Filed 5/20/20 Zenga v. Kit CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

VINCENT BO ZENGA,

Plaintiff and Appellant,

v.

ZORIANNA KIT,

Defendant and Respondent.

B293807

(Los Angeles County

Super. Ct. No. LD 073209)

APPEAL from a judgment of the Superior Court of Los Angeles County, John A. Slawson, Judge. Affirmed.

Vincent Bo Zenga, in pro per.; Dovel & Luner, Julien Adams for Plaintiff and Appellant.

Westover Law Group, Andrew L. Westover for Defendant and Respondent.

 

INTRODUCTION

Husband Vincent Bo Zenga appeals from the trial court’s award of community property to wife Zorianna Kit in this divorce action. The court awarded Kit $100,000, half of the $200,000 Zenga withdrew from their joint bank account and placed into a separate account prior to their separation. Although Zenga admits briefly commingling the $200,000 with community property, he contends he adequately traced the money to a separate property inheritance, thus rebutting the presumption that the funds were community property. Additionally, he argues that after transferring the money, he spent all but $200 of it for community expenses. Thus, at most, he contends Kit was only entitled to half of the remainder, or $100. We find no error. We therefore affirm the judgment.

FACTUAL AND PROCEDURAL HISTORY

I. Petition and Trial

Zenga and Kit were married on October 7, 2000 and separated on August 1, 2015. They have two minor children. Kit filed a petition for dissolution of marriage in February 2016.

The court held a four-day bench trial in April 2018. Both Zenga and Kit appeared in propria persona. We discuss only the portion of the trial relevant to Zenga’s characterization of property claims on appeal.

The dispute centers on two bank accounts – a Wells Fargo account (account number ending in 8189) jointly held by the parties, and an Ameritrade account (ending in 0415) held by Zenga. At trial, Kit introduced bank statements from the Wells Fargo account, showing a balance of $346,139.23 on May 1, 2015, and withdrawal of $200,000 from the account by Zenga on May 7, 2015. Kit also produced a bank statement showing a balance of $82,424,39 in the Wells Fargo account on July 31, 2015, the day prior to separation. The parties agreed that the July 31 balance was community property, which they subsequently spent on community expenses. Zenga testified that he and Kit continued to live together after their separation for almost nine months, and spent the account balance on community expenses. The parties agreed that the account was emptied and then closed, and in the divorce neither party claimed any funds from it apart from the $200,000 withdrawn by Zenga.

Kit testified that after Zenga withdrew $200,000 from their joint account on May 7, 2015, he deposited it into a new Ameritrade account in his name alone. Zenga did not dispute this testimony. Kit argued that the money was community property and she was therefore entitled to half, or $100,000. Zenga testified that the $200,000 was his separate property, the remainder of a $1.2 million inheritance from his family. Kit did not dispute that Zenga had inherited money, but stated she was not sure of the amount.

Kit testified that she did not have evidence of the balance of the Ameritrade account as of August 1, 2015, the date of separation. Zenga testified that he deposited $200,000 of his inheritance into the Wells Fargo joint account “for five minutes,” and then moved it into his Ameritrade account. He did not introduce any documents tracing the source of the funds. When the court asked whether all the money in the Ameritrade account was spent, Zenga responded: “Yes, your honor. I spent it on my family. There’s no money left. . . . To be more accurate, there’s maybe $200 in there.”

The trial court explained to Zenga that because he had commingled his separate property with community property, he had the burden to trace the $200,000 to a separate property source “by paperwork, not just by words” in order to rebut the presumption that it was community property. The court reasoned that Kit had “done her job” to establish that the $200,000 came from the joint account; thus the burden shifted to Zenga to trace his separate property.

When Zenga suggested to the court that he could gather the relevant documents for tracing, the court admonished him that it was the final day of trial and it “should have all been done.” Zenga offered no further evidence regarding the source of the $200,000 or how he spent the money after transferring it. The court found that Zenga had failed to provide evidence of tracing and therefore failed to rebut the presumption that the money was community property. Accordingly, the court concluded that Kit was entitled to half of the $200,000.

II. Order

In its written decision, the court found that the parties spent the balance of the joint Wells Fargo account for community purposes, therefore neither party was owed any money from that account. As for the Ameritrade account, the court ordered, in its entirety: “[Kit] shall receive $100,000 of the community property money that [Zenga] transferred from their joint Wells Fargo Account into the Ameritrade account ending in 0415.”

The judgment of dissolution was entered on September 10, 2018. Zenga timely appealed.

DISCUSSION

Zenga contends the court’s award of $100,000 to Kit was in error. He claims the $200,000 was his separate property, which he sufficiently traced to rebut the presumption of community property. He further argues that even if the funds were community property, there was undisputed evidence that he spent almost all of it on the community, and therefore, at most, Kit was entitled to half of the remaining $200. We disagree.

I. Legal Standards

The court’s characterization of property as community or separate determines the division of the property between spouses in a marital dissolution proceeding. (In re Marriage of Valli (2014) 58 Cal.4th 1396, 1399–1400 (Valli).) In general, “[a]ppellate review of a trial court’s finding that a particular item is separate or community property is limited to a determination of whether any substantial evidence supports the finding.” (In re Marriage of Bonvino (2015) 241 Cal.App.4th 1411, 1421 (Bonvino).) Similarly, “[w]hether 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); see also In re Marriage of Ciprari (2019) 32 Cal.App.5th 83, 94–95 (Ciprari).)

However, here Zenga had the burden of proof to establish that the money was his separate property, and the trial court found he did not meet that burden. In such a circumstance, the question for review is not whether substantial evidence supported the trial court’s finding. “‘[W]here the trier of fact has expressly or implicitly concluded that the party with the burden of proof did not carry the burden and that party appeals, it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment. . . . [¶] Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant’s evidence was (1) “uncontradicted and unimpeached” and (2) “of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding.”’” (Dreyer’s Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838; quoting In re I.W. (2009) 180 Cal.App.4th 1517, 1528.) We apply this standard to Zenga’s challenges here.

In addition, we remain mindful of two basic tenets of appellate law: First, we presume the trial court’s judgment is correct, “and all intendments and presumptions are indulged in favor of its correctness.” (In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 670.) Second, “[i]t is not our function to retry the case.” (In re I.W., supra, 180 Cal.App.4th at p. 1528.) “All issues of credibility are for the trier of fact, and all conflicts in the evidence must be resolved in support of the judgment.” (In re Marriage of Nichols, supra, 27 Cal.App.4th at p. 670.)

II. Analysis

Zenga contends the trial court erred by concluding that the $200,000 he withdrew from the joint Wells Fargo account was community property because Zenga failed to adequately trace those funds to a separate property source. Additionally, even if the sum was community property, Zenga argues the court lacked sufficient evidence to conclude that it had not already been spent on the community, as he claimed. We examine each contention in turn.

A. Tracing
B.
Family Code section 7605 states the basic presumption that, except as otherwise provided by statute, all property acquired during marriage is community property. On the other hand, property acquired before marriage, after separation, or at any time by gift, bequest, devise, or descent, is separate property. (§§ 770, subd. (a), 771.)

“‘Where funds are paid from a commingled account, the presumption is that the funds are community funds. In order to overcome this presumption, a party must trace the funds expended to a separate property source.” (In re Marriage of Higinbotham (1988) 203 Cal.App.3d 322, 328.) Commingling separate and community property does not alter the status of the separate property interest so long as it can be traced to its separate property source. (In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1057 (Cochran), citing Braud, supra, 45 Cal.App.4th at pp. 822-823.) “But if the separate property and community property interests have been commingled in such a manner that the respective contributions cannot be traced and identified, the entire commingled funds will be deemed community property pursuant to the general community property presumption of section 760.” (Ciprari, supra, 32 Cal.App.5th at pp. 91–92, quoting Braud, supra, 45 Cal.App.4th at pp. 822–823; see also Cochran, supra, 87 Cal.App.4th at p. 1057.)

The party contesting community property status bears the burden to overcome the presumption of community property. (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 289-290 (Haines), disapproved on another point in Valli, supra, 58 Cal.4th at p. 1404; see also See v. See (1966) 64 Cal.2d 778, 783 (See).) “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.” (In re Marriage of Stoll (1998) 63 Cal.App.4th 837, 841.) “Under the ‘direct tracing’ method, the disputed asset . . . is traced to the withdrawal of separate property funds from the commingled account.” (Braud, supra, 45 Cal.App.4th at p. 823.) This method “requires specific records reconstructing each separate and community property deposit, and each separate and community property payment as it occurs.” (Ibid.)

The record here does not compel a finding in Zenga’s favor. Zenga fails to point to evidence tracing the source of the $200,000 “of such a character and weight as to leave no room for a judicial determination that it was insufficient” to overcome the presumption in favor of community property. (In re I.W., supra, 180 Cal.App.4th at p. 1528.) It was undisputed that Zenga received some amount of money from an inheritance, and that he commingled that separate property (however briefly) into a community property bank account. It was also undisputed that he subsequently withdrew $200,000 from the commingled account and placed it into a separate account. Zenga claimed he was withdrawing his inheritance money, but this testimony is inadequate to satisfy his burden. “[O]ral testimony of intent” or “records that simply total up all separate property funds available during the relevant period and all the separate expenditures during that period” are inadequate to establish separate property status. (Braud, supra, 45 Cal.App.4th at p. 823.) Zenga provided no documentary evidence tracing the $200,000 to his separate property inheritance or specifically accounting for any of the money in the joint account. He therefore failed to establish that the $200,000 he withdrew was from a separate property source.

Zenga acknowledges the “general law” requiring documentary evidence to establish tracing, but argues that his trial testimony should be sufficient because “there was never a dispute regarding the separate nature of the contested money.” He cites no authority for the proposition that he should not be subject to the usual evidentiary requirements for tracing. Moreover, the record does not support Zenga’s contention that the characterization of the money as separate property was undisputed. Although Kit did not dispute that Zenga received an inheritance of some amount as his separate property, she did not concede that the $200,000 he withdrew was directly traceable to that inheritance. Indeed, she contended it was community property. Zenga’s suggestion that Kit was required to present evidence to establish that “the $200,000 was not from his inheritance” turns the evidentiary burden on its head. Zenga could have protected his inheritance by not commingling it with community assets. However, once he commingled assets, “he assume[d] the burden of keeping records adequate to establish the balance of community income and expenditures” at the time he withdrew money from the commingled account and placed it into a separate account. (Estate of Murphy (1976) 15 Cal.3d 907, 919, citing See, supra, 64 Cal.2d at p. 784.)

Zenga also argues that his testimony should be sufficient based on case law stating that “[s]ince this general community property presumption is not a title presumption, virtually any credible evidence may be used to overcome it, including tracing the asset to a separate property source, showing an agreement or clear understanding between the parties regarding ownership status and presenting evidence the item was acquired as a gift.” (Ciprari, supra, 32 Cal.App.5th at p. 91; see also Bonvino, supra, 241 Cal.App.4th at p. 1423.) He argues, without support, that “any credible evidence” should include his testimony that the source of the $200,000 he withdrew was his inheritance. But none of the cases discussing the use of “any credible evidence” found a spouse’s tracing burden was satisfied by his or her oral testimony alone. (See Ciprari, supra, 32 Cal.App.5th at p. 92 [finding sufficient tracing where husband’s forensic accountant engaged in “a detailed and comprehensive tracing of all the accounts”]; Bonvino, supra, 241 Cal.App.4th at p. 1423 [undisputed that husband made down payment on property from his separate property].)

Moreover, Zenga’s argument ignores the voluminous case law expressly requiring a commingling spouse to keep and present adequate records in order to trace an asset back to a separate property source. (See, e.g., Estate of Murphy, supra, 15 Cal.3d at p. 919 [“[T]he burden of establishing a spouse’s separate interest in presumptive community property is not simply that of presenting proof at the time of litigation but also one of keeping adequate records.”]; See, supra, 64 Cal.2d at p. 784 [once husband “commingles, he assumes the burden of keeping records adequate to establish the balance of community income and expenditures at the time an asset is acquired with commingled property”]; In re Marriage of Frick (1986) 181 Cal.App.3d 997, 1011 [“The exact amount of money allocable to separate property and the exact amount of money allocable to community property must be ascertained before it can be said the money allocable to separate property is not so commingled that all funds in the account are community property.”].) As such, we find no error in the trial court’s conclusion that Zenga failed to adequately rebut the presumption that the $200,000 was community property.

B. Expenditures

Even if the $200,000 was properly characterized as community property, Zenga argues that the evidence established he spent all but $200 of it on community expenses. Thus, he contends that Kit was only entitled to reimbursement of $100, rather than $100,000. We are not persuaded.

The evidence at trial regarding the Ameritrade account was sparse, as Zenga introduced no documentary evidence and Kit stated she did not have access to that account. Zenga testified that the money came from his inheritance, that he spent most of it “on my family” and that there was “maybe $200” left in the account. Zenga contends this is substantial and undisputed evidence that he spent $199,800 for community expenses and therefore that Kit was not entitled to a double recovery of half of those funds. Zenga contends the trial court erred in awarding $100,000 to Kit without determining how much money was in the Ameritrade account at the time of separation and how it was subsequently spent.

Zenga failed to raise this issue with the trial court at any time prior to entry of judgment. Thus, he has forfeited a right to challenge any implied factual findings in favor of the judgment, including a finding that the money was not spent on the community. A party may avoid implied findings in favor of a judgment, and preserve perceived error, by complying with the process set forth in Code of Civil Procedure sections 632 and 634. “‘[F]irst, a party must request a statement of decision as to specific issues . . . ; second, if the court issues such a statement, a party claiming deficiencies therein must bring such defects to the trial court’s attention to avoid implied findings on appeal favorable to the judgment.’” (Ciprari, supra, 32 Cal.App.5th at p. 94, quoting In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1134.) Here, there is no indication in the record that Zenga requested a statement of decision regarding the Ameritrade account or raised any objection to the trial court’s finding that Kit was entitled to $100,000. In fact, during trial, when the court explained to Zenga that “you owe her $100,000, her half of the commingled money,” Zenga replied, “I wasn’t disputing that, your honor.” Thus, because Zenga failed to request a statement of decision or raise any omissions or ambiguities before the trial court, we will infer the trial court made all factual findings necessary to support the judgment. (Bonvino, supra, 241 Cal.App.4th at p. 1424.)

Further, we find no error in the court’s finding that Kit was entitled to $100,000 as her half of the community property. The evidence established that Zenga withdrew $200,000 in community property funds a few months prior to his separation from Kit and deposited it into his separate account. In addition, we imply a finding by the trial court that the money was not spent on the community and, therefore, Kit was entitled to half of that amount. Zenga’s minimal testimony on this issue does not compel a different result. The court could have rejected his testimony as unreliable or determined that it was not sufficient to establish whether the money was spent for community expenses and in what amount. Zenga’s citations to cases applying the family expense presumption are inapposite. Under that presumption, “in the absence of other evidence, living expenses are presumed to have been paid out of community property rather than separate property.” (Cochran, supra, 87 Cal.App.4th at p. 1058.) In other words, when a community debt is paid from a commingled account, we may apply the presumption to trace which funds were used to pay the debt—we presume that community funds were used, rather than any separate property. Using this presumption, if a spouse can show that community funds were exhausted on community expenses, any remaining balance in the commingled account is established as his or her separate property. (See id. [applying presumption to payment of community debt, remaining account balance was husband’s separate property].) Rather than tracing an undisputed community expense back to establish its source within a commingled account, Zenga seeks to apply this presumption improperly to prove the nature of the expense—arguing that any community funds paid from his Ameritrade account were necessarily for community expenses. He cannot use the presumption in this manner.

Zenga seeks to draw a parallel with the evidence regarding the Wells Fargo account, arguing that the amounts in both accounts were undisputed. But the parties expressly agreed at trial that the balance in the Wells Fargo account had been spent on the community and that neither party was seeking recovery from that account. Kit made no such concession regarding the Ameritrade account; instead, she sought half of the money she claimed was community property. It was undisputed that Zenga transferred $200,000 into that account. He failed to establish that the money was spent on community expenses, as he claims, or to object to the trial court’s contrary implied finding. As such, we find no error.

DISPOSITION

We affirm the judgment. Kit is awarded her costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

COLLINS, J.

We concur:

MANELLA, P. J.

WILLHITE, J.

Parties and Attorneys
Kit v. Zenga
Division 4
Case Number B293807
Party Attorney

Zorianna Kit : Petitioner and Respondent
5044 Whitesett Ave
Valley Village, CA 91607

Andrew L. Westover
Westover Law Group, A.P.C.
24640 Jefferson Ave
Suite 204
Murrieta, CA 92562

Vincent Bo Zenga : Appellant
17062 Dearborn Street
Northridge, CA 91325

Julien A. Adams
Dovel & Luner, LLP
201 Santa Monica Blvd.
Suite 600
Santa Monica, CA 90401