Court Opinion

ID: 1035322
Source: CourtListenerOpinion
Date Created: 2013-07-25 20:15:51.539109+00
Date Added: 2024-06-11T15:11:26.792088
License: Public Domain

Filed 7/25/13 Marriage of Rynda 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                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication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

                                       FIRST APPELLATE DISTRICT

                                                DIVISION THREE

In re the Marriage of CAROLINA C. and
DAVID J. RYNDA.

CAROLINA C. RYNDA,
         Appellant,                                                      A137298
v.
                                                                         (Alameda County
DAVID J. RYNDA,                                                          Super. Ct. No. HFO4150159)
         Respondent.

         Carolina C. Rynda (Carolina) appeals an order denying her postjudgment motion
for property division in a marital dissolution proceeding. The court found there was no
property to divide following Carolina’s declaration of bankruptcy and a trustee sale of
assets to Carolina’s ex-husband, David J. Rynda (David). We shall affirm the order.
                                       Factual and Procedural History
         The parties are proceeding in propria persona and only Carolina has filed a brief.
The docket for the case spans nine years and contains hundreds of entries yet only a few
documents are included in the clerk’s transcript. The following facts are based on the
partial record provided.
         The parties were married in January 1996 and operated a family-owned insurance
agency. In April 2004, Carolina filed a petition for dissolution of marriage. A judgment
of dissolution of marriage was filed the following year, in May 2005, and the court
ordered an equal division of community property and debts including, without further

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specification, “50% of business with three locations” to each party. The court reserved
“jurisdiction to make whatever orders may be necessary or desirable to carry out this
order and to divide equally between the parties any community assets or liabilities
omitted from division under this order.” Sometime later, a receiver was appointed to
manage, control and inventory the business.
       In February 2009, Carolina filed for bankruptcy. In March 2009, the superior court
ordered: the “[v]aluation and division of assets shall be determined by this court at the
conclusion of the bankruptcy court proceedings to the extent that they remain available to
the parties.” The superior court delegated interim management and control of specified
properties and business offices to each party, subject to bankruptcy court oversight. The
bankruptcy trustee evaluated the parties’ business and, in April 2010, sold Carolina’s
stock in Rynda’s Number 1 Insurances Services, Inc. to David. The record does not
contain information on the distribution of other assets and liabilities by the bankruptcy
trustee. According to David, the bankruptcy trustee disposed of all community property
except for two real estate holdings, which were subsequently foreclosed.
       Carolina claims there are community assets and liabilities still to be divided. In
September 2012, she filed a “Motion for a trial . . . for Valuation and Division of
community assets” and “Allocation of Debts.” Carolina believes the bankruptcy
proceeding discharged community debts without settling community assets. She claims
entitlement to half the insurance agency business (now operated by David) and
reimbursement for half the community debts discharged in bankruptcy. In addition to
filing a motion to set trial on property division, Carolina also filed a motion seeking
sanctions against David for breach of fiduciary duty in managing the insurance agency.
       David opposed the motions and submitted evidence that he purchased Carolina’s
interest in the insurance agency from the bankruptcy trustee charged with administering
Carolina’s assets. David declared: Carolina’s “interest in Rynda’s Number 1 Insurance
Services, Inc., was voluntarily transferred to the Trustee when she filed for bankruptcy
and was later sold by the Bankruptcy Trustee, at a court supervised auction in which she
participated as a possible purchaser.”

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       A hearing on the matter was held on November 13, 2012. The court explained to
Carolina that “the bankruptcy court has superior jurisdiction to the superior court. And if
the bankruptcy court divided your businesses or sold them, then they’re done with them. I
can’t do anything about that.” Carolina acknowledged the bankruptcy court’s authority to
discharge community debt but disputed its authority to dispose of community property.
       The court denied Carolina’s motion for a trial on the division of community
business and real estate assets, finding none to divide. The court continued Carolina’s
motion for division of a bank debt, raised for the first time at the hearing, and ordered
David to produce accountings for the period of his interim management of community
assets. Carolina filed a timely notice of appeal.
                                         Discussion
       Carolina contends there are community business and real estate assets to divide
despite the bankruptcy court proceeding. The contention is based on a misunderstanding
of the bankruptcy court’s reach. “In states such as California, where each spouse has
management and control of community property, . . . the bankruptcy estate includes all
community property as of the commencement of the case, of both the debtor and the non-
debtor-spouse.” (McCoy v. Bank of America (Bankr. 9th Cir. 1990) 111 B.R. 276, 278,
citing 11 U.S.C.A. § 541(a)(2).) “[T]he community property is liable for a debt incurred
by either spouse before or during the marriage, regardless [of] which spouse has the
management and control of the property and regardless [of] whether one or more spouses
are parties to the debt or to a judgment for the debt.” (McCoy, supra, at p. 280.) The
bankruptcy court takes control of community property and may distribute community
assets to satisfy community debts. (8B C.J.S. (2013) Bankruptcy, § 1103.)
       Carolina acknowledges that she filed her bankruptcy petition before there was a
final property division. Her bankruptcy petition lists over $3 million in assets and
liabilities and includes the parties’ community real estate and business holdings.
Community property was therefore within the bankruptcy estate and subject to the
bankruptcy court’s disposition.

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       In recognition of the bankruptcy court’s jurisdiction, the superior court suspended
property division proceedings: “Valuation and division of assets shall be determined by
this court at the conclusion of the bankruptcy court proceedings to the extent that they
remain available to the parties.” The court found there were no assets at the conclusion of
the bankruptcy court proceedings, apart from two real property parcels that were
foreclosed, and therefore nothing for the superior court to divide. Carolina has failed to
produce any evidence to the contrary. She claims one-half interest in the Rynda insurance
agency but it is clear from the record that the bankruptcy trustee sold Carolina’s stock in
the business to David. On the record provided, there is no evidence of community
property to be divided. The superior court did not err in denying Carolina’s motion to set
trial for marital property division.
                                        Disposition
       The order is affirmed.

                                                  _________________________
                                                  Pollak, J.

We concur:

_________________________
McGuiness, P. J.

_________________________
Jenkins, J.

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