Filed 9/21/18
CERTIFIED FOR
PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH
APPELLATE DISTRICT
DIVISION THREE
In re Marriage of WISHTASB KUSHESH
and FARIMA KUSHESH-KAVIANI. |
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| WISHTASB KUSHESH, |
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G054936
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Respondent,
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(Super. Ct. No. 11D007966)
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v.
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O P I N I O N
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FARIMA KUSHESH-KAVIANI,
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Appellant.
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Appeal from a judgment of the Superior Court of Orange County, Franz E.
Miller , Judge. Reversed and remanded with directions.
Alan S.
Yockelson for Appellant. No appearance for Respondent.
- INTRODUCTION
No published opinion to date has addressed whether an interspousal
transfer grant deed (ITGD) meets the requirements for a transmutation of the
character of marital property under Family Code section 852.1 The trial court concluded
that the ITGD in this case did not contain the requisite language to effectuate
a transmutation.
We are forced to disagree. The standard ITGD expresses an intent to
transfer a property interest from one spouse to another: The constituent
components of the word “interspousal” – literally between spouses – plus the words “transfer” and “grant,” plus the
usual statement about the grantee (or grantees) taking the property as either
community or separate property, are all clear indicators the document
constitutes an express declaration of an agreement to change the marital
character of the property. This document includes all those features. We
therefore reverse the trial court, and remand for further proceedings as to
whether the beneficially-interested spouse in this case dispelled any
presumption of undue influence (see § 721, subd. (b)) that might have arisen
from the circumstances giving rise to this ITGD.
- FACTS
Farima Kushesh-Kaviani (Wife) and Wishtasb Kushesh (Husband) were married
in January 2010. The marriage did not last. Their only child, Bahram, was born
in April 2011, and the couple separated within two weeks of his birth. Husband
filed for dissolution in late August 2011.
During the marriage the couple lived in Husband’s separate property condominium
in Laguna Niguel. But that condo is not the one at issue in this case. This
case concerns a condo called “unit 13k” by the parties three doors down from
Husband’s condo, acquired in May 2010 (about four months into the marriage).
The price of this condo was $265,000, and the down payment was $134,654.78.
- All further statutory references are to the Family Code unless
otherwise indicated.
The deed to the condo from the seller was made out to “Farima Kaviani, a
Married Woman as Her Sole and Separate Property.” At trial, Husband admitted
both the loan application and loan itself were in Wife’s name only. What’s
more, on May 21, 2010 Husband signed an ITGD. It provided, all in bold and all
caps, “INTERSPOUSAL TRANSFER GRANT DEED,” the ITGD recited: “FOR A VALUABLE
CONSIDERATION,
receipt of which is hereby acknowledged, [¶] Vishtasb Kushesh, Spouse of
Grantee Herein [¶] hereby GRANT(s) to: [¶] Farima Kaviani, a Married Woman as
Her Sole and Separate Property [¶] the real property In the City or Laguna
Niguel . . . [¶] Also known as . . . 13-K . . . .” Thus Wife claimed the condo
should be confirmed to her as her separate property.
But Husband made his own claim to the condo as his separate property. And on that point
he had one undisputed fact in his favor: All the money for the down payment had
come from his separate bank account. As a backup against Wife’s separate
property claim, Husband could also point to the fact that the property had been
acquired during the marriage, so he could argue it was also presumptively community property. (See §
760.)
Trial thus centered on the origin of the funds in Husband’s account
used for
the down
payment. Though the evidence was in conflict, the trial judge found that those
funds came from Wife’s father’s monies in Iran and were transferred (Wife’s
attorney used the word “smuggled”) into the United States via Kuwait. Concerned
about inconsistencies in Husband’s testimony, the trial court explicitly
disregarded Husband’s story that the funds were the proceeds of a partnership
sale somewhere in the Middle East.
As to why those funds had been channeled through Husband’s
account, it was explained that Husband is a real estate investor by profession
and Wife’s father trusted Husband’s expertise to handle the transaction. Also,
as Wife testified, “cultural”
considerations
had motivated her father to send the money to Husband.2 The idea was that unit 13k would be a place for
her parents to live.
The trial judge analyzed the case this way: First,
unit 13k was acquired during the marriage, so it was presumed to be community
property. Second,
“we don’t worry about the title
presumption” (alluding to section 662 of the Evidence Code3).
Third, the
money to support the property, e.g., to “make the payments” on the mortgage,
was “essentially” community funds. Then the judge asked the question, “So what
could rebut the presumption?” He noted the existence of the ITGD, but agreed
with Husband’s attorney that there was an absence of “magic words” that would
make it “clear that’s it’s a transmutation.”4 Having found the ITGD “does not contain the
requisite language” to qualify as an “express declaration” under section 852,
the judge then said there was thus no need to address the question of undue
influence.
The bottom line was a judgment that unit 13k was to be sold, with Wife
receiving reimbursement for her separate property contribution “off the top”
(see § 2640) and the parties splitting the balance. From that judgment Wife has
brought this appeal.5
- DISCUSSION
Prior to the enactment of former Civil Code section 5110.730 in 1984, it was
relatively “‘easy’” for spouses to transmute community property into separate
property and vice versa, simply by oral statement. (See Estate of MacDonald (1990) 51
- Wife’s testimony on the issue was: “Q. And why did your father not wire
the money to your account, if you had an account? [¶] A. To be honest, it’s
just my father, he loved Wishtasb, and he trusted him. He thought he knows and – I don’t know. It’s a culture thing, I
guess. Like, men like to deal with men.”
- The “title presumption” is found in Evidence Code section 662. It is a
two-sentence statute: “The owner of the legal title to property is presumed to
be the owner of the full beneficial title. This presumption may be rebutted
only by clear and convincing proof.”
- Here is the trial judge’s thinking on the ITGD issue: “So what could
rebut the presumption? What about the transfer deed that Mr. Kushesh executed?
As Mr. Sarieh [Husband’s trial attorney] points out correctly that absent
language – affirmative language in the deed, the magic words if you will,
making it clear that it’s a
transmutation. So the deed’s ineffective to overcome the presumption.”
- Husband has not filed a respondent’s brief. Such a failure is not
treated as a de facto default, but rather the appellate
court examines the appellant’s brief in
conjunction with the record to see if the appellant carries its burden of demonstrating prejudicial error at the
trial level. (E.g., In re Marriage of Swain (2018) 21 Cal.App.5th 830, 834, fn. 2.)
Cal.3d 262,
268-269 (MacDonald), quoting
Recommendation Relating to Marital Property Presumptions and Transmutations, 17
Cal.Law Revision Com.Rep. (1984) p. 213 (1984 Law Revision Commission Report).)
The allure of easy transmutations had encouraged extensive litigation by
allowing spouses to “‘transform a passing comment into an ‘agreement’ or even
to commit perjury by manufacturing an oral or implied transmutation.’” (MacDonald, supra, 51 Cal.3d at p. 269,
quoting 1984 Law Revision Commission Report, supra, at p. 214.) With the passage of former Civil Code section
5110.730, the era of easy transmutation came to an end.
The statute was transmogrified into current Family Code section 852 in
1992 (see Stats. 1992, ch. 162, operative January 1, 1994), with literally no
change in language. Section 852 sets forth these elements: (1) the
transmutation must be made in writing; (2) the writing must contain an “express
declaration” of transmutation; and (3) the writing must be “made, joined in,
consented to, or accepted” by the adversely affected spouse.6
Most of the litigation involving section 852 has centered on the “express declaration” element. For
example, in MacDonald, a deceased
husband used community funds to open three IRA accounts, with the beneficiary
of each account being a trust that left most of money to one of his three
children from a prior marriage. Our Supreme Court held the opening of the
accounts did not qualify as transmutations of community property to separate,
even though the wife signed a writing to the effect she consented to them. The
reason was there was nothing in documents that warned the wife her husband was
changing the character of the property. (See MacDonald, supra, 51 Cal.3d at pp.
272-273.)
“Obviously, the consent paragraphs contain no language which characterizes
- The elements of transmutation are all found in subdivision (a) of
section 852. The remainder of the statute involves such collateral topics as
effect on third parties, gifts of a personal nature like jewelry, and
commingling. The exact text of subdivision (a) is: “A transmutation of real or
personal property is not valid unless made in writing by an express declaration
that is made, joined in, consented to, or accepted by the spouse whose interest
in the property is adversely affected.”
the property
assertedly being transmuted, viz., the pension funds which had been deposited
in the account. It is not possible to tell from the face of the consent paragraphs, or even from the face of the
adoption agreements as a whole, whether decedent was aware that the legal
effect of her signature might be to alter the character or ownership of her
interest in the pension funds. There is certainly no language in the consent
paragraphs, or the adoption agreements as a whole, expressly stating that
decedent was effecting a change in the character or ownership of her interest.
Thus, we agree with the Court of Appeal that these writings fail to satisfy the
‘express declaration’ requirement of section 5110.730 (a).” (MacDonald, supra, 51 Cal.3d at pp. 272-273.)
On the other hand, in Estate
of Bibb (2001) 87 Cal.App.4th 461 (Bibb),
a grant deed signed by the deceased husband transferring his separate property
interest in an apartment to himself and his wife as joint tenants was effective to transmute his separate
interest to community. The Bibb court
reasoned the word “‘grant’ is the historically operative word for transferring
interests in real property” and thus the grant deed “validly transmuted” the
apartment into joint tenancy. (Id. at
pp. 468-469, quoting MacDonald, supra, 51
Cal.3d at p. 273.)
The present case is more like Bibb than
MacDonald. For one thing, there were fewer magic words in Bibb than here. Here, not only did the
writing use the verb “grant” – the main point of Bibb – but the heading added the words “interspousal” – denoting a
spouse-to-spouse transaction – and “transfer grant” – denoting that whoever was
doing the granting was actually transferring something out of that person’s
estate. Furthermore, this ITGD unequivocally stated the transfer was to make
the property Wife’s as her sole and
separate property, inescapably pointing the reader in the direction of a change
in the marital characterization of the property.
We therefore
disagree with the trial court that the ITGD did not contain enough “magic
words” to effectuate a transmutation. (See Bibb,
supra, 87 Cal.App.4th at
p.
468 [noting that the words “I give to
the account holder any interest I have” would be
enough under MacDonald].) We do not believe any form
of the word “transmute” is necessary.
From his
remarks on the record, we think we know where the trial judge might have taken
a wrong turn. He appears to have read too much into In re Marriage of Valli (2014) 58 Cal.4th 1396 (Valli), as shown by his allusion to not
worrying about the title presumption.
In Valli, a famous pop star
took out a life insurance policy – the kind that accumulates a cash value. He
named his wife as the policy’s only owner and beneficiary. (Valli, supra, 58 Cal.4th at p. 1399.) In
later dissolution proceedings the wife claimed
the policy as her separate property based on it being solely in her
name. (Id. at p. 1400.) Most of the case centered on her argument that
acquiring an asset from a third party is exempt from section 852, but the court
rejected her request for an exemption. It held the insurance policy did not
satisfy section 852’s requirements because it had no language indicating that
any spouse-to-spouse transfer was taking place, despite its title ownership.
That silence was not golden for the wife; it caused the high court to hold the
policy was properly characterized as community. (Id. at p. 1406.)
The Valli court’s determination
the insurance policy on Frankie Valli’s life did not meet section 852’s
requirements was hardly a sunburst. Having lost on her fairly esoteric third
party argument, the wife had nothing left with which to argue the insurance
policy effectuated a transmutation. (See Valli,
supra, 58 Cal.4th at p. 1406.) But in the process of rejecting the wife’s
argument, the Valli court addressed
the long-standing tension in California family law between the Family Code
statutes and the title presumption set forth in the Evidence Code.7 The Valli majority held that the Family Code transmutation statutes
take precedence over the Evidence Code title presumption,
- For a brief history of the problems arising out of that tension see In re Marriage of Koester (1999) 73
Cal.App.4th 1032, 1034, discussing how the title presumption controlled the
outcome of the case in In re Marriage of
Lucas (1980) 27 Cal.3d 808 and the Legislature’s adverse reaction to Lucas.
but did not go
so far as to say the Evidence Code presumption might never apply in some other family law context. (Id. at p. 1406.) Justice Chin, joined by Justices Corrigan and Liu, would have eliminated the title presumption
entirely in actions between spouses. (Id.
at p. 1409 (conc. opn. of Chin, J.) [quoting amici brief that “‘section 662 has
no place in the characterization of property in actions between spouses.’”].)
We think the trial court here confused what Valli said about the title presumption with the elements of
transmutation set out in section 852. It must be remembered that ITGD’s have
dual roles. One the one hand, they are themselves
legal title to given property. They are, after all, deeds. Under Justice
Chin’s view (and we think under the Valli
majority holding as well), the title presumption they convey is not
effective as against section 852. So on that point the trial judge was quite
correct not to “worry” about the title presumption insofar as the ITGD simply
reflected the legal title of the property.
But ITGD’s are not only title documents. They are also writings that
expressly
transfer spousal interests, in which spouses unequivocally make “interspousal”
transfers to another, and do so, to harken back to Bibb, by way of the traditional word for a conveyance – a “grant.”
They don’t just reflect title. They
use a verb – “grant” – to convey title.
And in that role ITGD’s do meet
section 852’s transmutation requirements.
Of course, whenever there is a transfer from one spouse to another a
rebuttable presumption of undue influence arises if the transaction gives one
spouse an unfair advantage over the other. (See In re Marriage of Burkle (2006) 139
Cal.App.4th
712, 732, citing § 721.) The trial court did not address whether in this case
Wife obtained an unfair advantage over Husband, or, if so, whether she rebutted
the ensuing presumption. While the question of unfair advantage might arguably
be one of law we could address now, the question of whether a spouse has
rebutted a presumption of undue influence is unquestionably one of fact. (See In re Marriage of Fossum (2011)
192 Cal.App.4th
336, 344.) Rather than preempt the trial court on the unfair advantage issue,
we exercise our discretion not to address it now given that the case must be
returned to the trial court in the first instance anyway.
- DISPOSITION
We conclude this ITGD was valid to transmute condo unit 13k from
community property into Wife’s separate property. We therefore reverse the
judgment declaring the condo to be community property. The trial court must now
reach the issue of whether the transaction gave Wife an unfair advantage over
Husband and, if so, whether she rebutted the ensuing presumption of undue
influence. Assuming those issues are
decided in Wife’s favor, our opinion is without prejudice to Husband to make
whatever claims he might make for reimbursement of his half of any possible
community contribution to unit 13k during this short marriage. Because that
issue has not been briefed, we express no opinion on it.
Since Husband has not filed a respondent’s brief, there is no
need to allocate costs of appeal. Wife shall bear her own.
BEDSWORTH, ACTING P. J.
WE
CONCUR:
IKOLA, J.
THOMPSON, J.
Parties entering into Interspousal Transfer Grant Deeds should note that the new case law can easily impact your rights as spouses, and can impact the inheritance of your children after you pass away by changing spousal property petitions. To get help with elder family law issues, call Mina Sirkin, Specialist in Estate Planning, Probate, and Trust Law in Los Angeles County California who litigates spousal property petitions in the Los Angeles Probate Court on a regular basis