Court Opinion

ID: 9896925
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:03:57.347782+00
Date Added: 2024-06-11T09:14:53.144954
License: Public Domain

11/14/23 Marriage of Naranjo and Soto-Naranjo CA2/6
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                         DIVISION SIX

In re Marriage of JORGE                                       2d Civ. No. B320681
NARANJO and CLAUDIA                                         (Super. Ct. No. D354440 )
SOTO-NARANJO.                                                   (Ventura County)

JORGE NARANJO,

     Respondent,

v.

CLAUDIA SOTO-NARANJO,

     Appellant.

       In dividing the parties’ community property, the trial court
awarded husband Epstein credits for using his separate property
to pay obligations on a community property warehouse. (In re
Marriage of Epstein (1979) 24 Cal.3d 76 (Epstein). Wife appeals
the award of the credits. But the matter is not appealable
because there is no final judgment. We exercise our discretion to
treat the attempted appeal as a petition for extraordinary writ.
We grant the petition. There is no evidence that husband’s
payments from his separate property greatly exceeded the value
of his use of the community property after separation. We issue
the writ.
                               FACTS
       Jorge Naranjo and Claudia Soto-Naranjo were married in
1999 and separated in 2013. Jorge1 and his brother each own 50
percent of the shares of a corporation that operates a Mexican
restaurant in Oxnard (the Corporation).
       In 2008, Jorge, Claudia, Jorge’s brother, and Jorge’s
brother’s wife purchased a warehouse in Oxnard. The warehouse
was used to store restaurant supplies, as an office for the
restaurant business and to host catered events and parties. The
Corporation paid the mortgage and property taxes on the
warehouse. It listed the payments as rent on its balance sheet.
The rental payments listed on the balance sheet equaled the
mortgage and tax payments for the warehouse. Income from the
warehouse derived from event and party rentals, plus income
from the rental of a portion of the warehouse to a gym, were
deposited in the Corporation’s account. Claudia did not receive
any of the income.
       After the parties separated, the Corporation continued to
pay the mortgage and taxes and received all the income. The
parties stipulated that after the parties separated in January
2013, until the warehouse was sold in December 2018, the
Corporation paid $601,416 in mortgage payments and $63,096 in
property taxes. The sale of the warehouse produced a net profit
for the parties of $183,898.

      1We refer to the parties by their first names for ease of
reference. No disrespect is intended.

                                 2
       The parties agreed that the 50 percent interest in the
Corporation and its restaurant business are Jorge’s separate
property. But the trial court found that the parties’ 50 percent
interest in the warehouse was community property.
       Claudia asked the trial court to award her half of the
parties’ proceeds from the sale of the warehouse amounting to
$91,949. Jorge claimed credits pursuant to Epstein, supra, 24
Cal.3d 76, for the mortgage payments ($300,708) and the
property taxes ($31,548) the Corporation paid for the warehouse
after the parties separated, for a total credit of $332,256.
                                Ruling
       The trial court ruled that because Jorge owned only 50
percent of the Corporation, he is entitled to Epstein credits for
half of the $332,256 paid by the Corporation or $166,128. The
court, however, made a mathematical error and gave Jorge credit
for $168,128.
       The trial court took the parties’ total net proceeds from the
sale of $183,898, and subtracted $168,128, as Epstein credits
awarded to Jorge, for a net community property share of $15,770.
The court awarded half of the $15,770 or $7,885 to each party as
their respective community interests.
                            DISCUSSION
                           I. Appealability
       Ordinarily only final judgments are appealable. (Code Civ.
Proc., § 904.1, subd. (a)(1).) A judgment is not final and
appealable unless it decides the rights and duties of the parties
and terminates the litigation. (In re Marriage of Griffin (1993) 15
Cal.App.4th 685, 689.) Here, as the parties recognize, there
remains a dispute over an additional property. The judgment is
not final.

                                 3
        Claudia claims the trial court’s order could be appealed as a
post-judgment order. (Citing Code Civ. Proc., § 904.1, subd.
(a)(2).) But it is not a post-judgment order. There is no judgment
for it to be post.
        Claudia requests that if the order is not appealable, we
treat the appeal as a petition for an extraordinary writ. (Citing
In re Marriage of Ellis (2002) 101 Cal.App.4th 400, 404.) We
reluctantly agree. The matter is fully briefed on the merits.
There is little point to putting the parties through another appeal
on the same issues.
                          II. Epstein Credits
        Claudia contends that Jorge is not entitled to any Epstein
credits because the Corporation, not Jorge, made the mortgage
and tax payments.
        Claudia did not raise the issue in the trial court. But the
court sua sponte stated it is a “problem.” How true. Claudia
cannot prevail on the merits.
        Our Supreme Court in Epstein, supra, 24 Cal.3d at page 84,
held that a spouse who after separation uses separate funds to
pay community obligations is entitled to reimbursement.
        Claudia argues that Jorge must personally make the
payments to be entitled to Epstein credits. According to Claudia,
money would have to be transferred from the Corporation into
Jorge’s personal bank account from which the payments are
made for Jorge to get the credit. Claudia cites no authority in
support of her argument.
        A simple syllogism, drawn from the uncontradicted
evidence, will demonstrate this point. The Corporation is Jorge’s
separate property. The payments were made from the

                                 4
Corporation. Ergo, the payments were made from Jorge’s
separate property.
       Claudia argues that even if the payments were made from
Jorge’s separate property, he is not entitled to Epstein credits
because he failed to show that the warehouse payments greatly
exceeded the value of his exclusive use of the property. For a
community property asset used exclusively by one spouse
between separation and trial, no reimbursement should be
ordered unless the amount of the debt payment greatly exceeds
the value of the use of the asset. (In re Marriage of Hebbring
(1989) 207 Cal.App.3d 1260, 1271.) Jorge points to no such
evidence. Instead, he claims Claudia waived the issue by failing
to raise it in the trial court.
       But Jorge has the burden of proving he is entitled to
Epstein credits. (See Evid. Code, § 500 [a party has the burden of
proof as to each fact the existence of which is essential for the
claim for relief that he is asserting]; see also In re Marriage of
Prentis-Margulis & Margulis (2011) 198 Cal.App.4th 1252,
1280-1281 [husband was denied Epstein credits because he could
not trace payments to his separate funds].)
       Jorge failed to produce substantial evidence that the
amount of the debt payments greatly exceeded the value of the
use of the asset. Although the general rule is that the points not
raised in the trial court cannot be raised on appeal, the
contention that a judgment or order is not supported by
substantial evidence is an exception to the rule. (Tahoe National
Bank v. Beulah F. Phillips (1971) 4 Cal.3d 11, 23, fn. 17.)
       We grant Claudia’s writ petition. But because there is no
final judgment, Jorge will have the opportunity to produce
further evidence on his entitlement to Epstein credits on remand.

                                5
                           DISPOSITION
      Let a peremptory writ of mandate issue directing the trial
court to vacate its ruling awarding Epstein credits and to proceed
further consistent with this opinion.
      NOT TO BE PUBLISHED.

                                    GILBERT, P. J.
We concur:

             BALTODANO, J.

             CODY, J.

                                6
                  Matthew P. Guasco, Judge

              Superior Court County of Ventura

               ______________________________

     Ferguson Case Orr Paterson, John A. Hribar and Wendy C.
Lascher for Appellant.
     Taylor, McCord, Praver & Cherry and Patrick G. Cherry for
Respondent.