Court Opinion

ID: 6986112
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:11:08.911124+00
Date Added: 2024-06-11T16:09:27.578661
License: Public Domain

SCHWARZER, Senior District Judge,
concurring in part and dissenting in part:
I concur in all of Judge O’Scannlain’s opinion except section IV.B.l remanding for the trial judge to clarify his ruling regarding the value of Judy’s interest in the medical practice.
The bankruptcy court held that Judy gave no value by relinquishing her interest in the medical practice. We may affirm on any ground supported by the record. See Papike v. Tambrands, Inc., 107 F.3d 737, 744 (9th Cir.1997). Indeed, the trial court’s decision “must be affirmed if correct, even if the court relied on the wrong grounds or reasons.” Claar v. Burlington Northern R. Co., 29 F.3d 499, 501 n. 1 (9th Cir.1994). Because I believe the bankruptcy court reached the correct result, I would affirm.
As Judge O’Scannlain’s opinion recognizes, op. at 9805-06, because § 548(c) is an affirmative defense, Judy had the burden of proving the value she gave. See Hayes v. Palm Seedlings Partners-A, 916 F.2d 528, 535 (9th Cir.1990). It is not enough to state that under California law, when community efforts increase the value of a separate property business, the increase belongs to the community. See Dekker v. Dekker, 17 Cal.App.4th 842, 851, 21 Cal.Rptr.2d 642 (1993). To prove that she gave value, she must show that the medical practice actually increased in value during the marriage, and by how much.
On appeal, Judy rejects the contention that the burden is on her, arguing instead that the trustee has the burden of proving that the practice was Stephen’s separate property. From Judy’s posture in this case flowed her failure to present evidence of the value the community added to the practice. As Judge O’Scannlain’s opinion notes, op. at 9806, the only evidence about the value of the practice was its value at the time the M.S.A. § was executed; no evidence appears in the record regarding the value of the practice at the beginning of the marriage, making it impossible to determine the increase in value, if any, during the marriage.
Because the practice was Stephen’s separate property before the marriage, and Judy failed to introduce any credible evidence that the community acquired an interest in the practice, the bankruptcy court reached the correct result. I would affirm the court’s determination that Judy gave no value by relinquishing her interest in the medical practice.