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

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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 Superior 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 the same last name, we refer to them by their 

first names for the sake of clarity. Michele challenges very specific provisions of the 

judgment, including the trial court’s treatment of 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 child custody matters. The court’s “inherent 

power” to modify custody orders does not permit it to do so in the absence of proper 

notice and an opportunity to be heard. 

 We also agree the court erred by treating the obligation to repay a $50,000 

post-separation loan Gerald took from a community 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 goes back into the same account, which was 

awarded to Gerald in the dissolution. Consequently, Gerald’s repayment is effectively a 

payment to himself. Further, we note that 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 judgment, and remand the case to the trial 

court with directions to: (1) reinstate the provisions of the custody order in effect at the 

time the court announced its tentative decision following the trial on financial issues, and 

to incorporate those provisions into the judgment; 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 hearing to announce its oral tentative 

ruling on the financial disputes addressed in the trial. The court stated that “this 

trial on reserved issues did not 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 else were said or done, that statement would 

become the court’s formal statement of decision. 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 “should 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 and 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 without 
4

Gerald’s knowledge or consent, 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 Family Code section 1101. 

 The court also struggled somewhat with how to properly account for the 

loan taken by Gerald: “That’s the question I had as to how 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 obligation should be on the marital balance sheet: 

“If he’s being charged the 50,000 and he’s also picking up the 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.” The 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 Gerald was entitled to no credit for the $25,000 

sanction levied against him in connection with the loan. When his counsel 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 stated 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; completely different concept.” 

 When Gerald’s counsel again complained that it was unfair to penalize 

Gerald on the balance sheet for taking out the loan, and then also require him to pay it 

back without credit, the court again emphasized that the sanction items were not part of 

the property division: “I stuck [the penalties] on the marital 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 the double-sided entry. You 

could draw a line right below Vanguard Accounts Already Divided.’ At that point we 
5

have left the property balance 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 community account – a 

Pacific Life Teachers Savings Account (TSA) held solely in his name – from which he 

had taken it. The court calculated the starting account value as $132,000, but the current 

value as $91,000, after accounting for the loan. 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 tentative 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 about 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 letter briefs and set the matter for a review 

hearing on December 9, 2013. The court’s docket 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. The 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 and 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 obligations. Among other things, this part of the 

judgment confirms that while Michele is awarded the “specific sum” of $91,000 from the 

TSA, the account itself was confirmed to Gerald as his sole and separate property. It also 
6

states that “the parties have no community debts” 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 attachment 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 attorney fees awards and 

sanctions. The CFLA Propertizer balance sheet then details the value attributed to each 

asset and debt, and shows whether the court assigned it to Michele or Gerald. The initial 

reconciliation of these assets and debts showed that Gerald, who received the marital 

residence as an asset, was obligated to make an equalizing payment of $90,105 to 

Michele. However, the court interlineated 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 was an entry giving Gerald a $50,000 credit 

for paying “Pacific Life TSA community debt,” but without any corresponding entry 

charging him for receiving the TSA loan funds. After those 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 court 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 appellant’s burden to affirmatively 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 reflecting the court’s recitation of its statement of decision – 

and elected to proceed with this appeal based solely upon a clerk’s transcript which 
7

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. The sufficiency of the 

evidence is not open to review. The trial court’s findings of fact and conclusions 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 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 entered on September 1, 2011.” 

 We agree. Although our very limited record 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 custody order in the judgment on the basis that 

the court has “inherent power to modify custody orders,” and he implies the issue was 

one he raised in a letter brief to the court prior 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 connection 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 he 
8

had, the court could not alter custody terms based solely upon a request thrown into a 

party’s posttrial brief following a trial 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 grant unrequested relief against a party who 

appears without affording that party notice and an opportunity to respond. [Citations.] 

Due process requires affording a litigant a reasonable opportunity, by continuance or 

otherwise, to respond to evidence 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 management of his children is a compelling 

one, ranked among the most basic of civil rights [citations], the state, 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 the 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 significant distance in the evenings. She points out that the 

court made an explicit finding in the judgment that she is “disabled, has been in such a 

condition for some period of time, and would work if she could.” 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 the record that states she is. 

But that simply highlights the due process problem. 

 Michele’s contention is that if she had understood in advance the court was 

contemplating a last-minute change in the custody order – one which would require her to 

drive a significant distance in the evening to pick up the parties’ child – she would have 

been able to produce “an affidavit from her doctor about her condition and limitations.” 
9

But because Michele was deprived of that opportunity, there is no such evidence in the 

record. 

 The usual method employed by a party seeking modification of a custody 

order is to file a formal order to show cause (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 the judgment. In these circumstances, the 

custody modification inserted into 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 opening brief as a bill that “was due and owed 

during the marriage.” She seems to be arguing the court’s error was its failure to 

acknowledge that Michele had already paid this bill from her “personal money” prior to 

the judgment, and apparently believes the court 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 very 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 community 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 assets assigned to the party, so that each 

party’s net share of community assets remains equal. In this case, the 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 because the total amount of community assets is a 

fixed number, the increase on Michele’s side required a corresponding decrease on 

Gerald’s. It was through that decrease that Gerald effectively paid his “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 breach of fiduciary duty, which she does not 

contest. In its statement of decision, the court acknowledged there was some evidence 

Michele’s intent had been to resell the jewelry 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 court’s view from the credit card receipts the likely 
11

monies paid out of community property funds 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 “fiduciary duty issue.” 

 The court’s judgment confirmed the finding that Michele had breached her 

fiduciary duty, and stated she would be charged one-half the cost of the jewelry as a 

sanction pursuant to Family Code section 1101. Subdivision (g) of that statute provides 

that “[r]emedies 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 asset undisclosed 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 the 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 entries – one entry showing an asset of $16,500 on her side of 

the community property balance sheet, and the other showing a debit in the same amount 

on Gerald’s side of the sheet. The combined effect of those two $16,500 entries was that 

Michele reimbursed the community for the entire $33,000 cost of the jewelry she had 

purchased in violation of her fiduciary duty. 

 Michele first argues the court’s judgment is inconsistent with its statement 

of decision, which she believes gave her both the jewelry valued at $33,000 and its 

monetary value after finding she had breached her fiduciary duty in connection 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 her fiduciary duty to Gerald through her 
12

expenditure of $33,000 in community funds on the jewelry, and thus its reference to 

“enter[ing] on her part of the balance sheet the 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 the jewelry’s monetary value as a benefit. 

Having effectively required Michele to reimburse the community for the cost of the 

jewelry, the court’s tentative decision also awarded 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 $66,000 for the jewelry, she is incorrect. The 

“double entry” referenced by the court merely reflects that Michele’s $16,500 sanction 

was entered both on her side of the community property balance sheet and on Gerald’s 

side, so that the combined effect 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 undivided 50 percent of the community’s 

assets, she also benefitted from that reimbursement to the community in an amount equal 

to half the total. Consequently, the ultimate effect of the sanction on Michele was the 

same as if she had paid Gerald half that $33,000 community reimbursement – i.e., 

$16,500 – out of her separate funds. Thus, the court’s treatment of the sanction on the 

balance sheet was consistent with both its statement of decision and the provisions of the 

judgment. We find no error. 

5. Accounting for Loan Taken by Gerald from the TSA

 Michele also challenges the court’s accounting for the $50,000 loan taken 

by Gerald against the TSA, which was a community asset. The court found Gerald had 
13

also breached his fiduciary duty when he took out a $50,000 loan against the TSA, 

“without consent or sufficient notice to [Michele.]” Thus, the court again “impose[d] the 

remedy called for and mandated by Family Code 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 $25,000 sanction on both sides 

of the balance sheet, which combined for a total of $50,000, equal to the size of the loan 

Gerald took in violation of his fiduciary duty. 

 Michele first complains the court’s judgment does not account for the loan 

proceeds as a marital asset to be divided. However, absent of a complete record of the 

evidence admitted at trial, containing undisputed evidence that the loan proceeds still 

existed in divisible form at the time the marital 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 repay 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 repays the loan, he is actually depositing funds into his own 

account – and that consequently, the repayment obligation is not actually a net liability 

for Gerald. 

 While the court made no explicit finding on that point, we can nonetheless 

discern from the record that Michele is correct. The judgment itself confirms that 

Gerald’s loan was actually taken “from” the TSA, and the court explained in its statement 

of decision that Gerald’s loan decreased the balance in that account. Given that fact, it is 
14

beyond dispute that Gerald’s obligatory repayment of that same loan would replenish the 

value of that account. There is no third party recipient of the loan payments. And since 

that account was awarded to Gerald, we agree that 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 characterization of the loan, which is that “after 

separation, [Gerald] took $50,000 in loan value as against the Teacher’s Savings 

Account.” (Italics added.) An obligation incurred unilaterally by a party following 

separation does not qualify as a community obligation. (Fam. Code, § 910.) More 

significant, the court’s judgment explicitly confirms the separate nature of this obligation, 

stating first that “the parties have no community debts” (italics added), and 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 Gerald’s alone. Moreover, even if that were 

not true, the fact that Gerald’s repayment of the loan would directly replenish the value of 

an account that was awarded to him in the dissolution means the repayment obligation 

did not reflect a true liability for Gerald. For both of these reasons, we conclude the court 

erred when it gave Gerald credit for repaying the $50,000 loan to the TSA on the marital 

balance sheet. 

6. Valuation of the TSA 

 Michele also complains that the court erred by valuing the TSA at $91,000, 

rather than at $132,000, when it awarded her the value of that account in the judgment. 

She argues “there was substantial evidence” that the account was actually worth 

$132,000. However, as we have already explained, in the absence of a complete record 
15

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 conclusions 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 Video Productions, supra, 50 Cal.App.4th at p. 

924.) Consequently, we cannot address this claim. 

DISPOSITION 

 The judgment is reversed, and we remand the case to the trial court with 

directions to: (1) reinstate the provisions of the custody order in effect at the time the 

court announced its tentative decision following the trial on financial issues; (2) 

recalculate the marital balance sheet, and 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.