Marriage of Benson 12/23/03 CA2/6

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State: California

Court: 1st District Court of Appeal 1st District Court of Appeal

Docket No: B165252

Case Date: 12/23/2003

Preview:Filed 12/23/03

CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION SIX In re Marriage of DIANE and DOUGLAS BENSON. DIANE L. BENSON, Appellant, v. DOUGLAS BENSON, Respondent. Diane L. Benson (wife) appeals from the judgment distributing the assets and liabilities of the parties following the dissolution of their marriage. Wife contends the trial court erred by awarding Douglas Benson (husband) all of the retirement funds he earned during their marriage as his separate property based on a disputed oral transmutation in violation of Family Code section 852, subdivision (a).1 She argues the court erred by ruling that the doctrines of partial performance and estoppel provide an exception to the writing requirement of section 852. We affirm. 2d Civil No. B165252 (Super. Ct. No. 1043139) (Santa Barbara County)

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All statutory references are to the Family Code unless otherwise stated.

Factual and Procedural Background In 1983, husband and wife married. In May of 2000, after nearly 17 years of marriage, the parties separated and wife petitioned for dissolution of the marriage. The couple had two children, then ages 16 and 14. A trial was held to resolve issues of child support, child custody, spousal support, property division, and attorney's fees. During the marriage, husband worked as a truck driver for Jordano's, a wholesale distributor of food, earning about $4,000 monthly. As part of his employment, husband participated in Jordano's Employment Stock Ownership Plan (ESOP) and contributed to a 401k retirement plan. Husband also operated a gumball business at which he earned a nominal amount of income annually. Wife worked part-time (32 hours per week) as a vocational nurse at Santa Barbara Cottage Hospital, earning about $30,000 annually. She had a retirement plan with her employer. Wife is a beneficiary of an irrevocable trust of which her father is trustee. She made contributions from her salary towards the trust and inherited other property placed into it as well. During the marriage, the parties obtained a 100 percent ownership interest in their residence at 560 Gwyne Avenue in Santa Barbara. Wife explained that, in 1996, her father gave the couple a 72 percent interest in the equity in the residence. In December of 1996, the couple deeded their 72 percent interest in the property to wife's trust. Thereafter, her father gave the couple the remaining 28 percent of the equity in the house. In February of 1997, the couple executed a deed transferring the 28 percent interest in the residence to her trust as well. Prior to trial, husband filed a motion to join Robert L. Maahs, wife's father and trustee of her trust, as a party to the dissolution proceeding. In his motion, husband claimed a community property interest in the Gwyne Avenue residence. Husband contended that in order to establish and enforce the community property claim to the residence, it was necessary to join the trustee as a party to the action. Husband stated: "The community transferred the property into the Trust for no consideration, and with the understanding that [husband] was not surrendering his interest in the property." On the

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morning of trial, the parties reached an agreement that the trust would be dismissed from the action with prejudice. Husband agreed to waive any claim against the trust in exchange for $1,500. At trial, husband testified that at the time the couple signed the deed granting 72 percent of the equity in the residence to wife's trust, wife agreed she would waive any claim to his retirement funds or gumball business in the event they were to divorce. He stated he was adamant that he did not want to transfer his community property interest in the residence to her separate property trust but, after months of persuasion, agreed to do so only on the condition that she would waive her interest in his retirement funds in the event of a divorce. He testified that, although they had "issues," they were not planning on getting a divorce at that time, and she agreed to sign a document waiving her interest in these items at a later date. He testified that he never sought a writing memorializing the agreement because she had assured him she would sign such an agreement and he trusted her as his wife. Wife testified that she did not recall any conversation between her and husband wherein they agreed that, in exchange for waiving his community interest in the residence, she would waive her community interest in his retirement funds. The trial court found husband's testimony credible, ruling that husband agreed to sign the deeds transferring the parties' residence to wife's trust only after wife agreed in return that she would not make any claim to his retirement benefits and gumball business if the marriage failed. The court stated that, in doing so, husband gave up his interest in a $400,000 to $500,000 home (at 1996 values) in return for retirement assets valued at $91,165.50 (at the date of separation, i.e., May of 2000). In its written statement of decision, the trial court reasoned, "When spouses enter into an interspousal transaction or agreement which works a change in the character of the property, a transmutation of that property has occurred. . . . The agreement to transfer any of her community property interest in [husband's] ESOP and 401(k) was not in writing. Transmutation agreements must be made in writing [Fam. Code

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