Tentative Ruling

Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

FAMILY LAW
Scott Cyr and Laura Ann Cyr
Case No: 1403371
Hearing Date: Tue Oct 29, 2019 10:30

Nature of Proceedings: Req. for Order: Orders on Reserved Issues re Sale

Req. for Order: re Orders on Reserved Issues re Sale

Attorneys:

Matthew Long for Petitioner [“Scott”]; Joanne S. Sumalpong for Respondent [“Laura”]

Ruling:

1. As set out below, any and all interest from the date of the judgment on the equalizing note must be suspended, retroactively, until Scott removes Laura from his Ravenscroft mortgage; Laura’s motion to strike is denied.

2. The Court has very recently received a “Stipulation and Proposed Order” from Referee Timothy W. O’Hara that suggests that it has been signed by everyone and is only awaiting the Court’s signature. The Stipulation emailed to the Court does not reflect any signatures. The Court requests counsel to meet and confer and bring to the courtroom the stipulation that is completed and ready for the Court to sign.

Analysis

On 9/23 counsel for Laura filed a RFO seeking “Orders on Reserved Issues re Sale of Lots.”

She attaches the declaration of Laura who testifies that she has attached a copy of the Marriage of Cyr Property Division Spreadsheet which is attached to the Judgment in this case; attaches a copy of the $55,132.78 debt which she had to pay to Mr. Pulous created by Scott and his prior counsel after separation, and which was secured by her residence; attaches a copy of the rejection she received from the bank when she attempted to refinance her Pedernal residence and access its equity; she is still on the loan to Scott’s Ravenscroft residence, and therefore unable to qualify for a refinance until her name is removed from his mortgage loans; Judgment provides that Scott is to receive an equalizing payment from the sale of The Lots; there was no other means by which Scott could have received this sum earlier than the close of escrow on The Lots; she did nothing to hinder or delay the sale of The Lots; had no access to the rents or equity in The Lots pending their sale.

Laura testifies that the trial in this matter was long and complicated, and she required the legal services of Sumalpong & Sumalpong; she and Scott required access to legal counsel; both gave their respective attorneys liens (“FLARPL’s”) expecting that each attorney would be paid when The Lots sold; Scott will easily be able to pay Attorney Long’s lien from the sums he receives; if Scott also receives an illegal award of interest on his equalizing payment, she will be unable to pay Attorney Sumalpong’s lien; she is asking the Court to order that Scott receive his equalizing payment of $480,290.80, without interest; testifies that this is the legal and equitable result.

Scott’s Response

He filed a Hearing Brief; he point out that On August 13, 2018, the Judgment of Dissolution was entered ordering Respondent to make an equalizing payment of $480,000 + from the sale of “The Lots” in Arroyo Grande. The Court appointed a referee and ordered that he sell the lots, pay debts owed, collect rents, and pay necessary expenses. The Lots are agricultural land. Neither party has had any beneficial use of the property while awaiting its sale. The Court also said that the equalizing payment would bear interest at the legal rate from the date of Judgment to the date of payment. Now, over 13 months later, as the first lot is being sold, Laura refuses to acknowledge the underlying judgment and contends that In re Marriage of Teichmann (1984) 157 Cal.App.3d 302, is controlling; Laura claims that the ordering of interest is illegal; Scott says that the case is distinguishable. Scott also claims that Laura fails to acknowledge that the reason she doesn’t have liquid assets available to make the equalizing payment is that she violated the Family Law Automatic Restraining Orders during the pendency of this action. She would have had liquid assets available to make the equalizing payment and she could have avoided interest all together had she not violated the ATROs. Respondent’s unclean hands prevents her from seeking “equitable” relief.

Laura’s Reply

Filed 10/22; she points out that Scott failed to file a Responsive Declaration, or any competent evidence, in opposition to her RFO; asks the Court to strike Scott’s Hearing Brief filed on October 15, 2019; she argues that the case law supports her position that the accrual of interest on an equalizing payment owed from the community net sales proceeds legally cannot accrue interest, particularly when the sale is delayed through no fault of either party. The focus is on whether the payor should be sanctioned and penalized under these circumstances.

Laura also points out it has been over one year from the entry of Judgment in this case and Scott unaccountably has failed to remove Laura from his Ravenscrofi mortgage. As a result, Laura has been unable to access any of the equity in her real property holdings. After trial Mr. Long asked the Court to order both parties to remove the other from any mortgages and execute Interspousal Transfer Deeds. The Court stated in its denial of that request that it retained “jurisdiction” and that if cooperation was not forthcoming within a “reasonable time,” either party could make a motion under the “jurisdiction umbrella.”

Court’s Conclusions

1. As to the legal interest argument, this Court will not do an analysis of Teichmann or decide the issue on a clean hands analysis. The Judgment clearly spells out that the equalizing payment would “bear interest at the legal rate from the date of judgment to the date of payment.” [See page 20 of the Judgment of Dissolution). No timely appeal was taken from the judgment. Thus the Court has no legal authority to modify the judgment. That request must be denied.

2. On the other hand, as to the equitable argument, i.e., the refusal of Scott to remove Laura from the mortgage on his property, the Court finds that issue is not satisfactorily answered in Scott’s response. The Court also finds that Laura has made a valid and legitimate argument. Laura contends that Scott has Laura’s equity completely tied up, thereby preventing her from obtaining funds to pay any portion of the equalizing payment in advance of the sale of The Lots; at the same time Scott insists on collecting up to ten percent interest on the equalizing note [approximately $4,100.00 per month]. The Court concludes that equity prevents Scott from taking the position that he can insist on the interest but not get Laura off his mortgage promptly. His position is indefensible under the circumstances. Thus any and all interest on the equalizing note must be suspended, retroactively, until Scott removes Laura from his Ravenscroft mortgage.

3. Laura’s motion to strike must be denied. It is customary for the Court to get a Response accompanied by declarations, but there are rare cases when counsel for a party has concluded that there are no additional facts necessary to be presented via a declaration and the issue is solely a legal one. That was obviously the conclusion reached by Mr. Long. Thus the documents in response will not be struck.