Filed 4/28/15 Marriage of Wulf CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

In re Marriage of MICHELE A. and GERALD W. WULF.
MICHELE A. WULF, Appellant,

v. GERALD W. WULF, Respondent. G049636 (Super. Ct. No. 10D000079)

O P I N I O N

Appeal from a judgment of the Superi or Court of Orange County, Nancy Wieben Stock, Judge. Reversed and remanded with directions. Michele A. Wulf, in pro. per., for Appellant. Ludwig Law Center, Inc., Eric S. Ludwig and Michelle P. Ludwig, for Respondent.

* * *2 Michele A. Wulf appeals from the judgment dissolving her marriage to Gerald W. Wulf. Because the parties share th e same last name, we refer to them by their
first names for the sake of cl arity. Michele challenges very specific provisions of the judgment, including the trial court’s treatmentof particular financial items, and a lastminute change to the parties’ previously established custody order. We conclude Michele’s challenge to the court’s alteration of custody has merit. As Gerald expressly concedes, the final judgment altered an aspect of the prior custody order that specified which parent would pick up the minor child, even though the court had clearly stated the trial on reserved issues did not encompass ch ild custody matters. The court’s “inherent power” to modify custody orders does not pe rmit it to do so in th e absence of proper notice and an opportun ity to be heard. We also agree the court erred by trea ting the obligation to repay a $50,000 post-separation loan Gerald took from a co mmunity account as a community obligation for which Gerald was given repayment credit on the marital balance sheet. As Michele points out, Gerald’s repayment of the loan goe s back into the same account, which was
awarded to Gerald in the dissolution. Conse quently, Gerald’s repaym ent is effectively a payment to himself. Further, we note th at because Gerald’s loan was taken postseparation, the obligation to repay it was Gerald’s separate obligation, rather than an obligation of the community. Thus, it should not have been included on the marital
balance sheet. We consequently reverse the judgme nt, and remand the case to the trial court with directions to: (1) reinstate the pr ovisions of the custody or der in effect at the
time the court announced its te ntative decision following the trial on financial issues, and to incorporate those provisions into the judg ment; and (2) recalculate the marital balance sheet, and the equalizing payment Gerald owes to Michele, without giving Gerald credit for his repayment of the $50,000 loan.3 FACTS

Michele and Gerald were married in March 1996, and were granted a status-only divorce in December 2011. They have one child, born in 1999. Child custody orders were entered in September 2011 – apparently by stipulation, although the record is not entirely clear on this point. The parties were unable to resolve their disputes over financial matters; however, and the case proceeded to trial on those issues in
October 2012. In January 2013, the court held a h earing to announce its oral tentative ruling on the financial disput es addressed in the trial. The court stated that “ this
trial on reserved issues did no t involve child custody matters . And in that regard I have to . . . share with the parties that that is a good thing. It’s difficult enough to try cases on property and financial matters, but trying them on child custody matters can be extremely difficult. So obviously, the parties exercised your leadership and your parenting instincts to arrive at your understandings before you came here on those issues.” (Italics added.) The court then proceeded to give its oral statement of decision on the financial issues, explaining that if nothing el se were said or done, that statement would
become the court’s formal statement of deci sion. The court also directed Gerald to submit a proposed judgment and serve it on Michele within 30 days of receiving the reporter’s transcript of the hearing. The court instructed Gerald that the proposed judgment he submitted should be a “unified ” one, meaning he “sho uld go back and pick up, for example, the child custody orders that were entered on September 1, 2011, and any other significant orders that would be judgment-worthy, that are final in

nature . . . so we have a unified judgment a nd not just a series of handwritten prior orders.” (Italics added.) Among other things, the court found that both parties had breached their fiduciary duty to the other: Michele had purchased $33, 000 worth of jewelry without4 Gerald’s knowledge or consen t, and Gerald took a $50,000 postseparation loan from a community account without Michele’s consent. The court concluded that both should be sanctioned pursuant to Fam ily Code section 1101. The court also struggled somewhat with how to properl y account for the loan taken by Gerald: “That’ s the question I had as to ho w we are accounting for the $50,000 item. It didn’t show up as a charge to husband on anybody’s balance sheet, at
least not in that amount. So I wasn’t sure how we were accounting for it.” The court then noted that both the debt and the obliga tion should be on the marital balance sheet: “If he’s being charged the 50,0 00 and he’s also picking up th e debt for the 50,000, they probably should both be on the marital property balance sheet. . . . [¶] So we should do that, or just take it off the balance sheet.” Th e court then reiterated, “I currently . . . don’t have him being charged the 50[,000] because he ’s picking up the debt without credit.” Additionally, the court made it clear that Gera ld was entitled to no credit for the $25,000 sanction levied against him in connection with the loan. When his co unsel suggested that “if he’s taking the loan and he ’s being charged $25,000 for taking a loan, that means he’s being charged $75,000 against that asset,” the court stat ed that the sanction was “a completely separate area of the balance sheet. That’s not a property division. That’s the imposition of a statutory penalty; co mpletely different concept.”
When Gerald’s counsel again complained that it was unfair to penalize
Gerald on the balance sheet fo r taking out the loan, and then also require him to pay it back without credit, the court again emphasize d that the sanction items were not part of the property division: “I st uck [the penalties] on the marita l property balance sheet, just so we could possibly use it for equalization. . . . [¶] . . . We could have that just be a separate item. But I went ahead for the sake of discussion and rolled it in as a part of the equalization so we could get a single dollar figure that would be the final figure for everybody at the table here. [¶] So that’s why I’ve got th e double-sided entry. You could draw a line right below Vanguard Acco unts Already Divided.’ At that point we5 have left the property balan ce sheet and everything below that is things like penalties and attorney’s fees. But I thought we might want to roll them up and get this all handled in one equalization.”
Gerald’s loan also decreased the value of the comm unity account – a Pacific Life Teachers Savings Account (TSA) held solely in his name – from which he
had taken it. The court calculated the starti ng account value as $132,000, but the current value as $91,000, after accounting for the lo an. The court awarded the $91,000 cash
value of that asset to Michele.
After the court set out its tentative findings on the financial issues, it allowed the parties to ask questions and make comments and suggested they take a break
to meet and confer about the court’s tentativ e findings. After the break, the parties each made suggestions to clarify certain aspects of the court’s findings, and addressed other issues. At the conclusion of the hearing, the court indicated its expectation that the parties would continue to meet and confer abou t the provisions of the proposed judgment. The parties were unable to agree on the terms of a proposed final judgment, and the court permitted the parties to file le tter briefs and set the matter for a review hearing on December 9, 2013. The court’s docke t reflects that while Michele filed a brief on December 4, Gerald did not. The parties appeared in court for the review hearing, but our record includes no transcript of what occurred. Th e court’s minute order reflects it signed and filed the final judgment, which includes an 18-page attachment setting forth terms on the same day as that review hearing. Four an d a half pages of that attachment detail the terms of child custody. Six pages of the attachment detail the division of property, creditor’s claims and assumptions of obligati ons. Among other things, this part of the judgment confirms that while Michele is aw arded the “specific sum” of $91,000 from the TSA, the account itself was confirmed to Gerald as his sole and separate property. It also6 states that “the parties have no community de bts” and Gerald assumes the debt obligation for the loan he took against his TSA “as his sole and separate property.” The final two pages of the attachme nt are a “CFLA Propertizer” marital balance sheet, which lists each item of what the court’s judgment otherwise identified as marital community property or community debt, and entries for attorn ey fees awards and sanctions. The CFLA Propertizer balance shee t then details the value attributed to each asset and debt, and shows whether the court a ssigned it to Michele or Gerald. The initial
reconciliation of these assets and debts show ed that Gerald, who received the marital residence as an asset, was obligated to make an equaliz ing payment of $90,105 to Michele. However, the court interlineate d by hand two additional items on the balance sheet – a double-sided entry for “[Family Code section] 1101 sanctions against wife in favor of husband,” showing a credit to Gerald of $16,500, and a debit to Michele in the
same amount. The second interlineated item wa s an entry giving Gerald a $50,000 credit for paying “Pacific Life TS A community debt,” but with out any corresponding entry charging him for receivi ng the TSA loan funds. After t hose items were incorporated into the balance sheet, Gerald’s equalizing payment was reduced to $48,605.

DISCUSSION

1. Standard of Review “A judgment or order of the trial c ourt is presumed to be correct, and all intendments and presumptions are indulged to support it on matters as to which the record is silent. [Citation.] It is the a ppellant’s burden to affi rmatively demonstrate error.” ( In re Marriage of Gray (2002) 103 Cal.App.4th 974, 977-978.) And while Michele did not provide a reporter’s transcript of the trial – she provided only a transcript re flecting the court’s recitation of its statement of decision – and elected to proceed with this appeal ba sed solely upon a clerk’s transcript which7 included some trial exhibits, this qualifies as an appeal from the judgment roll. ( Allen v.
Toten (1985) 172 Cal.App.3d 1079, 1082-1083 .) “In a judgment roll appeal based on a clerk’s transcript, every presumption is in favor of the validity of the judgment and all facts consistent with its validity will be presumed to have existed. Th e sufficiency of the evidence is not open to review. The trial cour t’s findings of fact and conclusions of law are presumed to be supporte d by substantial evidence and are binding on the appellate court, unless reversible erro r appears on the record.” ( Bond v. Pulsar Video Productions (1996) 50 Cal.App.4th 918, 924.)

2. Child Custody Michele first argues the court erred by changing the custody order in its judgment, pointing out that such alteration is inconsistent with the court’s own clear
statement that “this trial on reserved issues did not involve child custody matters,” as well as with its direction that Gerald prepare a proposed judgment which incorporated “the child custody orders that were en tered on September 1, 2011.” We agree. Although our very limited re cord in this appeal does not include a copy of the September 2011 custody orders, and thus we cannot compare those orders to the custody provisions in the judgment, Gerald admits the court’s judgment “made a change to the custody orders that provided that the receiving parent pick-up the minor
child.” He defends this alteration of the cust ody order in the judgme nt on the basis that the court has “inherent power to modify cust ody orders,” and he implies the issue was one he raised in a letter brief to the court pr ior to the December 2013 hearing at which the court entered judgment. However, as we have already noted, while the record reflects the court permitted both sides to file letter briefs in c onnection with the December 2013 hearing,
there is no indication in the docket that Gerald actually filed one – let alone any suggestion that his letter might have sought any change in custody terms. And even if he8 had, the court could not alter custody terms based solely upon a re quest thrown into a party’s posttrial brief following a tria l that had been explicitly limited to financial issues.
The court’s exercise of its “inherent power” to modify custody orders, like its exercise of other powers, must be done in accordance with the requirements of due process. “[A] dissolution court cannot gr ant unrequested relief against a party who appears without affording that party notice and an opportunity to respond. [Citations.] Due process requires affordin g a litigant a reasonable opport unity, by continuance or otherwise, to respond to eviden ce or argument that is new, surprising, and relevant.” ( In re Marriage of O’Connell (1992) 8 Cal.App.4th 565, 574.) “Since the interest of a parent in the companionship, care, custody, and ma nagement of his children is a compelling one, ranked among the most basic of civil rights [citations], the stat e, before depriving a parent of this interest, must afford him adequate notice and an opportunity to be heard. ( In re B.G. (1974) 11 Cal.3d 679, 688-689.) In this case, Michele contends th e court’s alteration of the custody provision specifying who would pick up the parties’ child created a significant problem for her, because she suffers from a spinal cord injury that makes it extremely painful and dangerous for her to drive a si gnificant distance in the evenin gs. She points out that the court made an explicit finding in the judgment that she is “d isabled, has been in such a condition for some period of time, and would work if she coul d.” Gerald counters that
the court’s determination Michele was disabled from working did not establish she was in any way disabled from driving , and notes there is nothing in th e record that states she is. But that simply highlights the due process problem.
Michele’s contention is that if she ha d understood in advance the court was contemplating a last-minute change in the cu stody order – one which would require her to drive a significant distance in the evening to pick up the pa rties’ child – she would have been able to produce “an a ffidavit from her doctor about her condition and limitations.”9 But because Michele was deprived of that op portunity, there is no su ch evidence in the
record. The usual method employed by a part y seeking modification of a custody
order is to file a formal order to show ca use (OSC). And conspicuously missing from the trial court’s docket is any indication that Gerald filed such an OSC seeking any modification of the custody order between the end of the trial (when the court declared no child custody issues were involved) and th e judgment. In thes e circumstances, the custody modification inserted in to the judgment cannot stand.

3. The Visa Bill Michele complains the “court erred in finding [a] $8,713 Visa bill, as a debt,” even though she describes it in her ope ning brief as a bill that “was due and owed during the marriage.” She seems to be argu ing the court’s error was its failure to acknowledge that Michele had already paid this bill from her “per sonal money” prior to the judgment, and apparently believes the co urt should have removed the debt from the
marital balance sheet and instead forced Gerald “to pay his equal share.” We reject her contention because what Michele fails to understand is that by including the debt on Michele’s side of the “CFLA Propertizer” marital balance sheet incorporated into the judgment, the court gave her the ve ry outcome she now seeks; i.e.,
it forced Gerald to bear his fair share of that previously paid community debt. The purpose of a marital balance sheet is to ensure that each side ends up
with the same net amount of community assets after all co mmunity debts are satisfied.
When an exact division of the assets is not possible – such as in cases where one party takes sole ownership of the marital home and there are not enough other assets to equal its value – the party who retains the greater amount of assets is required to make an equalizing payment to the other, to achieve the ultimate goal of balance between the values received by each party.10 As part of achieving that balance, the court must ensure that if either party is assigned responsibility to pay a community debt, that liability is also included on the balance sheet and offset by other community a ssets assigned to the party, so that each party’s net share of community assets remains equal. In this case, th e marital balance sheet incorporated into the judgment shows that for purposes of the judgment, Michele was assigned that community Visa debt, and thus credited with having paid it. That meant her share of community assets had to be increased to account for her earlier payment of that community debt. And becaus e the total amount of community assets is a fixed number, the increase on Michele’s side required a corre sponding decrease on Gerald’s. It was through that decrease that Ge rald effectively paid hi s “fair share” of the
Visa bill. Even assuming Michele did pay this Visa bill before the judgment was entered, as she claims, the retention of that community debt on her side of the marital balance sheet was appropriate, as it was the only way the court could ensure she received proper credit for having done so. In short, the Visa debt was assigned to Michele in the judgment, she was given credit for paying it, and she paid it. Whether that payment came before, or after, the judgment is of no moment.

4. The Jewelry Michele next challenges the judgment ’s treatment of jewelry she purchased at a cost of $33,000, during the marriage. The court found that her purchase of the jewelry, using community funds, was a breac h of fiduciary duty, which she does not contest. In its statement of decision, th e court acknowledged there was some evidence Michele’s intent had been to resell the jewelr y as a business, but noted there was no effort by Michele to execute the second half of such a plan; i.e., to sell the jewelry. The court stated it was “inclined to enter on her part of the balance sheet the sum of $33,000, which
is as close as we can ascertain in the cour t’s view from the credit card receipts the likely11 monies paid out of community property fund s for the assets. And I would award her those assets.” The court also tentatively awarded Gerald $1,800 in attorney fees, tied specifically to Michele’s “f iduciary duty issue.” The court’s judgment confirmed the fi nding that Michele had breached her fiduciary duty, and stated sh e would be charged one-half th e cost of the jewelry as a sanction pursuant to Family Code section 1101. Subdivision (g) of th at statute provides that “[r]emedies for breach of the fiduciary duty by one spouse . . . sha ll 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 undisclose d or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.” The court’s judgment expressly states that Michele was being charged “one-half (1/2) the community expense of th e asset ($33,000)” and that it was “enter[ing]
double entries on each side of the balance sheet.” And the CFLA Propertizer balance sheet included in the judgment demonstrates that (1) Michele was assigned the jewelry as a community asset valued at its cost, and (2 ) she was charged $16,500 as “[Family Code]
1101 sanctions” in double entr ies – one entry showing an a sset of $16,500 on her side of the community property balance sheet, and th e other showing a debit in the same amount
on Gerald’s side of the sheet. The combined effect of thos e two $16,500 entries was that Michele reimbursed the community for the en tire $33,000 cost of the jewelry she had purchased in violation of her fiduciary duty. Michele first argues the court’s judgmen t is inconsistent with its statement of decision, which she believes gave he r both the jewelry valued at $33,000 and its monetary value after finding she had breached her fidu ciary duty in co nnection with the jewelry’s purchase. She believes “there were no sanctions involved” in the statement of
decision. Michele has simply misread the record . The court’s statement of decision reflects a finding that Michele breached he r fiduciary duty to Gerald through her12 expenditure of $33,000 in community funds on the jewelry, and thus its reference to “enter[ing] on her part of the balance sheet th e sum of $33,000, which is as close as we can ascertain [is] the likely monies paid out of community property funds for the assets,” meant the court was holding her liable to the community for that entire cost as a sanction

. The court did not mean it was awarding her th e jewelry’s monetary value as a benefit. Having effectively required Michele to reim burse the community fo r the cost of the jewelry, the court’s tentative decision also aw arded her the jewelry as a community asset,
valued at its cost. The court’s judgment is consistent with the tentative ruling. Although
Michele is concerned that the judgment’s reference to “double entries on each side of the balance sheet” means she was charged $66,00 0 for the jewelry, sh e is incorrect. The “double entry” referenced by the court merely reflects th at Michele’s $16,500 sanction
was entered both on her side of the community property ba lance sheet and on Gerald’s side, so that the combined e ffect of those entries was that she reimbursed the community for the entire $33,000 cost of the jewelry – exactly what the court’s tentative decision
stated would occur.
And because Michele owned an undi vided 50 percent of the community’s assets, she also benefitted from that reimburse ment to the community in an amount equal to half the total. Consequently, the ultim ate effect of the sanction on Michele was the same as if she had paid Gerald half th at $33,000 community reimbursement – i.e., $16,500 – out of her se parate funds. Thus, the court’s treatment of the sanction on the
balance sheet was consistent with both its st atement of decision and the provisions of the judgment. We find no error.

5. Accounting for Loan Take n by Gerald from the TSA Michele also challenges the court’ s accounting for the $5 0,000 loan taken by Gerald against the TSA, wh ich was a community asset. The court found Gerald had13 also breached his fiduciary duty when he took out a $50 ,000 loan against the TSA, “without consent or sufficient notice to [Miche le.]” Thus, the court again “impose[d] the remedy called for and mandated by Family C ode section 1101, which is 50% of the amount ($25,000).” The CFLA Propertizer balance sheet incorporates this $25,000 charge, referring to it explicitly as “[f]iduciary Duty Breach by H re : $50K loan.” And just as with Michele’s sanction, the court entered Gerald’s $25,0 00 sanction on both sides of the balance sheet, which combin ed for a total of $50,000, e qual to the size of the loan
Gerald took in violati on of his fiduciary duty. Michele first complains the court’s judgment does not acco unt for the loan proceeds as a marital asset to be divided. Howe ver, absent of a complete record of the evidence admitted at trial, containing undis puted evidence that th e loan proceeds still
existed in divisible form at the time the ma rital assets were divided, we must presume there were no proceeds to divide. ( In re Marriage of Gray, supra , 103 Cal.App.4th at pp. 977-978.) We consequently find no error in the court’s failure to list those loan proceeds as a divisible community asset. Michele also argues the court erred by giving Gerald $50,000 credit in the marital balance sheet for his obligation to repa y the TSA loan. This time, we agree. Michele’s specific point is that the loan was taken from the funds contained in the TSA, a marital asset that was ultimately awarded to Gerald, and she claims the terms of the loan require the funds be repaid back into that same account. Thus, she
contends that when Gerald re pays the loan, he is actually depositing funds into his own account – and that consequently, the repaymen t obligation is not actually a net liability
for Gerald. While the court made no explicit findi ng on that point, we can nonetheless
discern from the record that Michele is co rrect. The judgment itself confirms that Gerald’s loan was actually taken “from” the TS A, and the court explained in its statement
of decision that Gerald’s loan decreased the balance in that account . Given that fact, it is14 beyond dispute that Gerald’s obligatory repayment of that same loan would replenish the value of that account. There is no third part y recipient of the loan payments. And since that account was awarded to Gerald, we agree th at Gerald’s loan repayment is effectively a payment to himself. He was entitled to no credit on the marital balance sheet for such payments. Further, we also agree with Michele for a different reason. The court’s statement of decision adopts Michele’s char acterization of the loan, which is that “ after separation , [Gerald] took $50,000 in loan value as agains t the Teacher’s Savings Account.” (Italics added.) An obligati on incurred unilaterally by a party following separation does not qualify as a community obligation. (Fam. Code, § 910.) More significant, the court’s judgment explicitly confir ms the separate nature of this obligation, stating first that “the parties have no community debts ” (italics added), a nd then that the loan obligation to the TSA is Gerald’s “sole and separate property.” Because Gerald took out the loan after separation, it did not create any community obligation that had to be accounted for on the marital balance sheet. The $50,000 loan – and the resulting debt – were Ge rald’s alone. Moreover, even if that were not true, the fact that Gerald’s repayment of the loan would di rectly replenish the value of
an account that was awarded to him in the dissolution me ans the repayment obligation did not reflect a true liability for Gerald. Fo r both of these reasons, we conclude the court erred when it gave Gerald credit for repaying the $50,000 loan to th e TSA on the marital
balance sheet.

6 . Valuation of the TSA Michele also complains th at the court erred by valuing the TSA at $91,000, rather than at $132,000, when it awarded her the value of th at account in the judgment. She argues “there was substantial evid ence” that the account was actually worth $132,000. However, as we have already explai ned, in the absence of a complete record15 of the evidence admitted at trial, “[t]he sufficiency of the evidence is not open to review. The trial court’s findings of fact and conclusi ons of law are presumed to be supported by substantial evidence and are binding on the appellate court, unless reversible error appears on the record.” ( Bond v. Pulsar Vide o Productions, supra , 50 Cal.App.4th at p. 924.) Consequently, we cannot address this claim.

DISPOSITION

The judgment is reversed, and we re mand the case to the trial court with directions to: (1) reinstate the provisions of the custody order in ef fect at the time the
court announced its tentative decision fo llowing the trial on financial issues; (2) recalculate the marital balance sheet, a nd the equalizing payment Gerald owes to Michele, without giving Gerald credit for his obligation to repay the $50,000 loan to the TSA; and (3) incorporate those provisions into a new judgment that is otherwise unchanged. Michele shall recover her costs on appeal.

RYLAARSDAM, ACTING P. J.

WE CONCUR:

IKOLA, J.

THOMPSON, J.