Court Opinion

ID: 4573559
Source: CourtListenerOpinion
Date Created: 2020-10-06 21:02:40.714905+00
Date Added: 2024-06-11T13:31:58.837627
License: Public Domain

Filed 10/6/20 Marriage of Feng and Tian CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

 In re Marriage of JINGTAO FENG
 and LI TIAN.

 JINGTAO FENG,
                                                                       G057949
      Appellant,
                                                                       (Super. Ct. No. 17FL000060)
           v.
                                                                       OPINION
 LI TIAN,

      Respondent.

                   Appeal from a judgment of the Superior Court of Orange County,
Jonathan H. Cannon, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.)
Affirmed as modified.
                   Law Office of Alan S. Yockelson, Alan S. Yockelson; Hittelman Strunk
Law Group and Steven G. Hittelman for Appellant.
                   Holstrom, Block & Parke and Ronald B. Funk for Respondent.
                                             *               *               *
                                      INTRODUCTION
              Jingtao Feng (Husband) and Li Tian (Wife) divorced in China, and
executed a written divorce agreement purporting to divide all of their property. A
California court later determined that one piece of real property in California and one
investment in a business in the United States (neither of which had been specifically
mentioned in the parties’ written divorce agreement) were Wife’s separate property.
Substantial evidence supports the trial court’s finding that the real property was Wife’s
separate property, but does not support the finding that the business investment was
Wife’s separate property. The business investment is properly categorized as community
property.
              The trial court found that Husband breached his fiduciary duty to Wife by
encumbering her separate property without her knowledge or consent, and permitting her
properties to be lost to foreclosure. The trial court’s findings regarding the breach of
fiduciary duty claims are supported by substantial evidence.
              We reverse the trial court’s finding that the business investment was Wife’s
separate property, and instead conclude that the business investment is the parties’
community property. As modified, we affirm the judgment.
                    STATEMENT OF FACTS AND PROCEDURAL HISTORY
                                             I.
                                        THE PARTIES
              Husband and Wife married in the Republic of China in February 2003.
They owned numerous businesses and properties in China and in the United States. One
of these businesses was Wuhan Yiyang Technology Company, Ltd., a Chinese company
                                                                 1
in the business of sterilizing and disinfection (Wuhan Yiyang); at the time of their

1
  The name of this business is also identified as Wuhan Yihang in the appellate record;
for consistency, we will use the spelling Wuhan Yiyang, which is the most common
spelling in the record.

                                              2
divorce, 80 percent of the shares of the company were held in Husband’s name, and the
other 20 percent were held in Wife’s name. Another of their businesses was Wuhan
Juirui Electric Co. Ltd., a Chinese company in the business of manufacturing large
equipment (Wuhan Juirui). At all relevant times, Wuhan Juirui was owned 90 percent by
Wuhan Yiyang, and 10 percent by Husband. The other properties and businesses that are
relevant to this appeal will be discussed in detail post.
              Husband and Wife separated after she learned he’d had a child with another
woman. At the time, Husband and Wife had one minor child. They executed a voluntary
divorce agreement in China in March 2015 terminating their marriage, providing for
child custody and support, and allocating their properties. The divorce agreement
provided that, with one exception not relevant to the issues in this case, all “community-
owned real estate property will be divided according to the name on the deed for each
respective property.” The divorce agreement also provided, with regard to the parties’
business interests: “Disposition of Claims and Liabilities of Debts: The entirety of
company equity, claims and liabilities of debts will belong to the possession of the male
       2
party.” Other than the one piece of real property specifically awarded to Husband, the
divorce agreement did not identify any real or personal property, or any business
interests. Wife understood that the reference to the “entirety of company equity, claims,
and liabilities of debts” was a reference to Wuhan Yiyang and Wuhan Juirui. Husband
understood the divorce agreement to also refer to a company in the United States, CMB
Infrastructure Investment Group VII, LP, which is discussed in more detail post.

2
  The later Chinese judgment translated this as “all stock rights as well as credits and
debts of the company.”

                                              3
              Wife was awarded physical custody of the minor child; Husband agreed to
                                            3
pay 5,000 RMB per month in child support, in addition to tuition and medical expenses,
and was entitled to visitation.
              At the end of the divorce agreement, both parties wrote out and signed the
following statement: “I voluntarily divorce, I completely agree with each item of this
agreement, and additionally I have no other objections.”
                                            II.
                                  THE ALLIUM PROPERTY
              In September 2014, Wife took title to the real property located on Allium in
Irvine (the Allium property) as her sole and separate property. Husband signed two
interspousal transfer deeds confirming that the Allium property was Wife’s separate
         4
property. Husband testified no one told him the legal consequences of his signing the
interspousal deed transfers. Husband also testified that in China, all property is owned
50/50, no matter which spouse has title to the property. Wife paid all encumbrances,
taxes, insurance, association fees, and maintenance costs for the Allium property.
              In July 2015, Wife transferred title to the Allium property to the Tree
Family Living Trust, of which Wife’s brother is the trustee. The trust sold the property in
April 2017. Husband put a lien on the property, and the sales proceeds were transferred
to an attorney trust account.

3
  RMB stands for renminbi, the currency of China. (Xun Li v. Holder (9th Cir. 2009)
559 F.3d 1096, 1101, fn. 5.) The yuan is the principal unit of that currency. (Southgate
Master Fund v. United States (N.D. Tex. 2009) 651 F.Supp.2d 596, 602.) The equivalent
of 5,000 RMB at the time of the trial was $762.68 in United States dollars.
4
  One interspousal deed was signed in April, when the parties first acquired the vacant
lot on Allium, and one was signed in September when escrow closed on the new home
built on the lot.

                                             4
                                            III.
                    CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP
              In October 2011, Wife invested $535,000 in CMB Infrastructure
Investment Group VII, LP (CMB), which constituted a .444% interest in the company, in
order to obtain conditional resident status in the United States for herself, Husband, and
their minor child, as an alien investor. The United States Citizenship and Immigration
Services approved the alien investor petition on June 12, 2012, and the parties were
granted conditional resident status in April 2013. In January 2015, Wife filed a petition
by an investor to remove the conditions on the parties’ resident status. In February 2016,
the conditional basis on the resident status was removed, and the parties and the minor
                                    5
child became permanent residents.
              The money for the CMB investment came from shareholder loans made to
Husband and Wife by Wuhan Yiyang. These loans, totaling 4,500,000 RMB, were
secured by the parties’ shares in Wuhan Yiyang. At the time the CMB investment was
made, Wife held 80 percent of the company’s shares, while Husband held 20 percent.
Wife testified the loans from Wuhan Yiyang were to be repaid with dividends from
CMB. Husband testified Wuhan Yiyang did not have cash on hand to loan to the parties,
so the company took out a loan from a bank. No other evidence was presented as to the
terms of the Wuhan Yiyang loans to Husband and Wife, or the loan Wuhan Yiyang
obtained from a bank.
                                            IV.
                                REAL PROPERTIES IN CHINA
              Based on the terms of the divorce agreement, Wife received the following
properties in China as her sole and separate property:

5
 Trial exhibit A suggests that Husband did not receive permanent residency status, but
Husband testified that he did.

                                             5
              (1) 1F-2 Shop of Building, Baoan-Jiangnan 2nd Term, Nanhu Village
(South of Wuliang Highway), Hongshan District. At the time the divorce agreement was
signed, the fair market value of the property was $470,000, and the property was owned
free and clear.
              (2) 1F-15 Garage of Building No. 1, Baoan-Jiangnan 2nd Term, Nanhu
Village (South of Wuliang Highway), Hongshan District. The property had a fair market
value of $50,000, and was owned free and clear.
              (3) 1-3/F-19, Building 5, Qianyuewan, Biguiyuan, No. 1, Chuantoushan,
Dongjing Street, Hannan District, Wuhan. The property had a fair market value of
$450,000, and was owned free and clear.
              (4) 2F-C263 Central Mall, Hansheng Street, Qiaokou District. The
property had a fair market value of $600,000, and was mortgaged. Wife claims Husband
took out the mortgage on this property for the benefit of the company, but the house
mortgage record information sheet attached to Husband’s request for order lists Wife as
the debtor.
              (5) 7-2-101 Dingxiangyuan, Dongfeng Yangguangcheng, 17R Block of
Wuhan Economic & Technological Development Zone. The property had a fair market
value of $450,000 at the time of the divorce, and was mortgaged. Again, Wife claims
Husband took out the mortgage on this property, but she is listed as the debtor.
              In March 2013, Husband and Wife had signed a series of powers of
attorney authorizing another individual to act on their behalf in obtaining loans for which
                                                                                    6
they would cosign, and for which the five properties would be used as collateral.
Husband testified that all of the properties already had loans taken out against them
before the divorce agreement was signed.

6
  The powers of attorney identified other properties that would be used as collateral for
obtaining loans; we presume these properties were transferred to Husband as part of the
divorce agreement.

                                             6
              Wife’s properties (1), (2), and (3) were pledged by Husband for lines of
credit taken out by Wuhan Juirui. The loan document dated May 4, 2015, stated that
Wife agreed to be the guarantor of the loans; Wife testified the signature on the document
was not hers, and a fingerprint expert testified the thumbprint on the document did not
belong to Wife.
              Wuhan Juirui and Wuhan Yiyang defaulted on the loans and all of Wife’s
properties were lost to foreclosure.
                                  PROCEDURAL HISTORY
                                             I.
                                 LEGAL ACTIONS IN CHINA
              Wife brought a lawsuit against Husband in China in March 2016 for unpaid
child support. Husband claimed that he did not owe the child support specified in the
divorce agreement because Wife and the child had moved to the United States and
Husband could not have visitation. In March 2016, the Chinese court reaffirmed that
Husband owed Wife 5,000 RMB per month for support of the minor child, and
determined the amount of arrears owed by Husband was 40,000 RMB.
              Husband claimed he was unable to act on behalf of Wuhan Juirui and
Wuhan Yiyang because Wife refused to sign documents or take other actions necessary
to transfer control of the companies. Husband therefore obtained a judgment against
Wife in China in May 2016 requiring her to transfer ownership of her shares in Wuhan
Yiyang to Husband. The judgment concludes, “the divorce agreement . . . expresses [the]
real intent of both parties . . . . The agreement shall be valid herein and be binding on
[Husband] and [Wife] and both parties shall perform liabilities in line with the
agreement.” The judgment ordered Wife, in part, to transfer her shares in Wuhan Yiyang
to Husband; the judgment did not address Wife’s role as the legal representative of the
company.

                                              7
              Husband then obtained an execution order, which he used to get necessary
paperwork through various government entities. The execution order changes ownership
of 20 percent of the equity of Wuhan Yiyang from Wife to Husband; like the judgment, it
does not mention Wife’s status as the company’s legal representative.
                                             II.
                              LEGAL ACTIONS IN CALIFORNIA
              Husband filed a petition for joint physical and legal custody of the minor
child in the Superior Court of Orange County in March 2017. In his petition, Husband
asked the court to determine ownership of the Allium property, CMB, and three bank
accounts that he claimed had not been divided by the divorce agreement. In July 2017,
Wife filed notice of registration of the foreign support judgment, consisting of the divorce
agreement and the Chinese civil judgment.
              In October 2017, Wife filed a request (1) for child custody, (2) to determine
arrears, (3) for attorney fees and costs, (4) to determine that the Allium property was
Wife’s separate property and that the proceeds from the sale of the Allium property were
her separate property funds, (5) to determine that the interest in CMB was Wife’s
separate property, and (6) to find that Husband breached his fiduciary duties to Wife by
encumbering and permitting foreclosure of Wife’s separate real estate properties in
China.
              The parties stipulated to permit a retired judge to act as a temporary judge
to resolve their disputes. Following an evidentiary hearing, the trial court issued a
statement of decision. The statement of decision was revised after Wife filed a brief
regarding attorney fees and costs. Husband then filed objections to the statement of
decision. The court amended the statement of decision, but otherwise denied Husband’s
objections.
              The trial court issued findings and orders after the hearing. As relevant to
the issues in this appeal, the court found: (1) “The $500,000 investment in CMB

                                             8
Infrastructure Investment Group plus the approximate $35,000 in management fees is
found to be [Wife]’s separate property and is awarded to her as her sole and separate
property”; (2) “the [Allium] property . . . [was] conveyed by the parties to [Wife] as her
separate property. Thus, Allium sale proceeds, including the HUD refund are [Wife]’s
sole and separate property. As each party previously received a disbursement of
$179,353.50 from the Allium sale proceeds, [Husband] must repay $179,353.50 to [Wife]
as a return to her of her separate property payable forthwith”; (3) “[Husband] pledged to
the bank in China, without [Wife]’s knowledge or consent, three of [Wife]’s China real
properties previously awarded to her. They were subsequently lost in foreclosure.
[Husband] also failed to pay the encumbrances on two additional China real properties
previously awarded to [Wife]. The Court finds this conduct to be [a] breach of
[Husband]’s fiduciary duties to [Wife]. These five (5) real properties were previously
awarded to [Wife] under the terms of the parties’ Voluntary Divorce Agreement/Chinese
Judgment. [Husband]’s breach of his fiduciary duties to [Wife], directly resulted in
[Wife] being financially damaged in the sum total of $2,020,000. [Husband] is ordered
to pay [Wife] this amount payable forthwith.”
              Husband filed a timely notice of appeal.
                                       DISCUSSION
                                             I.
                                   STANDARD OF REVIEW
              We review the record to determine whether substantial evidence supports
the trial court’s findings. (People v. Semaan (2007) 42 Cal.4th 79, 88; Bowers v.
                                                  7
Bernards (1984) 150 Cal.App.3d 870, 873-874.)

7
  In re Marriage of Lehman (1998) 18 Cal.4th 169, on which Husband relies for his
argument that this court should independently review the trial court’s findings regarding
the nature of the property, is not on point. In that case, the Supreme Court considered the
following question: “Does a nonemployee spouse who owns a community property
interest in an employee spouse’s retirement benefits under such a plan own a community

                                             9
                                             II.
                                  THE ALLIUM PROPERTY
              We begin with the presumption that all property acquired during marriage
is community property. (Fam. Code, § 760.) The parties were domiciled in California
when the Allium property was purchased. Community property may be transmuted to the
separate property of either spouse (id., § 850, subd. (a)) if the transmutation is “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” (id., § 852, subd. (a)).
              In In re Marriage of Kushesh & Kushesh-Kaviani (2018) 27
Cal.App.5th 449, 456, another panel of this court held that a standard interspousal
transfer grant deed meets the requirements to transmute property. “[Interspousal transfer
grant deeds] are not only title documents. They are also writings that expressly transfer
spousal interests, in which spouses unequivocally make ‘interspousal’ transfers to
another . . . 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.” (Ibid.) The appellate court
remanded that case to the trial court to make factual findings as to whether (1) the
transmutation gave one spouse an unfair advantage over the other, (2) a rebuttable
presumption of unfair advantage had therefore arisen, and (3) the presumption had been
rebutted. (Id. at pp. 456-457.)
              In this case, the two interspousal transfer grant deeds met the requirements
to transmute the Allium property to Wife’s separate property. Further, the trial court
found that Wife had overcome the presumption of undue influence, based on the parties’

property interest in the retirement benefits as enhanced?” (Id. at p. 174.) The court
explained that the question was one solely of characterization: “[W]hether the
enhancement was a community asset in any part, and not apportionment, i.e., to what
extent the enhancement, if a community asset at least in some part, belonged to the
community and separate estates.” (Id. at p. 176.) The appellate court’s review of this
characterization was de novo. (Id. at p. 184; see In re Marriage of Davis (2004) 120
Cal.App.4th 1007, 1015 [same].)

                                             10
testimony and the divorce agreement’s provision that “[a]ll other community-owned real
estate property will be divided according to the name on the deed for each respective
property,” without reference to the country in which such property was held. Husband’s
claim that he did not understand the significance of the interspousal transfer grant deeds
because they were written in English was negated by the clear intent of the divorce
agreement, written in Chinese, that all real property was to be divided based on the name
of the party on title to the property.
              Further, Wife testified that the one piece of real property specifically
mentioned in the divorce agreement was transferred to Husband to account for the fact
that Husband knew Wife would be awarded the Allium property as part of the divorce
settlement.
              Substantial evidence supported the trial court’s finding that the Allium
property was Wife’s separate property, and the sales proceeds from the sale of the Allium
property belonged to her.
              The majority of Husband’s appellate argument focuses on the tracing of the
                                                           8
money used by the parties to acquire the Allium property. Because Wife established a
transmutation of the property to her separate property, and rebutted the presumption of
undue influence, any failure to trace the money used to acquire the property is irrelevant.

8
  The parties provided contradicting testimony regarding the source of the $400,000
down payment on the Allium property. Both agreed that a portion of the down payment
came from a return of their investment in Top Holdings, LLC, a real estate investment
company. Wife testified the remainder of the down payment came from a loan from her
brother. Husband testified the remainder of the down payment came from the parties’
joint bank account and money Husband wired from China.
  The majority of the money for the Top Holdings, LLC investment came from a loan
backed by another piece of real property they owned in the United States; Wife testified
the remainder came from her individual bank account, and a loan from her brother, while
Husband testified the remainder came from a loan from Wuhan Yiyang.

                                             11
                                            III.
                   CMB INFRASTRUCTURE INVESTMENT GROUP VII, LP
              The parties did not specifically discuss what would happen to the CMB
investment at the time they negotiated their divorce settlement in China. Wife testified
CMB is now her separate property because the investment was placed in her name and
because Wife gave up her investment in Wuhan Yiyang as part of the divorce. Husband
counters that he is entitled to the value of the CMB investment ($500,000) because the
divorce agreement awarded him the equity ownership, claims, and debts of all
companies, including CMB.
              The amended statement of decision makes the following factual findings
regarding the ownership of the CMB investment: “In October of 2011 as part of [Wife]
obtaining a United States Visa, a $500,000 capital contribution, plus approximately
$35,000 in management fees, was paid to CMB Infrastructure Investment Group. The
money came from a loan that was the result of [Wife] pledging her stock in one of the
Companies owned by the parties. The Visa was obtained in her name alone, to obtain
permanent residency in the United States. The parties divided their assets per the
Chinese [divorce agreement] (Ex. #2) as confirmed in the Chinese Judgment (Ex. #3).
This Judgment controls under the principle of comity. The fact that the parties stipulated
therein that they ‘completely agreed’ with its terms and the exhibit being admitted into
evidence, gave the companies in China to [Husband] including all of the debts. No
mention was made that [Wife] should have to reimburse the company for the loan
proceeds. Therefore, the loan proceeds became [Wife]’s separate property upon the
division of assets. [¶] Therefore, the court finds that the CMB investment is the separate
property of [Wife].” The trial court’s findings as to the CMB investment are not
supported by the evidence, and must be reversed.

                                            12
              The CMB investment was made using community funds, and was made in
                                                  9
Wife’s name for the benefit of the community. The parties agree that the divorce
agreement provides that Wuhan Yiyang was awarded to Husband, along with its equities,
debts, and claims. Therefore, the repayment of the loan from CMB to Wuhan Yiyang
would belong to Husband, and the loan from the bank to Wuhan Yiyang is also
Husband’s responsibility. Wife agreed that if the parties’ loan from Wuhan Yiyang were
not repaid, their shares would be forfeited back to the company. Of course, Wife’s shares
have all been transferred to Husband, so it is now only his shares that are technically at
stake.
              While the trial court found that the divorce agreement did not specify that
Wife must reimburse the company for the loan proceeds, the fact that it does transfer the
company’s “claims and liabilities of debt” to Husband indicates the parties were aware of
claims the company had, including its claim on the loan made to acquire the CMB
investment.
              Husband’s contention that CMB was awarded to him in the divorce
agreement is unsupported by the evidence. CMB was not a business owned by the
parties; it was a .444 percent investment in a company. While Husband twice sought the
intervention of the Chinese courts to compel Wife to transfer her shares in Wuhan Yiyang
to him, he never mentioned the interest in CMB, which he now claims is subject to the
same provision of the parties’ divorce agreement. We conclude that the CMB investment
was not intended by the parties to be a company whose equity, claims, and debts were
awarded to Husband under the terms of the divorce agreement.
              This leaves us with the question of how to categorize the CMB investment.
The investment was made with community funds during marriage. Both parties agree
that under Chinese law, all property owned by a married couple is owned 50/50, despite
9
  The community property presumption does not apply to the investment in CMB
because neither party was domiciled in California at the time the investment was made.

                                             13
how title is held. Because the divorce agreement does not address the CMB investment,
it should be characterized as a community property asset.
                                             IV.
                               BREACH OF FIDUCIARY DUTY
              Spouses have a fiduciary duty to each other with regard to their properties
during the marriage and throughout the dissolution process. (See Fam. Code, §§ 721,
1100, 2100.) The trial court found that Husband violated his fiduciary duty to Wife by
encumbering the properties that had been awarded to Wife as her separate property,
without her knowledge or consent, and by failing to make the loan payments on those
properties, causing them to be lost to foreclosure.
              In the statement of decision, the trial court made the following factual
findings regarding this issue: “As it turns out, three of [Wife]’s properties were pledged
as security for a line of credit benefitting [Husband]’s company. This was done after the
[divorce agreement] was entered into and without [Wife’s] knowledge or consent as per
[Wife]’s testimony and that of a fingerprint expert who testified it was not [Wife]’s
fingerprint on the loan documents. [Husband] defaulted on the repayment of the line of
credit and the properties were lost in foreclosure to the Bank. Further, the other two
properties had encumbrances which the [Husband] failed to pay, as required per the
[divorce agreement], resulting in the loss of these properties as well. In total the [Wife]
testified that the properties foreclosed on were worth $2,020,000 which testimony was
unrebutted. [¶] [Husband] testified that these losses were the fault of the [Wife]’s failure
to cooperate in changing the ownership of the companies. However, it was not until all
of the properties belonging to the [Wife] were foreclosed on that he decided to go to court
in China and get ownership of the stock in the companies changed. As there was no
adequate explanation for the delay, the Court finds [Husband]’s testimony lacks
credibility. The Court finds that the [Husband] breached his fiduciary duty to the [Wife]
and that he must repay her for her losses in the amount of $2,020,000.”

                                             14
              In May 2015, Wuhan Juirui and Wuhan Yiyang obtained loans in the
amount of 100 million RMB, or about $1.6 million. Wife’s three previously
unencumbered properties in China (identified ante as properties (1), (2), and (3)), were
pledged as security for the loans. Wuhan Yiyang and Wuhan Juirui defaulted on the
loans, and Husband did not advise Wife of the default. Because the loans were not repaid
the properties were seized and sold by the Chinese court.
              Wife’s testimony was unequivocal about her lack of knowledge of or
involvement with the loans using her properties as collateral. Wife did not sign any loan
applications for Wuhan Yiyang or Wuhan Juirui between 2013 and December 2014.
Wife was unaware of any loan applications in 2014, and did not recall her properties
having been used as collateral before the divorce agreement was signed. Wife never
authorized Husband to use her properties as security for any loans, and had nothing to do
with Wuhan Juirui after the divorce. Wife testified that the signature, thumbprint, and
                                                  10
guarantee on the loan documents was not hers.          Wife never received any documents or
forms related to the businesses after the divorce.
              Husband did not dispute that Wife’s properties were used as collateral for
loans taken out by Wuhan Yiyang and Wuhan Juirui, or that the loans were defaulted on
and the properties were seized and sold. Husband raised several other defenses to the
claim of breach of fiduciary duty.
              First, Husband claims the loans were taken out before the divorce. But
Husband’s fiduciary duty to Wife was in existence during the marriage. Even when the
properties were held by the parties 50/50 (despite title being in Wife’s name), using the
properties as collateral for a loan without Wife’s knowledge and consent would be a
breach of fiduciary duty.

10
   An expert in forensic science with training in fingerprint work testified that the
thumbprint on the loan application for Wuhan Yiyang was not Wife’s thumbprint. The
thumbprint was not Husband’s either.

                                             15
              Husband also claims he was unable to pay or renegotiate the loans because
Wife was the legal representative of the companies and was running the companies
between 2015 and 2018. The evidence does not support Husband’s contention. We first
note that Husband was at all relevant times the legal representative of Wuhan Juirui.
Husband offers no explanation of how Wuhan Yiyang could continue to operate as a
company, when Wife testified she had nothing to do with the companies after the divorce.
Wife countered Husband’s testimony that she had failed to sign documents necessary for
Husband to operate the companies. Finally, when Husband points to the Chinese
judgment and the execution order as proof that Wife failed to comply with the divorce
agreement, we note that the judgment and order only addressed the transfer of shares of
Wuhan Yiyang, not the change of the legal representative.
              Husband also testified that, despite the fact he was awarded both the assets
and the debts of Wuhan Yiyang and Wuhan Juirui in the divorce agreement, the loans to
those companies were actually Wife’s responsibility because they were obtained by the
companies while Wife was the legal representative. Wisely, Husband does not pursue
this argument on appeal.
              In the statement of decision, the trial court found that Husband’s “testimony
lacks credibility” because Husband failed to explain why he delayed in seeking help from
the Chinese court to change the ownership of the companies until after Wife’s properties
had been foreclosed on. In his appellate briefs, Husband spends much time on the
timeline of the foreclosure dates compared to his request for a judgment and execution
order in China. Husband initiated the Chinese action to enforce the divorce agreement
against Wife on June 23, 2015; the judgment was issued on May 25, 2016.
Properties (4) and (5) were foreclosed in July 2015; properties (1) and (2) were
foreclosed in April 2016, and the foreclosure date for property (3) is unknown (but the
fact of foreclosure is undisputed). Although Husband is correct that none of the
foreclosures occurred before he initiated the Chinese action, this invites the question why

                                            16
he waited until one month before the first of the foreclosures to act. The trial court’s
finding that Husband delayed in seeking relief from the courts is supported by the
reasonable inference that the process leading to foreclosure began before the actual
foreclosure date.
              Husband’s appellate briefs contain speculation and conjecture, such as “it is
possible that Wife permitted . . . ,” and “it is not firmly established that the loans were
acquired after the divorce.” Wife presented substantial evidence supporting her claim for
breach of fiduciary duty.
                                        DISPOSITION
              The trial court’s finding that the investment in CMB Infrastructure
Investment Group VII, LP is the separate property of respondent Li Tian is reversed. The
trial court shall enter a judgment finding that the investment in CMB Infrastructure
Investment Group VII, LP is the parties’ community property. In all other respects, the
judgment is affirmed. Because both parties prevailed in part, neither party shall recover
costs on appeal.

                                                   FYBEL, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.

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