Filed 9/9/20 Marriage of Owens 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
In re Marriage of DIANE CULBERSON-OWENS and GREGORY CHARLES OWENS.
DIANE CULBERSON-OWENS,
Respondent,
v.
GREGORY CHARLES OWENS,
Appellant. B295421
(Los Angeles County
Super. Ct. No. TD035582)
APPEAL from a judgment of the Superior Court of Los Angeles County. Stephen M. Lowry, Commissioner. Affirmed.
Marcia J. Brewer for Appellant.
Law Offices of Marjorie G. Fuller and Marjorie G. Fuller for Respondent.
INTRODUCTION
Appellant Gregory Charles Owens and respondent Diane Culberson-Owens were married for about 24 years before separating in 2011. It is undisputed that during the marriage, Gregory breached his spousal fiduciary duty to Diane in multiple ways. Among other things, Gregory repeatedly forged Diane’s signature on deeds and other documents so he could make transactions in community real property without obtaining her consent or even informing her. Diane filed this action for dissolution of marriage, and following a bench trial, the court ordered Gregory to repay Diane large sums for the devaluation of her interest in the community property. Finding that Gregory had breached his fiduciary duty, the court also required him to pay Diane an additional $100,000.
On appeal, Gregory challenges the court’s award relating to one of the parties’ properties (the “Haas property”), claiming the evidence did not support the court’s finding that he had taken $84,000 out of the equity in his second unilateral refinancing of the property. Gregory also challenges the additional award for his breach of the fiduciary duty, arguing it constituted an unauthorized double recovery. We conclude that the record supports the court’s award as to the Haas property, and that Family Code section 1101, subdivision (h) (Section 1101(h)), authorized the award for Gregory’s breach of the fiduciary duty. We therefore affirm.
BACKGROUND
A. The Marriage and the Petition for Dissolution
B.
Diane and Gregory married in 1987 and separated in 2011. During the marriage, Diane and Gregory purchased multiple real estate properties. It is undisputed that at some point, Gregory began transferring and encumbering the couple’s properties without Diane’s consent or knowledge. In November 2011, Diane filed a petition for dissolution of marriage. Among other relief, Diane sought an award of 100 percent of some community real property affected by Gregory’s fraud, as a penalty for his breach of his spousal fiduciary duty. The matter proceeded to trial.
C. The Trial
D.
At trial, both parties testified about their marriage, their finances, and the various transactions Gregory carried out in community real property without Diane’s consent or knowledge. As relevant to the issues on appeal, the evidence showed the parties purchased the Haas property from Gregory’s mother in 1992, taking title jointly. In 2003, Gregory signed Diane’s name to a quitclaim deed without her authorization or knowledge, placing title to the Haas property in his name alone. Gregory’s mother notarized the forged deed.
In 2003, Gregory refinanced the Haas property with State Farm Bank, extracting about $92,000 in cash from the property’s equity. In 2004, Gregory again refinanced the property, this time with Argent Mortgage Company (AMC). The amount of the new loan covered payments of $50,000 to James Ogburn, Gregory’s business partner, about $20,000 to satisfy a child-support lien, about $7,800 to Gregory himself, and various fees and charges related to the refinancing. In all, the AMC refinancing reduced the remaining equity in the Haas property by $86,537.53.
In 2009, after Diane learned that Gregory had transferred the property to himself as sole owner, he wrote her in an email: “I was totally wrong in taking your name off of Haas – and will accept any criminal prosecution. [¶] I signed your name – that was fraud. I did it for the best interest of our finances at the time as my credit was stronger at the time than yours. I have done this several times when refinancing in the past.”
In addition to the testimony about the parties’ real property, the parties testified about Gregory’s handling of Diane’s inheritance funds. Diane gave a portion of her inheritance to Gregory, who represented he would invest the money for her in a certificate of deposit. Diane later learned that Gregory had not invested the money, and though he then promised to return the funds, he ultimately repaid only a small portion.
Before the conclusion of trial, Gregory’s counsel requested that the court issue a statement of decision under Code of Civil Procedure section 632. Following trial, the parties filed written closing arguments. Regarding the Haas property, Diane’s brief stated that in addition to the 2003 State Farm Bank refinancing, “[i]n 2004, [Gregory] . . . gave JAMES OGBURN a Trust Deed for an alleged $83,000.00 loan.” The brief cited Diane’s trial exhibits 18 and 19 as support for this assertion, describing them as deeds of trust, but the record shows those exhibits actually contained Gregory’s bank records and Diane’s pension-plan documents, respectively. Diane’s brief made no mention of the 2004 AMC refinancing.
E. The Trial Court’s Ruling
F.
In October 2016, the trial court issued an order with its ruling on the disputed issues. First, the court addressed the division of property between the parties. As to the Haas property, the court stated Gregory refinanced the property twice without Diane’s consent or knowledge: “in 2003 he took out $91,970 from the property and in 2004 he took out an additional $84,000 from the equity in the property.” It ordered the Haas property sold and the proceeds divided, with Gregory to pay Diane about $88,000, representing one half of the total the court found had been removed from the equity in the property. The court made similar awards to Diane in dividing other properties Gregory fraudulently conveyed or encumbered, as well as an award to reimburse her for his misuse of her inheritance money. Overall, before accounting for various offsets, the court ordered Gregory to pay Diane over $300,000 as part of the division of property between the parties.
Next, finding that Gregory had breached his spousal fiduciary duty in committing his various misdeeds, the trial court ordered Gregory to pay Diane an additional $100,000 in “damages.” The court directed Diane’s counsel to prepare a statement of decision. It appears counsel never complied.
G. Gregory’s Requests for Reconsideration, the Hearing, and the Final Judgment
H.
Following the court’s ruling, Gregory filed a motion for reconsideration. Among other things, he contended: (1) the evidence showed he did not extract an additional $84,000 from the Haas property’s equity in 2004; and (2) the court’s award of an additional $100,000 to Diane for his breach of the fiduciary duty was inequitable. Gregory also filed a request for order, repeating his request to modify the award relating to the Haas property based on his contention that he did not take out an additional $84,000 in equity from the property in 2004.
At a March 2017 hearing on Gregory’s modification request, the court stated regarding the Haas property award, “my recollection was that I had based my ruling on testimony that I had a note on concerning the $84,000 second cash withdrawal.” Appellant asserted there had been no such testimony, but the court was unpersuaded and declined to modify its prior ruling. Neither the parties nor the court meaningfully addressed the $100,000 award for Gregory’s breach of the fiduciary duty at this hearing.
In December 2018, the trial court issued a final judgment. As it related to the division of property and the additional award based on Gregory’s breach of his fiduciary duty, the judgment largely mirrored the content of the court’s 2016 order. Gregory timely appealed.
DISCUSSION
A. The Haas Property Award
B.
Gregory challenges the trial court’s award of $88,000 to Diane in connection with the Haas property, to the extent the court’s calculation of that amount relied on a finding that he took $84,000 out of the equity in the property in a second refinancing. He contends the evidence did not support such a finding. We review the trial court’s findings of fact for substantial evidence, drawing all reasonable inferences in favor of the judgment. (Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 581.)
The record sufficiently supported the trial court’s award as to the Haas property. While Gregory focuses on Diane’s questionable claim that he executed a deed of trust in favor of Ogburn in 2004, the evidence at trial showed that the 2004 AMC refinancing, which Gregory obtained without Diane’s consent or knowledge, reduced the equity in the Haas property by about $86,500. Thus, the record established that in addition to the roughly $92,000 he took out of the equity in the property in the 2003 State Farm Bank refinancing, Gregory additionally reduced the equity by more than $84,000 in a second refinancing. Accordingly, substantial evidence supports the trial court’s calculation of the Haas property award.
C. The Additional Award for Gregory’s Breach of His Fiduciary Duty
D.
Gregory claims the trial court erred in awarding Diane an additional $100,000 for his breach of his spousal fiduciary duty. He asserts this award constituted an unauthorized windfall for Diane, as the overall award she received exceeded the value of her one-half interest in the affected property.
We will affirm the trial court’s award if it was permissible under any theory. (See Young v. Cal. Fish and Game Com. (2018) 24 Cal.App.5th 1178, 1192-1193 [“it is a settled appellate principle that if a judgment is correct on any theory, the appellate court will affirm it”].) Because the trial court issued no statement of decision, the doctrine of implied findings constrains our review of the judgment. (See Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58 (Fladeboe) [to avoid doctrine of implied findings, appellant must secure statement of decision and raise any objections to it before trial court].) “The doctrine of implied findings requires the appellate court to infer the trial court made all factual findings necessary to support the judgment.” (Ibid.) The question then becomes whether substantial evidence supported those implied findings. (See Michael U. v. Jamie B. (1985) 39 Cal.3d 787, 793 [“the only issue before us is whether substantial evidence supports [the] implied finding”].) “The doctrine [of implied findings] is a natural and logical corollary to three fundamental principles of appellate review: (1) a judgment is presumed correct; (2) all intendments and presumptions are indulged in favor of correctness; and (3) the appellant bears the burden of providing an adequate record affirmatively proving error.” (Fladeboe, supra, at 43-44.)
While the trial court did not explain the basis for its $100,000 award for Gregory’s breach of his fiduciary duty, we conclude it was a valid award under Section 1101(h). Section 721, subdivision (b), imposes a fiduciary duty on spouses in transactions between themselves. (Id. at subd. (b).) The fiduciary duty under section 721 “includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable . . . .” (§ 1100, subd. (e).)
Section 1101 creates a right of action for breach of the fiduciary duty resulting in impairment to the claimant spouse’s undivided one-half interest in the community estate. (§ 1101, subd. (a); In re Schleich (2017) 8 Cal.App.5th 267, 277.) In subdivisions (g) and (h), section 1101 provides remedies for a spouse’s breach of fiduciary duty. Under subdivision (g), “[r]emedies for breach of the fiduciary duty by one spouse . . . shall include . . . an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.” (§ 1101, subd. (g).) Under subdivision (h), when the breach falls within Civil Code section 3294 — i.e., “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice” (Civ. Code, § 3294, subd. (a)) — the remedy “shall include . . . an award to the other spouse of 100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in breach of the fiduciary duty” (§ 1101, subd. (h)). Section 1101(h)’s 100 percent “penalty” “constitutes the full remedy available . . . . It is not in addition to an equal share of the same asset as part of the property division.” (Hogoboom & King, Cal. Prac. Guide: Family Law (The Rutter Group 2020) ¶ 8:619, citing Marriage of Schleich (2016) 8 Cal.App.5th 267, 285-287, italics omitted.) When Section 1101(h)’s conditions are satisfied, the award of 100 percent of the relevant asset or its value is mandatory. (In re Marriage of Rossi (2001) 90 Cal.App.4th 34, 42.)
An award under Section 1101(h) requires findings that (a) Gregory breached his fiduciary duty to Diane and thereby impaired her interest in the community estate, and (b) clear and convincing evidence showed his breaches involved oppression, fraud, or malice. We therefore infer that the trial court made these findings. (See Fladeboe, supra, 150 Cal.App.4th at 58.) Gregory’s conclusory assertion to the contrary notwithstanding, his repeated forgeries of Diane’s signature on deeds and other documents and subsequent unilateral transfers and encumbrances of community property for his sole benefit and without Diane’s knowledge (among other egregious breaches detailed by the trial court) amply supported — if not compelled — findings that his conduct involved fraud. (See Civ. Code § 3294, subd. (c)(3) [“‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury”].)
While Gregory contends Section 1101(h) does not provide for a “monetary sanction,” this assertion is beside the point. The question is whether Section 1101(h), however characterized, authorized the remedy the trial court provided. Section 1101(h) requires an award of 100 percent of assets affected by the breach of the fiduciary duty, or their value, to the claimant spouse. As Gregory does not contend that the trial court’s total award (including both the “damages” award and the amounts awarded as part of the division of property) exceeded 100 percent of the relevant assets’ value, we conclude the award was permissible under that provision, and did not constitute an unauthorized double recovery. Accordingly, we perceive no error in the trial court’s award for Gregory’s breach of his fiduciary duty.
DISPOSITION
The judgment is affirmed. Diane is awarded her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
MANELLA, P. J.
We concur:
COLLINS, J.
CURREY, J.