Filed 5/16/23 Mondloch v. Bell CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

KATHLEEN MONDLOCH (BELL),

Appellant,

v.

BETSY BELL,

Respondent.

F084407

(Super. Ct. No. F71486)

OPINION

THE COURT*

APPEAL from an order of the Superior Court of Merced County. Shelly 

Seymour, Judge.

Cyril Lawrence, Inc. and Cyril L. Lawrence for Appellant.

McCormick, Barstow, Sheppard, Wayte & Carruth and Christopher A. Kent for 

Respondent.

-ooOoo-

* Before Franson, Acting P. J., Meehan, J. and Snauffer, J.
2.

Appellant Kathleen Mondloch (Bell) challenges the trial court’s award of $57,833 

to her daughter, Betsy Bell (daughter), representing a one-sixth interest in the family 

home that was sold through a short sale in 2011. Our review of the record provided on 

appeal, and the relevant legal standards governing the interpretation of the language used 

in the agreement at issue here, leads us to conclude this matter must be remanded to the 

trial court for further proceedings. 

PROCEDURAL AND FACTUAL SUMMARY

On February 7, 1984, an interlocutory judgment of dissolution of marriage was 

entered, with an attached stipulation dividing the community and separate property assets 

of Mondloch and Jimmie Bell (ex-husband) (hereinafter “1984 property agreement”). 

Among the property addressed in the 1984 property agreement was the “family” 

residence (the Mulberry property), which was declared to be Mondloch’s sole and 

separate property as follows:

“All interest of the parties in the house and lot at 5520 West Mulberry, 

Atwater, California, subject to the equitable interest of the minor children 

as more particularly set forth in this judgment.” 

Later in the 1984 property agreement, this equitable interest designated for the two minor 

children of the marriage was described this way:

“One-third of the gross value of the residence at 5520 West Mulberry, 

Atwater, California, which is awarded to [Mondloch] under the terms of 

this judgment, with the interest granted herein to be held in trust for the 

benefit of the minor children under the provisions set forth in the Civil 

Code of California, with one-half of the principle and accrued income of 

the trust distributed to each child as she attains the age of twenty-five (25);

the interest created herein shall be an equitable interest and shall accrue to 

the benefit of the minor children upon the sale of the residence, or the death 

of Petitioner, whichever first occurs; and, [Mondloch] and [ex-husband] 

shall act as co-trustees with the powers more specifically designated in 

Section 1120.2 of the Probate Code of California for the purposes of this 

paragraph, the gross value is defined as the gross sale proceeds of the 

residence less any costs of sale and real estate commissions.” 
3.

On July 8, 2021, a request for order was filed to enforce the 1984 property 

agreement with respect to daughter’s interest in the Mulberry property.1 Daughter is one 

of the two minors referenced in the 1984 property agreement, and is the real party in 

interest and respondent here. A hearing on the request for order was held on October 7, 

2021. 

The first witness at the hearing was Tammy Fornier, an employee of the title 

company who handled the escrow of a short sale involving the Mulberry property in 

2011. Fornier testified that all physical documents involved in the escrow had been 

shredded approximately seven years after the short sale. However, Fornier was able to 

retrieve a closing statement for the escrow from a computer. This statement showed 

Mondloch received nothing from the sale of the Mulberry property, and that the lender 

took all the proceeds from the short sale. The statement also showed the sale price for the 

Mulberry property was $177,000, and that the lender received $165,180.15 after 

commission, taxes, and other closing costs were deducted. 

Mondloch testified she continued to live on the Mulberry property, even after 

remarrying, until sometime in June 2011, when the property was sold in the short sale. 

Between 1984 and June 2011, Mondloch explained she took out various loans on the 

Mulberry property to pay for repairs and upkeep, and for other things related to her 

daughters. Mondloch recalled taking out three separate loans on the Mulberry property 

during that time. After the first loan, the subsequent loans refinanced whatever debt 

remained on the property for the prior loan. At the time of the short sale, Mondloch 

owed over $300,000 on the Mulberry property. In fact, Mondloch acknowledged that the 

notice of default showed she owed $347,000 on the Mulberry property.2 According to 

1 The actual request for order is not part of the appellate record. 

2 Mondloch testified to this fact during the hearing. We were not provided as part 

of the appellate record the notice of default listing this debt, which was introduced as an 

exhibit during the hearing. 
4.

Mondloch, the bulk of the funds borrowed were used for remodeling and upkeep, 

explaining that there were three buildings on the one and one-half acre Mulberry 

property. The funds were used to pay for roofs for each building, painting, and windows. 

The pool on the property also had to be replastered twice, and a new well was also built. 

Mondloch admitted that not all these expenses were incurred while her daughters were 

still living in the home. 

Daughter was the next to testify. She acknowledged receiving a $5,000 check 

from her mother in 2017. Daughter stated that although her mother testified this amount 

was given to offset the debt owed to daughter under the 1984 property agreement, 

daughter testified no such statement was made to her at the time the check was provided. 

Daughter only recalled a discussion that these funds may have been part of a “wedding 

fund” that had been saved on her behalf by Mondloch, but was now given to her because 

of her current needs. 

Ex-husband testified and explained that although the 1984 property agreement 

showed there was approximately $111,000 worth of liens against the Mulberry property 

in 1984, he eventually paid off all this debt near the time of the divorce so Mondloch 

would receive the home free and clear. It was ex-husband’s expectation Mondloch would 

only be obligated to pay insurance and taxes going forward. Ex-husband further testified 

he expected his daughters would receive their interest in the Mulberry property once they 

turned 25 years of age. Ex-husband explained that he did not pursue this matter earlier 

because of bad advice from a lawyer, but mostly because his daughters objected to that 

approach. 

After obtaining additional briefing on the issue of laches, the trial court entered an 

order on March 3, 2022. The order stated the 1984 property agreement created an 

equitable interest for daughter in the Mulberry property, and that she was entitled to 

one-sixth of any “sale proceeds.” After finding no grounds to apply the defense of 

laches, the court determined:
5.

“[T]he gross sale proceeds from the property [are] equal to what 

[Mondloch] received over the years by encumbering this property or 

$347,000, funds she and she alone received because of the equity in this 

property and used at her discretion to the exclusion of [daughter].” 

The court then awarded daughter $57,833, representing one-sixth of the “gross sale 

proceeds,” but declined to award daughter prejudgment interest. In the order, the court 

did not offset against this award an amount representing the $5,000 check provided to 

daughter in 2017. A notice of entry of this order was served on March 16, 2022. This 

appeal followed. 

DISCUSSION

In her appeal, Mondloch challenges the trial court’s award of $57,833 to daughter,

arguing it is based on an incorrect interpretation of the phrase “gross sale proceeds” in the 

1984 property agreement. Mondloch further argues the court improperly denied her 

defense of laches to the action brought on behalf of daughter to recover her 

one-sixth interest in the Mulberry property. 

I. The Trial Court’s Interpretation of the Phrase “Gross Sale Proceeds”

The trial court in its ruling found daughter was entitled to one-sixth of the sale 

proceeds for the Mulberry property. The court further found “the gross sale proceeds 

from the property to be equal to what [Mondloch] received over the years by 

encumbering this property or $347,000,” which meant daughter was owed $57,833. Our 

resolution of this issue will require us to consider the meaning of language used in the 

1984 property agreement. 

The standard of review when construing contract language is de novo, “including 

where conflicting inferences may be drawn from undisputed extrinsic evidence, ‘unless 

the interpretation turns upon the credibility of extrinsic evidence.’ ” (Hewlett-Packard 

Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 531.) When “ ‘ “competent extrinsic 

evidence is not in conflict, the appellate court independently construes the contract.” ’ ” 

(Ibid.) 
6.

“ ‘Marital property settlement agreements are favored under California law 

[citation], and [are] governed by general contract principles [citation].’ ” (Welch v. 

Welch (2022) 79 Cal.App.5th 283, 296.) “A contract must be so interpreted as to give 

effect to the mutual intention of the parties as it existed at the time of contracting, so far 

as the same is ascertainable and lawful.” (Civ. Code,3 § 1636.) “The language of a 

contract is to govern its interpretation, if the language is clear and explicit, and does not 

involve an absurdity.” (§ 1638.) “When a contract is reduced to writing, the intention of 

the parties is to be ascertained from the writing alone, if possible.” (§ 1639.) “The words 

of a contract are to be understood in their ordinary and popular sense, rather than 

according to their strict legal meaning; unless used by the parties in a technical sense, or 

unless a special meaning is given to them by usage, in which case the latter must be 

followed.” (§ 1644.) 

Again, the 1984 property agreement stated daughters (as the minor children) were 

entitled to receive one-third of the gross value of the Mulberry property, to be held in 

trust for their benefit. The gross value was further “defined as the gross sale proceeds ... 

less any costs of sale and real estate commissions.” Mondloch and ex-husband were 

designated as co-trustees of this equitable interest. 

In his testimony, ex-husband stated it was always his intent that each daughter 

receives one-third of any sale proceeds for the Mulberry property. He also believed the 

agreement required the property be sold by the time his daughters reached the age of 25. 

We do not find this characterization of the relevant language in the 1984 property 

agreement to constitute a credible or logical interpretation of the terms used. The 

language only mentions a one-third interest for “the children,” not for each. There is also 

no requirement stated that the Mulberry property be sold before either daughter turned 

25. We will therefore independently construe the language of the 1984 property 

3 Unless otherwise indicated, all further statutory references are to the Civil Code. 
7.

agreement on the issue of any obligation owed to daughter related to the Mulberry 

property. (See Hewlett-Packard Co. v. Oracle Corp., supra, 65 Cal.App.5th at pp. 530–

531.) This will require us to consider the meaning of “gross sale proceeds” as it is used 

in the 1984 property agreement. 

The specific language of the 1984 property agreement states, “gross value is 

defined as the gross sale proceeds of the residence less any costs of sale and real estate 

commissions.” (Italics added.) There is no mention in this language that any debts 

encumbering the property should be factored into the amount before the gross value is 

identified. Yet, the trial court determined “the gross sale proceeds from the property” 

were equal to what Mondloch “received over the years by encumbering this property or 

$347,000,” resulting in an award for daughter of $57,833. When viewing the plain 

language of the 1984 property agreement, we cannot conclude that the meaning of “gross 

sale proceeds” could be interpreted to mean the total value of loans received on the 

property.4 

This matter must be remanded to the trial court for a redetermination of what is 

owed to daughter under the 1984 property agreement, based on a new interpretation of 

the phrase “gross sale proceeds.”5 

4 The Merriam Webster online dictionary states “proceeds” is generally understood 

to mean proceeds before costs and expenses are deducted to determine the net proceeds 

from a sale that will be provided to a seller. (Merriam-Webster Dict. Online (2023) 

<https://www.merriam-webster.com/dictionary/gross proceeds> [as of April 20, 2023].) 

For federal income tax purposes, “[g]ross proceeds include cash and notes payable to [the 

transferor or seller], notes assumed by the transferee (buyer), and any notes paid off at 

settlement.” (I.R.S. form 1099-S, rev. 2022, p.4, emphasis added.) Both of these more 

common uses of the phrase “gross” or “gross proceeds” identify a starting point, or the 

total amount paid by the buyer before expenses, costs, or notes are deducted from that 

amount. 

5 We do not address any additional claims that may be available to daughter to 

address potential harm done to her equitable interest in the Mulberry property. 
8.

II. The Availability of a Laches Defense to Mondloch

“ ‘Laches is an equitable defense to the enforcement of stale claims. It may be 

applied where the complaining party has unreasonably delayed in the enforcement of a 

right, and where that party has either acquiesced in the adverse party’s conduct or where 

the adverse party has suffered prejudice .... [Citations.]’ ” (Straley v. Gamble (2013) 

217 Cal.App.4th 533, 538.) “We review the trial court’s finding [on the availability of a 

laches defense] for an abuse of discretion.” (Id. at p. 537.) 

The 1984 property agreement cited Probate Code section 1120.2 as providing 

guidance for Mondloch and ex-husband in their roles as co-trustees of the equitable 

interest provided to their daughters. While that specific provision of the Probate Code 

was repealed, the language contained in that provision was reenacted into Probate Code 

sections 16200 et. seq. Therefore, Mondloch continued to owe her daughters a fiduciary 

duty to protect the equitable interest they were provided at the time their parents 

divorced. (Prob. Code, § 16202.) 

A valid trust interest can “be created by any words or acts of the trustor which 

indicate with ‘reasonable certainty’ an intention” to create a trust interest, the subject, its 

purpose, and to designate any beneficiaries of the trust interest. (Estate of Berges (1977) 

76 Cal.App.3d 106, 109.) To that end, 

“An instrument that incorporates the powers provided in former [Probate 

Code] [s]ection 1120.2 (repealed by [Ch.] 820 of the [Stats.] of 1986) shall 

be deemed to refer to the powers provided in Article 2 (commencing with 

[Prob. Code,] [§] 16220). For this purpose, the trustee’s powers under 

former [Probate Code] [s]ection 1120.2 are not diminished and the trustee 

is not required to obtain court approval for exercise of a power for which 

court approval was not required by former law.” (Prob. Code, § 16203.) 

While the “grant of a power to a trustee, whether by the trust instrument, by statute, or by 

the court, does not in itself require or permit the exercise of the power,” any exercise of 

that power “by a trustee is subject to the trustee’s fiduciary duties.” (Prob. Code, 
9.

§ 16202.) A trustee also has an ongoing obligation to beneficiaries of trust property. 

(See Blackmon v. Hale (1970) 1 Cal.3d 548, 560.) 

Mondloch had an ongoing responsibility to her daughters to take care of the 

equitable interest owed to them through the 1984 property agreement. Even if other 

elements of the test for laches could be established, Mondloch failed to establish how she 

would be prejudiced by allowing such a claim to go forward, given the high duty she 

owed as a fiduciary to her daughters. We find no abuse of discretion in the trial court’s 

denial of Mondloch’s claim of laches. 

DISPOSITION

This matter is remanded to reconsider the findings made in paragraphs six and 

seven of the “RULING ON MOTION OF REAL PARTY IN INTEREST, BETSY 

BELL, TO ENFORCE JUDGMENT,” involving the interpretation of the phrase “gross 

sale proceeds” in the 1984 property agreement. In all other respects, the order is 

affirmed. Costs are not awarded in this appeal.