to Magdalena
because those funds were offset by $500,000 Kate received from Magdalena in the same
timeframe. Kate wrot e two $250,000 check s to Magdalena

— one in 2011 and another in
201 2 . We address the transactions separately.

The 2011 check Kate wrote a $250,000 check to Magdalena in March 2011. Two months later, Magdalena wrote Kate a check for $350,000 with “loan refund” written o n the memo
line . Kate and her expert represent ed the $350,000 was repay ment for the $250,0009

check and a $100,000 loan from November 2010

. The November 2010 loan was documented by a $100,000 cancelled check to Magdalena from the parties ’ joint account
dated November 9, 2010 (check n o. 6124)

. Th at check , endorsed by Magda lena,
included the notation “loan” on the memo line

. The family court adopted the conclusion of Peter’s expert that there was no nexus between the $250,000 che ck Kate wrote to Magdalena in March 2011 and the $350,000
check Magdalena wrote to Kate two months later

. Peter’s expert attributed the November
2010 check to a forgiven $100,000 loan to Ivan. Peter’s expert relied on the parties’ July
2012 schedule of gifts to Ivan , which included a $100,000 loan on November 9, 2010 ; the absence of any payment or series of payments to Ivan amounting to $100,000 on or around that date ; and the absence of document s indicating Kate’s $250,000 check was a loan t o Magdalena

. He conceded on cross

- examination to consulting with counsel regarding the conflicting documents, and that his conclusion regarding the $100,000 was a judgment call. The court found that the $100,000 check to Magdalena “was not actually repai d” with the $350,000 check because the loan was “actually a loan to Ivan” and forgiven

. Finding Kate “provide [ d ] no other explanation” linking Magdalena’s $350,000 check to Kate’s $250,000 check , the court concluded the $250,000 was “excess
cash to Kate.”
The conclusion of Peter’s expert that the $100,000 check to Magdalena was in fact a gift to Ivan is not supported by the evidence. Th at check ( n o. 6124) was written to and endorsed by Magdalena; Kate identified the $1 00,000 gift to Ivan in an e

- mail to the attorney who prepared the gifting schedules as check n o. 6123 ; and Ivan testi fied that he “wasn’t diligent” in reviewing his gifting schedule for accuracy. Without a showing that $100,000 was transferred from the co mmunity to Ivan on or near November 9, 201 0 , the
evidence could support a finding that the November 9, 2010 entry on Ivan ’s gift schedule
was a mistake ; but it does not support a finding that funds actually transferred to Magdalena were intended for and redirected to Ivan , and therefore not repaid by10

Magdalena

. (

Juen v

. Alain Pinel Realtors , Inc . (2019) 32 Cal.App.5th 972, 978

- 979 [“ ‘ where the issue on appeal turns on the failure of proof at trial, the ques tion for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant ’ s evidence was (1) “ uncontradicted and unimpeached ” and (2) “ of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding. ” ’ ” ].) Kate, as the spouse who managed the community finances, bears the burden of proof regarding missing assets. ( See In re Mar riage of Prentis

- Margulis & Margulis , supra , 198 Cal.App.4th 1252, 1271.) Kate met that burden here by establishing the $250,000 was returned to the community

. The evidence compels a finding that Magdalena’s $350,000 “loan refund” check to Kate repaid the November 2010 $100,000 loan and the March 2011 $250,000 loan. The absence of a notation on the $250,000 check (or elsewhere) designating those funds as a loa n does not contradict or impeach
that evidence.
The 2012 check
Kate’s expert opined that the $250,000 check Kate wrote to Magdalena in May
2012 repaid a $150,000 loan from May 2011 ( o n May 16, 2011 , Magdalena wrote Kate a check for $150,000, with “loan refund” written on the memo line) ; repaid a small amount of interest on that loan ( $4,875 ); and the balance was a new loan to Magdalena of $95,125. Following a trial recess during which time the expert and Kate spoke , the expert changed his testimon y regarding the $4,875 attributed to interest. The expert
testified the $4,875 was not interest on the $150,000 loan but was interest paid by and being returned to Magdalena

. Kate did not testify about the interest or the $95,125 loan, but she explain e d the
basis of the $150,000 loan the community received from Magdalena , which the $250,000
check was to repay . Kate testified that Magdalena ha d loaned the community $150,00011

in May 2011 for the community to purchase a $1.1 million condominium in San
Fran cisco for Magdalena and Ivan

. Kate planned to finance the property in part with a line of credit against the community residence in Cupertino. Kate and Peter applied for
that loan in April 2011 , but it was not funded in time to close on the condo . The condo “was a deal of a lifetime,” so Kate scrambled to secure the funds. Kate recalled Accura
bonuses , and Magda lena contributed $150,000 of her own money. Kate issued a $1.1 million promissory no te to Ivan and Magdalena secured by a deed of trust against
the San Francisco property

. Of the $250,000 transferred to Magdalena in 2012, Kate was returning the $150,000 used to purchase the condo so that Magdalena and Ivan would be on equal footing with regard to their indebtedness to their parents

. Peter’s expert did not accept Kate’s explanation of the transaction. In his view, “loan refund” not ed on the $150,000 check indicated that Magdalena was repaying (not extending) a loan. He pointed out that the word “refund” was interlineated on the copy of
the cancelled check which Kate had provided to her expert , who in turn provided it to Peter’s expert when they exchanged l etters regarding their findings. He also noted the
lack of documentation (other than Peter’s gift tax return) characterizing $95,125 as a loan to Magdalena.
The family court rejected the opinion of Kate’s expert because his math was supported only by Ka te’s representations

. The court found that the expert used an “unsupported plug figure” ($4,875) “to make the transaction add up,” without due diligence to support his conclusion , and noted his changed testimony regarding the $4,875 interest payment. The court agreed with Peter’s expert that the memo “loan refund” indicated Magdalena was repaying a $150,000 loan. It found that the copy of the $150,000 check with the word “refund” crossed out had been altered , and that a “possible conclusion regarding the facts of this case is that Kate altered documents in order to defraud Peter of his fair share of the community estate, specifically in the amount of $599,465.00.” As for the purported $95,125 gift to Magdalena, the court noted that12

Peter’s expert was unable to trace the amount to transactions, or a series of transactions, from the parties’ accounts. It was within the trial court’s discretion to reject the conclusions of Kate’s expert to the extent they were based on Kate ’s own representations

. But e ven if the expert’s
conclusions are rejected for lack of corroboration , the evidence does not support a finding
that of the $250,000, no loan was made to Magdalena and forgiven by the part ies

. The $95,125 loan is documented in a July 2012 e

- mail from Kate to the estate planning attorney and forwarded to Peter . Regarding community gifts intended for Magdalena, Kate wrote “$95,125.00, 5/22/12, ck 2565. Check 2565 was for $250K, $150K loan refund from me and Peter to her + $4,875.00 interest and $95,125.00 new loan to her.” The $95,125 loan, traced to the $250,000 check by that e

- mail , was entered on the schedule of gifts to Magdalena in July 201 2 , signed by Peter , and declared on Peter’s
2 012 tax return. That evidence compels a finding that the community loaned (and forgave) Magdalena $95,125. 3 ( Juen v

. Alain Pinel Realtors , Inc ., supra , 32 Cal.App.5th 972, 978. )
3. S ection 1101, s ubdivision (g) Subdivision (g) provides, “Remedies for breach of the fiduciary duty by one
spouse

. . . shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent,” of any undisclosed or transferred asset, plus attorney
fees and court costs. (§ 1101, subd. (g).) Kate argues an award under subdivision (g) is

3 Regarding the family court ’s “possible conclusion” that Kate altered documents to defrau d Peter of his share of the community estate , we observe that “refund” was interlineated on the copy of the check Kate provided to her expert, and the following was handwritten (presumably to assist her expert): “for 5/11 550,000 condo SF 125 Alhambra loan balance 400k → payments

. ” Kate also handwrote notes on the copy of the $350,000 check for her expert: “for 11/9/10 100k [¶] for 3/1/11 250K.” Those documents were not held out to either expert or the court as original s , and neither expert ’ s opinion rested upon the inter lineation s

. Kate’s expert relied on Kate’s verbal explanation regarding the transactions, and Peter’s expert relied on bank records Kate provided during discovery.13

limited to 50 percent, or an amount equal to 50 percent of the value of the undisclosed

asset

. In her view, construing the phrase “shall include, but not be limited to” to permit
additi onal sanctions at the court’s discretion is contrary to legislative intent and would render meaningless the distinction between subdivision s (g) and (h). We agree that interpreting subdivision (g) as giv ing the family court discretion to impose additional
sanctions blurs the distinction between subdivision (g) and subdivision (h), and render s meaningless the requirement that a “ 100 percent of the asset ” remedy require s clear and convincing evidence of oppression, fraud , or malice under subdivision (h). T o avoid an absurd result ( Farnow v

. Superior Court (1990) 226 Cal.App.3d 481, 486), we construe the phrase “but not be limited to” to mean a trial court may impose other statutory sanctions (as well as the remed y under section 1101 , subdivision (c) ) in addition to 50 percent of the asset and attorney fees authorized under subdivision (g)

. Kate argues that section 1101, subdivision (g) does not authorize an award of unrelated property as a remedy for the fiduciary breach

. We disagree, at least to the

extent the award offsets an equaliz ing payment sought by the breaching spouse for a community asset which the complaining spouse seeks to retain as separate property.
Kate ’s authorities do not persuade us otherwise. The court in In re Marriage of Simmons (2013) 215 Cal.App.4th 584, 594, held that the subdivision (h) remedy did not apply to nondisclosures involving separate property. The c ourt in Schleich extended that holding to awards under subdivision (g), as both subdivisions provide remedies for a spouse’s fiduciary breach that impairs the other spouse’s community interest. ( Schleich , supra , 8 Cal.App.5th 267, 279 ; see also In re Marr iage of Prentis

- Margulis & Margulis , supra , 198 Cal.App.4th 1252 , 1257

- 1258 ; 1270 [upholding “value of the asset” award ] .) In re Marriage of Fossum (2011) 192 Cal.App.4th 336 , 347

- 3 48 , and In re Marriage of
Hokanson (1998) 68 CalApp.4th 987, 993 , addressed the award of mandatory attorney fees under subdivision (g). To the extent a subdivision (g) award is offset in whole or in14

part by a buyout or equaliz ing payment, the award does not violate the statutory mandate

t hat the community estate be divided equally.
4. Remaining A rguments Kate argues the trial court abused its discretion by not determining the value of the community home in Croatia in formulating its section 1101 remedy

. Under section 1101,

s ubdivision (g) , the trial court is required to assess the undisclosed asset at its highest value, whether it be date of breach, date of sale, or date of the court’s award. The valuation applies to the undisclosed or transferred asset (cash in this case ), not to an offset ting asset. Kate valued the Croatia home in her 2017 schedule of assets and debts to be $1,003,200 , and she sought a 50 percent equaliz ing payment based on that value

. The court did not abuse its discretion using the same valuation when i t formulated a remedy under subdivision (g).
W e reject Kate’s argument that the award of the community home in Croatia to
Peter was intended to be punitive. Peter had asked that the residence be awarded to him to remedy Kate’s breaches given that she l acked sufficient funds to satisfy a judgment , and Kate did not wish to retain an interest in the property but rather asked that the home be sold and divided equally or that Peter buy her out. Finally, w e reject Peter’s argument that the section 1101, su bdivision (g) award may be upheld as a sanction under section 2 1 07, subdivision (c). That statute applies to disclosure violations in dissolution proceedings. Here, the fiduciary breach extended to Kate’s nondisclosure beginning before dissolution procee dings were initiated.
B. S ANCTIONS U NDER S ECTION 2107
S ection 2100, subdivision (b) announces a public policy of full disclosure and cooperation in a marital dissolution. To that end, the statute mandates in the early stages of a dissolution proceeding “a full and accurate disclosure of all assets and liabilities in which one or both par ties have or may have an interest

. . . regardless of the characterization as community or separate, together with a disclosure of all income and15

expenses of the parties.” (§ 2100, subd. (c).) The statute imposes “a continuing duty to immediately, fully, and accurately update and augment that disclosure to the extent there have been any material changes ” so that “each party will have a full and complete knowledge of the relevant underlying facts.” ( Ibid .)
Section 2102 extends the fiduciary standards set forth in section 721 “to all activities that affect the assets and liabilities of the other party” from the date of separation to the date community property is distributed in dissolution proceedings. (§ 2102, subd. (a).) Those activities include (1) “ a ccurate and complete disclosure of all assets and liabilities in which the party has or may have an interest or obligation and all current earnings, accumulations, and expenses, ” including “immediate, full, and accurate update[s]” ; (2) accurate and complete written disclosure of any investment or business opportunity that results from an investment, significant business activity, or
income

- producing opportunity of either spouse during the marriage before separation ; and (3) the oper ation or management of a business (or a business interest) in which the community may have an interest. (§ 2102, subd. (a)(1)

- (3).)
Section 2107 mandates monetary sanctions against a party who fails to comply
with dissolution disclosures . (§ 2107, sub d. (c)

. ) “S anctions shall be in an amount sufficient to deter repetition of the conduct or comparable conduct, and shall include reasonable attorney’s fees, costs incurred, or both, unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the imposition of sanctions unjust.” ( Ibid .)
The f amily c ourt found that Kate breached her duty under section 2100 , subdivision (c) to disclose $6.1 million in earn ings working for Accura between 2013 and
2016 and her 2016 purchase of a home in Croatia. Under section 2107, subdivision (c),
Kate was sanctioned $73,000 in attorney fees and costs, $220,952 in expert costs, and $200,000 to deter further disclosure violations.16

1. Kate’s N ondisclosures Kate argues she complied with her duty to disclose postseparation income by disclosing her earnings in 201 3 and 2017, which was “months before trial.” The Legislature requires that “all current earnings” be “immediate[ly], full[y], and accurate[ly] ” updated. (§ 2102, subd. (a)(1).) The record supports the trial court’s finding that Kate failed to comply with that requirement. Peter became aware of Kate’s postseparation earnings in 2016 in connection with Kate’s real estate purchase in Croatia, which resulted in further discovery and Kate ’s production in 2017 of W

- 2s for years 2013
to 2016. Accura paid Kate $880,000 in 2013 ; $1

. 4 4 million in 2014 ; $2

. 41 million in
2015 ; and $1

. 4 million in 2016

— all income earned pursuant to an agreemen t Kate reached with Ivan in early 2013. That agreement was a material change requiring Kate to “immediately, fully, and accurately update” her disclosures with the postseparation earnings . (§ 2100, subd. (c).) She was in breach as early as 2013 for not doing so. Further, Kate stated in her March 2013 income and expense declaration that she had no

earn ings in the preceding 12 months. Kate also omitted from her April 2013 interrogatory responses that she had earned $1

. 206 million in 2012. And in answers to supplemental interrogatories in 2017, Kate omitted earning s of $1

. 4 million in 2016 and $2

. 41 million in 2015

. Her 2017 interrogator y responses were also misleading in that she
stated she was not on Accura’s payroll and did not receive pay stub s from the company. (§ 721, subd. (b) [ the spousal relationship “imposes a duty of the highest good faith and fair dealing on each spouse”].)
Kate c halleng es the finding that she breached her duty to disclose her 2016 real

estate purchase because Peter k new about the acquisition . Peter testified that he was aware of the purchase when Kate travelled to Croatia to sign papers

. B ut Peter’s

awareness did not excuse Kate’s statutory duty to disclose the acquisition in her schedule
of assets. ( § 2102, subd. (a)(1) .) The home was purchased in August 2016, and Kate waited until July 2017 before adding the acquisition to her schedule of assets.17

2. Attorney Fees and Costs Kate argues that an award of attorney fee s and costs under section 2107,
subdivision (c) must be “tethered to ” her nondisclosures

. In her view, the attorney fees and expert costs award to Peter was required to have been based on the nondisclosures. Peter sought $466,044.58 in attorney fees , and the court exercised its discr etion to
limit the award ($70,000) to fees incurred during pretrial discovery. B etween May 2012
and November 2013 , Peter incurred $4,500 in attorney fees related to the parties’ preseparation finances. No additional amounts were incurred until 2017 , when Peter
incurred approximately $6 8 ,000 in discovery

- related fees and costs after learning of Kate’s postseparation earnings

. Peter hired a forensic accountant in early 2013 to trace the parties’ preseparation expenditures, a task that was unrelated to Kate’s nondisclosure of postseparation earnings and acquisitions. Peter’s expert was tasked in 2017 with examining Kate’s postse paration earnings . The expert testified at trial and billed $220,952 for his services. We see no abuse of discretion in either award . Both were reasonable in light of Kate ’s ongoing disclosure violations beginning in 2013

. Kate cites to Menezes v

. McDa niel (2019) 44 Cal.App.5th 340 , 344, where the
husband sought $500,000 in postjudgment sanctions under multiple sections of the Family Code and the Code of Civil Procedure. A $200,000 sanction was awarded only
under section 271. (

Menezes , at pp. 344

- 345 & fn. 2.) The record there identified $189,427 in attorney fees and costs, which included possible duplicative fees and $18,000 in unrecoverable travel expenses. ( Id . at p. 351 & fn. 5.) The Menezes court determined that insufficient evidence connec ted the entire $200,000 sanction to attorney fees and costs, and the matter was remanded for further consideration. ( Id . at p. 352.)
Unlike in Menezes , here the record supports $73,000 in attorney fees and costs and $ 220,952 in expert fees. Peter’s atto rney and expert submitted monthly invoices documenting ever y bill able transaction. The invoices provide sufficient detail to support
the award s

.18

Kate also cites In re Marriage of Feldman (2007) 153 Cal.App.4th 1470 , but we
do not see that case as demanding a different result. After recognizing that sanctions
under section 2107 are “similar to” sanctions under section 271 and civil discovery sanctions, the court review ed a sanctions award under section 2107 , subdivision (c) for
abuse of discretion in the first instance

. ( In re Marriage of Feldman , at p. 1478.) We uphold the sanctions award here under that standard.
3. $200,000 Monetary Sanction
We reject Kate’s argument that the $200,000 monetary sanction to deter future
misconduct was not authorize d by section 2107 , subdivision (c). Courts have consistently recognized that section 2107 authorizes both monetary sanctions and reasonable attorney fees. ( In re Marriage of Feldman , supra , 153 Cal.App.4th 1470, 1477 [“Section 2107, subdivision (c) requires the trial court to impose monetary
sanctions and award reasonable attorney fees if a party fails to comply with any portion of the chapter of the Family Code that deals with a spouse’s fiduciary duty of disclosure during dissolutio n proceedings”]; In re Marriage of Tharp (2010) 188 Cal.App.4th 1295,
1318

- 1319; In re Marriage of Sorge (2012) 202 Cal.App.4th 626, 651

- 652.) Had the Legislature intended sanctions for disclosure violation s under section 2107 to be limited to attorney fe es, it would not have amended section 2107 , subdivision (c) to provide for “sanctions

. . . in an amount sufficient to deter repetition of the conduct or comparable conduct,” including reasonable attorney fees and costs as a component of the sanction. ( St ats. 2001, ch

. 703 § 6 [ Assem. Bill No. 5 83 ]

. Before the 2001 amendment, section 2107 authorized attorney fees and costs only to remedy disclosure violations.) By its terms, subdivision (c) of section 2107 provides for monetary sanctions in addition to

r easonable attorney fees and costs.
4. Remaining A rguments Peter’s claims arose from Kate’s lack of transparency both during and after separation. Kate contends Peter had unclean hands because he did not prevail on all19

claims and did not comply with all disclosure requirements himself

. But new information on Peter’s 2017 schedule of assets and debts do es not, by itself, establish a disclosure
violation. Nor does Kate ’s testimony that Peter’s lawyers did not disclose his purchase of
a business interest in a restaurant shown on Peter’s 2017 schedule of assets and debts

. She has not establish ed the date of the transaction relative to Peter’s disclosure , n or that it
repr esented a material change in Peter’s financial profile.
C. S ECTION 271 S ANCTION S Section 271 , located under the Family Code’s General Provisions, authorizes an award of attorney fees and costs as a sanction when a party’s conduct “frustrates the policy of the law to promote settlement of litigation” and “to reduce the cost of litigation by encouraging cooperation between the parties and attorneys.” (§ 271, subd. (a).) Kate argues the trial court unfairly denied her request for section 271 fees b ased on Peter ’s “blatant forum shopping , ” inconsistent positions, and overreach.
We see no abuse of discretion on this record. Peter filed suit in Croatia in 2016
related to the characterization of the home Kate purchased there that year

. The family

c ourt noted th e lawsuit h ad been stayed pending its decision in the instant litigation , and expressly exercised its discretion not to sanction Peter for filing that suit , finding that “the bulk of the blame for prolonging th is litigation because of nondiscl osure of financial matters that could have easily been produced” rested with Kate. The court recognized
that Peter also contributed to prolonging the litigation , which is why it award ed Peter only part of his attorney fees under section 2107 , subdivision (c)

. D. K ATE ’ S H OME IN C ROATIA
Kate asserts the family court should have confirmed as her separate property the home she purchased in Croatia in 2016

. Peter counters ( for the first time in this court )
that the family court lack ed authority to confirm the property, as it was separate property acquired after separation.20

The family court ’s authority in dissolution proceedings is to adjudicate the community estate

. (§ 2550 [ in dissolution proceedings, “the court shall

. . . divide t he community estate of the parties equally ”] .) Although jurisdiction to divide property is
limited to the community estate ( Hogoboom & King, Cal Practice Guide: Family Law (The Rutter Group, 202 2 ) ¶ 8:901 [ “ Except as provided by [§ 2650], property divisi on jurisdiction under the Family Code extends only to the community estate ” ] ) , a court dividing a community estate “may characterize disputed assets and liabilities as being separate or community, [and] may confirm separate property to the owner spouse.” ( Id ., ¶ 8:903 ; Kirsch v

. Kirsch (1896) 113 Cal. 5 6 , 63 [a court in dissolution proceedings “has

. . . jurisdiction to determine whet her or not a given piece of property is or is not community property”]; In re Marriage of Dorris (1984) 160 Cal.App.3d 1208, 1215 [same] .) Peter’s asserted interest in the Croatia property derived from his claim to Kate’s postseparation earnings. The fa mily court expressly found those earnings were Kate’s separate property and that she purchased the home in Croatia using those funds. To the

extent the court did not take the additional step of “confirming” the home to Kate, we see no prejudice. (Cal. Co n st. art. VI, § 13 [ “ No judgment shall be set aside

. . . in any

cause

. . . for any error as to any matter of pleading, or for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice .” ] .) T

he s tatement of d ecision is entirely clear that the home is Kate’s separate property

. I V
. DISPOSITION The judgment is reversed and the matter remanded for the family court to reduce
Peter’s Family Code section 1101 award for Kate’s fiduciary duty breaches to $87,437.50 (one half of $174,875 misappropriated by Kate) and to recalculate an equaliz ing payment accordingly . The parties shall bear their own costs on appeal.____________________________________ Grover, J.

WE CONCUR:

____________________________ Greenwood, P.J.

____________________________ Lie , J

.

H04 7406

– Matkovic v

. Matkovic