Court Opinion

ID: 9371757
Source: CourtListenerOpinion
Date Created: 2023-02-16 19:02:32.61337+00
Date Added: 2024-06-11T17:16:29.996501
License: Public Domain

Filed 2/16/23 Marriage of Riccardi CA2/8
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

 In re the Marriage of VALERIE                                    B317828
 and MARK ANTHONY
 RICCARDI.

                                                                Los Angeles County
 VALERIE RICCARDI,                                              Super. Ct. No. BD632307
           Appellant,

           v.

 MARK ANTHONY RICCARDI,

           Respondent.

      APPEAL from a judgment of the Superior Court of Los
Angeles County. Armando Durón, Temporary Judge. (Pursuant
to Cal. Const., art. VI, § 21.) Reversed in part.
      Ferguson Case Orr Paterson, Wendy C. Lascher and
Jessica A. Barajas for Appellant.
      The Appellate Law Firm and Aaron Myers for Respondent.
                    ___________________________
      Mark Anthony and Valerie Riccardi were married in 2002.
Four years into their marriage, they bought a house in Santa
Clarita. It is undisputed that the house was community property
pursuant to section 760 of the Family Code.1 Mark and Valerie
separated in July 2017. Valerie filed for divorce, and after a
court trial, the court entered a judgment of dissolution on
October 27, 2021.
      Valerie challenges only one aspect of the judgment in this
appeal: the trial court’s decision to reimburse Mark, pursuant to
section 2640, subdivision (b), $50,000 from the down payment the
couple made on the Santa Clarita house. The basis for this
award was oral testimony from both Mark and Valerie that
proceeds from Mark’s sale of another house in Calabasas—one
that he owned before marriage—were used to fund the down
payment. Valerie asserts that the testimony was inadequate to
support the award. We agree and reverse that part of the
judgment ordering reimbursement of $50,000 to Mark.
                          BACKGROUND
      Mark and Valerie married in 2002. At the time of their
marriage, Mark owned the Calabasas house.
      Four years after their marriage, Mark sold the Calabasas
house. This sale generated net proceeds of “[r]oughly about
[$]80,000.”
      Mark testified that the approximately $80,000 in proceeds
from the Calabasas house sale were deposited “[i]nto a personal
account.” When asked what bank maintained the account, he
responded: “I’d have to say Bank of America.” How else this
“personal” Bank of America account was used is not the subject of

1    Undesignated statutory references are to the Family Code.

                                2
any express findings by the trial court and not clearly disclosed in
the record.
       About five months after Mark sold the Calabasas house,
Mark and Valerie bought the Santa Clarita house. They agree
that some of the money for the down payment on the Santa
Clarita house came from proceeds of the Calabasas house.
However, as discussed further below, they offer no clarity on the
amount.
       Mark and Valerie separated in July 2017. They sold the
Santa Clarita house in February 2018. They split the proceeds
equally, each receiving about $22,000.
       Their marital dissolution case proceeded to trial in July
2021. At trial Mark made a claim for reimbursement, pursuant
to section 2640, subdivision (b), for the value of his separate
property contribution to the down payment on the Santa Clarita
house. As Mark describes it in his appellate brief, he “claimed
$60–80,000 in separate property from the proceeds of his [pre]-
marital home used to purchase the marital home.” The rather
broad range of this indefinite request reflects the uncertainty and
vagueness of Mark’s testimony in support of the claim.
       On direct examination, Mark testified that the down
payment was “[$]80,000.” Initially, he said that this amount
came from the sale of the Calabasas house. He then added that
the money was from the Calabasas sale “[a]long with like
$20,000.” On cross-examination, he testified he “[could]n’t be
certain” how much the down payment was. When asked if it was
more or less than $80,000, he responded “[i]t could have been
less.” Whatever the amount was, he “guess[ed]” that he funded
the down payment by “writ[ing] a check from Bank of America,”
but then said the payment might have been made by “[c]ashier’s
check or could have been wired.” Mark conceded that “[n]o,” he

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did not “have the tracing to trace the money out of Calabasas,
holding into an account for five months, and then it going out into
the Santa Clarita escrow.”
        Valerie’s testimony about the down payment was even
more uncertain. When asked where the down payment came
from, she replied that “[p]art of it was a loan, I think. And then
the other of it were moneys from the sale of [the Calabasas]
house, I believe.” This exchange between Mark’s counsel and
Valerie followed:
        “Q    And do you recall that, in fact, the money that came
from the [Calabasas] house was $50,000?
        “A    I’m not sure.
        “Q    Or any other number? Do you have any idea what
that number was?
        “A    No, I’m not sure.
        “Q    When you say you’re not sure, does that mean ‘I don’t
know,’ or does that mean it could be this or that.
        “A    It means I don’t know.”
        The trial court requested supplemental briefing on Mark’s
claim for reimbursement, and the parties complied. It decided
the issue by minute order dated August 20, 2021. In the minute
order, the court noted that Mark had “provided no records to
corroborate” his request but that Valerie had acknowledged he
“contributed some funds from the sale of his separate property
home . . . .” The court called Valerie’s claimed inability to
remember the amount “not credible” in light of her contrasting
confidence on other topics and “evasive demeanor” when
questioned about Mark’s contribution. Finding the evidence
“ ‘sufficiently established’ ” the separate property portion used for
the down payment was $50,000, and summoning its equitable
powers, the court awarded Mark a separate property

                                 4
reimbursement of $50,000. (Quoting In re Marriage of Cochran
(2001) 87 Cal.App.4th 1050, 1059 (Cochran).)
      Judgment was entered on October 27, 2021.
      At no point did anyone object that the ordered
reimbursement exceeded the proceeds from the 2018 sale of the
Santa Clarita property or address that Mark and Valerie had
each already received half the proceeds of the sale before Mark
made his claim for reimbursement.
      GOVERNING LAW AND STANDARD OF REVIEW
      Section 2640, subdivision (b) allows a spouse to be
reimbursed for “contributions to the acquisition of property of the
community property estate to the extent [such spouse] traces the
contributions to a separate property source.” (Ibid.) The amount
that may be reimbursed is limited to the “net value of the
property at the time of the division.” (Ibid.)
      The spouse seeking reimbursement under section 2640 has
the burden of proving the money contributed to acquire
community property came from a separate property source. (In re
Marriage of Marsden (1982) 130 Cal.App.3d 426, 441.) Whether
the spouse seeking reimbursement of a contribution of separate
property to a community asset “has adequately [met his or her
burden of tracing] an asset to a separate property source is a
question of fact and the trial court’s holding on the matter must
be upheld if supported by substantial evidence.” (In re Marriage
of Braud (1996) 45 Cal.App.4th 797, 823 (Braud).) Substantial
evidence is that which “ ‘ “ ‘a reasonable mind might accept as
adequate to support a conclusion.’ ” ’ ” (Ogundare v. Department
of Industrial Relations (2013) 214 Cal.App.4th 822, 830.)

                                5
                            ANALYSIS
1.     Mark’s Tracing Burden Included the Burden to Show
       that the Calabasas Sale Proceeds Were Traceable
       and Identifiable in the Bank of America Account.
       Mark Offered No Substantial Evidence to Satisfy
       that Burden.
       Mark testified that the proceeds from the sale of the
Calabasas house passed through the “personal” Bank of America
checking account before funding the down payment on the Santa
Clarita house. Valerie characterizes the Bank of America
account as “commingled.” Valerie points to testimony that her
income during the marriage was deposited into Mark’s business,
Take Two Entertainment, Inc., and there is evidence in the
record that Take Two had a Bank of America account. She notes
that “[t]here is no testimony that Take Two maintained a
business account separate from Mark’s personal account into
which Valerie’s income was comingled.” Relying on In re
Marriage of Ciprari (2019) 32 Cal.App.5th 83, 95–96 (Ciprari)
and In re Marriage of McLain (2017) 7 Cal.App.5th 262, 273–274
(McLain), Valerie asserts Mark failed to satisfy his tracing
burden as a matter of law because tracing through a commingled
account requires documentary evidence and he offered none.
       Mark responds that the trial court made no finding that the
Bank of America account was commingled and, without record
citation, that Take Two had its own business bank account.
Mark refers to the Bank of America account that held the
Calabasas proceeds in briefing as a “separate” account and claims
there was no evidence of commingling in that account. He argues
his testimony about Calabasas proceeds going in and money for
the Santa Clarita down payment coming out was sufficient to
satisfy his tracing burden.

                                6
       Mark is correct that the trial court made no express finding
that the Bank of America account was commingled. However, he
fails to provide a record citation for his assertion that the Bank of
America account was “separate.” Mark only called it “a personal
account,” which he distinguishes in briefing from a “business
account.” His testimony it was “a personal account” is not
substantial evidence the Bank of America account contained only
Mark’s separate funds to the exclusion of any community funds.
As far as we have been shown, there is simply no substantial
evidence that the Bank of America account was separate. On the
other hand, the record does not compel a finding as a matter of
law that it was commingled. The question thus becomes whether
Mark can satisfy his tracing burden under section 2640 simply by
asserting he deposited money into a bank account held during the
marriage and withdrew a similar quantity of money months later
to fund the purchase of a community asset.
       Valerie asserts that the answer is “no” because section 760
creates a presumption that property acquired after marriage is
community property. We disagree that the record supports
application of that presumption here. There is no evidence of
when the Bank of America account was opened. If Mark owned
the Bank of America account prior to marriage and never
commingled community funds in it, it would remain Mark’s
separate property. (In re Marriage of Dekker (1993)
17 Cal.App.4th 842, 850 [“in California, property acquired prior
to marriage is separate”].)
       But we agree with Valerie that Mark’s burden to trace
under section 2640 called on him to introduce more information
about the Bank of America account than the record contains. If
the Bank of America account was commingled, as Valerie’s
testimony about the Take Two account suggests it may have

                                 7
been, the separate property funds deposited would become
community property to the extent that the separate property
funds were not traceable and identifiable. (Braud, supra,
45 Cal.App.4th at pp. 822–823.) Thus, to trace the funds through
the Bank of America account, Mark had to show that either
(a) there was no commingling at all—i.e., that the account
contained only Mark’s separate property; or (b) that even though
it was commingled he could adequately trace his separate
property to the down payment funds. (Id. at p. 822 [husband
bore burden to trace through commingled checking account that
was immediate source of funds even in absence of dispute that he
deposited separate funds into that account].) He did not show
either.
       As Mark correctly notes, tracing of funds does not
necessarily require documentary evidence in every case. In In re
Marriage of Ficke (2013) 217 Cal.App.4th 10, tracing through a
bank account did not require documentary evidence where the
husband testified that the bank account was a separate, non-
commingled account. (Id. at pp. 26–27.) Here, Mark did not
testify that the Bank of America account was separate (as we
said before, “personal” does not mean “separate” under the law),
and not commingled. And Valerie’s testimony suggested it may
have been commingled. If the account was commingled, Mark
had to introduce documentary evidence to show that the
Calabasas proceeds remained traceable through the Bank of
America account. (McLain, supra, 7 Cal.App.5th at pp. 273–274.)
       Without evidence either that the Bank of America account
was separate (oral or documentary) or the Calabasas proceeds
were traceable through the account (documentary), the trial court
made an unfounded assumption that one or the other of these
facts was true. “While substantial evidence may consist of

                                8
inferences, such inferences must be ‘a product of logic and reason’
and ‘must rest on the evidence’ [citation]; inferences that are the
result of mere speculation or conjecture cannot support a
finding . . . .” (Kuhn v. Department of General Services (1994)
22 Cal.App.4th 1627, 1633.)
        This case is unlike Cochran, supra, 87 Cal.App.4th 1050,
relied upon by the trial court. The Cochran court excused the
absence of documentary tracing evidence where the husband
seeking reimbursement offered stipulations sufficient to trace the
separate and community funds in a bank account. He and the
wife stipulated to a starting balance in a bank account ($77,395)
and the portions of that starting balance attributable to separate
($43,061) and community ($34,406) property. (Id. at p. 1055.)
A single draw ($34,192) to satisfy a community debt consumed all
but $213 of the community portion. (Id. at p. 1058.) With proof
that only $213 in community funds remained before payments
were made to build the family home, the court reversed the trial
court’s determination that husband failed to adequately trace
subsequent draws to the community asset. The court explained,
“[i]t can be presumed under the family expense presumption that
the remaining $213 in community property funds was used first
to pay for the subsequent home construction loan earnest money
since the loan was for building the family home, a community
asset. Then, by process of elimination (there being no community
property funds left in the bank account), we conclude that
husband’s remaining separate property funds were used for the
remainder of the $32,950 payment.” (Id. at pp. 1058–1059.)
        No such evidence was provided in this case. There was no
evidence of the starting balance in the Bank of America account.
There was no evidence of transactions (deposits, withdrawals, or

                                 9
no activity at all) in the account during the five months that some
or all of the Calabasas money remained on deposit.
       Finally, we acknowledge Mark’s discussion of Ciprari,
supra, 32 Cal.App.5th 83, which provides that parties have
flexibility in what methods they may use to trace funds and the
type of evidence that may be considered to do so. (Id. at pp. 96–
97.) Mark concludes that this flexibility permitted the trial court
to make the award it did based on his limited testimony.
Flexibility of proof is one thing; a failure of any evidence at all to
show that separate funds were traceable through the Bank of
America account is quite another. Ciprari does not authorize a
court to excuse the reimbursement claimant of his or her burden
to trace to identifiably separate property.
2.     Mark Also Failed to Trace Because There Is No
       Substantial Evidence of the Amount of Calabasas
       Sale Proceeds Used to Purchase the Santa Clarita
       House.
       The evidence was insufficient to support a finding that
Mark satisfied his tracing burden for an additional reason. As
Mark acknowledges, he testified “that he used proceeds from the
sale of [the Calabasas house] as the down payment for [the Santa
Clarita House]. [Citation.] The question left open was not that
he did so, but the amount of the proceeds used.” This concession
independently establishes a lack of substantial evidence that he
adequately traced the funds.
       Mark’s testimony failed to establish with any certainty
either the amount of the Santa Clarita down payment or the
amount of Calabasas proceeds used to make it. He first said the
down payment was $80,000, and it came from “[t]he proceeds
from the Calabasas home.” But he immediately clarified that it
was Calabasas proceeds “[a]long with like $20,000.” He later

                                 10
conceded he could not be certain how much the down payment
was at all, allowing that it “could have been less” than $80,000.
His cross-examination ended with the admission that he did not
“have the tracing to trace the money out of Calabasas . . . .”
       Although what it means to “trace” for purposes of
section 2640 is not explicated in the statute, courts have held
that it requires more clarity than Mark’s testimony provided. In
McLain, supra, 7 Cal.App.5th 262, the parties agreed, as they do
here, that some amount of money from the sale of the husband’s
separate property house was used to build a community property
house. The court found that such evidence did “not provide
substantial evidence for tracing Husband’s separate property
because it is unclear what amount of money from the sale of the
[separate property house] was used to pay for construction.”
(Id. at pp. 274–275, italics added.) Similarly, in Braud, supra,
45 Cal.App.4th 797, the wife’s admission that “some payments
were made” from a commingled account for improvements to the
family home was inadequate to support the husband’s
reimbursement claim because there was no proof of the amounts
expended on the improvements nor any other evidence about
funds going into or out of the account. (Id. at p. 824.)
       We have been cited no cases, and encountered none in our
own research, where tracing was accomplished through such
rough estimates, qualified by as much uncertainty, as offered
here. There is simply no evidentiary support for the $50,000
reimbursement the trial court ordered. The only appearance of
that number we are cited to in the record was in a question posed
to Valerie by Mark’s lawyer: “[D]o you recall that, in fact, the
money that came from the [Calabasas] house was $50,000?”
Valerie’s response: “I’m not sure.”

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       Even though the trial court doubted Valerie’s sincerity on
 this point, it does not establish a number. Disbelief of testimony
 “does not constitute affirmative evidence of the contrary
 proposition.” (Viner v. Sweet (2004) 117 Cal.App.4th 1218, 1229.)
 Rather, “disbelief of affirmative evidence . . . is the equivalent of
 no evidence at all,” and therefore, in the absence of other
 evidence, “requires entry of a judgment against the party with
 the burden of proof on that issue . . . .” (Id. at p. 1231.) Had
 Mark met his burden to adequately trace, the trial court would
 not have needed to rely on a non-answer to a lawyer’s question to
 establish the amount of his contribution.
3.     The Trial Court’s Equitable Powers Did Not
       Authorize It to Award Mark Reimbursement.
       Although family courts are courts of equity (In re Marriage
 of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28, 38), equity
 “may not be used to find liability where the result would nullify a
 contrary statute” (Tuthill v. City of San Buenaventura (2014) 223
 Cal.App.4th 1081, 1088). Section 2640, subdivision (b) permits
 reimbursement only to the extent the party seeking
 reimbursement “traces the contributions to a separate property
 source.” The trial court’s resort to equity cannot justify its award
 of $50,000 in reimbursement to Mark where he failed to
 adequately trace.
       Moreover, though neither party raised the issue, we note
 that the trial court’s award violated section 2640 in another
 manner—it reimbursed Mark an amount more than the “net
 value” of the Santa Clarita house at the time of division.
 Section 2640, subdivision (b) provides that “[t]he amount
 reimbursed . . . may not exceed the net value of the property at
 the time of the division.” The “net value” refers to the community
 estate’s equity in the property. (See Stare v. Tate (1971)

                                  12
21 Cal.App.3d 432, 435 [“equity” or “net value” calculated as
gross value less encumbrances].)
       At the time of division, i.e., the judgment date, the Santa
Clarita house had already been sold. The actual, realized net
proceeds were only approximately $44,000. Of this amount,
Mark already received $22,000. The trial court’s judgment that
“[t]he amount of the [section] 2640 reimbursement [Mark] is
entitled to from [Valerie] amounts to $50,000” is manifestly
contrary to section 2640. It would provide Mark a total of
$72,000 on account of the Santa Clarita house—nearly $30,000
more than the value of the community’s equity in it. The award
was not a proper exercise of the court’s equitable powers for this
reason as well.
                           DISPOSITION
       The judgment is reversed to the extent of the award to
Mark of $50,000 for reimbursement on account of his claimed
contribution of separate property to the purchase of the Santa
Clarita house. Valerie is to recover her costs on appeal.

                        GRIMES, Acting P. J.

      WE CONCUR:

                        WILEY, J.

                        VIRAMONTES, J.

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