Court Opinion

ID: 3178955
Source: CourtListenerOpinion
Date Created: 2016-02-19 19:14:00.754283+00
Date Added: 2024-06-11T08:38:20.083211
License: Public Domain

Filed 2/19/16 Marriage of Antoniadis CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA

In re the Marriage of CHRISTINE and
ROBERT ANTONIADIS.
                                                                 D066644
CHRISTINE ANTONIADIS,

         Respondent,                                             (Super. Ct. No. D540433)

         v.

ROBERT ANTONIADIS,

         Appellant.

         APPEAL from a judgment of the Superior Court of San Diego County, David B.

Oberholtzer, Judge. Affirmed.

         Merker & McDonald and Danny R. McDonald for Defendant and Appellant.

         Stephen Temko and Dennis G. Temko for Plaintiff and Respondent.

         Robert Antoniadis (Husband) appeals several aspects of the disposition of property

in this judgment of dissolution. He initially contends that the trial court erred as a matter

of law in ruling that respondent Christine Antoniadis (Wife) is entitled to receive as her

separate property a family residence that was purchased during the marriage (the
residence). Husband contends the Family Code section 760 presumption that property

acquired during marriage is community property must be dispositive, and thus the court

erred in applying methods for tracing and crediting Wife's separate property funds that

were utilized to make the down payment and mortgage payments on the residence.1

(In re Marriage of Valli (2014) 58 Cal. 4th 1396, 1406 (Valli).) Alternatively, Husband

argues Wife failed to present substantial evidence in support of her showing she could

trace her separate property contributions that paid for the residence, either through direct

tracing or the family expense method. (In re Marriage of Walrath (1998) 17 Cal. 4th 907,

920, fn. 5.)

       Husband presents a separate contention that the trial court erred in concluding that

the parties' 2003 estate plan, which included placement of the residence into family trust

ownership, did not result in transmutation of the residence into community property.

(§ 852, subd. (a);2 In re Marriage of Starkman (2005) 129 Cal. App. 4th 659 (Starkman).)

In the alternative, Husband contends he is entitled to reimbursement for payments that the

1      Family Code section 760 provides: "Except as otherwise provided by statute, all
property, real or personal, wherever situated, acquired by a married person during the
marriage while domiciled in this state is community property." All further statutory
references are to this code unless noted.

2      Section 852, subdivision (a), provides: "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."

                                              2
community had presumably made toward paying down the mortgage on the residence.

(§ 2640.)3

       Finally, Husband argues the trial court erred in placing a value on the community

real estate business, RACA, by including the value of certain commissions received after

the date of separation, although the court's special master had not taken them into

account. (See In re Marriage of Duncan (2001) 90 Cal. App. 4th 617, 631 (Duncan)

[valuation is a factual issue]; Evid. Code, § 730 [court appointed expert].) Having

reviewed the record and the arguments, we find sufficient evidence supports the

judgment, and there was no abuse of discretion in the court's findings. We affirm.

                                              I

                                OVERVIEW OF RECORD

                                  A. Assets and Disputes

       After Husband and Wife were married in 1988, they developed and worked at a

distribution business in Vermont. In 2000, Husband filed for personal bankruptcy and

the business failed. Wife and their two children moved to California, and Husband soon

followed. When Wife's parents, who had lived in Canada, passed away in the early

2000's, she received an inheritance of over $1.2 million in U.S. dollars ($1.6 million in

Canadian dollars), as her separate property. She deposited it all into a Royal Bank of

Canada inheritance account (the Canadian account).

3       Section 2640, subdivision (b) provides in part that "unless a party has made a
written waiver of the right to reimbursement . . . , the party shall be reimbursed for the
party's contributions to the acquisition of property of the community property estate to
the extent the party traces the contributions to a separate property source."
                                               3
       Instead of renting a family residence, the couple decided in 2002 that Wife would

use her separate property to acquire a home in Mission Beach (724 Seagirt Court; the

residence). The purchase price was $675,000, and Wife used $249,871 of her separate

property funds (designated $250,000 here) as the down payment. Title was taken by

Wife as her separate property, and she was responsible for the mortgage. As part of the

mortgage transaction, Husband signed a quitclaim deed in Wife's favor. As part of the

couple's 2002-2003 estate plan involving a revocable and restated trust, title to the

residence was transferred several times between trust ownership and Wife's separate

property, until the parties separated on December 31, 2012.

       After receiving the inherited funds, Wife regularly withdrew money from her

Canadian account for family living expenses and mortgage payments, depositing it in a

community property Wells Fargo account (also in her name alone). She had an

accounting degree and kept the books for the family, which maintained a comfortable

middle class lifestyle, including private schools for the children. Husband testified that

from 1986 to 2007, his income varied from zero to $300,000.

       From 2007 until their separation, the parties co-owned and worked at a real estate

business, RACA. Husband obtained real estate licenses and he worked up to 70 hours

per week, while Wife spent about 10 hours a week on its office work. After starting the

business, Husband waived some of his real estate commissions for the purpose of

increasing his professional profile, and he did not take significant income from the

                                             4
business until after 2010. By the time the couple separated, Wife's Canadian account had

approximately $130,000 left in it.4

       We will set forth additional relevant details from the record in connection with

discussing the characterization of the residence, through the tracing of Wife's separate

property funds. (Pt. II, post.) More facts will be provided during our discussion of the

transmutation issues, concerning the placement of the residence, at times, into family

trust ownership. (Pt. III, post.) We also defer outlining the facts relevant to Husband's

claims of insufficient evidence to support the ruling that disposed of the couple's RACA

business. (Pt. IV, post.)5

                          B. Summary of Statements of Decision

       At the conclusion of trial, Husband requested a written statement of decision

limited to the characterization of the residence property. Regarding the award of the

RACA business to Husband, the court analyzed the expert testimony presented and made

an oral statement of decision. To provide background for the issues raised on appeal, we

next summarize the trial court's rulings.

       The written statement of decision first discussed the proper characterization of the

residence, referring to evidence about Wife's separate property contributions to the down

4      As of the time of trial, June 2014, Wife's Canadian account had a balance of
$52,150. Husband testified about his January to July 2013 income and expense
declarations which said he had zero income, although in July 2013, he had a business
cashier's check on hand for $50,000, which he used to avoid paying child support.

5     Although the judgment resolved other issues between the parties, including
spousal support and attorney fees and costs, none of those orders is challenged on appeal.
                                             5
payment and monthly payments on the debt for the residence. Although she testified she

used a total of $520,761 in checks and withdrawals from her Canadian account, toward

expenses of the residence, she could only provide a portion of the financial records, but

insisted there were more.

       The court concluded that the only plausible reason for Wife making the large

withdrawals from her Canadian account, many of which were in round numbers, was to

pay down the principal on the mortgage. That evidence supported her claim that the

residence was her separate property when it was purchased. Husband had not made any

objections at trial to her testimony that her separate property was consistently used to pay

down the mortgage and to pay living expenses, through use of the Wells Fargo family

account.

       Regarding the community assets, Husband had testified to earning only modest

commissions before 2010. The court therefore found it was more likely than not that

Wife was making the mortgage payments from her Canadian accounts while the couple

was transferring the residence in and out of their family trust in 2002 and 2003.

       With respect to the transmutation issues argued, the court outlined the evidence

about the various deeds for the residence, which showed that Wife took title to the

residence in June 2002 as her separate property. The parties then decided to establish a

revocable trust as an estate planning device, and in December 2002, Wife signed a

quitclaim deed to Husband and herself as community property. That deed and a

Husband/Wife deed transferring title to the family trust were recorded in February 2003.

In June 2003, to facilitate refinancing the residence, the trust deeded the property back to

                                             6
Wife as her separate property. There were no more deeds produced in evidence except

for a recorded March 2011 trust transfer deed by Husband and Wife as joint tenants

(signed Jan. 4, 2011), transferring the residence to the family trust. The restated family

trust was also dated January 4, 2011. The court's statement of decision noted, "No one

can explain why the March 2011 deed stated the grantors were Robert and Christine as

joint tenants, which they were not--the last deed recorded before that had listed Christine

as the sole owner."

       From that evidence, the court concluded that placing title to the residence into the

trust did not support any inference that the parties intended to transmute it into

community property, particularly since they had also placed the Canadian accounts in the

trust, but it was undisputed that the Canadian accounts never were or became community

property.

       To finally resolve the dispute about the division of the residence interests, the

court acknowledged the presumption under section 760 that property acquired during the

marriage is presumed to be community property, unless acquired by gift or bequest. Wife

had the burden to prove otherwise by a preponderance of the evidence. (§ 760.) The

court then concluded that Wife had satisfied her burden of proof to show the residence

was purchased as separate property, by tracing the purchase funds to her separate

property as of the time of acquisition. At that time, the community was bankrupt and still

recovering from the Vermont business failure in 2000.

       The court next addressed whether Husband had satisfied his burden to prove under

section 850 that the residence was later transmuted to community property. This statute

                                              7
required an express written declaration by Wife unambiguously indicating a change in the

character or ownership of the property. The court concluded that the family trust deeds,

both in 2002 and 2003 and in March 2011, were insufficient to prove an express

transmutation. Because of that failure of proof, the court declined to make a

determination of whether there had been any undue influence exercised between spouses

or any violation of fiduciary duties. (§§ 721, 1100.) Consequently, the court was not

required to make any express findings on any right to reimbursement issues for the

purchase and payments on the residence. (§ 2640, subd. (a) [" 'Contributions to the

acquisition of property,' as used in this section, include down payments, payments for

improvements, and payments that reduce the principal of a loan used to finance the

purchase or improvement of the property but do not include payments of interest on the

loan or payments made for maintenance, insurance, or taxation of the property."].)

       In its oral statement of decision on the RACA business, the court assigned a value

to the business of $47,681 as of the date of separation, and awarded it to Husband,

conditioned on his making an equalizing payment to Wife of half that amount. The court

determined that contrary to a portion of the appointed expert's report and testimony, there

was additional business income from three identified real estate listings that were entered

into shortly before the date of separation. Since those deals had closed shortly after the

date of separation, the value of those commissions was essentially earned when they were

signed up and they were community property assets.6 There was a lack of evidence

6    During that time frame, Husband sold three Point Loma properties, Del Cerro,
Nipoma, and Locust, and received commissions. For many other sales, including the
                                         8
about the value of a fourth such waived commission (Plum) and the court accepted the

expert's deletion of the worth of that commission from the business value.

       Judgment was prepared accordingly and Husband appeals.

                                             II

              CHALLENGES TO THE COURT'S FINDINGS ON TRACING
                          OF SEPARATE PROPERTY

                              A. Nature of Inquiry on Appeal

       Section 760 reads, "Except as otherwise provided by statute, all property, real or

personal, wherever situated, acquired by a married person during the marriage while

domiciled in this state is community property." Initially, Husband seeks to have this

court begin and end the analysis with section 760, by concluding that the residence,

acquired during the marriage, cannot be other than community property. He argues for

de novo review of the trial court's decision on the residence characterization, solely as a

matter of statutory construction. (See, e.g., Kizer v. Hanna (1989) 48 Cal. 3d 1, 8 [plain

meaning rule]; see In re Marriage of Pearlstein (2006) 137 Cal. App. 4th 1361, 1371-1372

[de novo review of scope of statute].)

       Husband acknowledges that other portions of the Family Code create exemptions

from the statutory community property definition for certain types of separate property,

such as gifts, inheritances, and earnings while spouses are separated. (§§ 770, 771; In re

Marriage of Benson (2005) 36 Cal. 4th 1096, 1103.) He relies on a debate in case law on

whether "a common law rule codified in Evidence Code section 662" should have equal

fourth such property (Plum), Husband waived receiving a commission, in order to obtain
benefits from his business's increased visibility in the community.
                                              9
effect with Family Code presumptions in an action between spouses, on a determination

of whether property acquired during a marriage is community or separate. (Valli, supra,

58 Cal. 4th 1396, 1406 [majority opinion, declining to decide between effectiveness of

companion presumptions]; see pp. 1407-1412 [concurring opinion, J. Chin]; In re

Marriage of Haines (1995) 33 Cal. App. 4th 277, 294-295 (Haines) [effect of Evidence

Code section 662 in this context].)

       Husband's theory that the terms of section 760 control the analysis would require

us to disregard numerous California Supreme Court opinions that have applied its

provisions and presumptions to various fact situations. The majority opinion in Valli,

supra, 58 Cal. 4th 1396, 1399-1400, discusses previous case law on whether the parties'

assets are community property or separate property, stating that while the analysis begins

with section 760, it continues through a tracing process on whether an asset's acquisition

was "(1) traceable to a separate property source [citations, e.g., In re Marriage of Mix

(1975) 14 Cal. 3d 604, 610 [(Mix)]), (2) acquired by gift or bequest [§ 770, subd. (a)(2)]

or (3) earned or accumulated while the spouses are living separate and apart [§ 771, subd.

(a)]." (Valli, supra, at p. 1400.) A preponderance of the evidence is required to prove the

effect of a traced separate property source on the characterization of property, or on rights

of reimbursement. (Ibid.)

       When the Legislature enacted the Family Code in 1992, it did not intend to make

major substantive revisions to existing family law. (11 Witkin, Summary of Cal. Law

(10th ed. 2005) Community Property, § 2, p. 531.) California Supreme Court

jurisprudence accepting there is a methodology for tracing separate property interests in

                                             10
community property goes back at least to See v. See (1966) 64 Cal. 2d 778, 783 (See). (11

Witkin, Summary of Cal. Law, supra, § 17, pp. 544-546.)7 The classic analyses

applicable to tracing separate property contributions, as set forth in Mix, supra, 14 Cal. 3d
604, 610-614, are grounded in statutory presumptions and legal applications of them. As

an intermediate appellate court, we are unable to accept Husband's invitation to create

what he would consider to be "the better rule" for applying section 760, i.e., to conclude

that "no nonstatutory exception continues to have viability . . . ." (Auto Equity Sales v.

Superior Court (1962) 57 Cal. 2d 450, 455.) We are constrained to apply established

rules in this context.

                         B. Standard of Review; Methods of Tracing

       We examine the legal and factual bases for the trial court's conclusion that the

residence was and remained Wife's separate property. The court found that she had

provided sufficient evidence to trace her separate property Canadian account funds, both

in making the down payment and the bulk of the subsequent mortgage payments. (We

defer until pt. III, post, analysis of whether Husband was nevertheless able to show that

the residence was transmuted into community property at one or more points, such that

7      Early cases discussing family living expense tracing and direct tracing arose in the
legal context of property characterization rather than reimbursement. (See, supra, 64
Cal. 2d 778, 783; Mix, supra, 14 Cal. 3d 604, 612; Estate of Murphy (1976) 15 Cal. 3d 907,
918; Hicks v. Hicks (1962) 211 Cal. App. 2d 144, 157.) The same tracing methodologies
are now employed in cases where tracing is conducted to obtain reimbursement under
section 2640. (Walrath, supra, 17 Cal.4th at p. 920, fn. 5; In re Marriage of Braud
(1996) 45 Cal. App. 4th 797, 823-824 (Braud); In re Marriage of Stoll (1998) 63
Cal. App. 4th 837, 841 (Stoll).)
                                            11
he should obtain a right to reimbursement for community contributions under section

2640.)

         "Whether the spouse claiming a separate property interest has adequately traced an

asset to a separate property source is a question of fact for the trial court, and its finding

must be upheld if supported by substantial evidence." (Braud, supra, 45 Cal. App. 4th
797, 823.) A reviewing court examines the record in the light most favorable to the

judgment. (NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal. App. 4th 64, 71.)

         "It is hornbook California family law that tracing is done either directly, or by a

process of elimination whereby a spouse shows the exhaustion of available community

funds at the time of acquisition." (Stoll, supra, 63 Cal. App. 4th 837, 841.) "Under the

'direct tracing' method, the disputed asset . . . is traced to the withdrawal of separate

property funds from the commingled account. This method requires specific records

reconstructing each separate and community property deposit, and each separate and

community property payment as it occurs. Separate property status cannot be established

by mere oral testimony of intent or by records that simply total up all separate property

funds available during the relevant period and all the separate expenditures during that

period; such records do not adequately trace to the source of the purchase at the time it

was made." (Braud, supra, 45 Cal.App.4th at p. 823; original italics.)

         The second method, a "family living expense" approach, does not require very

detailed records that show each transaction in the parties' financial accounts. For

purposes of tracing under the family living expense method, "[c]ommunity expenses may

be shown by circumstantial evidence." (Price v. Price (1963) 217 Cal. App. 2d 1, 8.)

                                               12
       "Under the 'family living expense' or 'recapitulation' method, it is assumed that

family living expenses are paid out of community property funds. [Citations.] Payments

may be traced to a separate property source by showing community income at the time of

the payments or purchase was exhausted by family expense, so that the payments or

purchase necessarily must have been made with separate property funds. [Citations.]

The recapitulation must be sufficiently exhaustive to establish not only that separate

property funds were available to make the payments, but that they were actually used.

[Citation.] [T]he record must demonstrate that community income was depleted at the

time the particular asset was acquired." (Braud, supra, 45 Cal.App.4th at pp. 823-824;

Mix, supra, 14 Cal.3d at p. 612.)

                     C. Relevant Record on Tracing Issues; Analysis

       At trial, Wife presented evidence on each method of tracing. First, regarding

direct tracing, it was essentially not disputed at trial that the $250,000 down payment on

the residence was Wife's separate property. Husband argued in closing that assuming the

residence should be designated community property, Wife should then be entitled to a

$250,000 credit for her separate property contribution (down payment). (§ 2640.)

       The matter was contested on whether the ongoing mortgage payments on the

residence were provided exclusively or largely by Wife's separate property. Husband

argues that Wife failed to provide a sufficient number of checks and bank statements to

support her testimony that she contributed $520,761 in separate property funds toward

paying the mortgage and improvements to the residence (new flooring). From the year

2000 through 2012, Wife withdrew funds from her Canadian account to pay for the home

                                            13
purchase and mortgage payments, as well as other family living expenses. She had a

practice of depositing the Canadian checks into a family Wells Fargo checking account.

In that way, she used $250,000 from the Canadian account to make the down payment,

and she estimated there was another $250,000 used from it for mortgage payments on the

residence. Through 2012, up to $1.5 million (Canadian dollars) of her separate property

inheritance funds were spent on the purchase and mortgage for the residence and other

family living expenses. The evidence had showed that in 2002, Wife and Husband

originally agreed to place title to the home in her own name. Although several trust

transactions followed, they were not directly discussed by the court in this context.

       Although Wife did not supply full documentation of the decade of mortgage and

banking transactions, she was able to show the availability of her separate Canadian

account funds on given dates. Wife's testimony that her separate Canadian account was

gradually becoming depleted through spending on expenses for the residence, as well as

other living expenses, was deemed credible by the trial court. (Price v. Price, supra, 217
Cal. App. 2d 1, 8 [community expenses may be shown by circumstantial evidence].) In

the statement of decision, the court relied on several trial exhibits as backing up her

testimony, the available checks and statements, payable to the mortgage servicing

company or cash. Since some of the checks were in even dollar amounts (e.g., $ 4,000-

$5,000), while the mortgage bills were for odd amounts (e.g., $3,692.82), the court

surmised that some large checks to the mortgage company were being used to pay down

the principal on the loan, as would be consistent with Wife's claim to the residence as her

separate property.

                                             14
       Generally, the evidence showed that the salaries of the couple were minimal

compared to their community expenses, at least through 2010, when Husband began to

earn significant commissions. Around 2006, Husband obtained a loan of $62,000 from

Wife's brother. The court noted that Husband had not controverted the testimony that the

main source of the funds in the family Wells Fargo account was Wife's separate Canadian

account. No other consistent sources of community income had been identified for that

period. Moreover, the court relied on the evidence that the business failure in Vermont

had bankrupted the community, to conclude that as of the time of acquisition in 2002, the

community did not have income or a down payment to qualify for the mortgage on the

residence. (See Haines, supra, 33 Cal. App. 4th 277, 291 [time of acquisition of property

determines its status as community or separate].) From the available evidence and

testimony, the court concluded that Wife had satisfactorily traced the money from her

Canadian account into the bills for expenses of the residence, as direct tracing, especially

since there was no significant controverting showing by husband. (See Mix, supra, 14

Cal.3d at p. 613.) The record substantially supports this finding.

       Although the court did not expressly rely on the alternate method of tracing

(family living expense), evidence was presented to show there were insufficient

community funds to have contributed significantly to the acquisition of and payment for

the residence between 2002 and 2010. The RACA business was not incorporated until

2007, Husband did not earn significant commissions until at least 2010, and separation

occurred in 2012. The court discussed the ongoing use of Wife's Canadian account funds

for various family living expenses, and took note of the evidence showing that the

                                             15
community was bankrupt for some time after 2000. The court made express and implied

findings that the community funds had been exhausted and thus it was unlikely that the

residence expenses were paid by the community, for most of the relevant time period.

(Braud, supra, 45 Cal.App.4th at p. 823.)

       Moreover, the trial court's statement of decision expressed concern about the

credibility of the parties, noting that each of them testified at times to things they wished

were true but were probably not true, understandably with respect to long ago events.

The court then noted that Husband had testified about several items that he knew not to

be true, and therefore, when the parties' testimony differed on the financing of the

residence, the court tended to favor Wife's view. The court was entitled to take into

account the respective credibility of the witnesses and on appeal, we have been given no

basis to contradict it. (Braud, supra, 45 Cal. App. 4th 797, 823 [trial court's resolution of

disputed factual issues to be upheld where supported by substantial evidence].)

       Before we can draw any final conclusions about the sufficiency of the trial court's

findings that the residence was and is the separate property of Wife, we turn to the related

transmutation issues arising from the parties' use of the family trust as an estate planning

device.

                                             III

                                TRANSMUTATION ISSUES

       Husband contends the trial court should have analyzed the evidence as showing

that even if the residence were originally deemed to be Wife's separate property, the deed

from Wife to "Husband and Wife" as community property (executed in Dec. 2002 but

                                             16
recorded in Feb. 2003), clearly satisfied the standards of section 852. Subdivision (a) of

that section requires a transmutation from separate property to community to be in

writing by "express declaration." Husband claims that when the factual context of estate

planning and the use of a revocable trust is properly considered, the recorded deed and

the related trust transactions (including the 2011 trust transfer deed from the couple as

joint tenants) sufficed to indicate a change in the character and the ownership of the

property. (Starkman, supra, 129 Cal.App.4th at p. 664.)

                              A. Applicable Legal Principles

       In Estate of MacDonald (1990) 51 Cal. 3d 262 (MacDonald), the court concluded a

writing signed by the adversely affected spouse is not an "express declaration" for

purposes of section 852, subdivision (a), "unless it contains language which expressly

states that the characterization or ownership of the property is being changed."

(MacDonald, supra, at p. 272; original italics.)8 The court further concluded the

determination of whether a writing meets the "express declaration" requirement must be

made without resort to extrinsic evidence. (Ibid.) The determination of whether a written

document constitutes a transmutation is subject to de novo review. (In re Marriage of

Barneson (1999) 69 Cal. App. 4th 583, 588, 591 (Barneson) [a "transmutation may be

8      The court in MacDonald, supra, 51 Cal. 3d 262, 267-272, was analyzing a
predecessor statute, Civil Code section 5110.730, which also invalidated attempts to
transmute property unless certain conditions were met. The court's statements apply
equally to current section 852. (Starkman, supra, 129 Cal. App. 4th 659, 663-664.)
Section 852, subdivision (b) pertains to the requirements for a transmutation of real
property (not effective as to third parties without notice, unless recorded), and it does not
appear to apply here. Likewise, subdivision (c) of the section does not apply (gifts
between spouses).
                                              17
effected by means of a transfer, but a transfer is not necessarily a transmutation"]; Cox

Cable San Diego, Inc. v. City of San Diego (1987) 188 Cal. App. 3d 952, 958.)

       The court in Starkman, supra, 129 Cal. App. 4th 659, addressed whether documents

that transferred the husband's separate property into a revocable trust, created by the

husband and wife for estate planning purposes, satisfied the requirements of MacDonald,

supra, 51 Cal.3d at page 272, for an "express declaration" under section 852, subdivision

(a) (i.e., changing the characterization or ownership of the property). In Starkman, the

court held the trust instruments were insufficient to constitute a transmutation, relying on

the record showing that the husband and wife had created the trust to avoid probate and to

administer their estate in the event of death. It was not evidently the purpose of the trust

to transmute the husband's substantial separate property into community property.

(Starkman, supra, at p. 664.) The court declined to consider extrinsic evidence beyond

the trust documents, such as an attorney warning letter. (Id. at p. 665, citing MacDonald,

supra, 51 Cal.3d at pp. 271-272.) "A party does not 'slip into a transmutation by

accident.' " (Starkman, supra, at p. 664.)

       In re Marriage of Holtemann (2008) 166 Cal. App. 4th 1166 (Holtemann)

distinguished the analysis of Starkman, supra, 129 Cal. App. 4th 659, because the

documents before the court in Holtemann had used the "unique and specific term of art,"

"transmutation," leading to the conclusion that the parties had clearly chosen that

disposition of property. (Holtemann, supra, at p. 1173.) There, the main document was

entitled, "Spousal Property Transmutation Agreement," and the trust document expressly

transmuted certain of Husband's identified separate property to community property. (Id.

                                             18
at pp. 1169-1170.) "Regardless of the parties' motivations underlying the documents,

they contained the requisite express unequivocal declarations." (Id. at p. 1173.)

                   B. Relevant Record on Estate Planning/Trust Issues

       In the original June 2002 deed, Wife took title to the residence as her separate

property. In connection with establishing their estate plan in December 2002, Wife

signed a quitclaim deed to Husband and herself as community property. Both that deed

and a deed transferring title to the family trust were recorded in February 2003. In July

2003, to facilitate refinancing the residence in Wife's name, Husband and Wife, as

trustees, deeded the property back to Wife as her separate property. No other deeds were

produced in evidence except for the March 2011 trust transfer deed from Husband and

Wife as joint tenants, granting the residence to the family trust. The 2011 restated trust

was also admitted into evidence.

       During closing argument, Husband's attorney mainly argued that despite the

sequencing of the deeds, there was an understanding between the parties that the

residence would be community property. He claimed that the use of the separate

property designations was merely for financing and refinancing, because of Husband's

bankruptcy and bad credit, such that Wife had a fiduciary duty to reconvey title to the

community.

       As noted, the court's statement of decision observed that the record was unclear

"why the March 2011 deed stated the grantors were Robert and Christine as joint tenants,

which they were not -- the last deed recorded before that had listed Christine as the sole

owner." The burden had shifted to Husband to prove, by a preponderance of the

                                             19
evidence, that the residence had been transmuted into community property. (§ 852,

subd. (a).) Pursuant to the authority of MacDonald, supra, 51 Cal. 3d 262, the court

declined to consider testimony or other extrinsic evidence. Husband's only admissible

evidence, the written deeds transferring the residence into the family trust and the restated

trust, did not provide a showing with the requisite specificity that Wife had made an

express written declaration to unambiguously indicate her intent to change the character

or ownership of the property. (Starkman, supra, 129 Cal.App.4th at p. 662.)

       In particular, the court noted that the restated trust, at its paragraph 2.A, declared

that the property described in the attached schedule (the residence and the Canadian and

Wells Fargo bank accounts) was their community property, and that community property

transferred into the trust retained its character as such. However, since Husband had

conceded the Canadian account was never community property, the trust documents

likewise did not support any inference that the parties had intended to transmute the

separate property residence into community property. (Barneson, supra, 69 Cal.App.4th

at p. 591 [a transfer is not necessarily a transmutation].)

       The court concluded that Husband's evidence did not satisfy his burden of proof

for transmutation, and consequently, "the court has no call to analyze the spouses'

fiduciary duties to one another [citations] or a presumption of undue influence."9

9       "Section 721 . . . creates a broad fiduciary relationship between spouses in their
transactions with each other. This relationship 'imposes a duty of the highest good faith
and fair dealing on each spouse, and neither shall take any unfair advantage of the
other.' " (In re Marriage of Simmons (2013) 215 Cal. App. 4th 584, 590.) Section 1100
recognizes the fiduciary duty of spouses in the management and control of community
personal property, and section 1101 provides remedies for breaches of same.
                                               20
          C. Analysis; No Transmutation; No Undue Influence Issues Resolved

       We examine whether the deeds and trust relied upon by Husband amounted to

Wife's "express declaration" of transmutation within the meaning of section 852,

subdivision (a). This was a revocable trust, stating at its paragraph 8 that on revocation,

the settlors would receive their property back. The trial court could reasonably conclude

that merely listing both community and separate property on the trust's Schedule A did

not serve as an express transmutation. The original deeds and trust transactions did not

contain clear and unambiguous language to change the characterization or ownership of

property. (Barneson, supra, 69 Cal.App.4th at p. 590 [term "transfer" has multiple

definitions and can be ambiguous].)

       Husband seeks to characterizes the trust's 2003 deed transferring the residence to

Wife as her separate property as merely a financing device that was consistent with

continued community property status. However, the 2011 trust transfer deed from the

couple as joint tenants to the trust still had no foundation in any deed back from Wife to

the community. Husband does not explain how the 2011 deed originated or how it

became effective. He cannot show error in the trial court's conclusion that the writings in

evidence did not clearly and unambiguously establish an intent to change the

characterization or ownership of the residence as separate property. There is again no

need to reach any issues of undue influence.

                        D. Alternate Argument for Reimbursement

       Finally, Husband argues that even if the trial court were correct in designating the

residence to be Wife's separate property, there was still a basis in the evidence to grant

                                             21
credits to the community for its presumed contributions of funds to reduce the principal

of the loans on the residence, either as monetary reimbursement or as an percentage

interest in the equitable ownership of the residence. (§ 2640; In re Marriage of Nelson

(2006) 139 Cal. App. 4th 1546, 1556-1557 (Nelson) [to apply a Moore/Marsden

calculation to allow a community interest according to amounts the community

expended, sufficient supporting evidence must be presented].)10

       To show the existence of such community contributions toward the payments on

the mortgage, Husband essentially argues that separate property funds must have been

commingled with community funds, such as through the use of the Wells Fargo family

account. Husband has not pointed to any proof he presented of community contributions

toward paying down the mortgage, and instead he merely assumes there must have been

some, apparently because his income varied widely and he admitted to earning significant

amounts after 2010. As supporting evidence in the record, he points to a 2014 mortgage

bill with both names on it, and estimates there should be a community property interest of

nearly $75,000. Evidently, the premise of Husband's argument is that the residence

qualified as part of the community estate to be divided, but that premise fails. He did not

provide proof that he made contributions qualifying him for reimbursement under section

2640, subdivision (b), for his "contributions to the acquisition of property of the

10     Under In re Marriage of Moore (1980) 28 Cal. 3d 366, 371-372, the community
has a pro tanto community property interest in acquired property " 'in the ratio that the
payments on the purchase price with community funds bear to the payments made with
separate funds.' " (See In re Marriage of Marsden (1982) 130 Cal. App. 3d 426, 436-439.)
                                           22
community property estate to the extent the party traces the contributions to a separate

property source." (Italics added.)

       Also, Wife argues that no such issue was raised at trial and it should be deemed

forfeited. On appeal, the parties do not argue any effect of section 852, subdivision (d),

and due to a failure of proof by Husband, we need not address its provisions, reading:

"Nothing in this section affects the law governing characterization of property in which

separate property and community property are commingled or otherwise combined."

       Although it is not clear whether this issue was properly brought before the trial

court, it is moot in light of our determination on the other issues presented. It is

unnecessary to address any reimbursement issues. Sufficient evidence supports the trial

court's findings that the residence was and is the separate property of Wife.

                                             IV

                            CONDITIONAL AWARD OF RACA

       The parties stipulated to the December 31, 2012 separation date for valuation of

the business, and evidence was presented about RACA's proceeds. In its oral statement

of decision on the RACA business, the court assigned a value of $47,681 as of the date of

separation, and awarded it to Husband, conditioned on his making an equalizing payment

to Wife of half that amount.

       Husband contends the trial court erroneously failed to accept the valuation as

estimated by the special master appointed by the court, Dennis Pearson. (Evid. Code,

§ 730 [court's appointed expert].) Pearson used the time rule and found that the value to

the community of eligible real estate commissions was $25,627.78. The court examined

                                              23
the evidence and the witnesses, and determined that there was a basis to allocate to the

community an additional three commissions that were payable after the date of

separation. Husband thus argues insufficient evidence supports the higher valuation the

court assigned to the business.

                      A. Standard of Review and Valuation Methods

       On a showing of good cause, the trial court may value a community asset at an

alternate valuation date from the date of trial. (§ 2552, subds. (a), (b); Nelson, supra, 139
Cal. App. 4th 1546, 1550.) "In this regard, the trial court has considerable discretion to

divide community property in order to assure that an equitable settlement is reached. 'As

long as the court exercised its discretion along legal lines, its decision will be affirmed on

appeal if there is substantial evidence to support it.' " (Ibid., citing Duncan, supra, 90
Cal. App. 4th 617, 625; In re Marriage of Nichols (1994) 27 Cal. App. 4th 661, 670

[discretionary valuation ruling affirmed so long as within the range of evidence

presented].)

       In determining the status of property as separate or community property, the court

may apply an inception of title theory, which determines when equitable title becomes

incipient, as well as the time in which title is extended and perfected. In some cases,

ownership of an asset may not become complete until the original right "matures" into

full title. (Giacomazzi v. Rowe (1952) 109 Cal. App. 2d 498, 500; 11 Witkin, Summary of

Cal. Law, supra, Community Property, § 7, p. 534; In re Marriage of Joaquin (1987) 193
Cal. App. 3d 1529, 1533.) This "inception of title" theory is commonly applied to

determine when property acquired before marriage retains a separate property character,

                                             24
but Husband has not shown why it must be confined to that context. (Ibid.; see, e.g., In

re Marriage of Kilbourne (1991) 232 Cal. App. 3d 1518, 1526 [trial court could properly

accept expert's value of a law practice by considering work in progress as of the date of

separation].)

                               B. Relevant Record; Analysis

       At trial, Husband testified that the income from RACA was the product of work

performed prior to receiving the income. The value of many waived commissions was

discussed, according to Husband's practice of representing certain clients on that basis

(such as the Plum property), to increase his professional visibility in the community.

Real estate commissions paid in January and February were the result of work done in

November and December. Certain listed properties, Del Cerro, Nipoma, and Locust,

were signed up in December 2012 and closed in January and February.

       In Pearson's report and testimony, he gave his valuation opinion based on RACA's

closed listings, including waived commissions. He considered as the relevant dates:

(1) listing, (2) closing of escrow, and (3) the percentage of time in the listing periods that

occurred prior to December 31, 2012. He concluded that as of the date of separation, the

community's commissions value was $25,627.78. Also, there were $8,160 in net tangible

business assets, for a combined $33,787 community value.

       The court treated the determination of the community business's value as a

question of fact. (Duncan, supra, 90 Cal.App.4th at p. 631.) It considered the special

master's report and inquired about the methods in it. Pearson responded that he utilized

the time rule to arrive at the community commission value, and apportioned commissions

                                              25
into two separate groups. He only included commissions he believed were earned prior

to separation, for a $25,627 value. The court asked Pearson whether a fee is earned at the

time the professional contract is signed, and compared valuation methods used in other

contexts (bankruptcy). Pearson said he was not familiar with such an inception of rights

theory, but he agreed with Wife's counsel that it would be possible to allocate the

aggregate of commissions according to the time of listing, as opposed to the time of

completion of payment.

       In issuing its ruling, the court said it would be speculative to allocate all of the

disputed waived commissions to the value of the business. Specifically as to the expert's

straight line allocation of all listings and his omission of the value of those closing shortly

after separation, the court disagreed with that method. Three such commissions had

closed between 29 and 79 days after listing, and the court ruled they were essentially

earned when signed up. The court made a finding that the value of those three

commissions was part of the community property. However, the fourth waived

commission (Plum), had been on the market longer and there was no evidence about

when effort was put in to make that sale, and it was properly omitted. The court assigned

a $47,681 value to RACA, and required Husband to buy Wife out by making a payment

of half that.

       The trial court was granted "considerable discretion to divide community property

in order to assure that an equitable settlement is reached." (Nelson, supra, 139
Cal. App. 4th 1546, 1550; Duncan, supra, 90 Cal. App. 4th 617, 625.) Under that approach,

the court had a substantial basis in the evidence to conclude that the three listings signed

                                              26
before separation, but paid shortly thereafter, were earned when listed. The court had the

discretion to question the expert's methods and to decide not to accept the expert's

recommendation in full. (Evid. Code, § 730 [discretionary language, court "may" appoint

expert to assist it]; In re Conservatorship of McKeown (1994) 25 Cal. App. 4th 502, 509

[trier of fact may reject expert testimony]; 1 Witkin, Cal. Evidence (5th ed. 2012)

Opinion Evidence, § 86, p. 728.) The decision placing a value on the community

business had a legal basis and was within the range of the evidence presented. No abuse

of discretion is apparent, and we affirm the judgment in full.

                                      DISPOSITION

       The judgment is affirmed. Costs on appeal are awarded to Wife.

                                                                  HUFFMAN, Acting P. J.

WE CONCUR:

                        NARES, J.

                     PRAGER, J.*

*       Judge of the San Diego Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
                                              27