Court Opinion

ID: 4314517
Source: CourtListenerOpinion
Date Created: 2018-09-21 18:01:59.72719+00
Date Added: 2024-06-11T14:44:44.012574
License: Public Domain

Filed 9/21/18

                             CERTIFIED FOR PUBLICATION
                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                              FOURTH APPELLATE DISTRICT

                                      DIVISION THREE

In re Marriage of WISHTASB KUSHESH
and FARIMA KUSHESH-KAVIANI.

WISHTASB KUSHESH,
                                                     G054936
    Respondent,
                                                     (Super. Ct. No. 11D007966)
        v.
                                                     OPINION
FARIMA KUSHESH-KAVIANI,

    Appellant.

                  Appeal from a judgment of the Superior Court of Orange County, Franz E.
Miller , Judge. Reversed and remanded with directions.
                  Alan S. Yockelson for Appellant.
                  No appearance for Respondent.
                                        I. INTRODUCTION
              No published opinion to date has addressed whether an interspousal transfer
grant deed (ITGD) meets the requirements for a transmutation of the character of marital
property under Family Code section 852.1 The trial court concluded that the ITGD in this
case did not contain the requisite language to effectuate a transmutation.
              We are forced to disagree. The standard ITGD expresses an intent to
transfer a property interest from one spouse to another: The constituent components of
the word “interspousal” – literally between spouses – plus the words “transfer” and
“grant,” plus the usual statement about the grantee (or grantees) taking the property as
either community or separate property, are all clear indicators the document constitutes
an express declaration of an agreement to change the marital character of the property.
This document includes all those features. We therefore reverse the trial court, and
remand for further proceedings as to whether the beneficially-interested spouse in this
case dispelled any presumption of undue influence (see § 721, subd. (b)) that might have
arisen from the circumstances giving rise to this ITGD.
                                               II. FACTS
              Farima Kushesh-Kaviani (Wife) and Wishtasb Kushesh (Husband) were
married in January 2010. The marriage did not last. Their only child, Bahram, was born
in April 2011, and the couple separated within two weeks of his birth. Husband filed for
dissolution in late August 2011.
              During the marriage the couple lived in Husband’s separate property
condominium in Laguna Niguel. But that condo is not the one at issue in this case. This
case concerns a condo called “unit 13k” by the parties three doors down from Husband’s
condo, acquired in May 2010 (about four months into the marriage). The price of this
condo was $265,000, and the down payment was $134,654.78.

       1      All further statutory references are to the Family Code unless otherwise indicated.

                                                      2
               The deed to the condo from the seller was made out to “Farima Kaviani, a
Married Woman as Her Sole and Separate Property.” At trial, Husband admitted both the
loan application and loan itself were in Wife’s name only. What’s more, on May 21,
2010 Husband signed an ITGD. It provided, all in bold and all caps, “INTERSPOUSAL
TRANSFER GRANT DEED,” the ITGD recited: “FOR A VALUABLE
CONSIDERATION, receipt of which is hereby acknowledged, [¶] Vishtasb Kushesh,
Spouse of Grantee Herein [¶] hereby GRANT(s) to: [¶] Farima Kaviani, a Married
Woman as Her Sole and Separate Property [¶] the real property In the City or Laguna
Niguel . . . [¶] Also known as . . . 13-K . . . .” Thus Wife claimed the condo should be
confirmed to her as her separate property.
               But Husband made his own claim to the condo as his separate property.
And on that point he had one undisputed fact in his favor: All the money for the down
payment had come from his separate bank account. As a backup against Wife’s separate
property claim, Husband could also point to the fact that the property had been acquired
during the marriage, so he could argue it was also presumptively community property.
(See § 760.)
               Trial thus centered on the origin of the funds in Husband’s account used for
the down payment. Though the evidence was in conflict, the trial judge found that those
funds came from Wife’s father’s monies in Iran and were transferred (Wife’s attorney
used the word “smuggled”) into the United States via Kuwait. Concerned about
inconsistencies in Husband’s testimony, the trial court explicitly disregarded Husband’s
story that the funds were the proceeds of a partnership sale somewhere in the Middle
East.
               As to why those funds had been channeled through Husband’s account, it
was explained that Husband is a real estate investor by profession and Wife’s father
trusted Husband’s expertise to handle the transaction. Also, as Wife testified, “cultural”

                                             3
considerations had motivated her father to send the money to Husband.2 The idea was
that unit 13k would be a place for her parents to live.
                   The trial judge analyzed the case this way: First, unit 13k was acquired
during the marriage, so it was presumed to be community property. Second, “we don’t
worry about the title presumption” (alluding to section 662 of the Evidence Code3).
Third, the money to support the property, e.g., to “make the payments” on the mortgage,
was “essentially” community funds. Then the judge asked the question, “So what could
rebut the presumption?” He noted the existence of the ITGD, but agreed with Husband’s
attorney that there was an absence of “magic words” that would make it “clear that’s it’s
a transmutation.”4 Having found the ITGD “does not contain the requisite language” to
qualify as an “express declaration” under section 852, the judge then said there was thus
no need to address the question of undue influence.
                  The bottom line was a judgment that unit 13k was to be sold, with Wife
receiving reimbursement for her separate property contribution “off the top” (see § 2640)
and the parties splitting the balance. From that judgment Wife has brought this appeal. 5
                                               III. DISCUSSION
                  Prior to the enactment of former Civil Code section 5110.730 in 1984, it
was relatively “‘easy’” for spouses to transmute community property into separate
property and vice versa, simply by oral statement. (See Estate of MacDonald (1990) 51

           2       Wife’s testimony on the issue was: “Q. And why did your father not wire the money to your
account, if you had an account? [¶] A. To be honest, it’s just my father, he loved Wishtasb, and he trusted him. He
thought he knows and – I don’t know. It’s a culture thing, I guess. Like, men like to deal with men.”
           3        The “title presumption” is found in Evidence Code section 662. It is a two-sentence statute: “The
owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be
rebutted only by clear and convincing proof.”
           4       Here is the trial judge’s thinking on the ITGD issue: “So what could rebut the presumption?
What about the transfer deed that Mr. Kushesh executed? As Mr. Sarieh [Husband’s trial attorney] points out
correctly that absent language – affirmative language in the deed, the magic words if you will, making it clear that
it’s a transmutation. So the deed’s ineffective to overcome the presumption.”
           5       Husband has not filed a respondent’s brief. Such a failure is not treated as a de facto default, but
rather the appellate court examines the appellant’s brief in conjunction with the record to see if the appellant carries
its burden of demonstrating prejudicial error at the trial level. (E.g., In re Marriage of Swain (2018) 21
Cal.App.5th 830, 834, fn. 2.)

                                                           4
Cal.3d 262, 268-269 (MacDonald), quoting Recommendation Relating to Marital
Property Presumptions and Transmutations, 17 Cal.Law Revision Com.Rep. (1984) p.
213 (1984 Law Revision Commission Report).) The allure of easy transmutations had
encouraged extensive litigation by allowing spouses to “‘transform a passing comment
into an ‘agreement’ or even to commit perjury by manufacturing an oral or implied
transmutation.’” (MacDonald, supra, 51 Cal.3d at p. 269, quoting 1984 Law Revision
Commission Report, supra, at p. 214.) With the passage of former Civil Code section
5110.730, the era of easy transmutation came to an end.
                  The statute was transmogrified into current Family Code section 852 in
1992 (see Stats. 1992, ch. 162, operative January 1, 1994), with literally no change in
language. Section 852 sets forth these elements: (1) the transmutation must be made in
writing; (2) the writing must contain an “express declaration” of transmutation; and (3)
the writing must be “made, joined in, consented to, or accepted” by the adversely affected
spouse.6
                  Most of the litigation involving section 852 has centered on the “express
declaration” element. For example, in MacDonald, a deceased husband used community
funds to open three IRA accounts, with the beneficiary of each account being a trust that
left most of money to one of his three children from a prior marriage. Our Supreme
Court held the opening of the accounts did not qualify as transmutations of community
property to separate, even though the wife signed a writing to the effect she consented to
them. The reason was there was nothing in documents that warned the wife her husband
was changing the character of the property. (See MacDonald, supra, 51 Cal.3d at pp.
272-273.) “Obviously, the consent paragraphs contain no language which characterizes

          6        The elements of transmutation are all found in subdivision (a) of section 852. The remainder of
the statute involves such collateral topics as effect on third parties, gifts of a personal nature like jewelry, and
commingling. The exact text of subdivision (a) is: “A transmutation of real or personal property is not valid unless
made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose
interest in the property is adversely affected.”

                                                         5
the property assertedly being transmuted, viz., the pension funds which had been
deposited in the account. It is not possible to tell from the face of the consent paragraphs,
or even from the face of the adoption agreements as a whole, whether decedent was
aware that the legal effect of her signature might be to alter the character or ownership of
her interest in the pension funds. There is certainly no language in the consent
paragraphs, or the adoption agreements as a whole, expressly stating that decedent was
effecting a change in the character or ownership of her interest. Thus, we agree with the
Court of Appeal that these writings fail to satisfy the ‘express declaration’ requirement of
section 5110.730 (a).” (MacDonald, supra, 51 Cal.3d at pp. 272-273.)
              On the other hand, in Estate of Bibb (2001) 87 Cal.App.4th 461 (Bibb), a
grant deed signed by the deceased husband transferring his separate property interest in
an apartment to himself and his wife as joint tenants was effective to transmute his
separate interest to community. The Bibb court reasoned the word “‘grant’ is the
historically operative word for transferring interests in real property” and thus the grant
deed “validly transmuted” the apartment into joint tenancy. (Id. at pp. 468-469, quoting
MacDonald, supra, 51 Cal.3d at p. 273.)
              The present case is more like Bibb than MacDonald. For one thing, there
were fewer magic words in Bibb than here. Here, not only did the writing use the verb
“grant” – the main point of Bibb – but the heading added the words “interspousal” –
denoting a spouse-to-spouse transaction – and “transfer grant” – denoting that whoever
was doing the granting was actually transferring something out of that person’s estate.
Furthermore, this ITGD unequivocally stated the transfer was to make the property
Wife’s as her sole and separate property, inescapably pointing the reader in the direction
of a change in the marital characterization of the property.
              We therefore disagree with the trial court that the ITGD did not contain
enough “magic words” to effectuate a transmutation. (See Bibb, supra, 87 Cal.App.4th at
p. 468 [noting that the words “I give to the account holder any interest I have” would be

                                              6
enough under MacDonald].) We do not believe any form of the word “transmute” is
necessary.
                  From his remarks on the record, we think we know where the trial judge
might have taken a wrong turn. He appears to have read too much into In re Marriage of
Valli (2014) 58 Cal.4th 1396 (Valli), as shown by his allusion to not worrying about the
title presumption.
                  In Valli, a famous pop star took out a life insurance policy – the kind that
accumulates a cash value. He named his wife as the policy’s only owner and beneficiary.
(Valli, supra, 58 Cal.4th at p. 1399.) In later dissolution proceedings the wife claimed the
policy as her separate property based on it being solely in her name. (Id. at p. 1400.)
Most of the case centered on her argument that acquiring an asset from a third party is
exempt from section 852, but the court rejected her request for an exemption. It held the
insurance policy did not satisfy section 852’s requirements because it had no language
indicating that any spouse-to-spouse transfer was taking place, despite its title ownership.
That silence was not golden for the wife; it caused the high court to hold the policy was
properly characterized as community. (Id. at p. 1406.)
                  The Valli court’s determination the insurance policy on Frankie Valli’s life
did not meet section 852’s requirements was hardly a sunburst. Having lost on her fairly
esoteric third party argument, the wife had nothing left with which to argue the insurance
policy effectuated a transmutation. (See Valli, supra, 58 Cal.4th at p. 1406.) But in the
process of rejecting the wife’s argument, the Valli court addressed the long-standing
tension in California family law between the Family Code statutes and the title
presumption set forth in the Evidence Code.7 The Valli majority held that the Family
Code transmutation statutes take precedence over the Evidence Code title presumption,

        7        For a brief history of the problems arising out of that tension see In re Marriage of Koester (1999)
73 Cal.App.4th 1032, 1034, discussing how the title presumption controlled the outcome of the case in In re
Marriage of Lucas (1980) 27 Cal.3d 808 and the Legislature’s adverse reaction to Lucas.

                                                          7
but did not go so far as to say the Evidence Code presumption might never apply in some
other family law context. (Id. at p. 1406.) Justice Chin, joined by Justices Corrigan and
Liu, would have eliminated the title presumption entirely in actions between spouses.
(Id. at p. 1409 (conc. opn. of Chin, J.) [quoting amici brief that “‘section 662 has no
place in the characterization of property in actions between spouses.’”].)
                We think the trial court here confused what Valli said about the title
presumption with the elements of transmutation set out in section 852. It must be
remembered that ITGD’s have dual roles. One the one hand, they are themselves legal
title to given property. They are, after all, deeds. Under Justice Chin’s view (and we
think under the Valli majority holding as well), the title presumption they convey is not
effective as against section 852. So on that point the trial judge was quite correct not to
“worry” about the title presumption insofar as the ITGD simply reflected the legal title of
the property.
                But ITGD’s are not only title documents. They are also writings that
expressly transfer spousal interests, in which spouses unequivocally make “interspousal”
transfers to another, and do so, to harken back to Bibb, by way of the traditional word for
a conveyance – a “grant.” They don’t just reflect title. They use a verb – “grant” – to
convey title. And in that role ITGD’s do meet section 852’s transmutation requirements.
                Of course, whenever there is a transfer from one spouse to another a
rebuttable presumption of undue influence arises if the transaction gives one spouse an
unfair advantage over the other. (See In re Marriage of Burkle (2006) 139
Cal.App.4th 712, 732, citing § 721.) The trial court did not address whether in this case
Wife obtained an unfair advantage over Husband, or, if so, whether she rebutted the
ensuing presumption. While the question of unfair advantage might arguably be one of
law we could address now, the question of whether a spouse has rebutted a presumption
of undue influence is unquestionably one of fact. (See In re Marriage of Fossum (2011)

                                               8
192 Cal.App.4th 336, 344.) Rather than preempt the trial court on the unfair advantage
issue, we exercise our discretion not to address it now given that the case must be
returned to the trial court in the first instance anyway.
                                     IV. DISPOSITION
              We conclude this ITGD was valid to transmute condo unit 13k from
community property into Wife’s separate property. We therefore reverse the judgment
declaring the condo to be community property. The trial court must now reach the issue
of whether the transaction gave Wife an unfair advantage over Husband and, if so,
whether she rebutted the ensuing presumption of undue influence. Assuming those issues
are decided in Wife’s favor, our opinion is without prejudice to Husband to make
whatever claims he might make for reimbursement of his half of any possible community
contribution to unit 13k during this short marriage. Because that issue has not been
briefed, we express no opinion on it.
              Since Husband has not filed a respondent’s brief, there is no need to
allocate costs of appeal. Wife shall bear her own.

                                                   BEDSWORTH, ACTING P. J.
WE CONCUR:

IKOLA, J.

THOMPSON, J.

                                               9