Court Opinion

ID: 2817789
Source: CourtListenerOpinion
Date Created: 2015-07-16 17:22:36.075213+00
Date Added: 2024-06-11T12:44:49.850454
License: Public Domain

Filed 7/16/15 Marriage of Furrh CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA

In re the Marriage of GAIL K. and OTHAR
DEAN FURRH.
                                                                 D064756
GAIL K. FRICK,

         Plaintiff and Appellant,                                (Super. Ct. No. D506467)

         v.

OTHAR DEAN FURRH,

         Defendant and Appellant.

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

Clements (Ret.), Judge. Reversed in part; affirmed in part.

         Niddrie Fish & Addams and David A. Niddrie for Defendant and Appellant.

         Sharron Voorhees for Plaintiff and Appellant.
       Othar Dean Furrh appeals and Gail Frick cross-appeals following a judgment on

reserved reimbursement issues under Family Code section 2640 in their marriage

dissolution action.1

       A judgment of dissolution was entered in December 2009, and the parties

thereafter entered into several stipulations concerning the distribution of their assets

subject to reimbursement after trial on certain remaining stipulated issues. A trial on the

reserved issues was held in May 2013, and the trial court filed its statement of decision

on October 31, 2013, after considering the parties' objections.

       This appeal and cross-appeal concern several of the reserved reimbursement issues

decided by the trial court. As we will explain, we determine that the only meritorious

argument is Frick's cross-appeal from the trial court's ruling that Furrh is entitled

reimbursement of $50,000 for his separate property contribution to real property

purchased by Frick's parents before the parties' marriage. We therefore reverse that

ruling, and in all other respects we affirm the judgment.

                                              I.

                   FACTUAL AND PROCEDURAL BACKGROUND

A.     Assets Held at the Time of Marriage

       Frick and Furrh were married on September 30, 1995, and separated on

November 16, 2007. At the time of their marriage, Frick and Furrh were near retirement

age and both had separate property assets. Furrh's wealth was primarily held in the form

1      Unless otherwise indicated, all further statutory references are to the Family Code.

                                              2
of real estate, which included his residence and several income-producing rental

properties. Frick's wealth was primarily held in the form of money, securities and three

real properties. Frick had inherited much of her wealth shortly before marriage after the

passing of her parents and her aunt and uncle.2 According to the analysis of available

documentation conducted by Frick's expert witness accountant, John R. Cooper, Frick

had liquid assets at the date of marriage (including securities) in the amount of

$2,888,178. Furrh's liquid assets at the date of marriage were $227,689.3

       In 1996, the parties combined many of their liquid assets into a single brokerage

account held at Jack White & Co. ("the Jack White account"), which the parties opened

together as a joint account and to which both had access.4 Much of the initial funding for

the Jack White account came from the sale or transfer of Frick's securities. Cooper

determined that the sale of these securities yielded $1,876,461, which funds were

deposited into the Jack White account. According to Cooper, Furrh also liquidated

2      One of the three real properties owned by Frick at the at the time of the marriage
(330 S. Horne St.) was an income-producing rental property, which Frick had obtained
from Furrh shortly before the marriage through a like-kind exchange (26 U.S.C. § 1031)
for a property (260 Diamond St.) she inherited from her parents. Another real property
held by Frick was a vacation home in Borrego Springs, which she inherited from her
parents.

3      Cooper testified that he based his conclusion about the parties' liquid assets at the
date of marriage on account statements dated as close to the date of marriage as possible.
In determining the parties' liquid assets held at the date of marriage, Cooper allocated any
uncertain items to Furrh's separate property.

4     The parties also held various joint deposit and checking accounts during their
marriage.

                                             3
$62,243 of his securities to initially fund the Jack White account. As confirmed during

Furrh's testimony, records show over $2 million in checks being deposited from Frick's

separate accounts into the Jack White account between November 1995 and February

1997.

        Furrh was primarily responsible for managing the parties' finances. Furrh devoted

significant attention to buying and selling securities through the Jack White account, and

there were capital gains on the investments as reported on the parties' tax returns. It was

not possible to directly trace every securities trade in the Jack White account to determine

whether a specific gain or loss in the account was attributable to the original funding

contribution of Frick or Furrh. Therefore, for the purposes of his analysis, Cooper

allocated the income from the Jack White account to Frick and Furrh based on what he

determined to be their ratio of initial funding: 97 percent to Frick, and 3 percent to Furrh.

B.      Issue of Reimbursement for Separate Property Contributions to the Purchase of
        Real Estate in 1999

        In April 1999, the parties purchased real property at 869 San Antonio Place in San

Diego (San Antonio) for $1,815,900 in cash. In September 1999, the parties purchased

real property at 690 California Street in Oceanside (California St.) for $1,230,000 in

cash.5 There was no dispute at trial that both parcels were held as the parties' community

property based on the form of title on the grant deeds. However, a major disputed issue

during trial was whether the parties could establish that either of them contributed their

5      The parties sometimes refer to California St. as "Seaview Point," presumably
based on the name of the condominium development.

                                             4
separate property funds to the purchase of the San Antonio and California St. properties

for the purpose of establishing a right to reimbursement under section 2640.

       1.     The Purchase of the San Antonio and California St. Properties Was
              Structured as a Reverse Like-Kind Exchange Under Section 1031 of the
              Internal Revenue Code

       As relevant here, Furrh attempted for tax purposes to structure the purchase of the

San Antonio and California St. properties as a reverse like-kind exchange under section

1031 of the Internal Revenue Code (26 U.S.C. § 1031).

       As Cooper explained, a like-kind exchange under Internal Revenue Code section

1031 "allows a taxpayer to move an investment in real property currently owned to other

real property without paying tax on sale of the original property. This provides a

significant benefit to real estate investors since they can use all the proceeds from sale of

the originally owned property . . . rather than the net of tax proceeds." Cooper further

explained that in a reverse Internal Revenue Code section 1031 like-kind exchange, as

Furrh purported to accomplish here, "the taxpayer acquires the target properties first, then

at a later date, sells the relinquished properties within the time limits to meet the

requirements under [Internal Revenue Code section ]1031."

       According to the evidence presented at trial, to accomplish the Internal Revenue

Code section 1031 reverse like-kind exchange, the funds for the purchase of the San

Antonio and California St. properties in 1999 were loaned by the parties to an entity set

up to accommodate the exchange, San Diego Bay, LLC (the accommodator). According

to the documentation, the accommodator then bought the San Antonio and California St.

properties in 1999 from the sellers (using the loaned funds) and took title to the

                                               5
properties. Then, in the years 2000 and 2001, Furrh and Frick sold some of their separate

real properties6 and paid the proceeds from those real estate sales to the accommodator,

who then used the funds to repay the loan used to buy the San Antonio and California St.

properties.7

       Furrh could not provide a detailed explanation about the movement of the funds in

the Internal Revenue Code section 1031 reverse like-kind exchange,8 and his expert

witness, Karen Kaseno, did not attempt to do so. Wesley and Cooper both testified that

6       According to the record, the parties sold five real properties in 2000 and 2001,
which may have been part of the purported Internal Revenue Code section 1031 reverse
like-kind exchange. Specifically, Furrh sold: 109 South Horne (Sept. 9, 2000); 123
South Nevada (Sept. 11, 2000); 3704 Clove Way (Dec. 11, 2000); and 260 Diamond
Street (Jan. 21, 2001). Frick sold 330 South Horne Street (Aug. 31, 2000).

7       The second half of the Internal Revenue Code section 1031 reverse like-kind
exchange transaction was not well explained or well documented at trial. The most
useful explanation of the Internal Revenue Code section 1031 reverse like-kind exchange
transaction — although still very sparse and not supported by documentation — came
from the testimony of Frick's expert witness, Robert F. Wesley, who cautioned that he
was not an expert on Internal Revenue Code section 1031 exchanges. As Wesley
explained, "The money . . . on a theoretical basis was supposed to be from [Frick] and
[Furrh], [who] len[t] it to an accommodator who was supposed to purchase [San Antonio
and California St.] And then somewhere down the line to complete the 1031 exchange,
109 [South ]Horne, 123 South Nevada, 3704 Clove, and 26[0] Diamond as well as 330
South Horne would then have been sold. The money was supposed to go back to the
accommodator, and then the accommodator would have repaid the loan back to the
parties." As the transaction was apparently set up, only after the money from the sale of
the couple's real estate was turned over to the accommodator, and those funds were in
turn used to reimburse Frick and Furrh for the original loan made to the accommodator
did title to San Antonio and California St. pass from San Diego Bay, LLC to Frick and
Furrh by recorded quit claim deeds.

8      As Furrh simplistically testified, "the money was all sifted through and given to
the correct person."

                                             6
Internal Revenue Code section 1031 was not relevant to tracing the separate property

funds contributed by Frick or Furrh to the purchase of the San Antonio and California St.

properties because it was undisputed that those funds originally came from Frick and

Furrh's accounts in 1999, and the federal tax provision was meant to provide favorable

tax advantages, not to impact a tracing analysis under the Family Code.

       2.     Wesley's Tracing Analysis

       To determine whether separate property was used to purchase the San Antonio or

California St. properties for the purpose of the section 2640 reimbursement claim, Frick's

expert Wesley undertook an analysis of the parties' available separate property liquid

assets at the time of the real property purchases in 1999 as well as any available

community property liquid assets. As the starting point of his analysis, Wesley relied on

Cooper's conclusions about the liquid assets available to the parties at the date of

marriage (which, as we have described above, Cooper concluded to be $2,888,178 for

Frick, and $227,689 for Furrh), as well as the amount of separate property income and

community property income earned by the parties from the date of marriage to the time

that the San Antonio and California St. properties were purchased in 1999.

       As Wesley's analysis relied on Cooper's calculation of the parties' income between

1996 and 1999, we first turn to those figures. Based on the parties' tax returns, account

statements and other supporting documentation, Cooper concluded that the community

property income from the date of marriage to April 1999 when the San Antonio property

was purchased was $81,036, and the community property income between April 1999

and the purchase of the California St. property in September 1999 was $14,450.

                                              7
Community property income was minimal because Frick and Furrh were retired and did

not have community property assets that were generating income.9

       Frick's separate property income from the date of marriage to April 1999 was

$1,104,962, and her separate property income from April 1999 to September 1999 was

$269,286. The primary sources of Frick's separate property income were the capital

gains on her investments, including those held in the Jack White account,10 and the

income on her separate property rental properties.

       Furrh's separate property income from the date of marriage to April 1999 was

$16,168, and his separate property income from April 1999 to September 1999 was

$33,160. Furrh's sources of separate property income included the capital gains on his

separate property investments held in the Jack White account and the income from his

separate property rental properties. However, as reflected on the parties' tax returns,

Furrh's rental properties were not particularly profitable due to associated expenses. For

instance, the tax returns for one year showed a net loss of $44,575 on Furrh's rental

properties.

       In the next step of his analysis, Wesley factored in the parties' living expenses

from the date of marriage until the purchase of the San Antonio and California St.

properties in 1999. There was no dispute at trial that insufficient records existed to create

9      Cooper testified that when he was uncertain how to characterize an item of income
that appeared on the tax returns, he designated it as community property.

10    As we have explained, Cooper assigned 97 percent of the capital gains in the Jack
White account to Frick, and 3 percent of the capital gains in that account to Furrh.

                                              8
a detailed accounting of the parties' living expenses. However, Frick created a list of the

parties' estimated annual living expenses, as well as one-time significant expenses, such

as trips and vehicle purchases, all of which she described at trial.

       According to Frick's estimate, the parties' annual living expenses, excluding travel

expenses and one-time significant expenses, averaged $107,600 per year between 1996

and 1999. With the travel expenses and one-time large expenditures included, the annual

expenses from 1995 to 1999 averaged $148,123.11 Furrh testified that he had no dispute

with Frick's estimate of their annual living expenses.

       With respect to expenses, Wesley also pointed out that Furrh had used his separate

property funds to pay off the mortgages on two of his separate property real properties in

1998: $50,676.94 for the Valley Road property, and $42,262 for the Clove Way

property.12

11     As reflected in Wesley's report, prior to trial, Frick had estimated the parties'
annual living expenses, excluding one-time big items and significant travel expenses to
be least $98,000 per year, and Wesley used that figure in preparing his report. In its
statement of decision, the trial court also referenced the amount of $98,000 per year in
living expenses. The difference between $98,000 and $107,600 is not material to our
analysis.

12      We note that the statement of decision states that $43,345 was the amount paid on
the principal on the Clove Way property. It is unclear where that figure is derived from,
although it also appears in Frick's closing argument. Further, Wesley several times refers
to a rough amount of $91,000 that Furrh paid to reduce the principal on the two
mortgages, although the total shown on the records is actually $92,939. The discrepancy
is not relevant because, regardless of the precise figure, the reasoning of the trial court as
reflected in the statement of decision would still show that Furrh had no available
separate property funds with which to purchase the San Antonio property in April 1999.

                                              9
       In the last step of his analysis, Wesley subtracted the parties' living expenses from

their available community property and separate property funds to determine that (1) no

leftover community property funds were available to apply to the purchase of either the

San Antonio or California St. property; and (2) based on Furrh's relatively small amount

of separate property funds, Furrh could not have contributed a significant amount of his

own separate property funds to purchase the San Antonio or California St. property, with

Frick's separate property funds necessarily making up the majority of the funding source

for those purchases.

       3.     The Trial Court's Statement of Decision on Section 2640 Reimbursement
              for the Purchase of the San Antonio and California St. Properties

       In its statement of decision, the trial court adopted Wesley's basic tracing

methodology and arrived at the following specific findings as to the parties' separate

property contributions to the purchase of the San Antonio and California St. properties.

       First, fixing the parties' total minimum living expenses from the date of marriage

to the acquisition of the San Antonio property at $443,000 based on the parties'

testimony, the trial court reasoned that all of the community property income would have

been consumed in that period by the parties' community living expenses.13 Thus, no

community property funds could have been used to buy the San Antonio property in

April 1999.

13    Specifically, the trial court assumed $98,000 in annual living expenses, plus
$100,000 in extraordinary expenses for travel and vehicle purchases.

                                             10
       Second, even after assuming that all of the community property income in the

period from September 1999 to April 1999 was paid out to cover the community living

expenses, significant community living expenses remained, totaling $359,834. The trial

court found that those expenses were necessarily paid with the parties' separate property

funds. The trial court charged each party's separate property funds for half of the leftover

community living expenses, in the amount of $179,917 each.14 The trial court then

examined whether, through a process of elimination, it could determine which funds were

necessarily used to purchase the San Antonio and California St. properties.

       In conducting this analysis, the trial court relied on Cooper's calculations of

Furrh's beginning balance of liquid assets at the date of marriage, Furrh's separate

property income since the date of marriage, and Furrh's expense of paying off two

mortgages in 1998, to determine that in April 1999, Furrh had at most $149,835 in

separate property funds. The trial court concluded that the entire amount of $149,835

would have been consumed by Furrh's share of the leftover community living expenses of

$179,917. As a result, the trial court ruled that Furrh could not have contributed any

separate property funds to the purchase of the San Antonio property in April 1999, and

14      In the statement of decision, the trial court observed that it "appears to be a matter
of first impression . . . how to apportion the $359,834 of expenses between the parties'
separate property funds." The trial court concluded that it was a "fair method" to require
the parties to pay the expenses equally. Although the trial court identified the matter as
an apparent issue of first impression, the parties do not challenge that part of the trial
court's ruling on appeal, and we accordingly do not express a view on the issue.

                                              11
therefore the entire purchase price of the San Antonio property was paid with

$1,818,626.48 of Frick's separate property funds.

       The trial court applied the same approach in determining the source of funds used

to purchase the California St. property in September 1999. Based on Cooper's

calculations, the community earned $14,450 in income between the April 1999 purchase

of the San Antonio property and the September 1999 purchase of the California St.

property, and Furrh earned $33,160 in separate property income. The entire amount of

the community property income would have been consumed by the parties' community

living expenses during that period.15 The remaining community living expenses during

the period from April to September 1999 would have been $26,384. Charging Furrh's

separate property funds with half of those expenses, Furrh had $19,968 of separate

property funds to contribute to the purchase of the California St. property in September

1999. The balance of the purchase price was $1,200,982, which the trial court concluded

was paid with Frick's separate property funds.

       In sum, as to the section 2640 reimbursement issues for the purchase of the San

Antonio and California St. properties, the trial court found that Frick was entitled to

reimbursement from the community of $1,818,626.48 for separate property contributions

to the purchase of the San Antonio property and $1,200,982 for separate property

contributions to the purchase of the California St. property; and Furrh was entitled to

15     Although not explicitly setting forth its calculations, the trial court appears to have
assumed five months of living expenses between the purchase of the San Antonio and
California St. properties at a rate of $98,000 per year.

                                             12
reimbursement from the community of $19,968 for separate property contributions to the

purchase of the California St. property.

C.     Reimbursement for Separate Funds in the Parties' Financial Accounts at Date of
       Separation

       Another issue decided at trial was whether the parties were entitled to

reimbursement for any separate property funds that they could trace to the parties' joint

financial accounts at the date of separation. Among the funds the parties were attempting

to trace were the proceeds from the sale of certain separate property real estate.

Specifically, Furrh sold seven real properties between September 2000 and September

2004.16 Frick sold one real property in August 2000.17

       In analyzing this issue, the trial court explained that the evidence was not

sufficient to conduct a tracing of all of the parties' separate property funds after the

purchase of the San Antonio and California St. properties. Although Furrh's expert,

Kaseno, attempted to conduct a tracing of certain of Furrh's separate property funds

16     According to Wesley's report, Furrh's seven real estate sales between 2000 and
2004 were the (1) sale of 109 South Horne on September 9, 2000, for $361,552; (2) sale
of 123 South Nevada on September 11, 2000, for $545,793; (3) sale of 3704 Clove Way
on December 11, 2000, for proceeds of $119,796; (4) sale of 260 Diamond Street on
January 21, 2001, for proceeds of $835,620; (5) sale of 2133 Valley Road on May 23,
2003, for proceeds of $428,525; (6) sale of 4267 Arcata Bay Way on March 29, 2004, for
proceeds of $226,102; and (7) sale of 1302 Partridge Lane on September 14, 2004, for
proceeds of $377,676. As we have explained, the sale of the properties in 2000 and 2001
may have been included in the Internal Revenue Code section 1031 reverse like-kind
exchange.

17    According to Wesley, Frick sold 330 South Horne Street in August 2000 for
proceeds of $1,068,416.

                                              13
obtained from the sale of his real estate into the parties' financial accounts at the date of

separation, the trial court stated that it found Kaseno's report to be "flawed and

inaccurate" and decided to "disregard Ms. Kaseno's report in its entirety."

       However, the trial court also found that (1) Furrh had adequately traced

$1,603,149 from his real estate sales to a TD Waterhouse account, which was formerly

the Jack White account; (2) Frick had traced $900,000 from her real estate sales to that

same account; and (3) Frick had also established she had a preexisting balance of

$836,649 in separate property funds in that account as of July 2000. The trial court's

statement of decision does not specify the dates of the parties' deposits to the TD

Waterhouse accounts. However, based on our review of the record, it appears that the

trial court was relying on page 16 of Wesley's report in making the finding that the

parties had traced funds to a TD Waterhouse account, which was formerly the Jack White

account. According to that report, the deposits to the TD Waterhouse account that the

parties had traced were as of 2000 and 2001, several years prior to the date of

separation.18 The trial court noted that these figures resulted in an approximately equal

18      Specifically, Wesley states that as of July 31, 2001: (1) Furrh had deposited
$1,603,149 into the TD Waterhouse account, consisting of proceeds from the sales of his
separate property real property in 2000 and 2001; (2) Frick had deposited $900,000 into
the TD Waterhouse account, consisting of proceeds from her sale of 330 South Horne
Street; and (3) Frick had a preexisting balance of $836,649.21 in separate property funds
in the TD Waterhouse account. Therefore, in finding that the parties had traced relatively
equal amounts into the TD Waterhouse account, the trial court was indicating that the
parties had traced those amounts only to deposits in 2000 and 2001, not to any account
balances at the date of separation in 2007.

                                              14
amount of separate property traced by each party as having been deposited in the TD

Waterhouse account.

       Noting both that (1) it was impossible to trace the party's separate property funds

after the purchase of the San Antonio and California St. properties; and (2) the limited

amounts the parties had shown that they deposited in the TD Waterhouse account were

approximately equal, the trial court concluded neither party had established a right to

reimbursement from the parties' financial accounts at the date of separation.

D.     Borrego Springs Real Property

       Another disputed issue at trial was whether Furrh was entitled to reimbursement

for separate property funds that he contributed before the parties' marriage toward the

1994 purchase of a vacation home in Borrego Springs by Frick's parents (the Borrego

Springs property).

       According to Furrh, the sellers of the Borrego Springs property agreed to a sale

price of $250,000, but Frick's parents wanted to pay only $200,000 for a vacation home.

Furrh testified that he personally contributed an additional $50,000 in cash directly to the

sellers to meet their stated requirement for a $250,000 sale price. According to the

escrow documents, the sale was completed at the price of $200,000, with the additional

$50,000 not documented.

       Furrh testified that he had no discussion with Frick's parents about giving him a

legal interest in the Borrego Springs property for his $50,000 contribution, and there were

no recorded documents giving him any ownership interest. Instead, as Furrh testified, "I

just thought we were buying something for the family, and I didn't mind helping." At the

                                             15
time of the purchase in 1994, Frick and Furrh had no plans to get married but were living

together.

       Frick's parents both passed away in 1995, shortly before the parties' September

1995 marriage, and Frick inherited the Borrego Springs property. Title was transferred to

Frick as her separate property in December 1995, with Furrh handling the recording of

the deed as the executor of the estate.

       As part of the dissolution proceedings, Furrh contended that he was entitled to

reimbursement in the amount of $50,000 for the separate property funds he contributed to

purchase the Borrego Springs property in 1994. The trial court ruled in favor of Furrh,

concluding that pursuant to section 2640, Furrh was entitled to reimbursement from Frick

in the amount of $50,000.

E.     Breach of Fiduciary Duty

       During his testimony, Furrh confirmed that he was involved in making deposits

from Frick's separate property accounts between 1995 and 1997 to the jointly-held Jack

White account in a total amount of over $2 million. Furrh also testified that he assumed

the parties' joint accounts were community property. Frick contended that these facts

showed that Furrh breached a fiduciary duty to her as the manager of her separate

property funds. The parties could not agree at trial whether the breach of fiduciary duty

issue was properly before the trial court as part of the stipulated reserved issues. The trial

court ruled during trial that the issue of breach of fiduciary duty under section 721 was

properly before it, but only as part of the reserved section 2640 reimbursement claim.

                                             16
       In its statement of decision, the trial court found that Furrh had breached a

fiduciary duty to Frick in violation of section 721. Specifically, the trial court pointed out

that Furrh testified that "the legal effect of transferring [Frick's] separate property funds

to a community property fund would result in [Frick's] funds all becoming community

property." The trial court explained that "[w]hile this is not the law, and while his

transfers did not result in [Frick] losing any money, it's troubling to the court that [Furrh]

hoped to in effect transmute [Frick's] separate property to the parties' community

property, thereby providing him with what he hoped would be a windfall."

       Although the trial court found that Furrh's behavior constituted a breach of

fiduciary duty, it did not impose any penalty as Frick did not lose any money and had

been able to trace her separate property contributions to the purchase of the San Antonio

and California St. properties without relying on her argument that Furrh breached a

fiduciary duty in managing her separate property funds.

F.     Issues on Appeal

       Furrh has appealed from (1) the trial court's ruling that Frick is entitled to

reimbursement for her separate property contributions to the purchase of the San Antonio

and California St. properties; (2) the trial court's ruling that the funds in the parties' joint

financial accounts at the date of separation should be split equally, with neither party

entitled to reimbursement; (3) the trial court's purported failure to rule on whether Furrh

is entitled to reimbursement for the funds obtained from the sale of his real property in

2003 and 2004; and (4) the trial court's ruling that Furrh breached a fiduciary duty to

Frick in violation of section 721.

                                               17
       Frick has cross-appealed from the trial court's ruling that Furrh is entitled to

reimbursement from Frick in the amount of $50,000 for his contribution to the purchase

of the Borrego Springs property prior to the parties' marriage.

                                             II.

                                    FURRH'S APPEAL

A.     Furrh's Appeal from the Ruling That Frick Is Entitled to Reimbursement for
       Separate Property Contributions to the Purchase of the San Antonio and
       California St. Properties

       We first consider Furrh's contention that the trial court erred in finding that Frick

was entitled to reimbursement pursuant to section 2640 because she adequately

established that she made a separate property contribution of $1,818,626.48 to the

purchase of the San Antonio property and a separate property contribution of $1,200,982

to the purchase of the California St. property.

       1.     Applicable Legal Principles

       We begin with an overview of the applicable legal principles for obtaining

reimbursement of separate property funds used to purchase a community property asset.

Section 2640, subdivision (b) provides: "In the division of the community estate under

this division, unless a party has made a written waiver of the right to reimbursement or

has signed a writing that has the effect of a waiver, 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. The amount

reimbursed shall be without interest or adjustment for change in monetary values and

may not exceed the net value of the property at the time of the division." (See In re

                                             18
Marriage of Cochran (2001) 87 Cal. App. 4th 1050, 1057 (Cochran) ["Though tracing to a

separate property source generally cannot defeat title presumptions, . . . it will establish a

prima facie statutory right of reimbursement in a marital action dividing the community

estate." (Fn. omitted.)].) As the statute expressly states, only an express written waiver

will defeat a party's right to seek reimbursement for separate property contributions to a

community property asset pursuant to section 2640. (Id., subd. (b); In re Marriage of

Carpenter (2002) 100 Cal. App. 4th 424, 427 (Carpenter).)

       "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." (In re Marriage of Braud (1996)

45 Cal. App. 4th 797, 823 (Braud).)19

       When a party purchases a community property asset using separate property funds

that have been comingled with other funds in a joint account, that party may obtain

reimbursement "where the separate property contribution is traced to its source."

(Carpenter, supra, 100 Cal.App.4th at p. 427.) Here, as we have explained, after the

parties married, the majority of Frick's separate property funds were comingled in the

Jack White account, which also contained Furrh's separate property funds. The parties

also had certain community property income during the relevant time period. It was

19     However, when our review of the trial court's decision concerns " 'legal principles
and their underlying values, the determination in question amounts to the resolution of a
mixed question of law and fact that is predominantly one of law.' " (In re Marriage of
Rossin (2009) 172 Cal. App. 4th 725, 734 (Rossin).)

                                              19
therefore Frick's burden to trace her separate property funds to show that those funds

were used to purchase the San Antonio and California St. properties, rather than Furrh's

separate property funds or the parties' community property income.

       Case law discusses two different methods for tracing a separate property

contribution into the purchase of a community property asset for the purpose of obtaining

reimbursement under section 2640. "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." (In re Marriage of

Stoll (1998) 63 Cal. App. 4th 837, 841 (Stoll).)20

       The first method is referred to as direct tracing. "Under the 'direct tracing' method,

the disputed asset . . . is traced to the withdrawal of separate property funds from the

20      Section 2640 and its predecessor statute, former Civil Code section 4800.2,
enacted in 1983, established that a party had the right to reimbursement for the
contribution of separate property to a community property asset. (Cochran, supra, 87
Cal.App.4th at p. 1061; In re Marriage of Walrath (1998) 17 Cal. 4th 907, 914.) Prior to
that time, courts discussed the two distinct methods of tracing — i.e., direct tracing and
family living expense tracing — in the context of deciding whether a party adequately
established that separate property was used to fund the purchase of an asset during
marriage for the purpose of characterizing that asset as the party's separate property
rather than community property. Thus, prior cases discussing family living expense
tracing and direct tracing arose in the legal context of property characterization rather
than reimbursement. (See v. See (1966) 64 Cal. 2d 778, 783 (See); In re Marriage of Mix
(1975) 14 Cal. 3d 604, 612 (Mix); Estate of Murphy (1976) 15 Cal. 3d 907, 918; Hicks v.
Hicks (1962) 211 Cal. App. 2d 144, 157.) However, those same tracing methodologies are
now employed in cases where tracing is conducted to obtain reimbursement under section
2640. (Walrath, at p. 920, fn. 5; Braud, supra, 45 Cal.App.4th at pp. 823-824; Cochran,
at pp. 1058-1059; Stoll, supra, 63 Cal.App.4th at p. 841.) We cite to cases conducting
tracing under both characterization and reimbursement scenarios, as the methods
employed are the same in both instances.

                                             20
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.) In one case, for instance, direct tracing was accomplished

when the party presented a schedule of receipts and expenditures showing the availability

of separate funds on given dates and also testified that the schedule accurately reflected

the receipts and expenditures as accomplished through various bank accounts. (Mix,

supra, 14 Cal.3d at p. 613.) In contrast, in In re Marriage of Marsden (1982) 130
Cal. App. 3d 426, 444-445, the court held that the party's attempt to conduct a direct

tracing of stock purchases was unsuccessful. "Since the records introduced by husband

were prepared after the stock transactions took place and the work sheet did not correlate

each stock transaction with an entry in a particular bank account and it is close to

impossible to trace the source of most of the shares of stock because husband

indiscriminately deposited and withdrew funds from his bank accounts for his stock

transactions, the trial court did not err in determining that all of the stock purchased by

husband during the marriage was community property on the ground that it could not

determine which stocks were purchased from funds in the Great Western account."

(Ibid.) Here, Frick did not attempt to use the direct tracing method, as account records

were incomplete.

                                             21
       The second method of tracing is referred to as the family living expense method

and does not require the existence of detailed account records showing each transaction

in the parties' financial accounts. "Under the 'family living expense' or 'recapitulation'

method, it is assumed that family living expenses are paid out of community property

funds. . . . 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. . . . 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. . . . [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,

citations omitted.) "If at the time of the acquisition of the property in dispute, it can be

shown that all community income in the commingled account has been exhausted by

family expenses, then all funds remaining in the account at the time the property was

purchased were necessarily separate funds." (Mix, supra, 14 Cal.3d at p. 612.)

"Basically . . . the rule effectuates a tracing of the source of the disputed property by a

process of elimination." (Patterson v. Patterson (1966) 242 Cal. App. 2d 333, 344

(Patterson).)

       Following the lead of Frick's expert witnesses, the trial court's statement of

decision made findings under the family living expense method to conclude that Frick

had traced her contribution of separate property funds to the purchase of the San Antonio

and California St. properties. Put simply, the trial court found that Frick had eliminated

                                              22
all of the other possible sources of payment for the purchase of the San Antonio and

California St. properties,21 and therefore concluded that Frick contributed her separate

property funds to the purchases.

       2.     Furrh's Arguments

       Furrh sets forth a variety of arguments attacking the trial court's decision that Frick

was entitled to reimbursement under section 2640 for the contribution of funds to the

purchase of the San Antonio and California St. properties.

       Although Furrh's arguments are poorly developed, often lack necessary citations to

the record and to legal authority, and frequently are difficult to follow, we have

endeavored to sort out Furrh's arguments and have grouped them into three categories:

(1) Furrh's challenges to how the tracing methodology was carried out; (2) Furrh's

contentions that the underlying findings on factual issues for the tracing analysis were

flawed, such as the trial court's findings about the parties' respective separate property

funds, community property income, and the amount of the family living expenses; and

(3) Furrh's contention that the trial court erred in not assigning any significance to the

Internal Revenue Code section 1031 reverse like-kind exchange in determining whether

21     As we have explained, as to the purchase of the California St. property, Frick
eliminated all other sources of funds except for $19,968 of Furrh's separate property
funds, for which Furrh was entitled to reimbursement. As to the purchase of the San
Antonio property, Frick eliminated all other possible sources of funds.

                                              23
Frick successfully traced her separate property funds to the purchase of the San Antonio

and California St. properties. We now turn to each category of argument.22

              a.     Flaws in Applying the Tracing Methodology

       We first consider Furrh's arguments directed at establishing that Frick's attempt to

trace her separate property contributions to the purchase of the San Antonio and

California St. properties was not properly carried out and thus should not have been

accepted by the trial court. Specifically, we address Furrh's arguments that (1) Frick was

required to meet the standards applicable to a direct tracing, but did not do so; and

(2) even if a family living expense tracing methodology was available to Frick, she failed

to satisfy a basic requirement for that type of tracing because she did not establish that

her separate property funds were actually used to purchase the San Antonio and

California St. properties.

22      As a preliminary observation, we note that Furrh's briefing places significant
emphasis on the applicability of section 760, which creates a presumption that property
acquired during the marriage is community property. At certain points in his briefing,
Furrh discusses the community property presumption of section 760 in a context that
implies he believes the characterization of the San Antonio and California St. properties
as community property or separate property is at issue in this appeal. However, Furrh's
discussion is misplaced. Frick did not dispute at trial that the San Antonio and California
St. properties were the parties' community property, and the trial court expressly
concluded that because those parcels were acquired during marriage (§ 760) and held in
joint form (§ 2581), they were community property. Further, despite Furrh's apparently
mistaken understanding to the contrary, all of the appreciation on the value of the
community property assets — San Antonio and California St. — was awarded to the
community. The sole disputed issue with respect to the San Antonio and California St.
properties at trial and on appeal is whether Frick is entitled to reimbursement under
section 2640 for her separate property funds used to acquire those properties for the
community.

                                             24
                     i.     Direct Tracing Instead of Family Living Expense Tracing

       As we have explained, there are two distinct tracing methodologies on which a

party may rely to trace separate property contributions to the acquisition of a community

property asset: direct tracing and family living expense tracing. Further, as we have

explained, Frick's experts did not attempt to conduct a direct tracing because the records

were not available to do so. Instead, Frick's experts used the family living expense

methodology, employing a process of elimination to establish that Frick's separate

property funds were necessarily used to purchase the San Antonio and California St.

properties. The trial court relied on the evidentiary presentation and analysis by Frick's

experts' under the family living expense method and found that Frick successfully traced

her separate property contributions to the purchase of the San Antonio and California St.

properties.

       Even though Frick did not attempt to conduct a direct tracing, Furrh contends

throughout his briefing that Frick did not adequately trace her separate property funds

because she did not satisfy the requirements applicable to a party conducting a direct

tracing. For example, citing portions of case law on direct tracing, Furrh argues that the

burden was on Frick "to provide 'specific records reconstructing each separate and

community property deposit, and each separate and community property payment as it

occurs.' " (Quoting Braud, supra, 45 Cal.App.4th at p. 823.)23 Although he does not

23      This quotation is clearly from the portion of Braud discussing the requirements for
direct tracing. Quoted more fully, Braud states, "Under the 'direct tracing' method, the
disputed asset (in this case the improvements to the community property home) is traced
                                             25
directly say so, Furrh apparently believes that, under the circumstances, Frick was

required to conduct a direct tracing, and that the family living expense method was

therefore not available to her to trace her separate property contributions to the purchase

of the San Antonio and California St. properties. Furrh's argument fails.

       Case law consistently states that two tracing methods are available when separate

property funds are comingled with other funds and a party is seeking to establish under

section 2640 that a payment was made with separate property funds. (In re Marriage of

Margulis (2011) 198 Cal. App. 4th 1252, 1281-1282 ["a spouse who has commingled

community and separate funds" can employ "traditional family law tracing methods, such

as direct tracing or the family expense method of tracing"]; Braud, supra, 45 Cal.App.4th

at p. 822 ["Either of two tracing methods may be utilized . . . : 'direct tracing,' or 'family

living expense tracing.' "]; Stoll, supra, 63 Cal.App.4th at p. 841 ["It is hornbook

California family law that tracing is done either directly, or by a process of

elimination . . . ."].) Thus, although Furrh cites to the standards for direct tracing in

arguing that Frick did not successfully trace her contributions to the purchase of the San

Antonio and California St. properties, Frick was entitled to reject use of the direct tracing

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." (Braud, supra, 45
Cal.App.4th at p. 823.) In the next paragraph, Braud contrasts the family living expense
method, in which "it is assumed that family living expenses are paid out of community
property funds" and "[p]ayments 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." (Ibid.)

                                              26
method and instead rely on the family living expense method of tracing, which does not

have the same documentation requirements.

       As part of his discussion of direct tracing, Furrh cites to See, supra, 64 Cal. 2d 778,

for the statement that a spouse who allows the commingling of community and separate

assets and income "assumes the burden of keeping records adequate to establish the

balance of community income and expenditures at the time an asset is acquired with

comingled property." (Id. at p. 784, italics added.) If Furrh interprets See's reference to

adequate "records" to mean that a party who comingles funds is limited to direct tracing,

he is mistaken. After See was decided, our Supreme Court made clear in Beam v. Bank of

America (1971) 6 Cal. 3d 12 (Beam) that by its discussion in See it "intended to work no

changes in the established family expense presumption." (Beam, at p. 23, italics added.)

As Beam explained, even if a party knowingly comingles funds, the party may establish

that the account contained separate property used to purchase an asset if he or she

introduces sufficient evidence to conduct a family living expense tracing and, through

that method, show that family living expenses exceeded community income at the

relevant time. (Ibid.) Thus, the fact that Frick's funds were comingled with other funds

in the Jack White account does not preclude her from using a family living expense

tracing methodology rather than a direct tracing methodology to establish the source of

funds used to purchase the San Antonio and California St. properties. (See Cochran,

supra, 87 Cal.App.4th at pp. 1058-1059 [party successfully employed the family living

expense tracing method in lieu of conducting a direct tracing to establish a separate

property payment of funds when the evidence sufficiently established that separate and

                                             27
community property funds were deposited in a comingled account, but that community

property funds were exhausted at the time the funds at issue were paid out].)

       Further, although Furrh's argument is not entirely clear, he appears to contend that

the family living expense method of tracing was not available to Frick because she did

not have sufficient documentation of the parties' living expenses to undertake such an

analysis. We disagree. Case law establishes that for the 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.) As the court noted in Price,

although the husband "did not offer a formal accounting of all sums expended for the

maintenance of his family during the long period of marriage," the evidence of family

expenses was nevertheless sufficient because "the record is replete with evidence relating

to the manner in which they lived," including the general expenses associated with their

high standard of living. (Ibid.) Similarly, in Beam, supra, 6 Cal.3d at pages 16 and 21,

the testimony of the parties concerning their normal monthly living expenses was

sufficient for the purposes of applying the family living expense methodology. (Id. at

p. 16 [observing that pursuant to "testimony of both parties, the ordinary living expenses

of the family throughout the marriage amounted to $2,000 per month and, in addition,

after 1960, the family incurred extraordinary expenses (for travel, weddings, gifts) of

$22,000 per year"].) Here, Frick testified about the family's estimated living expenses,

and Furrh expressly stated at trial that he had no dispute with Frick's testimony on that

subject.

                                             28
                     ii.    Frick Established That Her Separate Property Funds Were
                             Actually Used to Purchase the San Antonio and California
                             St. Properties

       In his second challenge as to how the tracing analysis was carried out, Furrh

argues that even if the family living expense method was available to Frick, she failed to

satisfy a basic requirement of that tracing analysis because she failed to establish, as

required by Braud, supra, 45 Cal.App.4th at pages 823-824, "not only that separate

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

the time the particular asset was acquired." (Ibid.) As we will explain, Furrh's argument

lacks merit. Substantial evidence supports a finding that Frick's separate property funds

were actually used, not just available, to purchase the San Antonio and California St.

properties.

       The family living expense approach to tracing relies on "a process of elimination"

(Patterson, supra, 242 Cal.App.2d at p. 344) to establish that a community asset must

have been bought with separate property funds because all other possible source of funds

have been eliminated due to the community property funds having been consumed by

family living expenses. (Mix, supra, 14 Cal.3d at p. 612 [if "all community income in the

commingled account has been exhausted by family expenses, then all funds remaining in

the account at the time the property was purchased were necessarily separate funds"].)

Thus, in Braud, when the husband sought to establish that home improvements were paid

for with his separate property funds from a comingled account, he failed to do so because

he could not establish that all other funds in the account had been "depleted at the time"

of the home improvement payments, and thus although the separate property funds were

                                             29
available, he did not establish that they were "actually used." (Braud, supra, 45

Cal.App.4th at p. 824.)

       Here, the trial court made findings that (1) no community property funds were

available to purchase the San Antonio and California St. properties because the

community property funds had been consumed by the parties' living expenses; (2) only

Frick's separate funds were available to purchase the San Antonio property; and (3) only

a small amount of Furrh's separate funds were later available to purchase the California

St. property, leaving the remainder of the purchase price to necessarily be paid by Frick's

separate property funds.24

       As a matter of logic, these findings are sufficient to establish not only that Frick

had separate property available for the purchase of the San Antonio and California St.

properties, but that those funds were actually used. Specifically as to the San Antonio

property, the trial court found that no other funds were available at the time of the

purchase. Thus, by a process of elimination, Frick's separate property funds were not just

available, but "actually used" "at the time the [San Antonio property] was acquired."

(Braud, supra, 45 Cal.App.4th at p. 824, italics added.) As to the California St. property,

the trial court found that Furrh had only a limited amount of separate property funds

available to contribute toward the purchase, and there were no community property funds

24      In part II.A.2.b., post, we will address and reject Furrh's challenges to the trial
court's more specific factual findings on which these ultimate findings are based,
including the trial court's findings regarding the parties' separate property funds and
community property income during the relevant time period.

                                              30
available because they had all been consumed by the family living expenses.

Accordingly, the remainder of the purchase price for the California St. property,

$1,200,982, must necessarily have been paid with Frick's separate property funds, which

were thus actually used for that purpose.

       In sum, because Frick showed that all the other possible sources of funds had been

"depleted at the time" the San Antonio and California St. properties were purchased

(Braud, supra, 45 Cal.App.4th at p. 824), substantial evidence supported a finding that

her separate property funds were actually used as required by the family living expense

method of tracing, not just available.

              b.     Factual Findings Underlying the Ruling That Frick Traced Separate
                     Property Funds in Specific Amounts

       We next consider several arguments in which Furrh seeks to undermine the trial

court's factual findings that provide the foundation for its conclusion that Frick

successfully traced her separate property contributions in specific amounts to the

purchase of the San Antonio and California St. properties using the family living expense

method. More specifically, as we have explained, as a predicate to its ruling awarding

Frick reimbursement for her separate property contributions, the trial court made findings

about (1) the parties available separate property funds from the date of marriage to 1999,

when the San Antonio and California St. properties were acquired; (2) the parties'

community property income during that period; and (3) the parties' family living

expenses during that period. Each of the six arguments by Furrh that we discuss in this

section are aimed at attacking one or more of those factual findings, which we will

                                             31
uphold if they are supported by substantial evidence. (Braud, supra, 45 Cal.App.4th at

p. 823.) As we will explain, Furrh has failed to establish that insufficient evidence

supports the trial court's findings.

                      i.     Treating the Capital Gains on the Separate Property
                             Contributions to the Jack White Account as Community
                             Property

       Furrh contends that the trial court relied on a flawed opinion by Cooper to make

findings about the amount of separate property income that Frick had available in the

Jack White account to use for the real property purchases. Specifically, Furrh contends

that Cooper improperly credited the parties with the capital gains in the Jack White

account according to the percentage of their separate property contributions to that

account instead of treating all of the appreciation in the account as community property.

As we understand Furrh's position, he contends that because the parties' separate property

funds were placed in a joint account held in both of the parties' names, the funds became

community property, as did the appreciation on those community property funds. As we

will explain, we disagree.

       We start with the fundamental statutory principle that "[t]he rents, issues, and

profits" of a party's separate property also constitute that party's separate property.

(§ 770, subd. (a)(3); see In re Marriage of Dekker (1993) 17 Cal. App. 4th 842, 851

(Dekker) ["rents, issues and profits are community property if derived from community

assets, and separate property if derived from separate assets"].) The Jack White account

was originally funded with the parties' respective separate property, and thus according to

                                              32
section 770, subdivision (a)(3), Cooper treated the appreciation on that separate property

as the parties' separate property as well.

       The characterization of funds in a married couple's joint accounts is controlled by

Probate Code section 5305. (See Hogoboom & King, Cal. Practice Guide: Family Law

(The Rutter Group 2015) ¶ 8:383, p. 8-139.)25 Under Probate Code section 5305, a

married couple's net contribution to a joint account is presumed to be community

property, but that presumption can be rebutted if the "sums on deposit that are claimed to

be separate property can be traced from separate property unless it is proved that the

married persons made a written agreement that expressed their clear intent that the sums

be their community property." (Id., subd. (b)(1).) This statutory presumption and the

ability to rebut it by tracing is consistent with longstanding case law which does not rely

on Probate Code section 5305, but which provides that separate property funds

comingled in a joint bank account have the character of separate property if their source

can be traced. (Rossin, supra, 172 Cal.App.4th at p. 734 [" ' "[M]ere commingling of

separate with community funds in a bank account does not destroy the character of the

former if the amount thereof can be ascertained." ' "].)

       Here, based on our discussion in the preceding section, we have concluded that the

evidence, including the available documentation, testimony and expert opinion, was

25     Although Furrh assumes for the purpose of his argument that the Jack White
account was held jointly by the parties, no account agreements were presented at trial.
The account statements for the Jack White account contained in the record up to the date
of December 1997 are addressed to "Dean Furrh & Gail K. Furrh Com Prop." After that
date they are addressed to "Dean Furrh & Gail K. Furrh JT Ten."

                                             33
sufficient to trace the source of the funds in the Jack White account to the parties'

separate property funds using the family living expense method. Indeed, Furrh does not

dispute that the Jack White account was funded with the parties' separate property.

Therefore, Frick met her burden to rebut the presumption that the funds in the Jack White

account were community property. As the funds retained their character as separate

property, there is no basis for characterizing the appreciation on the separate property

funds held in the Jack White account as community property. Profits from a party's

separate property are also the party's separate property. (§ 770, subd. (a)(3).)

       In connection with the dispute over whether Frick adequately traced her separate

property funds, Furrh repeatedly refers to a supposed agreement of the parties that they

"pool" their separate property for the benefit of the community. Furrh may be attempting

to establish that, within the meaning of Probate Code section 5305, by agreeing to "pool"

their separate property assets in the Jack White account, the parties entered into "a written

agreement that expressed their clear intent that the sums be their community property."

(Prob. Code, § 5305, subd. (b)(1).) If that is Furrh's argument, it fails.

       Furrh has not pointed to any written agreement by the parties that the funds held in

the Jack White account would become the parties' community property, even if the funds

were able to be traced to a separate property source. Furrh has identified some statements

from the Jack White account addressed to "Dean Furrh & Gail K. Furrh Com Prop" and

"Dean Furrh & Gail K. Furrh JT Ten," but case law establishes that a reference on an

account statement to that account being held in joint tenancy or as community property

does constitute "a written agreement" that expresses the "clear intent" that the funds

                                              34
become community property as required by Probate Code section 5305. (Id.,

subd. (b)(1); Estate of Petersen (1994) 28 Cal. App. 4th 1742, 1754-1755.) The main

evidence that Furrh points to in support of his contention that the parties agreed to "pool"

their assets is a statement that Frick made in a declaration during the early stages of the

dissolution proceeding. In that declaration, in the context of providing background about

the parties' financial resources, Frick stated, "We each brought significant separate

property assets into the marriage, which we pooled in order to acquire a number of new

assets." Frick's vague statement that the parties "pooled" their assets is not a written

agreement expressing the parties clear intent, as required by Probate Code section 5305,

that the funds deposited in the Jack White account would be the parties' community

property.

       We accordingly find no merit to Furrh's argument that the trial court erred in

relying on Cooper's opinion that the appreciation on the party's separate property funds in

the Jack White account was also their separate property, rather than community property,

for the purposes of tracing the source of the funds used to purchase the San Antonio and

California St. properties.

                     ii.     Crediting the Community with Additional Income Based on
                             Furrh's Management of the Parties' Securities

       In an argument also aimed at challenging the trial court's findings on the amount

of the parties' community property income for the purpose of the family living expense

tracing, Furrh contends that even if the appreciation in the Jack White account is treated

as the parties' separate property, the community should have been allocated some of the

                                             35
appreciation on Frick's separate property funds as compensation for Furrh's efforts in

managing the investments held in the Jack White account during the marriage. Furrh

bases his argument on the principle " '[t]he community is entitled to the increase in profits

attributable to community endeavor.' " (Quoting Dekker, supra, 17 Cal.App.4th at

p. 851.) Under this rule, "courts must apportion profits derived from community effort to

the community, and profits derived from separate capital are apportioned to separate

property." (Ibid.; see also Hogoboom & King, Cal. Practice Guide: Family Law, supra,

¶ 8:338, p. 8-84.11 ["apportionment is required even where a spouse's efforts during

marriage contribute to an increase in the other spouse's separate property"].)

       We see no indication that Furrh made this argument in the trial court. To the

contrary, Furrh's expert, Kaseno, testified that she had not been asked to determine any

value contributed by Furrh's efforts in managing the parties' investments. Kaseno

explained that normally when a spouse expends effort in managing an investment

account, she would recommend that the spouse be given a management fee, but she was

not asked to perform that analysis here. Further, Kaseno testified that she had done no

analysis to determine whether Furrh's efforts resulted in losses or gains compared to the

market average.

       As Furrh did not argue at trial that the community should be reimbursed for his

efforts in managing the investment in the Jack White account, he may not argue on

appeal that the trial court erred in failing to make such a ruling. (In re Marriage of

Walker (2006) 138 Cal. App. 4th 1408, 1418 (Walker) ["As a rule, parties are precluded

from urging on appeal any points that were not raised before the trial court. [Citation.]

                                             36
To permit a party to raise a new theory is both unfair to the trial court and unjust to the

opposing litigant."]; Perez v. Grajales (2008) 169 Cal. App. 4th 580, 591-592 (Perez)

[" '[I]t is fundamental that a reviewing court will ordinarily not consider claims made for

the first time on appeal which could have been but were not presented to the trial court.' "

"Such arguments raised for the first time on appeal are generally deemed forfeited."].)

                     iii.    Separate Property Income from Furrh's Rental Properties

       Furrh contends that the trial court's findings about the parties' separate and

community property income was flawed because Frick's experts, on whom the trial court

relied, "failed to credit either the community or [Furrh] with the income from the parties'

rental units." As part of this argument, Furrh contends that the experts "omit[ted] any

consideration of the rental [income] from [Furrh's] income-producing properties."

       Furrh's argument depends on a clear mischaracterization of the evidence. The trial

court relied on Cooper's analysis for its findings about Furrh's separate property income

in the statement of decision. Cooper testified that he arrived at the figures for the parties'

separate property income between 1995 and 1999 by examining the parties' tax returns

and supporting documents, and that he expressly included the income from the parties'

respective rental properties in determining the parties' separate property income.

Cooper's schedule shows rental income credited to Furrh and Frick each year.26 We

therefore reject Furrh's argument.

26     At points in his briefing, Furrh appears to take the position that some of the
income from the parties' rental properties between 1995 and 1999 should have been
treated as community property income rather than Furrh's and Frick's separate property
                                              37
                     iv.    Furrh's Separate Property Used to Pay the Family Living
                            Expenses

       Furrh argues that the evidence at trial established that from 1995 to 1999, prior to

the purchase of the San Antonio and California St. properties, he paid the family's living

expenses from his separate property rental income. At different points, Furrh appears to

rely on this purported fact to argue either (1) there were leftover community property

funds to buy the San Antonio and California St. properties because all the family

expenses that purportedly consumed the community property funds were in fact paid by

Furrh's separate property rental property income; or (2) Furrh actually had more separate

property income from his rental properties than the tax returns reflect because he

deducted the payment of the community living expenses to reduce the separate property

income reported on his taxes. As we will explain, regardless of the focus of Furrh's

argument, it fails because it lacks a factual foundation.

       Under a fundamental legal precept applied in the family living expense method of

tracing, family living expenses are presumed to have been paid first by the available

community property funds. (Braud, supra, 45 Cal.App.4th at p. 823.) Furrh did not

present evidence at trial to rebut that presumption. Although Furrh purports to provide

citations to the record to support his contention that he paid the family living expenses

income. Furrh does not explain his basis for taking that position, and we perceive none.
The record is clear that in the period 1995 to 1999, the parties did not own any
community property rental units. Therefore, in determining the parties' income from that
period, Cooper properly credited the rental property income shown on the tax returns as
the separate property income of either Furrh or Frick, depending on which rental property
generated the income.

                                             38
using his separate property funds from his rental properties, the record citations he

provides do not establish that fact.

       In arguing that he paid the family living expenses with his separate property funds,

Furrh may be referring to vague testimony at trial that at some point during the parties'

marriage he became more aggressive in preparing his tax returns, charging some of the

family's living expenses as expenses of his rental property business. However, it appears

from the parties' testimony that this aggressive approach on the tax returns did not occur

until after the San Antonio and California St. properties were purchased in 1999, and thus

would not have any relevance here. Specifically, Furrh testified that his accountant

advised him to take an aggressive tax position by writing off family living expenses as

part of the expenses of his rental property business only after he incorporated the rental

property business in 2001. Frick confirmed in her testimony that she understood that

Furrh's aggressive tax position was not taken until after incorporation of the rental

property business. Moreover, Frick testified that in making her list of family living

expenses, she attempted to omit any expenses that Furrh wrote off on the tax returns.

Cooper testified that although he understood from Furrh's deposition that some of the

living expenses were written off as part of the business expenses, the amount was "pretty

small."27

27     Further, Cooper did not identify a specific a time period when describing Furrh's
practice of writing off living expenses as part of the business expense. Therefore, Cooper
may have been referring to write-offs that were taken after Furrh incorporated the rental
property business in 2001.

                                             39
       Based on all of the above, Furrh did not establish that he used his separate

property income from his rental properties, rather than community property funds, to pay

the parties' living expenses from 1995 to 1999.

                     v.      Extraordinary Living Expenses

       Furrh next takes issue with the trial court's factual findings about the amount of the

parties' family living expenses. Specifically, he points out that Wesley's family living

expense tracing analysis did not factor in the additional extraordinary expenses identified

by Frick for items such as travel and expensive vehicles when determining the funds

available to purchase the San Antonio and California St. properties. Furrh's argument

fails because even though Wesley did not take account of the parties' extraordinary living

expense in his analysis, the trial court did not make that error. Indeed, the trial court

expressly made a finding that not only did the parties have $98,000 per year in family

living expenses, which was the same figure used by Wesley in his analysis, the parties

also had an additional $100,000 in extraordinary expenses over the course of the relevant

time period. Thus, whatever flaw Furrh has identified in the factual assumptions

underlying Wesley's tracing analysis, it was not replicated by the trial court in its

statement of decision.

                     vi.     Payment of Estate Taxes on Frick's Inheritance

       In his final factual challenge, Furrh takes issue with the trial court's finding that

Frick had $2,888,178 in liquid assets at the time of marriage. Specifically, Furrh

contends that the figure was flawed because it did not account for the estate taxes on the

portion of Frick's assets that were acquired through inheritance.

                                              40
       As the factual basis for his argument, Furrh states that there was "nearly $381,337

in estate taxes on the money [Frick] inherited." We are not able to ascertain whether that

figure is correct, as Furrh does not provide accurate record citations to support his

argument.28 By failing to support his argument with proper record citations, Furrh has

waived the argument. (Air Couriers Internat. v. Employment Development Dept. (2007)

150 Cal. App. 4th 923, 928 ["party on appeal has the duty to support the arguments in the

briefs by appropriate reference to the record, which includes providing exact page

citations," and we "have no duty to search the record for evidence and may disregard any

factual contention not supported by proper citations to the record"]; City of Lincoln v.

Barringer (2002) 102 Cal. App. 4th 1211, 1239 [arguments not supported by adequate

citations to record need not be considered on appeal].)

       We note, moreover, based on our own review of the record, the evidence at trial

shows that the estate taxes were paid before the inherited property was transferred to

Frick, and Cooper was operating under that assumption when he calculated that Frick had

$2.8 million in separate property liquid assets at the time of the parties' marriage.

Specifically, Cooper's report states that based on his review of the documentation for the

estate of Furrh's aunt and uncle, "[e]xpenses of the estate, including federal and state

taxes of $115,418.00, were paid by the executor. The remainder of the estate was

28      We note that even if Furrh's argument had merit, it would not have any practical
effect, because even reducing Frick's $2.8 million in assets by $381,337 in 1995, she
would still have had ample separate property funds available in 1999 to have purchased
San Antonio and California St.

                                             41
disbursed to [Frick]." For the estate of Frick's parents, "[e]xpenses of the estate,

including federal and state taxes of $91,191, were paid by . . . the executor. The

remainder of the estate was distributed to [Frick]." Further, during his testimony, Wesley

stated that he proceeded on the assumption that Frick's $2.8 million in separate property

assets at the time of marriage were calculated after estate taxes were paid.29

              c.     The Internal Revenue Code Section 1031 Reverse Like-Kind
                     Exchange

       The last issue that Furrh raises in challenge to the trial court's ruling awarding

reimbursement to Frick concerns the Internal Revenue Code section 1031 reverse like-

kind exchange.

       As we have explained, following Wesley and Cooper's approach, the trial court did

not give any effect to the structure of the purchase transaction for the San Antonio and

California St. properties under Internal Revenue Code section 1031. Specifically, the

trial court focused on determining the source of the funds used to purchase the San

Antonio and California St. properties in 1999 and did not attach any significance to the

fact that Furrh and Frick sold some of their real properties in 2000 and 2001 as part of the

Internal Revenue Code section 1031 reverse like-kind exchange.

29     In another argument that is insufficiently focused or developed to warrant
extensive discussion, Furrh contends that the trial court erred in relying on Cooper's
opinion because Cooper "double count[ed]" some of Frick's assets. However, the specific
testimony about Frick's assets that Furrh relies upon in his appellate argument does not
lend support. Specifically, the testimony that Furrh identifies concerns Cooper's criticism
of charts prepared by Kaseno; it does not relate to the foundation for Cooper's own
opinions.

                                             42
       Although the argument is not well developed, Furrh contends that the trial court

erred in failing to take account of the Internal Revenue Code section 1031 reverse like-

kind exchange when determining which funds were used to purchase the San Antonio

and California St. properties. In the most clear statement of his argument, Furrh argues

that Wesley's tracing analysis, which the trial court adopted, was flawed because

although "Wesley acknowledged [Furrh's] properties were used in the exchange," he

"refused to acknowledge [Furrh's] properties were part of the purchase price of San

Antonio and [California St.]"

       Furrh's argument fails because he points to no evidence supporting a finding that

any of his separate property funds from the sale of his real estate in 2000 and 2001 "were

part of the purchase price" of the San Antonio and California St. properties in 1999. For

the purposes of this appeal, there is no dispute that the purchase of the San Antonio and

California St. properties occurred in 1999, not later. Indeed, as Furrh acknowledges in

his opening appellate brief, "[f]or the purposes of these proceedings, San Antonio and

[California St.] were deemed acquired in April and September 1999, respectively." As a

simple matter of logic, separate property funds that did not become available until 2000

and 2001 could not have been used to fund purchases that occurred in 1999.30

30     As we have explained, the attempt to satisfy the requirements of a reverse like-
kind exchange under Internal Revenue Code section 1031 impacted the structure of the
transaction in which the parties acquired the San Antonio and California St. properties
because the accommodator took title to those properties in 1999 and waited until 2001,
when the funds from the parties' 2000 and 2001 real estate sales were paid to the
accommodator, to transfer title of the San Antonio and California St. properties to Frick
and Furrh by quit claim deeds. One approach that Furrh might have taken at trial, had
                                            43
       In an argument also related to the significance of the Internal Revenue section

1031 reverse like-kind exchange, Furrh contends that the parties entered into an

agreement that they both provided half of the funding for the purchase of San Antonio

and California St. in 1999, equally sharing the financial burden. As we understand this

statement, Furrh contends that in deciding to structure the purchase of the San Antonio

and California St. properties as a Internal Revenue Code section 1031 reverse like-kind

exchange, Frick and Furrh entered into an agreement to treat the San Antonio and

California St. properties as if they were purchased in 1999 with all of the funds liquidated

in the parties' 2000 and 2001 real estate sales.

       We reject Furrh's attempt to establish that the parties agreed to treat Furrh's funds

as having been used in the purchase of the San Antonio and California St. properties. As

discussed above, the right to reimbursement under section 2640 can be waived only by an

express writing. (Id., subd. (b); Carpenter, supra, 100 Cal.App.4th at p. 427.) Here,

sufficient documentation been available, was to attempt to trace his separate property
funds through this second portion of the Internal Revenue Code section 1031 reverse
like-kind exchange to establish that some of his separate property funds were paid to the
accommodator in 2001 to enable the parties to acquire title to the San Antonio and
California St. properties in 2001. However, Furrh did not take that approach at trial and
thus did not present any evidence to support it. Nor does he pursue the argument on
appeal, agreeing that for the purposes of this proceeding, San Antonio and California St.
properties were acquired in 1999 when the accommodator first took title to them, not in
2001. Although Furrh testified very generally that he sold his real property in 2000 and
2001 as part of the Internal Revenue Code section 1031 reverse like-kind exchange so
that the parties would be able to "afford" the purchase of the San Antonio and California
St. properties, neither through his own testimony nor that of his expert witness, Kaseno,
did Furrh attempt to establish the flow of funds to the accommodator in the second part of
the exchange transaction. Indeed, Kaseno attempted to trace funds from Furrh's 2000 and
2001 real estate sales into the parties' financial accounts at the date of separation, but not
to trace those funds to any payments that Furrh made to the accommodator in 2001.

                                              44
Furrh has not identified any express writing by the parties stating that due to the parties'

decision to structure the purchase of the San Antonio and California St. properties as an

Internal Revenue Code section 1031 reverse like-kind exchange, Frick agreed to waive

her right to trace her contribution of separate property funds to the purchase of those

properties in 1999 to obtain reimbursement under section 2640.

       In sum, having rejected all of Furrh's legal and factual challenges to the trial

court's ruling that Frick established she was entitled to reimbursement for her separate

property contributions to the San Antonio and California St. properties, we affirm the

trial court's ruling awarding reimbursement to Frick under section 2640.

B.     Tracing of Furrh's Separate Property Funds to the Parties' Financial Accounts at
       the Date of Separation

       We now turn to another major issue at trial that Furrh focuses on in his appellate

briefing. Specifically, the statement of decision contains a ruling on whether Furrh

successfully traced any of his separate property funds obtained from the sale of his real

properties into the parties' financial accounts on the date of separation for the purpose of

obtaining reimbursement. As the statement of decision explained, Furrh failed to

adequately trace any separate property funds, and thus the amounts in the parties' joint

financial accounts were to be split equally by the parties.

       Furrh makes two arguments challenging this ruling: (1) the trial court's findings

do not support its ruling because of a purported mathematical error; and (2) the trial court

failed to rule on Furrh's claim that he had adequately traced his separate property funds

from the sale of his real estate in 2003 and 2004. We will examine each of these

                                             45
arguments in turn. However, to address the arguments, we must first take a closer look at

the findings and legal conclusions underlying the trial court's ruling that the amount in

the financial accounts on the date of separation should be split equally.

       1.     The Trial Court's Ruling

       The trial court made two separate findings regarding the tracing of the amounts in

the parties' financial accounts.

       First, apparently relying on Wesley's report about the funds in the parties' TD

Waterhouse account31 as of July 31, 2001, the trial court found that Furrh had deposited

$1,603,149 into the account after his 2000 and 2001 real estate sales, and Frick had

deposited $900,000 after the sale of 330 South Horne Street in 2000. Further, Frick

already had a preexisting balance of $836,649 in separate property funds in the TD

Waterhouse account as of July 2000. The trial court thus found that the parties' separate

property funds in the TD Waterhouse account, apparently as of 2001, were "relatively

equal."

       Second, in addressing Furrh's attempt to trace his separate property to the financial

accounts at the date of separation, the trial court found that "the court is unable to

ascertain from the evidence presented whose separate property money went where after

the purchase of San Antonio and California St." in 1999. Indeed, the only evidence that

Furrh presented at trial in an attempt to trace some of his separate property funds to the

parties' financial accounts on the date of separation was Kaseno's analysis. However, the

31     The TD Waterhouse account was formerly the Jack White account.

                                              46
trial court ruled that "significant portions of [Kaseno's] work appear flawed and

inaccurate," and therefore "[t]he court has elected to disregard Ms. Kaseno's report in its

entirety."32 Without Kaseno's report, there was no evidence supporting Furrh's attempt

to trace his separate property funds into the financial accounts at the date of separation.

Further, as the trial court observed, it was impossible to trace the separate property funds

in brokerage accounts because of "fluctuations of value due to market conditions."

       The trial court's second finding (that it could not trace the parties' separate

property funds after 1999) provides legally sufficient support for its ruling that the

amounts in the parties' financial accounts at the date of separation were to be equally

divided. Comingled funds in joint accounts during marriage are characterized as

community property unless they can be specifically traced to separate property. (Prob.

Code, § 5305; Rossin, supra, 172 Cal.App.4th at pp. 733-734.) As Furrh did not succeed

in tracing any of his separate property into the accounts as of the date of separation, the

funds in the parties' joint accounts at the date of separation were properly treated as

community property and divided equally between the parties.

       2.     The Trial's Court's Purported Mathematical Error

       In his first argument challenging the trial court's ruling that the funds in the parties'

financial accounts at the date of separation should be equally divided, Furrh contends that

the trial court incorrectly calculated that the parties' separate property funds in the TD

32     In his appellate briefing, Furrh makes no argument challenging the trial court's
finding that Kaseno's analysis was not credible.

                                              47
Waterhouse account in 2001 were "relatively equal." Specifically, Furrh argues that if, as

the trial court found, he deposited $1,603,149 into the account after his 2000 and 2001

real estate sales, and Frick deposited $900,000 after the sale of 330 South Horne Street in

2000, those amounts are not relatively equal. We reject this argument because, in

performing his calculations, Furrh overlooks the trial court's finding that Frick had

$836,649 of separate property funds already being held in the TD Waterhouse accounts.

When the amount of $836,649 is added to the equation, the separate property funds of the

parties in the TD Waterhouse account are relatively equal, with $1,736,649 attributed to

Frick and $1,603,149 attributed to Furrh.

       Further, even had Furrh been able to establish that the parties' separate property

funds in the TD Waterhouse account were not relatively equal as of 2001, that fact would

not undermine the trial court's decision to equally split the amounts in the parties'

financial accounts at the date of separation. The trial court equally divided the parties'

financial accounts at the date of separation based on the finding that Furrh had not

adequately traced his separate property funds after 1999, not based on its finding that the

parties had relatively equal separate property balances in the TD Waterhouse account as

of 2001. Thus, an attack on the trial court's findings regarding the separate property

balances in the TD Waterhouse account in 2001 is of no legal consequence in

undermining the trial court's ruling.

       3.     Separate Property Funds from Furrh's 2003 and 2004 Real Estate Sales

       In his second challenge to the trial court's ruling on his claim for reimbursement of

his separate property funds in the parties' financial accounts at the date of separation,

                                             48
Furrh argues that the trial court failed to rule on his claim for reimbursement for the

proceeds of his real estate sales in 2003 and 2004.33 Furrh's argument lacks merit.

       Furrh's claim for reimbursement for proceeds from the 2003 and 2004 real estate

sales was covered by the trial court's ruling on the division of the funds in the parties'

accounts at the date of separation. Furrh's expert Kaseno attempted to trace the funds that

Furrh obtained from 2000 and 2001 real estate sales, as well as from the 2003 and 2004

real estate sales into the parties' financial accounts at the date of separation. By rejecting

Kaseno's analysis in its entirety, and stating that it was not possible to trace the parties'

separate property funds after 1999, the trial court ruled on and rejected Furrh's claim for

reimbursement of the separate property funds from all of his real estate sales, including

the sales in 2003 and 2004.34

33     The parties' list of stipulated reserved issues specifically includes Furrh's "claim
for proceeds from real property sold in 2003-2004 (Partridge, Valley and Arcata Bay)."

34      Although the issue was not addressed in the trial court's statement of decision and
was not within the scope of the parties' stipulated reserved issues, Furrh contends on
appeal that the community should be reimbursed for $450,000 to $600,000 in taxes that
were purportedly paid from community funds from 1995 to 1999 for the capital gains
incurred as a result of profits made from sale of parties' separate property securities. We
reject this argument for two reasons. First, Furrh has not cited to any place in the record
where he made this argument during trial and has not attempted to show that this claim
for reimbursement to the community is even within the scope of the stipulated reserved
issues. (Perez, supra, 169 Cal.App.4th at pp. 591-592 [party forfeits argument raised for
first time on appeal].) Second, even were the issue properly before us, Furrh has not
cited evidence in the record to establish that community funds were used to pay the
parties' capital gains taxes derived from their separate property securities. The record
citations that Furrh provides in his appellate briefing do not lend support to his argument.
Indeed, the only testimony specifically on point comes from Cooper, who explained that
from the documentation available, he could tell that capital gains taxes were paid by the
parties during the relevant period, but he could not trace the source of funds for the
                                               49
C.     Breach of Fiduciary Duty

       In his final appellate challenge to the trial court's ruling, Furrh focuses on the trial

court's finding that Furrh breached a fiduciary duty to Frick in managing her separate

property funds in violation of section 721 by placing a substantial amount of Frick's

assets in the Jack White account under the belief that those funds would become

community property "with what he hoped would be a windfall."35 As we have

explained, although the trial court found a breach of fiduciary duty, it did not order any

remedy, as it found that Frick did not lose any money and had been able to trace her

separate property funds to the purchase of the San Antonio and California St. properties

despite the fact that those funds were comingled in the Jack White account.

       Furrh argues that on either of two separate grounds we should reverse the finding

that he breached a fiduciary duty to Frick. First, he contends that the issue of whether he

breached a fiduciary duty to Frick was not properly before the trial court because it was

not within the scope of issues set forth in the parties' list of stipulated issues for the trial

court to decide. Second, he argues that the ruling was flawed on the merits, as it is not

payments. As Cooper's analysis shows, there was very little community property income
from 1995 to 1999, so that the majority of expenses were necessarily paid by the parties'
separate property funds.

35      "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.) Further, as
relevant here, case law establishes that a spouse's fiduciary duty includes the duty of fair
dealing in handling the separate property of the other spouse. (Walker, supra, 138
Cal.App.4th at p. 1419.)

                                               50
supported by substantial evidence and is contrary to law. We discuss each argument in

turn.

        As to whether the issue of Furrh's breach of fiduciary duty was properly before the

trial court, we conclude that the trial court properly ruled during trial that although a

statutory claim for breach of fiduciary duty under section 721 was not one of the

stipulated reserved issues for trial, the factual question of whether Furrh breached his

fiduciary duty in the management of Frick's separate property funds was nevertheless

subsumed in the issue of whether Frick was entitled to reimbursement under section 2640

for separate property funds traced into the purchase of the San Antonio and California St.

properties. Specifically, a party seeking reimbursement under section 2640 may attempt

to set aside an interspousal transaction accomplished in breach of the fiduciary duty owed

under section 721. (In re Marriage of Mathews (2005) 133 Cal. App. 4th 624, 629; In re

Marriage of Haines (1995) 33 Cal. App. 4th 277, 293-294.) As part of Frick's attempt to

trace her separate property into the Jack White account and then into the purchase of the

San Antonio and California St. properties, Frick argued that because Furrh had

transferred Frick's separate property funds into the Jack White account in violation of his

fiduciary duty to her, Furrh could not claim that Frick's separate property funds were

transmuted to community property when they were comingled by Furrh in the Jack White

account. Indeed, Frick made that specific argument in her trial brief, and she continues to

advance that argument on appeal. Therefore, the trial court was correct to rule that

Furrh's breach of fiduciary duty was within the scope of the issues before it, but only to

the extent it was relevant to deciding the section 2640 reimbursement claim.

                                              51
       However, as it turned out, Frick's claim that Furrh breached his fiduciary duty in

handling her separate property funds in the Jack White account was not necessary or

relevant to the trial court's decision awarding reimbursement under section 2640. Frick

succeeded in tracing her separate property contribution to the purchase of the San

Antonio and California St. properties without relying on her claim that Furrh breached his

fiduciary duty. The finding that Furrh breached his fiduciary duty might have been

relevant if Frick had not otherwise succeeded in tracing her separate property

contributions to the Jack White account, but that was not the case here, and therefore, the

finding on Furrh's breach of fiduciary duty had no effect on the outcome of this case.

       "[E]rrors favorable to an appellant are not subject to review. It is 'well settled by

statute, case law, and logic that only an aggrieved party may bring the appeal.' " (In re

Marriage of Brockman (1987) 194 Cal. App. 3d 1035, 1041.) A party is aggrieved if his

"rights or interests are injuriously affected." (County of Alameda v. Carleson (1971) 5
Cal. 3d 730, 737.) Here, the trial court's finding on the breach of fiduciary duty did not

cause any injury to Furrh as it did not impact the ruling awarding reimbursement to Frick

under section 2640. Therefore, we need not, and do not, review Furrh's appeal of the trial

court's finding, as it is not properly before us on appeal. Moreover, even were we to

conclude that the breach of fiduciary duty issue was properly before us, we would

nevertheless decline to reach it, as we would be issuing an unnecessary advisory opinion

with no practical effect on the parties' rights. (See In re Executive Life Ins. Co. (1995) 32
Cal. App. 4th 344, 398 [when appellants did not demonstrate they were aggrieved by the

issue presented to the appellate court for resolution, the court declined to reach the issue

                                             52
because "[a]ny disposition of this issue would thus constitute no more than an advisory

opinion"].)

                                              III.

                                 FRICK'S CROSS-APPEAL

       We now turn to Frick's cross-appeal from the trial court's ruling that Furrh

established he was entitled to reimbursement under section 2640 for a separate property

contribution of $50,000 to the 1994 purchase of the Borrego Springs property by Frick's

parents. Frick contends that the trial court erred in ruling that Furrh was entitled to

reimbursement under section 2640 because that provision does not apply to transactions

before marriage. As we will explain, we agree.

       There is no dispute that the Borrego Springs property was owned by Frick as her

separate property after she inherited it from her parents. Accordingly, the applicable part

of section 2640 is subdivision (c), which describes the circumstances under which one

spouse may obtain reimbursement for a contribution of funds to the acquisition of the

other spouse's separate property asset. Specifically, section 2640, subdivision (c)

provides in relevant part that "[a] party shall be reimbursed for the party's separate

property contributions to the acquisition of property of the other spouse's separate

property estate during the marriage, unless there has been a transmutation in

writing . . . ." (Italics added.) Applying that statutory provision, the trial court's ruling

that Furrh was entitled under section 2640 to recover the $50,000 contribution to Frick's

parents to purchase the Borrego Springs property is in error for two separate reasons.

                                              53
       First, according to Furrh, he contributed $50,000 to the purchase of the Borrego

Springs property before the parties' marriage, at a time when the parties had not even

discussed marriage. The plain language of section 2640, subdivision (c) states that it

applies only to contributions to the acquisition of property during the marriage. Because

Furrh contributed the funds to the purchase of the Borrego Springs property before the

parties were married, he may not seek reimbursement under section 2640,

subdivision (c). Furrh makes a weak attempt to argue that section 2640 applies even

though the parties were not married at the time the Borrego Springs property was

purchased because they were not simply dating — they were living together. Furrh cites

no authority in support of his argument, and it is contrary to the plain language of the

statute which refers to property acquired "during the marriage." (§ 2640, subd. (c).)

       Second, section 2640, subdivision (c) applies to contributions made "to the

acquisition of property of the other spouse's separate property estate." (Ibid., italics

added.) However, Furrh did not make the contribution of $50,000 to the purchase of any

property by Frick's "separate property estate." (Ibid.) Instead, he made the contribution

to Frick's parents, who were the buyers of the Borrego Springs property on behalf of their

trust. Frick did not take ownership of the Borrego Springs property until after her parents

died. Although, Frick was apparently the sole beneficiary of her parent's trust, there is no

merit to Furrh's argument that Frick's status as a beneficiary means that the Borrego

Springs property should be treated as having been part of Frick's separate property assets

at the time of the 1994 purchase. Frick's interest in the trust's assets did not vest until

after her parents died and the trust became irrevocable. (Aulisio v. Bancroft (2014) 230

                                              54
Cal. App. 4th 1516, 1525 [" 'When the settlor dies, the trust becomes irrevocable, and the

beneficiaries' interest in the trust vests.' "].)36

       As section 2640, subdivision (c) is not applicable to Furrh's premarriage

contribution of $50,000 to the purchase of the Borrego Springs property by Frick's

parents in 1994, we reverse the trial court's order awarding Furrh reimbursement in the

amount of $50,000.

36      We note that in the trial court, Furrh appeared to argue in the alternative that if
section 2640 were not applicable, the trial court should award $50,000 to him under the
theory that he had a claim for a constructive trust against Frick. Furrh does not pursue
that argument on appeal, and we accordingly do not address it here. We also note that the
constructive trust claim does not appear to be within the scope of the parties' stipulated
reserved issues for trial.

                                                55
                                      DISPOSITION

       The trial court's order awarding Furrh reimbursement in the amount of $50,000 for

his contribution to the purchase of the Borrego Springs property is reversed. In all other

aspects the judgment is affirmed. Frick shall recover her costs on appeal.37

                                                                                 IRION, J.

WE CONCUR:

BENKE, Acting P. J.

MCINTYRE, J.

37     Frick makes a cursory request for an award of attorney fees on appeal pursuant to
sections 271 and 2030, which she does not support with any written argument. We
hereby deny the request. We also deny Frick's request that we strike Furrh's reply brief.
                                            56