Filed 2/26/16 Marriage of Mussallem 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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 ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

In re the Marriage of LINDA and NEIL 

MUSSALLEM.

 H039860

 (Santa Clara County

 Super. Ct. No. 1-09-FL150138)

LINDA MUSSALLEM,

Respondent,

 v.

NEIL MUSSALLEM,

Appellant.

This case arises from the dissolution of the marriage of Neil Mussallem (Neil) and 

Linda Mussallem (Linda). During the dissolution proceedings, the parties disputed the 

characterization and value of real property known as the “Redwood Retreat Ranch” in 

Gilroy. 

Neil appeals an order of the trial court awarding his ex-wife, Linda, a 47 percent

separate property share in Redwood Retreat Ranch. The court determined the value of 

the property at the time Linda transferred it from her name alone to Neil and herself in 

2005 to be $5,435,000. 

Neil argues on appeal that the trial court erred because it failed to award the 

community either a pro tanto interest in the increased value of the property created by the 
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improvements that were paid for with community funds, or reimbursement to the 

community for the cost of the improvements.1

STATEMENT OF THE FACTS

Neil and Linda were married on October 6, 1971, and separated on 

September 19, 2008. A judgment of status only was entered on October 10, 2012, and a 

bench trial ensued to resolve disputed issues regarding the couple’s home. 

 On February 3, 1972, 156.58 acres of real property located at 5355 Redwood 

Retreat Road in Gilroy were purchased for $275,000 with a $75,000 down payment that 

was Linda’s separate property, and a promissory note to the sellers in the amount of 

$200,000 with interest, to be paid off in 10 years. The first payment of $20,000 on the 

promissory note was made with Linda’s separate property funds. 

The improvements to the property that existed at the time of purchase in 1972 

were a two-bedroom, one-bathroom house, a barn and some wooden corrals. The 

property also contained a roadway to the house. 

In 1973, an additional parcel next to 5355 Redwood Retread Road was purchased 

for $63,000 with Linda’s separate funds. Both properties were purchased by Linda’s 

trust, and were subsequently transferred into her name alone. The two parcels 

collectively are the “Redwood Retreat Ranch,” and remained in Linda’s name alone until 

November 11, 2005, when they were transferred to Linda and Neil. 

Shortly after the purchase of the property, the couple began to make 

improvements, including constructing a 6,000 square foot house, four garages, a 

swimming pool, and tennis and basketball courts. 

The parties remodeled the 6,000 square foot house a number of times throughout 

the years leading up to their dissolution. In the early 1990’s, the house was remodeled 

 

1

 Linda filed a motion to strike portions of Neil’s reply brief that we deferred for 

consideration with the appeal. The motion is denied.
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from seven bedrooms, eight bathrooms to three bedrooms, the kitchen, pantry and 

breakfast room were changed to one large room, and the living room, dining room and 

den was made into a great room. The house was remodeled again in the 2000’s. 

The parties presented a number of experts to testify about the value of the 

property. Linda called real estate appraiser Neil Lefmann, who testified that the property 

consisted of four separate parcels of property. Mr. Lefmann provided his opinion of the 

value of the property under different factual scenarios. Mr. Lefmann opined that the 

value of the land alone in January 1, 2006 was $4,000,000, but that the value of the land 

as of the date of trial on November 7, 2012 had declined to $3,280,000. He stated that he 

believed the value of the land with improvements that existed in 1982, assuming them to 

be in good condition in 2006 was $6,000,000, but that as of trial, the value of the land 

with the 1982 improvements was $4,900,000. Mr. Lefmann further opined that as of 

2006, the land with its current improvements was worth $6,175,000, but that as of the 

date of trial, the value was $5,040,000. Mr. Lefmann believed that the land itself held 

most of the value, and that the improvements added little additional value to the property. 

Real estate appraiser Wayne Prescott also testified to the value of the property. 

Unlike Mr. Lefmann, Mr. Prescott testified that the property consisted of five separate

parcels. He determined the value of the property by separately valuing each of the 

parcels. Mr. Prescott valued the property under the same date restrictions and factual 

scenarios considered by Mr. Lefmann, and testified that the value of this type of real 

property has decreased substantially since 2006. Like Mr. Lefmann, Mr. Prescott also 

opined that the improvements added little additional value to the property.

Neil called local real estate agent, Linda Pond, who testified that under market 

conditions as of the date of trial, she would list the property with the improvements for 

just under $5,000,000.
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Neil also called Dan Dowling, a licensed general contractor to testify about the 

cost of constructing the improvements to the property. Mr. Dowling opined on the cost 

to construct the improvements as of the date of trial in 2012. Mr. Dowling did not testify 

about the actual costs of the improvements when they were made, nor was he qualified to 

testify about the value the improvements added to the property. 

The court found that as of the date the property was transferred from Linda’s name 

alone to Linda and Neil on November 11, 2005, the property was valued at $5,435,000

without improvements.

The court found that “Linda sufficiently traced $75,000 to the purchase of the 

Redwood Retreat, $63,000 for the 1973 parcel purchase and $20,000 for the second 

installment of the [promissory] note.” The court found that the remaining $180,000 owed 

on the promissory note was paid with community funds. Based on a finding of a total 

purchase price of $338,000, the court determined that Linda’s separate property share in 

Redwood Retreat was 47 percent. 

The court found that as of the date of trial in 2012, Redwood Retreat Ranch with 

improvements had decreased in value from the date of transmutation, and was worth 

$5,000,000. This value was subject to Linda’s Family Code section 2640 reimbursement 

right of 47 percent in the amount of $2,554,450. The remaining community property 

interest in the property was deemed by the court to be $2,445,550. 

The court’s findings regarding the property were incorporated into a judgment of 

dissolution that was filed on April 29, 2013. Neil brought this appeal. 

DISCUSSION

Neil asserts that the trial court erred in setting a value for Redwood Retreat Ranch. 

Specifically, Neil argues that the court did not adequately account for the increased value 

the improvements added to the land value. He argues that although the community paid 
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for the improvements, the community did not received a pro tanto interest in the value of 

the improvements, nor was the community reimbursed for the costs of the improvements. 

We review the trial court’s characterization of the parties’ property interests to 

Redwood Retreat Ranch under the standard of review set forth by this court in Bono v. 

Clark (2003) 103 Cal.App.4th 1409 (Bono). In Bono, we held that “ ‘[q]uestions of fact 

concern the establishment of historical or physical facts; their resolution is reviewed 

under the substantial-evidence test.’ ” (Id. at p. 1421.) Therefore, a “ ‘trial court’s 

finding that a particular item is separate or community property is limited to a 

determination of whether any substantial evidence supports the finding.’ ” (Ibid.) On the 

other hand, questions of law are subject to our independent review. (Ibid.) “In this case, 

we apply the substantial evidence standard to the trial court’s factual findings as to the 

existence and character of the parties’ property. By contrast, the trial court’s 

determination of what legal principles apply is subject to our de novo review.” (Ibid.)

The issue on appeal in this case is the community’s interest in the improvements 

made to the property. With regard to the improvements to the property, the court found 

the following: “During the time the property was in Linda’s sole name, substantial 

improvements were made to the property but, not all of the improvements enhanced the 

value of the ranch and some were simply remodels of what had been done before. Linda 

could not prove that any of the improvements were paid with her separate property and 

therefore the improvements are presumed to have been made from community sources. 

Most, if not all of the improvements were made by Neil and he ran the expenses through 

his company and paid no contractor’s overhead. In addition, these funds were pre-tax 

funds. Thus, the expenses, if they could be confirmed and totaled, would be far less than

costs for such improvements would otherwise have been if a third party made the 

improvements. Further, Neil’s estimates of the costs are self-serving and not believable. 

Neil could not offer any extrinsic evidence as to the actual costs and his expert’s (Mr. 
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Dowling) opinion as to the cost of the improvements was unpersuasive because a 

significant amount of the improvements were done before Mr. Dowling ever became a 

contractor. Further, Mr. Dowling could not tell which, if any of the improvements

enhanced the value of the property and his estimate of costs were based on a contractor’s 

costs and not a person who wrote off the costs through his business. [¶] Linda’s separate 

property interest in Redwood Retreat Ranch as of the date of trial is limited to her Family 

Code §2640 rights. The Redwood Retreat Ranch was Linda’s separate property until 

November 11, 2005. Neil did not rebut the presumption of Family Code §803(a). Her 

separate property interest should be quantified as close to November 11, 2005 as 

possible. The community is entitled to a pro tanto interest in the property as of that date 

for community funds expended in acquisition and improvement to the property that 

enhanced the value of the property. [¶] Based on the reports, schedules, and testimony 

submitted by both parties’ real estate experts, the Court finds that most of the value of 

Redwood Retreat is in the land and that this is an appropriate case to value the land

separately from the improvements as contemplated in Bono v. Clark (2002) 103 Cal 

App.4th 1409. Linda’s experts offered opinions of the value of the land separate from the 

improvements. Neil’s expert’s opinion of value was based on the land plus 

improvements. The Court finds that on or about November 11, 2005, the value of 

Redwood Retreat’s land, without improvements, was $5,435,000.[2]The total purchase 

price for the land was $338,000 and the community is presumed to have paid $180,000 of 

that which is 53%. Linda’s separate share is 47% or $2,554,450.3. [¶] Based on the 

reports, schedules, and testimony submitted by both parties’ experts, the Court finds that 

at the date of trial the value of Redwood Retreat Ranch including improvements is 

 

2

 The court relied on the opinion of Linda’s expert, Mr. Prescott in arriving at the 

valuation. The court deemed Mr. Lefman’s valuation of $4,000,000 unpersuasive, 

because it was based on the faulty premise that the ranch consists of only four parcels, 

when, in fact, it is five. 
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$5,000,000. This value is subject to Linda’s Family Code §2640 claim in the amount of 

$2,554,450 and Redwood Retreat Ranch plus improvements shall be confirmed to Linda 

at the community value of $2,445,550.”

Neil argues at length that the trial court did not order a pro tanto interest in the 

value of the improvements of the property, nor did the court order the community be 

reimbursed for the costs of the improvements, and thus, did not follow the provisions of 

Bono, supra, 103 Cal.App.4th 1409. 

In Bono, this court considered the circumstance when community funds are used 

to improve a separate property residence. There, a single man owned a parcel of real 

property containing a trailer before he was married. (Bono, supra, 103 Cal.App.4th at 

pp. 1414-1415.) After the marriage, he and his wife lived in the trailer for 17 years, and 

at some point during their marriage, the couple used community funds to improve the 

trailer. (Id. at p. 1426.) The couple separated and before a judgment could be entered in 

their dissolution proceedings, the husband died. (Id. at p. 1415.) The wife sued his 

estate, seeking a declaration regarding the community interest in the trailer. (Id. at 

p. 1426.) This court concluded that because improvements constitute an investment in 

the property akin to the expenditure of funds to acquire the property or to pay off a loan 

used to buy the property, the use of community funds to improve the property entitles the 

community to a share of the property’s appreciation due to the improvements. (Id. at 

p. 1427.) Accordingly, when community funds are invested in improvements, the 

community property share is “ ‘ “the ratio of the community investment to the total 

separate and community investment in the property,” ’ ” including the original purchase 

price and the cost of the improvements. (Id. at pp. 1427-1428 & fn. 2, quoting In re 

Marriage of Moore (1980) 28 Cal.3d 366, 372.) However, this court cautioned that in 

determining this ratio, “care must be taken to include only capital improvements, and 
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then only to the extent that those capital improvements enhance the property’s value.” 

(Bono, supra, 103 Cal.App.4th at p. 1427.)

In this case, the court followed the directive of Bono, and ordered that the 

community was entitled to a pro tanto interest in the value of Redwood Retreat Ranch

because community funds were used to make the improvements to the property. 

However, based on the evidence at trial the court concluded that the improvements added 

little to the overall value of the property. 

The court’s finding of the value of the property was based on its review of the 

evidence presented at trial, and in particular, the testimony of multiple experts for both 

parties. The court deemed the testimony of Mr. Prescott as the most reliable expression 

of the property’s value. In doing so, the court specifically discounted that of 

Mr. Leffman, finding that his testimony was based on a faulty premise. 

Mr. Prescott opined that the improvements created little added value, estimating 

that the property’s value in 2006 without improvements was $5,435,000. In addition, 

Neil’s only expert to testify to the land’s value was Linda Pond, who stated that at the 

time of trial in 2012, she would list Redwood Retreat Ranch at a little less than 

$5,000,000, due to the decline in property values due to the recession. Ms. Pond offered 

no opinion of the value, if any, that the improvements added to the overall property value.

Neil points to the fact that Linda’s expert, Mr. Lefmann, estimated the value of the 

property in 2006 to be $4,000,000 for the land alone, and $6,175,000 with improvements. 

He further states “[t]he improvements thus enhanced the property’s value by $2,175,000, 

a more than 50% increase to the value of the raw land.” Neil fails to note, however, that 

the court discounted Mr. Lefmann’s opinion as to the value of the property, finding it was 

based on an incorrect premise. 

In addition, Neil argues that the trial court erred by “failing to determine the fair 

market value of the property on the date the community began funding the 
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improvements.” However, Neil offered no evidence at trial of the actual date or dates the 

improvements were made, or the market value of the property at that time. 

The court’s conclusion that the value of the property was $5,435,000 in 2006, and 

$5,000,000 at the time of trial in 2012 is supported by substantial evidence. The court 

considered all of the evidence presented at trial, and discounted that which it found to be 

lacking in credibility. As an appellate court, we do not weigh the evidence presented in 

the trial court, nor do we make a determination of a witness’ credibility. Indeed, 

“ ‘ “[o]ur power begins and ends with a determination as to whether there is any

substantial evidence to support [the findings] . . . we have no power to judge the effect or 

value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, 

or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn 

therefrom.” [Citations.]’ [Citation.]” (In re Marriage of Schnabel (1994) 30 

Cal.App.4th 747, 752.)

Neil argues that because the trial court “failed to calculate a pro tanto interest” for 

the community, it was required to order that the community be reimbursed for the costs 

associated with making the improvements to the property. 

At trial, Neil attempted to prove the costs of the improvements by calling 

Mr. Dowling as an expert. However, Mr. Dowling could only offer an estimate of what 

the construction costs would be in 2012, having not worked on any of the improvements, 

and having not been a licensed contractor at the time the improvements were made. The 

trial court deemed Mr. Dowling’s testimony unpersuasive. 

Neil’s own testimony offered no support for his claims regarding the 

improvements. Neil built the 6,000 square foot house on the Redwood Retreat Ranch 

through his own construction company in 1972 continuing until 1974. He had no records 

of the costs associated with building the house, and testified that he destroyed all 

financial records up until those from 2000. 
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The court deemed Neil’s testimony self-serving and not reliable. In addition, the

court found that Neil made most of the improvements himself, and ran the expenses 

through his construction company pre-tax. The court further noted that Neil paid no 

contractor’s overhead on the construction costs, and as a result, the expenses incurred to 

build the improvements were far less than if Neil had hired an independent contractor to 

complete the construction. Most importantly, there was no evidence presented at trial of 

the actual costs incurred to construct the improvements, because Neil destroyed all of his 

financial records and the records from his construction company from that time. 

For the reasons stated above, we find that the trial court’s findings regarding 

Redwood Retreat Ranch are supported by substantial evidence. 

DISPOSITION

The judgment is affirmed.
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______________________________________

RUSHING, P.J.

WE CONCUR:

____________________________________

PREMO, J.

____________________________________

MÁRQUEZ, J.