Court Opinion

ID: 2686552
Source: CourtListenerOpinion
Date Created: 2014-07-30 23:01:05.714994+00
Date Added: 2024-06-11T13:13:45.962874
License: Public Domain

Filed 7/30/14 Marriage of Lin CA1/3
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE

In re the Marriage of HELEN LO LIN and
FENG-LIN LIN.

HELEN LO LIN,
         Respondent,                                                     A138349
v.
                                                                         (San Mateo County
FENG-LIN LIN,                                                            Super. Ct. No. 111096)
         Appellant.

         Feng-Lin Lin (Husband) appeals from a judgment dissolving his marriage to
Helen Lo Lin (Wife) and dividing the parties’ property. (Fam. Code, § 2010.)1 He
contends the family court erred in (1) sanctioning him for fraudulently encumbering the
marital home by awarding the property to Wife and assessing attorney fees; and
(2) awarding to Wife a condominium purchased by her parents but held by Husband and
Wife in joint title. We shall affirm the judgment.
                                               Factual Background
         Husband and Wife were married in December 1985 and separated in October 2010
after almost 25 years of marriage. At the time of separation, Husband was 57 years old
and Wife was 53 years old. They have two adult children.

1
    All further section references are to the Family Code except as indicated.

                                                             1
       Husband is an auto mechanic who earned roughly $76,000 in 2010. Wife has an
M.B.A. in accounting. At the time of trial, she earned about $30,000 yearly. The couple’s
principal assets are real estate. At the time of separation, three San Mateo properties were
held in joint tenancy: the marital home, a rental property and a condominium.

Marital home

       The house in which the couple lived was initially acquired by Husband and his
sisters in 1978, before his marriage. Husband testified that he made a down payment of
about $80,000 and financed the remainder. Husband also testified that he made $50,000
in improvements to the property in 1980. In 1989, Husband and Wife, as joint tenants,
acquired a one-third interest in the property and, in 1992, received complete ownership.
Wife testified that the house was appraised at a “little bit less than $900,000” when it was
refinanced in 2009. Husband estimated the fair market value of the house at $835,500.
The balance on the mortgage encumbering the home was $410,015.

Rental property

       The rental property was acquired by the couple in 1997. The tenant’s rent does not
cover the mortgage and other expenses. Wife testified that the property was appraised at
“close to $700,000” when it was refinanced in 2009. Husband estimated the fair market
value at $657,000. The mortgage balance was $412,232.

Condominium

       The couple acquired joint title to a condominium in 1991 but Wife testified that
she is a trustee for her parents, who are the beneficial owners. Wife said her parents could
not qualify for a loan so the loan and title were put in the name of herself and Husband.
Wife’s parents rented the property to a tenant for about two years then lived in the
condominium themselves until 2008, when they moved back to China. Wife’s nephew
(her parent’s grandson) was living in the condominium at the time of trial. Wife’s parents
made all payments for the purchase and maintenance of the condominium: the $40,000
down payment, all monthly mortgage payments, property taxes, homeowner association

                                             2
fees, and homeowner’s insurance. Wife’s parents paid off the mortgage in 2000 with a
$70,000 lump sum payment. Husband estimates the property’s fair market value at
$302,000.
         Husband concedes that he and Wife never “put any money into the purchase” of
the property, never lived there, never leased the property or received rent from tenants,
and never paid the property taxes or homeowner association dues. In his trial brief,
Husband said the property was placed in the names of Husband and Wife “to keep in trust
for [Wife’s] parents” but also claimed the property was “gifted to the [couple], as
evidenced by the deed.” Husband testified he was “not sure” if the condominium was
given to the couple at the time of its purchase in 1991, when title was placed in their
names, but was “pretty sure” the condominium was given to them when the parents paid
off the loan in 2000. Husband said he based that belief on a conversation with Wife’s
father but the conversation was not related and no further evidence of a gift was
presented.

JNC Enterprises

         In addition to their real estate assets, the couple also invested in JNC Enterprises, a
Texas real estate development company operated by Wife’s cousin. In 2006, the couple
invested $900,000 and were promised an 18 percent return in two years.2 The couple
obtained funds for the investment by refinancing the marital home and rental property.
The couple lost much of their investment. JNC Enterprises filed for bankruptcy and owes
$839,869 on the $900,000 invested.
         The couple had difficulties paying their mortgages when JNC Enterprises failed to
repay their investment. In 2009, the couple refinanced their properties. They needed cash
to pay down the increased loans they had obtained in 2006 and asked family members for
assistance. To refinance the couple’s residence, Husband’s sister, Frances Sue, provided
$370,000 and another sister, Feng Wah Tang, provided $120,000. Wife’s mother

2
    The nature of the investment, whether a loan or ownership interest, is unclear.

                                                3
provided $50,000. To refinance the couple’s rental property, Sue provided $196,000 and
Wife’s sister, Winnie Luo, provided $80,000.3
       The nature of these payments – whether gifts or loans – is in dispute. The only
contemporaneous writings memorializing these payments are “Gift Letters” signed by the
sisters as part of the refinancing process. In the letters, the sisters certify that the funds are
gifts and “further certify that there is no repayment of this gift expected or implied.” Wife
testified that the funds were gifts and, while she felt a “moral obligation” to repay the
funds if possible, there was never a promise to repay the funds and “no legal obligation”
of repayment. Some amounts were repaid. Wife’s mother was repaid in full, Wife’s sister
was repaid $5,000 and Husband’s sister Francis Sue was repaid $70,000. The repayments
were made with money received from JNC Enterprises or other businesses operated by
Wife’s cousin.
       Husband’s sister, Tang, testified the funds were a loan to be repaid when the
couple received money from JNC Enterprises or “little by little” if the investment never
paid off. Husband’s other sister, Sue, testified that the provided funds were loans to be
repaid within two years. Husband also testified that the funds were loans. Husband said,
“You borrow money from someone, that mean[s] you automatically owe someone that
money.” But Husband also acknowledged that he and Wife made no plan to repay the
money, intending only to “try [their] best” to do so.
                                     Procedural History
       Wife petitioned for dissolution of marriage on October 22, 2010. Husband
received a summons and a copy of the petition. The summons advised that both parties
were restrained from transferring or encumbering property without the written consent of
the other party or a court order. (§§ 233, subd. (a), 2040, subd. (a)(2).)
       In March 2011, Husband unilaterally signed promissory notes secured by deeds of
trust encumbering the marital home and rental property. Husband gave the notes to his

3
  Husband’s trial brief mentions another sister who provided funds to facilitate
refinancing but the record is undeveloped on this point.

                                                4
sisters in exchange for the funds they had provided two years earlier. Husband’s sister,
Sue, received separate notes for $300,000 and $196,476.20 and his sister, Tang, received
a note for $120,000.
       A status conference was held in April 2011. Husband represented himself but
Wife was represented by recently retained counsel. At the conference, Husband gave
Wife’s attorney several documents, including a copy of the $196,476.20 deed of trust on
the rental property. No other deeds of trust were provided. The proceedings were
conducted in chambers and not transcribed. A declaration by Wife’s attorney provides
little description of the proceeding, stating only that the court commissioner “instructed
[Husband] that he should not have recorded the lien.”
       A settlement conference commenced in June 2011, by which time Husband had
retained counsel. A joint settlement conference statement makes no mention of the lien.
Settlement discussions were held on multiple days over several months but no resolution
was reached.
       In advance of trial, Husband’s attorney filed a brief listing the principal disputed
issues as ownership of the condominium and characterization of the funds provided by
Husband’s sisters, which Wife claimed were gifts and Husband asserted were “unsecured
debt[s].” Wife did not file a trial brief. Wife’s parents informed the court that they would
file a quiet title action if the court ordered the condominium sold as Husband and Wife’s
community property. The court agreed to stay any order of that nature to permit
resolution of the parents’ claim at a later time.
       A bench trial was held in March 2012 lasting less than eight hours over the course
of two days. At trial, Wife’s counsel asked Husband’s sister Tang whether she had any
writings evidencing the funds she had provided. Tang testified that she had a lien on the
marital home and produced a copy of the deed of trust and promissory note for $120,000,
which Husband had signed after the dissolution proceedings commenced. Wife and her
attorney had not previously known of the lien. Tang testified that she believed “putting a
lien on the property was a more enforceable way of getting money” from Wife. During
trial, Wife also learned that Husband’s sister Frances Sue held a $300,000 promissory

                                               5
note secured by a deed of trust on the martial home. Previously, the only lien that had
been disclosed was Sue’s deed of trust on the rental property. The court conducted an in-
chambers conference with counsel following the sisters’ testimony.
       At the close of evidence, the court asked the parties to provide written briefs for
their closing arguments. The court noted that counsel had “some research to do.”
Husband’s attorney asked if the briefs should discuss “the issue with regard to the matter
we discussed in chambers?” Wife’s attorney asked if he meant the “proposed division”
and Husband’s counsel said, “No, with regard to the ATROs” or automatic temporary
restraining orders. The court replied, “I don’t think so. There’s been nothing filed in that
regard. It should be strictly with regard to the proposed division.” Wife’s attorney said,
“Right” and Husband’s attorney said, “Okay. Just what we’ve litigated here.” The court
replied, “Exactly.” The parties did not request a statement of decision. (Code Civ. Proc.,
§ 632.)
       Wife filed her brief in June 2012. Wife argued that the funds obtained from
Husband’s sisters were gifts or, if loans, were “payable only upon the condition precedent
of the parties receiving a return on their investment.” Wife argued that Husband violated
the restraining order and his fiduciary duties by encumbering the marital home and rental
property during pendency of the dissolution action. She maintained that Husband’s
violation was fraudulent and, under section 1101, subdivision (h), warranted an award to
her of 100 percent of the wrongfully encumbered marital home. Wife also claimed
entitlement to the rental property since it was wrongfully encumbered but stated she was
willing to have the entire rental property awarded to Husband if she received the
condominium. Wife argued that the condominium was held in the parties’ names as a
constructive trust for the benefit of her parents and she should receive the condominium
“so that she may effectuate the intent of the parties to hold the condo in trust” but, in the
alternative, asked to be awarded the condominium “as an offset” for surrendering her
interest in the rental property to Husband. Wife also requested attorney fees as a sanction
for Husband’s misconduct. (§ 271.)

                                              6
       Husband filed his brief five months later in November 2012. He asked the court to
characterize the funds received from the parties’ sisters as community debts to be divided
equally. He admitted executing liens on the properties in favor of his sisters but denied
his acts were “a knowing and/or willful violation” of the restraining order. Husband
maintained that the liens were “a non-issue” because “[t]heir presence has had no bearing
on the manner in which this case has been conducted” and he was willing “to remedy the
situation by reconveying the properties back to the community in their entirety.” Husband
also interpreted the court’s request for briefing “strictly with regard to the proposed
division” to preclude all forms of sanctions, including an unequal property division. As to
the real property, Husband argued the condominium must be characterized as community
property subject to division because it was acquired in joint title during the parties’
marriage. He asked that the marital home be awarded to him and the rental property to
Wife, with an equalizing payment from Husband to Wife for the difference in value
between the two properties.
       The court filed its property division order in December 2012. The court found that
Husband’s unilateral execution of the three deeds of trust impaired Wife’s interest in the
community estate, in breach of his fiduciary duties under sections 1101 and 1102, and
that his acts were fraudulent as defined in Civil Code section 3294, subdivision (a)(3).
The court also found that Husband’s conduct violated the automatic temporary
restraining order. (§ 2040, subd. (a)(2).) The court ruled that Husband’s misconduct
warranted an unequal division of property and awarded Wife 100 percent of the marital
home. (§ 1101, subd. (h).) The court also awarded Wife the condominium and Husband
the rental property, without any specification of reasons. The court reserved jurisdiction
to quiet title and cancel the deeds of trust.
       In its order, the court did not state whether the funds provided by the couple’s
sisters were loans or gifts but ruled that that “[a]ny and all debt” owed to Wife’s sister
was assigned to Wife and “[a]ny and all debt” owed to Husband’s sisters was assigned to
Husband “due to” his violation of the restraining order and breach of fiduciary duties.
Husband was awarded any funds received from the JNC Enterprises investment beyond

                                                7
the first $150,000, which was to be divided equally. The court divided other assets
equally and awarded Wife spousal support. Finally, the court awarded Wife $14,872 in
attorney fees and costs as a sanction against Husband for frustrating settlement of the
litigation (§ 271, subd. (a)), noting his violation of the restraining order (§ 2040, subd.
(a)(2)) and breach of fiduciary duties (§§ 1101, 1102).
       Husband filed a motion for reconsideration. (Code Civ. Proc., § 1008.) Husband
asserted that he did not fully address the issue of sanctions in his closing trial brief
because he understood the court’s request for briefing “strictly with regard to the
proposed division” to indicate that no sanctions were under consideration. He argued
further that sanctions were, in any event, unwarranted because his violation of the
restraining order was not knowing or willful. Husband said his ability to read and
understand the restraining order when he was unrepresented by counsel was “severely
compromised” by his lack of English proficiency. He also argued that his violation of the
restraining order did not dispossess Wife of the properties or otherwise impair her
interests.
       Wife opposed the motion. Wife’s attorney submitted a declaration addressing the
court’s briefing instructions. Counsel said it was her understanding, from discussions in
court and chambers, that the court intended to consider an unequal division of property as
a remedy for Husband’s violation of the restraining order and limited the parties only
from addressing contempt. Wife declared that Husband is proficient in English, noting
that he has lived in the United States for 40 years and uses English regularly in
professional and private capacities. Wife argued that his creation of promissory notes and
notarized deeds of trust shows sophistication that belies his claim of ignorance. She also
maintained that a court commissioner put Husband on notice of the wrongfulness of the
liens when Husband revealed one of them at the April 2011 status conference, yet
Husband failed to expunge the liens after retaining counsel or at any time before the
March 2012 trial.
       At the hearing, Husband’s counsel argued that Husband placed the liens on the
properties out of “panic” when Wife “took the position that these family loans were

                                               8
gifts.” Counsel maintained that the liens had no detrimental effect on Wife’s interests or
the course of the dissolution action. Counsel also informed the court that Husband
recently removed the liens and, at the hearing, provided Wife’s attorney with copies of
the reconveyances.
       Wife’s attorney argued that the liens had jeopardized Wife’s interests and may
have impeded settlement. The attorney said, “Had those liens not existed, [Husband] may
have been more willing to allow for some of the proposals we had made going back and
forth as to how the three properties would have been assigned.”
       The court denied Husband’s reconsideration motion, finding its original order “fair
based on the circumstances and the facts.” The court said, “I think it was clear [Husband]
was intentionally violating the automatic restraining orders. There’s no other conclusion
that the court could draw.”
       The court filed its judgment of dissolution and property division order on August
23, 2013. Husband filed a timely notice of appeal.
                                        Discussion
1. Statutory Background
       In every dissolution action, standard temporary restraining orders take effect
automatically upon issuance and service of the summons. (§§ 233, subd. (a), 2040, subd.
(a).) Among other restrictions, parties to a dissolution action are barred from transferring
or encumbering any property without the other party’s written consent or a court order,
with limited exceptions for certain types of expenses. (§ 2040, subd. (a)(2).)4 A spouse
also has fiduciary duties in the joint management and control of community property that

4
 Section 2040, subdivision (a)(2) provides, in relevant part, that the summons shall
contain an order: “Restraining both parties from transferring, encumbering,
hypothecating, concealing, or in any way disposing of any property, real or personal,
whether community, quasi-community, or separate, without the written consent of the
other party or an order of the court, except in the usual course of business or for the
necessities of life, and requiring each party to notify the other party of any proposed
extraordinary expenditures at least five business days before incurring those expenditures
and to account to the court for all extraordinary expenditures made after service of the
summons on that party.”

                                             9
limits disposition of property during marriage, regardless of whether a dissolution action
is pending. (§ 1100, subd. (e).) As relevant here, both spouses must join in an
encumbrance of community real property. (§ 1102, subd. (a); see Droeger v. Friedman,
Sloan & Ross (1991) 54 Cal.3d 26, 29-30 [noncompliant encumbrance is voidable by
nonconsenting spouse].)
       Willful disobedience of a property restraining order may be punished in a
contempt proceeding. (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter
Group) ¶ 18:129; see Goold v. Superior Court (2006) 145 Cal.App.4th 1 [affirming
contempt order]; see also In re Liu (1969) 273 Cal.App.2d 135, 140 [stating contempt
standards].) A violation of a property restraining order may also result in statutory
remedies for breach of fiduciary duty. (In re Marriage of McTiernan & Dubrow (2005)
133 Cal.App.4th 1090, 1102-1103; Hogoboom & King, Cal. Practice Guide: Family Law,
supra, ¶¶ 5:57.5, 8:612 et seq.)
       “A spouse has a claim against the other spouse for any breach of fiduciary duty
that results in impairment to the claimant spouse’s present undivided one-half interest in
the community estate, including, but not limited to, a single transaction or a pattern or
series of transactions, which transaction or transactions have caused or will cause a
detrimental impact to the claimant spouse’s undivided one-half interest in the community
estate.” (§ 1101, subd. (a).)
       Remedies for breach may include an award to the claimant spouse of 50 percent or
100 percent of the impacted community asset, depending on the breaching spouse’s
culpability. (§ 1101, subds. (g), (h).) “Remedies for breach of the fiduciary duty by one
spouse . . . shall include, but not be limited to, an award to the other spouse of 50 percent,
or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the
fiduciary duty plus attorney fees and court costs. . . .” (§ 1101, subd. (g).) “Remedies for
breach of the fiduciary duty by one spouse . . . when the breach falls within the ambit of
Section 3294 of the Civil Code shall include, but not be limited to, 100 percent of any
asset undisclosed or transferred in breach of the fiduciary duty.” (§ 1101, subd. (h).)

                                             10
       Conduct falls within the ambit of section 3294 of the Civil Code if committed with
oppression, fraud or malice -- the standard for an award of punitive damages. Fraud,
which is relevant here, “means an intentional misrepresentation, deceit, or concealment of
a material fact known to the defendant with the intention on the part of the defendant of
thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ.
Code, § 3294, subd. (c)(3).)

2. Remedies imposed under section 1101 are not punitive damages and are not subject to
review under standards applicable to punitive damages.

       Husband contends that in awarding Wife 100 percent of the marital home the court
awarded punitive damages which are excessive under constitutional standards. Husband
misconstrues the nature of the remedy that the court imposed. Remedies imposed under
section 1101 for breach of fiduciary duty are not punitive damages. The award to a
spouse of 50 percent of an undisclosed or transferred asset provides restitution for the
loss. (§ 1101, subd. (g); In re Marriage of McTiernan & Dubrow, supra, 123 Cal.App.4th
1090, 1103.) The award of 100 percent of the asset for a fraudulent, oppressive or
malicious breach of fiduciary duty is a civil sanction or penalty; though similar in nature
and effect, it is not an assessment of punitive damages. (§ 1101, subd. (h); see In re
Marriage of Rossi (2001) 90 Cal.App.4th 34, 42-43 [referring to remedy as a “severe
sanction” and “penalty”].)
       As noted above, a spouse may be awarded the full value of a community asset
impacted by the other spouse’s breach of fiduciary duty if “the breach falls within the
ambit of Section 3294 of the Civil Code.” (§ 1101, subd. (h).) The reference in the
Family Code to Civil Code section 3294 governing punitive damages incorporates the
standard of misconduct (fraud, oppression or malice) for the purpose of imposing
sanctions under section 1101; it does not convert the Family Code sanction into punitive
damages as Husband asserts. The family court is authorized to impose penalties and
sanctions but has no power to award punitive damages. Tort remedies do not apply in
dissolution actions. (Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1146-1147.)

                                             11
The legislative history of section 1101 is not to the contrary.5 It is true, as Husband notes,
that section 1101’s value-of-the-asset penalty was referred to as “punitive damages” in an
assembly committee report (Assem. Com. on Judiciary, Rep. on Sen. Bill No. 716 (1991-
1992 Reg. Sess.) Aug. 21, 1991, p. 1) but that same report also uses the term “penalty”
(id. at p. 11). Neither reference is determinative of the proper construction of section
1101, subdivision (h), which is best determined from the language of the statute and the
function it serves in family law as a whole. Read in context, the value-of-the-asset
remedy is a civil sanction meant to deter abuse of community property assets. “Through
the enactment of the section 1101 value-of-the-asset remedy, the Legislature has in effect
altered the one-half interest community property formula in the event a spouse violates
his or her duty to preserve the other spouse’s one-half right to the property, by awarding
the aggrieved spouse more than his or her one-half interest.” (In re Marriage of Simmons
(2013) 215 Cal.App.4th 584, 593-594.)
         Standards used to assess whether the amount of punitive damages awarded in a
tort case are constitutionally excessive are therefore inapplicable and Husband’s reliance
upon them is misplaced. (State Farm Mut. Auto. Ins. Co. v. Campbell (2003) 538 U.S.
408, 418; Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 712; see In re Marriage of
Feldman (2007) 153 Cal.App.4th 1470, 1478, fn. 7 [rejecting argument that Family Code
sanctions are reviewable as punitive damages].) Nevertheless, due process rights are
implicated here. “Courts have consistently assumed that ‘oppressive’ or ‘unreasonable’
statutory penalties may be invalidated as violative of due process.” (Hale v. Morgan
(1978) 22 Cal.3d 388, 399.) “Courts examine whether a penalty provision, on its face or
as applied in a specific case, imposes a penalty that exceeds these limits.” (Home Depot
U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 225.) Husband does not make
a facial challenge but does assail the reasonableness of the penalty as applied to him. We
conclude, for reasons discussed below, that the penalty is supported by the evidence and
not constitutionally excessive.

5
    Husband’s request for judicial notice of legislative history materials is granted.

                                               12
3. Substantial evidence supports the court’s finding that Husband intentionally violated
the restraining order and fraudulently impaired Wife’s interest in the community estate,
thus warranting an unequal property division and award of attorney fees.

       “A judgment or order of a lower court is presumed to be correct on appeal, and all
intendments and presumptions are indulged in favor of its correctness.” (In re Marriage
of Arceneaux (1990) 51 Cal.3d 1130, 1133.) When there is no statement of decision, “the
reviewing court must infer, following a bench trial, that the trial court impliedly made
every factual finding necessary to support its decision.” (Fladeboe v. American Isuzu
Motors, Inc. (2007) 150 Cal.App.4th 42, 48.) We review the factual findings of the
family court, express or implied, for “substantial evidence, examining the evidence in the
light most favorable to the prevailing party.” (In re Marriage of Rossi, supra, 90
Cal.App.4th at p. 40.)
       Substantial evidence supports the family court’s finding that Husband
intentionally violated the restraining order and fraudulently executed promissory notes
and deeds of trust encumbering community real property. Husband admitted at trial that
he received a copy of the summons and petition for dissolution. The summons, served in
November 2010, contained explicit notice of the mutual restraining order enjoining the
parties from “transferring, encumbering, hypothecating, concealing, or in any way
disposing of any property, real or personal, whether community, quasi-community, or
separate, without the written consent of the other party or an order of the court . . . .”
(§ 2040, subd. (a)(2).) Apart from the restraining order, family law dictates that both
spouses “must join in executing any instrument” in which community real property is
sold, conveyed or encumbered. (§ 1102, subd. (a).)
       Husband violated these restrictions in March 2011 by unilaterally executing three
separate promissory notes secured by deeds of trust in favor of his sisters. The
encumbrances were substantial, totaling $616,476.20. The deeds of trust on the marital
home alone totaled $420,000 and roughly equaled the equity value of the property. One
of the sisters, Tang, testified that Husband offered to sign the note secured by the marital
home and she accepted. Tang understood that “putting a lien on the property was a more

                                              13
enforceable way of getting money from [Wife].” A month after encumbering the
property, Husband disclosed the existence of one of the liens to Wife’s attorney at an
April 2011 status conference and the court commissioner told Husband “he should not
have recorded the lien.” Husband did not reveal the other liens and did nothing to
expunge them through the time of trial in March 2012, almost a year later. Husband
released the liens only after the court issued its order imposing sanctions. On this
evidence, the family court could conclude that Husband made “an intentional
misrepresentation, deceit, or concealment of a material fact” with the intention of
“depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code,
§ 3294, subd. (c)(3).)
          Comparable misconduct has been held to warrant an award of 100 percent of the
community asset to the aggrieved party under section 1101, subdivision (h). A wife’s
intentional concealment of lottery winnings resulted in the court awarding all the
winnings to her husband. (In re Marriage of Rossi, supra, 90 Cal.App.4th at pp. 40-42.)
In Rossi, the wife pooled money with coworkers to buy lottery tickets and hit the jackpot.
(Id. at p. 36.) Her share of the winnings was over $1.3 million. (Ibid.) Within weeks, the
wife filed for dissolution of marriage and did not list the lottery winnings as either
community or separate property. (Id. at p. 37.) The husband did not learn of the omitted
asset until after judgment of dissolution, at which time he moved to set aside the
judgment and sought award of 100 percent of the lottery winnings. (Id. at p. 38.) The
family court determined that the wife fraudulently concealed the lottery winnings, which
was a community asset, and awarded the entire amount to the husband. (Id. at p. 39,
citing § 1101, subd. (h).) The order was affirmed on appeal, with the court noting that
“[t]he statutory scheme for dissolution depends on the parties’ full disclosure of all assets
so they may be taken into account by the trial court. A failure to make such disclosure is
properly subject to the severe sanction of section 1101, subdivision (h).” (Rossi, supra, at
p. 42.)
          In In re Marriage of Murray (2002) 101 Cal.App.4th 581, section 1101,
subdivision (h) was also held to authorize the award of an entire asset to a defrauded

                                             14
spouse. In Murray¸ the husband permitted a default to be taken against him by his
girlfriend in an action to enforce promissory notes he signed, which enabled the girlfriend
to attach the proceeds from the sale of the marital home. (Id. at p. 589.) The family court
found that the husband and his girlfriend committed fraud and awarded the entire $82,000
obtained from sale of the house to the wife. (Id. at pp. 589, 592.) The order was affirmed
on appeal. (Id. at p. 604.)
       Apart from claims of insufficient evidence, which we reject, Husband also
contends that he did not receive adequate notice and an opportunity to be heard on the
subject of sanctions. The contention is not supported by the record. Husband’s
encumbrance of the community property was revealed at trial, during his sister Tang’s
testimony. Once revealed, both sisters were questioned about the matter. The
encumbrances were clearly a subject of concern at trial and appear to have been the
subject of an in-chambers conference that followed the sisters’ testimony. Husband
testified after his sisters and had an opportunity to explain his conduct but said nothing on
the subject. When Wife’s attorney asked Husband about documents memorializing the
sisters’ provision of funds, Husband was vague and nonresponsive. At the close of
evidence, the court asked the parties to present their closing arguments in writing and the
parties agreed to that procedure.
       Wife’s brief included a request for sanctions under sections 271 and 1101,
described the evidence supporting a finding of misconduct, and specifically sought award
of the marital home, assignment of any debts owed to Husband’s sister to him alone, and
an award of attorney fees. Husband had almost five months to file his responsive brief.
Husband merely dismissed the sanctions request as a “non-issue” because he was willing
to release the liens. Husband also said he believed Wife’s sanctions request was outside
the scope of the briefing requested by the court.
       Although Husband may have misunderstood the court’s intention to consider
sanctions in the form of an unequal property division and fees, but not contempt, he had a
further opportunity to address the issue of sanctions on his motion for reconsideration. He
chose to present little evidence on the matter. Husband did not file a declaration and

                                             15
relied entirely on the declaration and argument of counsel. Counsel argued that
Husband’s violation of the restraining order was not knowing and willful because
Husband lacked English proficiency (a contested point), which compromised Husband’s
ability to understand the restraining order. The record clearly demonstrates that Husband
had adequate notice of the request for sanctions under sections 271 and 1101 and was
given an opportunity to be heard on the subject.
       We also find no abuse of discretion in the amount of fees awarded. “The purpose
of section 271 is ‘ “to promote settlement and to encourage cooperation which will
reduce the cost of litigation.” [Citation.]’ (Parker v. Harbert (2012) 212 Cal.App.4th
1172, 1177.) “ ‘Family law litigants who flout that policy by engaging in conduct that
increases litigation costs are subject to the imposition of attorneys’ fees and costs as a
sanction.’ ” (Ibid.) The court awarded fees and costs of $14,872, which was the sum
incurred through trial according to a declaration filed by Wife’s attorney. Husband argues
that the court should not have awarded fees and costs incurred for the entire litigation
and, in doing so, imposed an unreasonable financial burden upon him. Husband failed to
raise a timely objection to the amount of fees and thus has forfeited the issue on appeal.
(In re Marriage of Feldman, supra, 153 Cal.App.4th at pp. 1495-1496.) In any event, the
court did not abuse its discretion in impliedly concluding that Husband’s misconduct
impacted the proceedings as a whole by necessitating a trial that may have been avoided
had Husband not secretly encumbered community property. As for Husband’s ability to
pay, Husband earned about $76,000 in 2010 and received an equal division of a number
of assets. He was also awarded the couple’s rental property, which the court characterized
as “substantial real property.” Husband has failed to demonstrate an inability to pay
$14,872.

4. Husband has failed to demonstrate a basis for overturning the court’s award of the
condominium to Wife.

       The court awarded the condominium to Wife “as her sole and separate property”
with no specification of reasons. The condominium was acquired by the couple as joint
tenants during marriage, although Wife testified that her parents paid for the property and

                                             16
are the beneficial owners. Husband argues that the parents’ claims must be separately
adjudicated and, for purposes of the dissolution action, the property characterized as
community property. Husband notes that “property acquired by the parties during
marriage in joint form . . . is presumed to be community property,” rebuttable only with
documentary proof to the contrary. (§ 2581.)
       The parties assume the family court awarded the condominium to Wife by
crediting her claim that she held the property in trust for her parents and debate whether
the court erred in doing so. The disagreement is based on false assumptions. The court
did not award the condominium to Wife in trust for her parents. It awarded the
condominium to Wife “as her sole and separate property” while awarding the rental
property to Husband “as his sole and separate property.” It appears the court deemed both
the condominium and the rental property to be community property and, given their
relatively equal value, awarded one property to each spouse. This specific division of
property – the condominium to Wife and the rental property to Husband – was proposed
by Wife. Wife argued in her trial brief that she should receive the condominium in trust
for her parents but, in the alternative, asked to be awarded the condominium “as an offset
for the portion of the parties’ rental property” she would otherwise be awarded. Wife was
entitled to 50 percent of the rental property because it was acquired during marriage and
was potentially entitled to 100 percent of the property because Husband fraudulently
encumbered it. (§ 1101, subd. (h).) The court seems to have adopted Wife’s request and
awarded the condominium to her as an offset for her interest in the rental property. It is
difficult to ascertain why the court awarded Husband the rental property (which was
admittedly community property) if not as an offset for its award of the condominium to
Wife. When, as here, there is no statement of decision, “the reviewing court must infer,
following a bench trial, that the trial court impliedly made every factual finding necessary
to support its decision.” (Fladeboe v. American Isuzu Motors, Inc., supra, 150
Cal.App.4th at p. 48.) Absent a demonstration of error, we presume the order is correct.
(In re Marriage of Arceneaux, supra, 51 Cal.3d at p. 1133.) We therefore presume the

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court found the jointly titled condominium to be community property but awarded it to
Wife as an offset for awarding the comparably valued rental property to Husband.
                                      Disposition
      The judgment is affirmed.

                                               _________________________
                                               Pollak, J.

We concur:

_________________________
McGuiness, P. J.

_________________________
Siggins, J.

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