Estate of Lu CA1/4 ( 2021 )

Filed 5/12/21 Estate of Lu CA1/4
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FOUR
Estate of CHI ZEN LU, Deceased.
HAL LIU,
A160649
Petitioner and Appellant,
v. (Alameda County
Super. Ct. No. RP-18-916424)
CECILLIA DERPHINE WANG,
Individually and as Executor, etc.,
Objector and Appellant.
CECILLIA WANG, as Trustee, etc.,
A161583
Plaintiff and Appellant,
v. (Alameda County
Super. Ct. No. RP-18-930905)
HAL LIU,
Defendant and Appellant.
These consolidated appeals arise out of conflicting claims to interests in
two residential properties in Fremont (the properties), one located on Madrid
Place (Madrid) and the other on Hidalgo Court (Hidalgo). Hal Liu, surviving
spouse of Chi Zen Lu, claims a community property interest in the properties.
Cecillia Wang, the decedent’s daughter, contends the properties are owned by
the Chi Zen Lu Trust. Following a court trial, the probate court found that
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Chi Zen’s trust is the sole owner of the properties.1 The court also found that
Hal must vacate Hidalgo, where he has been living since Chi Zen died. But
the court rejected Cecillia’s claim that Hal owes the trust damages for the
rental value of that property. Both parties appeal. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
I. The Properties
Hal and Chi Zen married in 1989. At that time, Chi Zen was the sole
owner of Madrid and held title to Hidalgo in joint tenancy with two of her
sisters, Chi Hwa Lu and Chi Chi Lu.
In March 1993, Chi Hwa, Chi Chi, and Chi Chi’s husband executed a
grant deed pursuant to which they granted Hidalgo to Chi Zen, who was
identified in the instrument as an unmarried woman. In November 1993,
Hal executed a grant deed, which granted Hidalgo to Chi Zen “as her sole and
separate property.”
In October 1998, Hal executed a quitclaim deed that divested him of
any interest in Madrid and quitclaimed the property to Chi Zen “as her sole
and separate property.”
In October 1999, Chi Zen executed a revocable trust and a pour-over
will. The trust was funded with the properties and an undeveloped lot in
Truckee. Chi Zen designated herself trustee, Cecillia substitute trustee, and
Cecillia as her sole beneficiary. The trust instrument and will both contain
provisions expressly stating Chi Zen’s intention to exclude Hal as a
beneficiary because she had provided for him by leaving him other assets
outside her estate.
1For clarity, we will use given names to refer to the parties, the
decedent, and several witnesses.
2
During the second decade of his marriage to Chi Zen, Hal executed two
“Interspousal Grant Deed[s],” which contain statements disavowing Hal’s
interest in the properties. A January 2007 deed conveyed all right, title, and
interest Hal had in Madrid to Chi Zen “as her sole and separate property.”
And a December 2009 deed conveyed all right, title, and interest he had in
Hidalgo to Chi Zen as her “sole and separate property.”
In 2012 and 2013, Chi Zen and Hal executed a series of four deeds, the
nature and impact of which became a focal point of the current litigation.
A September 2012 grant deed executed by Chi Zen (the September 2012
Hidalgo deed) contains the following language: “FOR A VALUABLE
CONSIDERATION, receipt of which is hereby acknowledged, CHI ZEN LU,
TRUSTEE OF THE CHI ZEN LU TRUST DATED OCTOBER 5, 1999
hereby GRANT(s) to CHI ZEN LU, TRUSTEE OF THE CHI ZEN LU
TRUST DATED OCTOBER 5, 1999 AND HER HUSBAND HAL LIU, AS
TENANTS IN COMMON the following described property in the City of
FREMONT.” After Chi Zen executed the September 2012 Hidalgo deed, she
and Hal used Hidalgo as security to obtain a $406,000 loan.
In April 2013, Chi Zen executed a grant deed (the April 2013 Madrid
deed), which contains the following language: “FOR A VALUABLE
CONSIDERATION, receipt of which is hereby acknowledged, CHI ZEN LU,
TRUSTEE OF THE CHI ZEN LU REVOCABLE LIVING TRUST
DATED OCTOBER 5, 1999 hereby GRANT(s) to CHI ZEN LU, TRUSTEE
OF THE CHI ZEN LU REVOCABLE LIVING TRUST DATED
OCTOBER 5, 1999 AND HAL LIU, A MARRIED MAN the following
described property in the City of FREMONT.” After Chi Zen executed the
April 2013 Madrid deed, she and Hal used Madrid as security to obtain a
$273,500 loan.
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On May 27, 2013, Chi Zen and Hal executed a grant deed (the May
2013 Hidalgo deed), pursuant to which they granted Hidalgo to Chi Zen as
trustee of her trust. And, on June 3, 2013, Chi Zen and Hal executed another
grant deed (the June 2013 Madrid deed), pursuant to which they granted
Madrid to Chi Zen as trustee of her trust. Both deeds contain language that
the transaction was made for no consideration and that the grant did not
constitute a change in ownership under the Revenue and Tax code, as it was
a gift.
II. Probate and Trust Proceedings
In May 2018, Chi Zen died after a long battle with cancer. Chi Zen’s
will was admitted to probate and Cecillia was appointed executor of her
mother’s probate estate.
On October 12, 2018, Hal filed a Spousal Property Petition, in which he
claimed an undivided one-half interest in Hidalgo and Madrid. Hal admitted
that Chi Zen owned the properties “before marriage,” but alleged that the
community acquired interests in them because “successive mortgages were
paid with community funds” and his name was “frequently” on the property
titles “during the course of the marriage.” Hal also claimed community
property interests in the undeveloped property in Truckee, personal property
in the Hidalgo house, and “[u]nknown bank and investment accounts” that
were opened during the marriage.
Cecillia filed objections to the spousal property petition and a cross-
petition against Hal. Cecillia objected that Hal not only failed to allege facts
to support his claims but ignored evidence defeating them. Cecillia relied on
Chi Zen’s estate planning documents, title documents describing the
properties as Chi Zen’s separate property, and alleged admissions by Hal that
he did not have any interest in the assets held in Chi Zen’s trust. Cecillia’s
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cross-petition set forth causes of action for breach of fiduciary duty, fraud,
and elder abuse, which were based on allegations that Hal made repeated
assurances to Chi Zen that Cecillia would be the sole beneficiary of Chi Zen’s
trust, and that Chi Zen relied on these assurances by naming Hal the
beneficiary of other assets she held outside her trust, including her pension
and retirement accounts. The cross-petition also included a claim for
conversion based on allegations that Hal took Chi Zen’s personal property
from Hidalgo, which he refused to return.
As trustee and beneficiary of Chi Zen’s trust, Cecillia also filed a
Petition for an Order Confirming Trust Assets. This petition was filed
against Hal and Doe respondents who claimed an interest in the trust’s three
real property assets. In her first cause of action, Cecillia sought a
determination that the trust holds titles against all adverse claims. A second
cause of action against Hal for conversion alleged that Hal reneged on a
promise to move out of Hidalgo, took Chi Zen’s personal property from the
house, and caused “waste” by allowing Hidalgo to “fall into disrepair and
squalid conditions.” Cecillia also alleged a cause of action for declaratory
relief, seeking a judicial determination of the parties’ respective rights to the
properties.
A trial date for Hal’s petition, the cross-petition and Cecillia’s trust
petition was set for December 2019. Cecillia had requested that these
matters be consolidated with a civil action Hal filed against Cecillia for
damages and constructive trust. The court treated the probate and trust
proceedings as related but did not consolidate any cases.
III. Hal’s Summary Judgment Motion
Prior to trial, Hal filed a motion for summary judgment or summary
adjudication. Hal’s sole claim in that proceeding was that Chi Zen
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transmuted the properties to community property in 2012 and 2013. (Fam.
Code, § 852; statutory references are to the Family Code unless otherwise
indicated.) Specifically, Hal’s theory was that the September 2012 Hidalgo
deed and the April 2013 Madrid deed transmuted the properties into
community property assets while the May 2013 Hidalgo deed and June 2013
Madrid deed did not transmute the properties back to Chi Zen’s separate
property. Opposing Hal’s motion, Cecillia argued that the “reverse” was true.
The trial court denied Hal’s motion on November 26, 2019. In its
detailed written order, the court set forth the following facts, undisputed for
purposes of the motion: Chi Zen acquired Hidalgo and Madrid before she
married Hal; prior to execution of the September 2012 Hidalgo deed, Hidalgo
was Chi Zen’s separate property; and prior to execution of the April 2013
Madrid deed, Madrid was Chi Zen’s separate property. Then, the court found
that the four deeds executed in 2012 and 2013 do not satisfy the statutory
requirements for transmutation, reasoning as follows: To accomplish a valid
transmutation of property by executing a deed, the deed must contain an
express declaration that the characterization or ownership of the property is
being changed. (§ 852, subd. (a); e.g. Estate of MacDonald (1990) 51 Cal.3d
262 (MacDonald).) None of the deeds executed in 2012 and 2013 “included
sufficient language” to satisfy section 852’s express declaration requirement.
After concluding that Hal was not entitled to summary judgment or
summary adjudication, the court ordered that the “trial dates of December 9–
13, 2019 are maintained to afford [Hal] the opportunity to establish a
contribution claim and for hearing on [Cecillia’s] Cross Petition and Trust
Petition.”
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IV. The Court Trial
Trial was held over four court days in early December 2019. As a
preliminary matter, the court addressed the effect of its summary judgment
order. In his trial brief, Hal continued to argue that the properties were
transmuted to community property, but the trial court ruled that this matter
was not going to be re-litigated. Because the deeds executed in 2012 and
2013 were not transmutations, the court found, the summary judgment
evidence establishes that Hidalgo and Madrid were Chi Zen’s separate
property at the time of her death. The court urged the parties to focus on
whether the community acquired interests in the properties through
contribution.
Opening statements foreshadowed a factual dispute as to which marital
partner took advantage of the other. Hal’s trial counsel claimed that Chi Zen
“took advantage” of Hal’s “mental condition and difficulty with finances to
cheat him out of his community property interest.” Cecillia’s counsel claimed
that Chi Zen supported Hal financially throughout the marriage and made
provisions for him in her estate plan, and that Hal always knew Chi Zen
intended to leave the properties to Cecillia, but after Chi Zen died, he “turned
on her,” refusing to vacate the house and accusing her of undue influence
with no evidentiary basis.
A. Hal’s Evidence
Hal called two witnesses: Julia Ross, and himself. Ross, an attorney,
testified that she drafted Chi Zen’s estate planning documents, did not
perform any other legal service for Chi Zen, and never represented Hal. Ross
could not remember drafting deeds pertaining to the properties in 2013, but
she did not deny doing so. She recalled exchanging pleasantries with Hal,
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but she did not remember having a conversation with him about Chi Zen’s
estate plan.
Hal testified that he was born in China, moved to the United States in
the 1950’s and obtained a PhD in Mathematics in the 1970’s. He has not
been employed since 1985 because he suffers from depression. Hal also has a
bipolar illness and severe hearing loss. When Hal and Chi Zen married in
1989, Chi Zen knew Hal was unemployed and she never asked him to go back
to work.
When Hal married Chi Zen, he owned stock worth approximately
$100,000 and received income from disability and a pension. Under direct
examination, Hal testified that while he was married to Chi Zen, he used his
monthly income to pay utility bills at the Hidalgo house. Under cross-
examination, Hal testified that his monthly benefits were deposited into his
personal bank account at Wells Fargo, which he controlled. Hal could not
recall his account balance at the time of Chi Zen’s death, but he
acknowledged treating the funds as his separate property.
While Hal was married to Chi Zen, he received an inheritance when
each of his parents died. Hal testified that some of his inheritance was spent
“very quickly in the household,” but he did not elaborate further, stating “I
don’t know what happened.” Part of the inheritance Hal received from his
mother was deposited into an account at Wells Fargo that Chi Zen opened in
Hal’s name. Under direct examination, Hal testified that Chi Zen used
another part of his inheritance to purchase stock on Hal’s behalf from
Ameritrade. Hal testified that Chi Zen took charge of his inheritance because
she thought Hal was not capable of handling money. Under cross-
examination, Hal acknowledged that during the marriage, he opened his own
brokerage account at a company called Scottrade that later became TD
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Ameritrade, he managed and controlled this account throughout the
marriage, and he retained it as separate property after Chi Zen died.
Hal testified that Chi Zen had a checking account at Wells Fargo that
she used to pay mortgages on Madrid and Hidalgo, and that rental income
from Madrid was deposited into that account. During his direct testimony,
Hal was asked where Chi Zen deposited her salary from her job. He
responded, “I think her checking account.” Hal’s counsel asked if Chi Zen’s
salary during the marriage always went into the same Wells Fargo account,
to which he responded: “As far as I know.”
Hal was shown several deeds pertaining to the properties. He
identified his signature on some of these deeds, but was not able to answer
basic questions about any of them, such as why they were executed. Hal
testified that he signed loan applications, but he and Chi Zen never discussed
the loans or why they were made. Hal’s name was put on loan applications
along with his wife’s name because the banker said that Hal’s credit rating
was better than Chi Zen’s credit rating. Hal did not have “any idea” why Chi
Zen took out loans on Hidalgo and Madrid, testifying that he believed Chi
Zen’s salary and his own income was sufficient to support them throughout
their marriage.
Hal testified that the first time he heard the term “community
property” was approximately a month after Chi Zen’s death. During his 30-
year marriage to Chi Zen, “not a single person, not once, explained anything
related to property to [him].” Hal told people that he was “okay” with Chi
Zen’s plan to leave her real property to Cecillia because he trusted his wife
and thought the property did not belong to him. If he had understood that he
could have a community property interest in the properties he would not
have been “okay” with his wife’s plan to leave them to Cecillia.
9
After Chi Zen died, Cecillia pressured Hal to move out of Hidalgo,
saying that he did not have a right to stay there because he did not pay the
mortgage. Cecillia also took things from the house without Hal’s permission
and told him he could not invite people over. And she called him a thief and
a liar for taking books that he had purchased. Hal testified that “[a]lmost all”
of the personal property in the Hidalgo house was purchased during his
marriage to Chi Zen. But he also admitted there were items in the house
from before the marriage, including a dining table, Cecillia’s desk, “[m]aybe a
dresser,” and “[m]aybe some chairs.”
B. Cecillia’s Evidence
Cecillia called three witnesses at trial, two of Chi Zen’s sisters and
herself. Chi Zen’s sisters, Chi Chi and Chi Hwa, testified that Hal was not a
provider or a good husband. Both sisters recalled executing a grant deed that
conveyed Hidalgo to Chi Zen in 1993. Chi Chi recounted two conversations
when Chi Zen said she was going to leave real estate to Cecillia and her
pension to Hal, and Hal said that he approved of that plan.
Cecillia testified about her close relationship with Chi Zen and her
excellent relationship with Hal prior to Chi Zen’s death. Cecillia, who was a
teenager when her mother married Hal, disagreed with Hal’s claim that all
the property in the Hidalgo house was purchased during the marriage. She
listed specific furniture, items of clothing and other personal belongings that
Chi Zen owned before marriage, and also testified that her property was in
her former bedroom.
Cecillia testified that while Chi Zen was married to Hal, Chi Zen
discussed her estate plan in front of Hal, Cecillia and other family members.
During these conversations, Chi Zen said specifically that she was going to
leave her real estate to Cecillia and she was going to leave other assets to
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Hal, including her pension. This subject “came up over the years on a
number of occasions” because Chi Zen had been defensive about marrying
Hal. Cecillia explained that, prior to the marriage, Hal and Chi Zen were in
the same social circle, and many of their friends thought that Hal was a “gold
digger.” Chi Zen defended Hal by assuring others that, even though Hal was
unemployed, he was not interested in Chi Zen’s real estate. She would often
say that Hal had offered to sign quitclaim deeds, and that he was not
interested in her real property.
In late April 2018, Chi Zen asked Cecillia to help her schedule a
meeting with Julia Ross so they could review Chi Zen’s estate plan. Cecillia
arranged the meeting for the following month. She did not tell Hal about the
meeting, but he came with Chi Zen. At the beginning of the meeting, Ross
asked Chi Zen what she wished to discuss. Chi Zen said she wanted to
review her estate plan. So Ross went through the will and trust instrument
and summarized the key provisions, including the provisions stating that Chi
Zen was going to “provide[] for Hal separately.” Because Hal and Chi Zen
were both hard of hearing, Cecillia repeated many of the things that Ross
said, using a loud, clear voice.
Shortly after Chi Zen died, Cecillia collected Chi Zen’s financial and
business records from the Hidalgo house because she wanted to make sure
bills were paid. The following month, Cecillia began paying the mortgages
for the properties. Cecillia determined from her mother’s records that there
was one outstanding mortgage for each of the properties. The monthly
payment for Hidalgo was $1,823.13 and the monthly payment for Madrid was
$1,266.62. Chi Zen’s rental income from Madrid was $4,125 a month, which
covered the total mortgage payments for the properties “and then some.”
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Cecillia obtained copies of bank statements from Chi Zen’s Wells Fargo
checking account dating back to 2009. The statements were not admitted
into evidence because the trial court sustained Hal’s objection that they were
hearsay. However, Cecillia reviewed the statements while she was on the
witness stand and testified that they reflected deposits equivalent to the
rental income that Chi Zen received from Madrid.
Cecillia testified that after her mother died, Hal said he was going to
live with his son in Portland. Cecillia attempted to assist Hal by packing up
the house and helping him claim benefits that Chi Zen left to him. In late
August 2018, Cecillia asked Hal when he was moving because it did not
appear that he was making arrangements to leave. Hal responded by asking
“[w]here is my eviction notice?” Hal told Cecillia that he had a lawyer and
she should go look up California law. At that point, Cecillia questioned
whether Hal had deceived Chi Zen throughout their marriage and was
actually a thief.
After the evidence phase of trial, the parties were granted time to
submit written closing arguments and proposed orders. The matters were
deemed submitted on January 13, 2020.
V. Order after Trial and Judgment
In an order after trial that was filed on March 3, 2020 (the March 2020
order), the court denied Hal’s spousal property petition, finding that Hal is
not entitled to any personal or real property held in Chi Zen’s trust or probate
estate. The court also granted in part Cecillia’s cross-petition, finding that
Chi Zen’s trust “owns and has all rights, title, and interest” in Madrid,
Hidalgo, and the undeveloped property in Truckee. The court found that the
trust is entitled to “possession” of Hidalgo and to have Hal vacate that
property “forthwith.”
12
The March 2020 order contains findings on five material issues raised
by the parties. First, Hal claimed that the two-thirds interest in Hidalgo that
Chi Zen’s sisters granted to Chi Zen in 1993 was a community property asset
because it was acquired during the marriage. The trial court rejected this
claim because Hal had acknowledged repeatedly throughout the marriage
that Hidalgo was Chi Zen’s separate property. Explaining this ruling, the
court first pointed out that Hal’s summary judgment motion was denied
because the 2012 and 2013 deeds did not transmute Chi Zen’s separate
property interests. Then the court cited several deeds that were executed
prior to 2012 and found that those “earlier deeds clearly recorded [Chi Zen’s]
sole ownership of the Hidalgo property during the life of their marriage.”
Second, Hal claimed a community property interest in Hidalgo and
Madrid based on contributions he made toward mortgage payments.
Rejecting this claim, the court found that “any calculation of the percentage
of community property ownership by [Hal] based on his alleged contribution
would be completely speculative.” In explaining this finding, the court
addressed specific evidence that Hal had relied on to try to prove this claim.
Although the court “agree[d]” Hal had testified that his social security
benefits were deposited into an account he shared with Chi Zen and this joint
account was used to make mortgage payments, the court found this
testimony not credible because Hal was not able to recall any details about
alleged deposits or payments. The court also rejected Hal’s posttrial
argument that Cecillia admitted during her testimony that the account used
to pay the mortgages contained community funds. Further, evidence that
Hal’s income was used on a loan application was not evidence that the income
was used to pay a mortgage. Finally, the court refused to consider Hal’s
“post-trial exhibits” that allegedly calculated the community interest in the
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properties acquired through contribution. These exhibits had not been
admitted at trial and Hal failed to demonstrate that they were based on
admitted evidence.
Third, Hal claimed that Chi Zen exercised undue influence over Hal
when he executed deeds that described Hidalgo and Madrid as Chi Zen’s
separate property. The court rejected this claim, finding no evidence Chi Zen
took unfair advantage of Hal.
Fourth, Hal claimed that personal property in the Hidalgo house was
community property because it was acquired during marriage. This claim
was denied for lack of evidence.
Fifth, Cecillia claimed that Hal owed fair market rent for occupying
Hidalgo since Chi Zen’s death. The court rejected this claim because Cecillia
failed to cite “persuasive evidence” of the fair market rental value of the
property in her posttrial brief.
The March 2020 order was incorporated into a judgment that was
entered on July 24, 2020. The judgment reiterates the court’s key rulings:
Hal is not entitled to any real or personal property held in Chi Zen’s trust or
probate estate; Chi Zen’s trust is the sole owner of Madrid, Hidalgo, and the
Truckee property; and “[t]he Trust is entitled to possession of Hidalgo and to
have [Hal] vacate that property.”
DISCUSSION
I. The Properties Were Not Transmuted
Hal challenges the finding that the September 2012 Hidalgo deed and
the April 2013 Madrid deed did not transmute the properties to community
property. As noted, the court made this finding in its summary judgment
order and precluded the parties from re-litigating it at trial.
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A transmutation changes “the character of community or separate
property.” (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1100 (Benson).)
The requirements for transmutation are codified in section 852, which states
in pertinent part: “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.” (§ 852, subd. (a); see In re Marriage of Campbell (1999)
74 Cal.App.4th 1058, 1062 [for a transmutation of property to occur, the
requirements in section 852 must be met].)
The Legislature enacted section 852 in 1985 in order to abrogate prior
law permitting transmutations by oral agreement or mutual understanding,
with the intent to “increase certainty and honesty in marital property
disputes, and to decrease the burden on the court in resolving such matters.”
(Benson, supra, 36 Cal.4th at p. 1100.) Courts have construed section 852 as
“a ‘presumption’ that transactions between spouses are not ‘transmutations,’
rebuttable by evidence the transaction was documented with a writing
containing the requisite language.” (In re Marriage of Barneson (1999) 69
Cal.App.4th 583, 593.)
The requirements for a transmutation may not be proven with extrinsic
evidence, nor may they be satisfied by “just ‘any writing.’ ” (In re Brace
(2020) 9 Cal.5th 903, 935 (Brace).) To constitute a transmutation, an
instrument must contain a declaration by the adversely affected party
“ ‘which expressly states that the characterization or ownership of the
property is being changed.’ ” (Ibid., quoting MacDonald, supra, 51 Cal.3d at
p. 269; see Benson, supra, 36 Cal.4th at p. 1100 & 1106.)
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Applying these principles, we affirm the trial court’s findings that the
September 2012 Hidalgo deed and the April 2013 Madrid deed did not
transmute Chi Zen’s separate property.
The September 2012 Hidalgo deed does not state that a separate
property asset is being changed to a community property asset. Nor does it
specify on its face what interest Chi Zen is transferring to Hal. The
instrument contains a reference to a tenancy in common but, as the trial
court observed, “[w]ithout resort to extrinsic evidence, the language of the
Deed . . . does not state whether [Chi Zen] intended to give [Hal] a 1%
interest or a 99% interest in the subject of the real property.”
The April 2013 Madrid deed is even less specific than the Hidalgo deed.
Again, this deed does not state on its face that Chi Zen’s separate property is
being changed to community property. Nor does it contain any information
regarding the nature of the interest being granted to Hal, or any expression
of Chi Zen’s intent to transmute her property into a marital asset. Because
this deed lacks any reference to the form in which the transferred property is
to be jointly held, the law presumes a tenancy in common but, as with
Hidalgo, this leaves unresolved the respective interests of the two owners.
(See Civ. Code, § 686.)
Disputing our conclusions, Hal relies primarily on Estate of Bibb (2001)
87 Cal.App.4th 461 (Bibb). In that case, a husband executed a grant deed
that conveyed his separate real property to himself and “ ‘his wife as joint
tenants.’ ” (Id. at pp. 464–465.) The Bibb court found that the deed
transmuted the husband’s separate property into a joint tenancy, which
became the wife’s separate property upon the husband’s death. (Id. at
p. 469.) The court reasoned that “since ‘grant’ is the historically operative
word for transferring interests in real property, there is no doubt that [the
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husband’s] use of the word ‘grant’ to convey the real property into joint
tenancy satisfied the express declaration requirement.” (Id. at pp. 468–469.)
Hal contends that Bibb shows that Chi Zen satisfied section 852’s
express declaration requirement because she used the word “grant” to convey
the properties to herself and Hal. We disagree. The deed under review in
Bibb used the word “grant” to transfer a husband’s separate property to the
husband and his “wife as joint tenants.” A joint tenancy is a very specific
type of estate that is owned jointly in undivided equal shares by two or more
persons. (Civ. Code, § 683, subd. (a).) Because the husband in Bibb used the
word “grant” in conjunction with the words “joint tenancy,” the deed that he
executed stated on its face that the form of property ownership was being
changed from separate property to joint ownership by a husband and wife.
(Bibb, supra, 87 Cal.App.4th at p. 468.) The deeds Chi Zen signed in 2012
and 2013 are materially different, as neither specifies the interest that is
being transferred to Hal. Because Chi Zen did not express her intent to
create a joint tenancy or otherwise change the character of her separate
property, her use of the word “grant” was ambiguous and inadequate to
establish that a transmutation occurred. (See In re Marriage of Begian &
Sarajian (2018) 31 Cal.App.5th 506, 515 (Begian & Sarajian).)
The case before us is similar to Begian & Sarajian, a dissolution
proceeding between Ida and Richard, who made conflicting claims to a
residence referred to as Avonoak. (Begian & Sarajian, supra, 31 Cal.App.5th
506.) Prior to May 2006, they held a community property interest in Avonoak
as joint tenants with Ida’s mother Rose. (Id. at pp. 509–510.) Then, Richard,
Ida, and Rose executed a “ ‘Trust Transfer Deed,’ ” which stated that they
“ ‘hereby GRANT to IDA’ ” the property described as Avonoak. (Id. at p. 510.)
The Begian & Sarajian court found that the May 2006 deed did not satisfy
17
the strict requirements for proving a transmutation of Richard’s community
property into Ida’s separate property. (Id. at p. 515.)
The Begian & Sarajian court acknowledged Bibb’s holding that the
word “grant” is an unambiguous expression of an intent to transfer an
interest, but distinguished Bibb as a case in which “the court was forced to
conclude” that the property was transmuted because the adversely affected
spouse transferred it into a joint tenancy. (Begian & Sarajian, supra, 31
Cal.App.5th at p. 515.) By contrast, Richard’s use of the word “ ‘grant’ ” in
the May 2006 deed was ambiguous because that word “only establishe[d] his
intention to transfer an interest in real property, ‘without specifying what
interest was being transferred.’ ” (Ibid., italics omitted.) Moreover, the
reference to a “ ‘Trust Transfer’ ” in the title of the May 2006 deed was a
compounding ambiguity, as it supported Richard’s contention that the
purpose of the conveyance was not to change the marital character or
ownership of Avonoak but only to put it into trust. (Id. at pp. 515–516.)
Hal contends that Begian & Sarajian is inapposite because the deeds
Chi Zen executed in 2012 and 2013 were not titled as trust transfer deeds.
This fact is hardly dispositive, particularly when the properties were being
transferred out of and back into Chi Zen’s trust. Regardless, these deeds are
analogous to the deed in Begian & Sarajian because the word “grant” is not
used in conjunction with any language, either in the title or the deed itself,
that specifies what interest is being granted.
Hal also relies on In re Marriage of Kushesh & Kushesh-Kaviani (2018)
27 Cal.App.5th 449 (Kushesh), which holds that standard language in an
interspousal transfer grant deed “meets the requirements for a
transmutation of the character of marital property.” (Id. at p. 451.) The
Kushesh court reasoned that “constituent components of the word
18
‘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.” (Ibid., italics omitted.)
Kushesh does not assist Hal. The only deeds in this record that are
analogous to an interspousal transfer grant deed are the deeds Hal executed
in 2007 and 2009, which contain Hal’s express declarations that Hidalgo and
Madrid are Chi Zen’s “sole and separate property.” These earlier deeds
support the trial court’s finding that the properties were Chi Zen’s separate
property prior to 2012. However, none of the deeds executed in 2012 and
2013 were interspousal transfer grant deeds, as each lacks “the usual
statement about the grantee (or grantees) taking the property as either
community or separate property.” (Kushesh, supra, 27 Cal.App.5th at
p. 451.) Thus, Kushesh is consistent with the trial court’s finding that Chi
Zen did not transmute her separate property.
II. The Two-Thirds Interest in Hidalgo
Hal challenges the trial court’s finding that the two-thirds interest in
Hidalgo that Chi Zen acquired in March 1993 is not community property. At
the outset, we note that only in the most formal sense can one describe the
interest Chi Zen acquired from her sisters in 1993 as a two-thirds interest.
Testimony from the two sisters established that even when the property was
held first in Chi Hwa’s name alone, it was primarily Chi Zen who paid the
mortgage. Later, the property was transferred into the names of all three
sisters, although Chi Chi’s name was added just so the sisters could qualify
for a loan. When, in 1993, the three sisters transferred the property to Chi
Zen alone, Chi Chi received no money for surrendering her interest, and Chi
19
Hwa received only $100,000, five percent of which she then rebated to Chi
Zen. This payment to Chi Hwa represents only a small fraction of the
property’s value, which we know because Chi Zen promptly used the home as
security for $383,150 in mortgage loans.
Hal’s argument that the interest Chi Zen acquired from her sisters was
community property relies on section 760, which states that “[e]xcept as
otherwise provided by statute, all property, real or personal, wherever
situated, acquired by a married person during the marriage while domiciled
in this state is community property.” Section 760 establishes a “ ‘general
presumption that property acquired during marriage by either spouse other
than by gift or inheritance is community property unless traceable to a
separate property source.’ ” (In re Marriage of Ciprari (2019) 32 Cal.App.5th
83, 91 (Ciprari).)
This general community property presumption may be overcome by the
party contesting community property status. (Ciprari, supra, 32 Cal.App.5th
at p. 91.) Because it “ ‘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.’ ” (Ibid., fn. omitted; see In re Marriage of Bonvino (2015)
241 Cal.App.4th 1411, 1423; In re Marriage of Haines (1995) 33 Cal.App.4th
277, 289–290 (Haines), questioned on another point in In re Marriage of Valli
(2014) 58 Cal.4th 1396, 1404.)
Whether the general community property presumption has been
rebutted presents a question of fact for the trial court that is subject to review
for substantial evidence. (Ciprari, supra, 32 Cal.App.5th at pp. 94–95.)
Here, substantial evidence supports the trial court’s finding that the general
20
community property presumption was rebutted. After Chi Zen acquired her
sisters’ interests in Hidalgo, Hal acknowledged repeatedly that Hidalgo was
Chi Zen’s separate property. In November 1993, for example, he executed a
deed, which contains an express statement that Hidalgo is Chi Zen’s “sole
and separate property.” Later, after Chi Zen transferred Hidalgo into her
trust, Hal executed the 2009 deed, which contains another express statement
that Hal has no interest in Hidalgo and that Hidalgo is the “sole and separate
property” of Chi Zen.
Hal contends that the trial court violated Brace, supra, 9 Cal.5th 903,
by finding that the community property presumption was rebutted under the
facts presented here. Hal’s theory is that the finding that Hidalgo is Chi
Zen’s separate property depends on application of a presumption that the
holder of legal title also holds full beneficial title to property. (Evid. Code,
§ 662.) This finding cannot be sustained, Hal posits, because Brace holds
that the community property presumption supersedes the legal title
presumption.
Hal’s premise that the trial court relied on a legal title presumption to
characterize Hidalgo is not supported by the record. The Hidalgo deeds are
relevant here because they were executed by Hal after Chi Zen’s sisters
transferred their interests in Hidalgo to Chi Zen. This documentation,
combined with the facts that Hal repeatedly acknowledged to family and
friends that Hidalgo was Chi Zen’s separate property and that Chi Zen
purchased the property before marrying Hal, constitutes substantial evidence
rebutting the community property presumption. This conclusion does not
conflict with Brace, where, under very different facts, the Supreme Court
held that “the community property presumption in Family Code section 760
applies not only to dissolution actions but also to a dispute between one or
21
both spouses and a bankruptcy trustee, and that [the title presumption in]
Evidence Code section 662 does not apply when it conflicts with the Family
Code section 760 presumption.” (Brace, supra, 9 Cal.5th at p. 935.)
III. The Finding of No Undue Influence
Hal contends the judgment must be reversed because the trial court
denied him the benefit of a statutory presumption that Chi Zen exercised
undue influence over him by depriving him of his community property
interests in the properties.
“In property-related transactions between spouses, Family Code section
721, subdivision (b) ‘imposes a duty of the highest good faith and fair dealing
on each spouse . . . .’ ” (Lintz v. Lintz (2014) 222 Cal.App.4th 1346, 1353.)
“Thus, ‘ “[i]f one spouse secures an advantage from the transaction, a
statutory presumption arises under section 721 that the advantaged spouse
exercised undue influence and the transaction will be set aside.” ’ ” (Ibid.)
Here, Hal argues that section 721’s presumption of undue influence
applies to the May 2013 Hidalgo deed, the June 2013 Madrid deed, and “all
earlier deeds . . . which purported to grant [Hal’s] community interests” in
Hidalgo and Madrid to Chi Zen. We are not persuaded by this argument,
which fails to afford Chi Zen’s estate the same protection Hal demands for
himself. There was evidence in this case that each spouse controlled a
separate checking account, with Hal depositing his income during the
marriage into an account he treated as his own separate property,
notwithstanding the community property presumption. (See § 760.)
Similarly with regard to Chi Zen’s estate plan, Hal accepted an undivided
interest in a life-time pension of $4,600 per month from Chi Zen’s former
employer plus financial assets worth some $220,000, without acknowledging
that some portion of these were Chi Zen’s separate or community property,
22
which she might have left to her daughter if she thought Hal would lay claim
to any of the real estate. In light of Cecillia’s claims for breach of fiduciary
duty, fraud and elder abuse, the trial court could well have found that the
character of Hidalgo and Madrid cannot be decided based on competing
presumptions of undue influence.
Even if Hal could invoke a presumption of undue influence against
Cecillia under these circumstances, it would only apply as to a specific
transaction in which one spouse gained an advantage over the other.
(Haines, supra, 33 Cal.App.4th at p. 297.) Some courts have emphasized that
the advantage must be unfair for the presumption to apply. (In re Marriage
of Burkle (2006) 139 Cal.App.4th 712, 731; In re Marriage of Baltins (1989)
212 Cal.App.3d 66, 88.) Here, Hal contends that he was disadvantaged by
every deed that purported to transfer his community property interest to Chi
Zen. This theory rests on the premise that Hal had a community property
interest in the properties whenever one of these deeds was executed. The
trial court rejected this premise by finding that the properties were always
Chi Zen’s separate property. On appeal, Hal points to no evidence that would
undermine this conclusion. He asserts that Chi Zen bought her sisters out of
Hidalgo with community property and used community property to pay the
mortgages on both properties, but the record does not compel us to accept
either of these allegations. Indeed, some evidence points the opposite
direction, establishing that Chi Zen borrowed much more against Hidalgo
than she paid for Chi Hwa’s interest in the property, and that she earned at
least as much in rental income on Madrid as she paid for mortgages on the
two properties together (discussed further below).
Hal makes a specific claim that a presumption of undue influence
should have applied to the May 2013 Hidalgo deed and the June 2013 Madrid
23
deed. These were the deeds that transferred the properties back into Chi
Zen’s trust for the last time prior to her death. The trial court found, and we
agree, that the properties were Chi Zen’s separate property before these
deeds were executed, and that the execution of these deeds did not transmute
the properties. Since the properties were Chi Zen’s separate property before
and after these deeds were executed, Hal fails to show how the transactions
disadvantaged him in any way. He therefore fails to trigger a presumption of
undue influence.
Nor does Hal even attempt to point to direct evidence that Chi Zen
unduly influenced him to agree to any of these transactions. The trial record
contains substantial evidence that Hal and Chi Zen always intended for the
properties to retain their character as Chi Zen’s separate property, and that
neither spouse took unfair advantage of, nor unduly influenced, the other.
IV. Hal’s Contribution Claim
Hal contends that even if the properties are Chi Zen’s separate
property, the trial court “separately erred in ruling that there was no
community property interest created through the 5–6 years of mortgage
payments after the [May] 2013 Hidalgo Deed and June 2013 Madrid Deed
were executed.”
“When community property is used to reduce the principal balance of a
mortgage on one spouse’s separate property, the community acquires a pro
tanto interest in the property. [Citations.] This well-established principle is
known as ‘the Moore/Marsden rule.’ ” (Bono v. Clark (2002) 103 Cal.App.4th
1409, 1421–1422.) The trial court did not make a Moore/Marsden calculation
in this case because it concluded that community property was not used to
reduce the mortgages on the properties. We review this factual finding under
24
the substantial evidence standard. (In re Marriage of Ettefagh (2007) 150
Cal.App.4th 1578, 1584.)
Hal testified that rental income from Madrid was deposited into the
same account that Chi Zen used to make mortgage payments, and Cecillia
corroborated this fact during her testimony. Cecillia also testified that the
Madrid rental income was more than sufficient to cover the mortgage
payments. This testimony was buttressed by Cecillia’s extensive review of
bank statements from Chi Zen’s Wells Fargo account. During her direct
testimony, Cecillia used those statements to testify about monthly deposits
into the account that corresponded to the monthly rent owed by the Madrid
tenants. Testimony on this subject covered several years and was not subject
to any objection, although the bank statements were excluded pursuant to a
hearsay objection. Cecillia’s testimony about the amount of monthly rent
paid by the Madrid tenants was corroborated by leases, which were admitted
into evidence. And documentary evidence confirmed her testimony regarding
the amount of the monthly mortgage obligations on Hidalgo and Madrid.
Evidence showing that rental income from Madrid was deposited into
the same account that Chi Zen used to make mortgage payments and that
this income was sufficient to cover the mortgages substantially supports the
trial court’s finding that Chi Zen used her separate property to pay
mortgages on the properties. This is true because the trial court found that
Madrid was Chi Zen’s separate property, and rents received from a separate
property source is also separate property. (§ 770, subd. (a)(3); In re Marriage
of Frick (1986) 181 Cal.App.3d 997, 1010.)
On appeal, Hal argues that he proved the rental income from Madrid
was not used to pay the mortgage obligations on the properties by producing
income tax documents, which indicated that profits generated by Madrid
25
were too low to cover the mortgages. This argument ignores our substantial
evidence review. The issue on appeal is not whether substantial evidence
supports Hal’s factual theory. “Rather, we review the entire record solely to
determine whether substantial evidence supports the trial court’s expressed
and implied factual findings. If there is [substantial evidence], our analysis
ends; we may not substitute our deductions for those of the trial court.”
(Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982,
1006.)
In another attempt to avoid substantial evidence review, Hal contends
the trial court ignored a presumption that the mortgages were paid by the
community. Hal contends that this presumption was triggered by (1) Hal’s
testimony that his social security benefits were deposited into a joint account
that Chi Zen used to pay the mortgages, and (2) Cecillia’s “admissions” at
trial that Chi Zen only had one checking account, which she used to pay all
the mortgages on both properties.
First, Hal did not testify that he deposited his social security benefits
into a joint account with Chi Zen or even that the couple had a joint account,
but that he deposited his income into his own, separate account. Hal ignores
this testimony in his appellate brief and instead relies on a statement in the
March 2020 order that is not supported by the record.2
Second, Cecillia did not admit that Chi Zen paid the mortgages from a
comingled account. During cross-examination, Hal’s counsel asked this
question: “At some point you were added onto the checking account that your
2 After reviewing the confusing presentation of Hal’s testimony at trial,
we see how the court could have mis-remembered it, but the minor error did
not affect the judgment because the trial court found Hal’s testimony here not
credible. Hal’s reliance on the court’s misstatement in his appellate briefs is,
by contrast, difficult to comprehend and appears wholly unjustified.
26
mother received her salary from and paid her mortgage out of, correct?”
Cecillia responded, “[y]es.” We decline to construe this response as an
admission that Chi Zen’s salary was deposited into this checking account.
Counsel’s compound question was ambiguous because he misspoke in stating
Chi Zen received her salary from the account. And although Hal testified,
when his counsel asked whether Chi Zen’s salary was deposited into her
checking account, “[a]s far as I know,” the trial judge rejected this testimony
because he found Hal lacked basic knowledge about Chi Zen’s checking
account.
Even if Hal could establish that community funds were comingled with
Chi Zen’s separate property in her Wells Fargo account, that fact would not
be sufficient to undermine the court’s finding that Chi Zen used her separate
funds to pay the mortgage. “Where funds are paid from a commingled
account, the presumption is that the funds are community funds. [Citations.]
In order to overcome this presumption, a party must trace the funds
expended to a separate property source.” (In re Marriage of Frick, supra, 181
Cal.App.3d at p. 1010; see Brace, supra, 9 Cal.5th at p. 914 [“a spouse may
rebut the Family Code section 760 presumption by tracing the source of funds
used to acquire the property to separate property”].) “This issue presents a
question of fact for the trial court and its finding will be upheld if supported
by substantial evidence.” (Frick, at p. 1010.) At trial, Cecillia traced rent
payments from Madrid into Chi Zen’s Wells Fargo account and presented
evidence that those payments were sufficient to cover the mortgages on both
properties. Thus, the record supports the trial court’s finding that the funds
expended to pay the mortgages are traceable to a separate property source.
27
V. Hal’s Claim Regarding Loan Proceeds
Hal contends the trial court failed to consider evidence that the
community has an interest in the proceeds from the two loans that Hal and
Chi Zen obtained in 2012. Hal argues that the trial court erred by
“dismissing” this “aspect” of his “claims at trial.”
We reject Hal’s contention that the trial court dismissed part of his case
by failing to make an express finding as to whether these loan proceeds were
community property. Hal’s petition does not include a claim to recover
proceeds from loans made during the marriage. Nor do we find any
indication that Hal requested a written finding on this specific issue, or any
other issue for that matter. (See Code Civ. Proc., § 632 [court must issue
statement of decision addressing “principal controverted issues at trial upon
the request of any party”].)
Hal’s broader contention that the trial court failed to consider evidence
of an alleged community interest in the loan proceeds is not a cognizable
claim of error. Hal purports to show that a presumption the loan proceeds
are community property was not overcome at trial, but he fails to explain how
the presumption benefits him in any concrete way. Hal cites no evidence that
addresses how these loans were used or that even suggests the loan proceeds
are an existing asset that is subject to classification. “ ‘ “We are not bound to
develop appellants’ arguments for them.” ’ ” (Orange County Water Dist. v.
Alcoa Global Fasteners, Inc. (2017) 12 Cal.App.5th 252, 360.) Thus, we treat
this matter as waived. (Ibid.)3
3 Hal contends that although the trial court awarded the properties to
the trust, he remains liable for both mortgages. This contention,
unsupported by citation to evidence or legal authority imposing such an
obligation on him, is not adequate to state a cognizable claim of error on
appeal.
28
VI. The Order Granting Possession of Hidalgo to Cecillia
Hal contends the order requiring him to vacate Hidalgo must be
reversed because (1) the trial court lacked jurisdiction to make this order, and
(2) Hal’s constitutional right to due process was violated. Both parts of this
argument are erroneous.
Hal concedes that the trial court would have jurisdiction to order him
to vacate Hidalgo if Cecillia had filed a claim under Probate Code section 850,
et seq., but he argues that Cecillia failed to plead this “type[]” of action. Hal
overlooks that Cecillia’s trust petition was filed “pursuant to [Probate Code]
Section 850.” Furthermore, Hal’s argument that the court lacked jurisdiction
to make this order rests on the erroneous premise that this “issue” was not
raised in the pleadings or pretrial proceedings. (Citing Orange County Water
Dist. v. City of Colton (1964) 226 Cal.App.2d 642, 649.) Cecillia’s cross-
petition and trust petition both state claims for declaratory relief regarding
the respective rights of Cecillia and Hal to the properties, and both petitions
include requests for judicial declarations that: (1) Cecillia owns “all”
interests in each of the properties; (2) Hal does not have “any interest” in the
properties; and (3) the “Marital Community” has “no” interest in the
properties. In addition, Cecillia’s trust petition relies specifically on
allegations that Cecillia made a request of Hal to move out of Hidalgo and
that Hal promised to move out of the house by September 2018. These
allegations and claims for declaratory relief were sufficient to put at issue the
specific question whether Hal has any right to occupy the Hidalgo house.
Hal’s due process claim posits that Hal was denied his right to a “pre-
ouster hearing.” Hal bases this claim on Mendoza v. Small Claims Court
(1958) 49 Cal.2d 668, 672–673, which recognizes a constitutional right to a
noticed hearing in unlawful detainer proceedings. This analogy is
29
unavailing, as Hal was afforded a full trial of his claims and the claims
against him.
VII. Hal’s Claims Regarding Evidence Rulings
Hal contends the trial court made multiple errors regarding the
admission and exclusion of evidence, each of which requires reversal of the
judgment and reconsideration of his claims. For clarity, we address these
arguments as they pertain to a specific witness.
“ ‘Trial court rulings on the admissibility of evidence, whether in limine
or during trial, are generally reviewed for abuse of discretion.’ [Citation.]
‘[T]he trial court is vested with broad discretion in ruling on the admissibility
of evidence, and its ruling will be upset only upon a clear showing that it
exceeded the bounds of reason.’ [Citation.] In addition, a ‘trial court’s error
in excluding evidence is grounds for reversing a judgment only if the party
appealing demonstrates a “miscarriage of justice”—that is, that a different
result would have been probable if the error had not occurred.’ ” (Evans v.
Hood Corp. (2016) 5 Cal.App.5th 1022, 1040.)
A. Julia Ross
Hal’s attorney asked Ross if she and Chi Zen had discussed
“community property.” After Ross answered “[n]o,” the trial court sustained
an objection that this question called for attorney-client privileged
information. The court then advised Hal’s counsel to “[m]ove on.”
Hal contends that Ross’s testimony on this matter was not privileged
because Evidence Code section 957 provides that the attorney-client privilege
does not apply to “a communication relevant to an issue between parties all of
whom claim through a deceased client.” We conclude that section 957 is
inapplicable because Hal is not claiming an interest in the properties
“through” the deceased client of Ross. His claims are adverse to Chi Zen, as
30
they are made against her trust estate. (DP Pham LLC v. Cheadle (2016) 246
Cal.App.4th 653, 669–672.) Hal relies on Paley v. Superior Court (1955) 137
Cal.App.2d 450, which involved materially different facts and legal
principles. Nothing in that case supports Hal’s theory that his claims are
made through Chi Zen, rather than against her.
Further, Hal fails to demonstrate prejudice. He contends the testimony
he sought to elicit from Ross was highly relevant because evidence that Ross
and Chi Zen discussed community property law would have supported his
trial theory that Chi Zen purposefully concealed the legal effect of deeds that
she convinced Hal to sign. This theory of relevancy reinforces our conclusion
that Hal’s claims are indeed adverse to Chi Zen. Beyond that, Hal fails to
recognize that the allegedly erroneous ruling had no practical effect.
Although the court sustained an objection, it did not strike Ross’s answer to
the question, that she did not discuss community property with Chi Zen.
Ross went on to explain that she did not remember preparing any of the
deeds pertaining to these properties or “recall anything about 2013 vis-a-vis
this client.”
B. Hal
Exhibit 58: Hal’s counsel asked him several questions about a 2012
application for a loan secured by the Hidalgo property that was marked as
Exhibit 58. Hal could not identify this document, nor did he recall how or
why it was completed, but he identified his signature and Chi Zen’s
signature. When Hal’s counsel moved to admit Exhibit 58, the court
sustained Cecillia’s hearsay objection.
Hal contends Exhibit 58 was admissible under Evidence Code section
1225, an exception to the hearsay rule that permits statements by a
predecessor in interest to be admitted against a successor in interest of real
31
property. Hal argues this document is admissible against Cecillia because it
would have been admissible against Chi Zen as an admission that she used
Hal’s income to qualify for the loan. Assuming this was a valid theory, we
find no prejudice. Hal’s trial counsel used the exhibit to refresh Hal’s
recollection that his social security income was listed as an income source on
the application and that Chi Zen told him that his income was necessary to
get this loan. Therefore, any error in failing to admit Exhibit 58 was
harmless.
“Demonstrative” Exhibits: Hal contends that the trial court erred by
excluding four exhibits that were “offered as Exhibits 50, 51, 68 and 69.” Hal
includes these documents in his appellant’s appendix, although he assigns
them different exhibit numbers. As a preliminary matter, we find no
evidence in this record that Exhibits 68 and 69 were offered into evidence at
trial, so Hal’s argument about what these documents show is improper, and
we will limit our discussion to Exhibits 50 and 51.
During Hal’s direct testimony, he was asked to “take a look at” Exhibit
50, a document that was titled “ ‘Hidalgo loan details.’ ” Cecillia’s counsel
objected that this exhibit was “just Counsel’s argument put on paper.” Hal’s
counsel responded that Exhibit 50 was “demonstrative evidence” showing
calculations that were “done to determine the community property payments”
on the Hidalgo mortgage. Then he asked Hal whether the first two pages of
Exhibit 50 contain “information from the deeds of trusts” on Hidalgo over the
course of the marriage. The court sustained Cecillia’s objection that this
question lacked a proper foundation.
Hal’s trial counsel disputed the ruling, arguing an adequate foundation
had been laid for Exhibit 50 because Hal reviewed the Hidalgo deeds of trust
and testified about them. Rejecting this argument, the court explained that,
32
although the deeds were admitted into evidence, Hal “doesn’t know anything
about them. . . . I can look at it and make my own determination but he still
doesn’t know what these things say. He recognizes the signature.
Sometimes you’ve demonstrated that he can read. But he hasn’t—he doesn’t
know anything about these documents.”
The trial court told Hal’s counsel that he might be able to use Exhibit
50 “for some argument,” but Hal could not testify about it absent “anything to
indicate that he actually recognized” the deeds, knew what they said or even
remembered them. The court also suggested counsel could go back over the
deeds of trust with Hal and ask questions to establish some knowledge.
Instead, counsel turned to Exhibit 61, which was referred to as a summary.
When the court asked whether Hal “put together this summary,” his counsel
responded that “[w]e put it together together.” The court ruled that Hal
could not be questioned about Exhibit 61 and instructed counsel to “[m]ove
on.”
Hal’s counsel moved on to Exhibit 51, which he described as
“information regarding the Madrid loan details.” The court sustained
Cecillia’s objection to asking Hal questions about this exhibit, on the ground
that Hal hadn’t testified that he had “any knowledge” of the information in
Exhibit 51 and he was “not the right witness to testify about this.”
On appeal, Hal argues the trial court erred because Exhibits 50 and 51
are admissible “demonstrative” exhibits containing calculations that are
relevant to establish the value of his community property interest in each of
the properties as it has grown over time.
Demonstrative evidence refers to evidence that is shown to the trier of
fact “ ‘ “as a tool to aid . . . in understanding the substantive evidence.” ’ ”
(People v. Vasquez (2017) 14 Cal.App.5th 1019, 1036.) As the trier of fact in
33
this case, the trial court did not abuse its discretion by concluding that
Exhibits 50 and 51 did not aid the court in understanding the substantive
evidence. At trial, Hal’s counsel argued that the deeds of trust on Hidalgo
and Madrid established a foundation for admitting Exhibits 50 and 51 into
evidence. The trial court did not err by rejecting this argument. The deeds of
trust did not supply a foundation for Hal’s testimony because Hal testified he
had no knowledge or recollection of the deeds of trust, and the exhibits
appear to assume that all mortgage payments were made with community
property, an assumption not supported by the evidence.
Taking a different tack, Hal argues that if the trial court had not
prevented him from testifying about these exhibits, his testimony would have
established a foundation for admitting the documents into evidence. The
record shows otherwise. At trial, the court suggested that Hal’s trial counsel
go back over the deeds of trust with Hal to see if he knew anything about
them. Hal’s counsel elected not to take that opportunity to lay a foundation
for these exhibits.
Tax Return Documents Prepared By Hal: Under direct examination,
Hal was asked to review Exhibit 1, a 2016 Individual Income Tax Return
Form 1040, that contained handwritten information. Cecillia objected that
this document, and several other tax returns that Hal had marked as trial
exhibits, had not been produced in discovery, were hearsay, and were
protected from disclosure by the taxpayer privilege. After discussing the
alleged discovery violation, the court inquired why Hal was offering these
exhibits. Hal’s counsel stated that the tax returns were relevant to rebut
Cecillia’s claim that rental income from Madrid was sufficient to pay the
mortgages for both properties. The court ruled that, in order to be “fair for all
34
purposes concerned,” the court would permit Hal to use the exhibits to
refresh his recollection about income that was generated from Madrid.
Hal’s counsel led Hal through Exhibit 1, extracting specific information
about rental income figures that had been recorded on the document. After
completing this exercise, Hal’s counsel moved to admit the exhibit into
evidence and the court sustained Cecillia’s objections to it. Hal’s counsel
repeated the same exercise with Exhibit 2, a 2012 California tax return
document, and Exhibit 3, a 2014 California tax return document. The court
afforded counsel wide latitude to lead Hal through the exhibits but denied his
request to admit them into evidence.
On appeal, Hal argues that (1) he had authority to waive the taxpayer
privilege, and (2) these tax return exhibits were admissible hearsay because
they were admissions by Chi Zen. Even if these arguments are true, Hal
ignores the fact that the challenged ruling was an appropriate resolution of
the alleged discovery violation. Nor does Hal establish prejudice. He argues
these exhibits were relevant to show the rental income from Madrid, ignoring
the fact that the court’s compromise permitted him to elicit this very
evidence.
Asking Hal to Confirm Prior Testimony: On the third day of Hal’s
testimony, his attorney asked the following question: “Mr. Lui, you’ve
previously testified that during your marriage, no one explained to you that
you might have a community property interest in Hidalgo or Madrid or other
property; is that right? No one explained that to you during your marriage?”
After Hal answered “[n]o,” Cecillia’s counsel objected that the question had
been “[a]sked and answered.” The court sustained this objection, but Hal
proceeded to answer the question a second time, stating, “You’re correct.”
35
On appeal, Hal contends the trial court erred because “asked and
answered” was an invalid objection. We disagree. Counsel explicitly
acknowledged that he was asking a question that had previously been
answered, and the record shows that Hal had already repeatedly testified
that nobody explained community property law to him. Moreover, Hal’s
answer was not stricken from the record. Thus, we find neither error nor
prejudice.
Cross-Examination: Hal contends the trial court erred by overruling
two of his counsel’s objections to questions that Hal was asked during cross-
examination. First, Hal was asked whether proceeds from mortgage loans
were used to pay off prior loans. After Hal responded that he did not know,
his counsel objected that the question “[l]acks foundation.” The court
overruled this objection. On appeal, Hal posits that the objection was valid
because there was no prior testimony about how the loan proceeds were used.
Even if this is true, there is no prejudice; Hal’s response established nothing
more than the fact he had no foundation for answering the question—that he
did not know the answer.
A short time later, Hal was asked whether he was aware that there
was a mortgage on Hidalgo prior to 2012. After Hal responded “[y]es,”
opposing counsel asked: “And you weren’t paying the mortgage, were you?”
Hal’s counsel objected that the question called for a legal conclusion. The
objection was overruled and Hal answered “[n]o.” On appeal, Hal argues this
question was improper because it asked Hal for an expert opinion. We
disagree; the question whether Hal made mortgage payments for the
properties was factual, appropriate, and relevant.
36
C. Chi Chi
When Hal’s trial counsel cross-examined Chi Zen’s sister Chi Chi, he
asked her who owned Hidalgo at the time that Chi Zen and Hal got married.
Chi Chi responded: “My sister.” When counsel questioned this response, Chi
Chi testified that her sister had worked “her butt off to get mortgage to own
that house,” and if she bought the house in 1981 then she owned it in 1989
when she married Hal. Then Hal’s counsel showed Chi Chi a copy of a 1981
deed, which conveyed Hidalgo to Chi Hwa (rather than Chi Zen), and asked
the following question: “So isn’t it true that Chi Zen Lu didn’t buy Hidalgo in
1981?” Cecillia’s counsel objected that this question called for speculation.
The objection was sustained and counsel rephrased, asking whether the
document refreshed Chi Chi’s recollection about who bought Hidalgo in 1981.
Chi Chi responded that Chi Hwa was named in the deed but Chi Zen paid the
mortgage.
On appeal, Hal argues the trial court erred because his trial counsel’s
initial question about the 1981 deed did not call for speculation, but simply
asked Chi Chi to confirm a fact that was proven by the deed. This ruling was
prejudicial, Hal argues, because it prevented him from establishing that Chi
Chi lied about the original owner of Hidalgo. Hal’s analysis is unsound. The
fact that Chi Hwa’s name was on the 1981 deed did not necessarily mean that
Chi Chi lied in answering, “My sister.” Aside from the fact that both women
were her sisters, Chi Chi’s testimony made clear why she considered Chi Zen
the owner of the property, even though title was held in Chi Hwa’s name. In
any event, Hal’s attorney established with his rephrased question (and by
admitting the 1981 deed into evidence) that Chi Hwa was the sister named
on the deed, so if there was error it caused no prejudice.
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D. Chi Hwa
Chi Hwa testified about an argument that Hal had with his son when
several family members were attempting to clean out the Hidalgo house.
According to Chi Hwa, Hal had been sleeping while the group hauled some of
his things out of the garage and into a dumpster that had been left in the
driveway. The noise woke Hal who became very angry. Hal’s son said things
like, “we got to get rid of this junk,” “[y]ou got to get out of this house,” and
the “house does not belong to you.” The trial court overruled an objection to
these statements. On appeal, Hal claims they were inadmissible hearsay.
The testimony was admissible for a non-hearsay purpose because, regardless
of the truth of what Hal’s son said, the fact that the argument happened
supported Cecillia’s claim that Hal agreed to move out of the house but then
refused to do so. Chi Hwa was competent to testify about the altercation
because she was present when it happened.
E. Cecillia
Hal’s Tax Return Documents: Under cross-examination, Cecillia
testified that she recognized Hal’s handwriting on Exhibit 1, the 2016 tax
return document that had been produced (but not admitted) during Hal’s
testimony. Cecillia acknowledged that she heard Hal testify that he had filed
this document with the IRS, but she had no knowledge if this was true.
Counsel asked if Cecillia had reason to question whether rental income
reported on the exhibit was accurate and Cecillia testified that she did
question whether the figure was accurate. Then Hal’s counsel asked Cecillia
to look at Exhibit 2, which counsel described as a 2012 tax document that had
not been admitted into evidence. Cecillia had never seen the document
before and did not know if the information was accurate. Then counsel asked
about a 2005 income tax return that Cecillia had found in her mother’s file.
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Cecillia did not know if the document was a draft or a copy of something that
had been filed with the IRS. Hal’s counsel asked Cecillia if she could “explain
why” she thought that the Madrid rental income was sufficient to pay the
mortgages on the properties when the rental income “on all of these tax
returns” was lower than the monthly mortgage payments. Cecillia did not
answer this question because the trial court sustained objections that it
assumed facts not in evidence about monthly mortgage payments and called
for speculation about whether the tax returns were accurate.
On appeal, Hal argues his counsel’s question did not assume facts not
in evidence because Cecillia had already testified about monthly mortgage
obligations on the properties, and Cecillia could provide her opinion about
this evidence without having to speculate. Therefore, Hal posits, the court
erred by denying him sufficient latitude to conduct cross-examination.
(Citing McDonald v. Price (1947) 80 Cal.App.2d 150, 152.)
“[C]ounsel in putting questions to the witness should not be allowed to
assume facts not in evidence and state as positive assertions facts which if
true would be detrimental to the opposing party’s case. . . . This is especially
true where . . . there is no proof of the facts asserted.” (McDonald v. Price,
supra, 80 Cal.App.2d at p. 152.) The question Hal’s counsel asked Cecillia
violated these rules. Cecillia had testified about the mortgage obligations
and about the rent earned from Madrid, but she also testified that she did not
have any knowledge about Hal’s tax return exhibits. To answer counsel’s
question, Cecillia would have to speculate about whether the tax returns
were accurate, whether they were filed, and whether they falsely reported
income. Sustaining the objections was not error.
Speculation about Hal: Under cross-examination, Cecillia was asked
the following question: “Isn’t it correct that Hal never expressed any intent
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to forego his community property interest except in the quitclaim deeds that
we have seen in Court this week?” The court sustained an objection that this
question called for speculation. On appeal, Hal contends the objection should
have been overruled because his counsel was entitled to wide-latitude. The
question called for speculation because of the use of the word “never,” in a
question that was not limited to what Cecillia herself had seen or heard. The
objection was properly sustained.
Cecillia’s testimony about statements made by third parties: Hal
contends that Cecillia’s testimony about the May 2018 meeting she attended
at Julia Ross’s office was inadmissible hearsay. This testimony was
admissible for the non-hearsay purpose of establishing that the meeting
occurred and that certain matters were disclosed to Hal. In particular, the
testimony established that Ross walked Chi Zen and Hal through the key
provisions of Chi Zen’s estate plan.
Hal also objects to the admission of testimony by Cecillia that a friend
asked her why she went to collect documents from Hidalgo the day after Chi
Zen died. This brief testimony was part of Cecillia’s explanation for her own
conduct. It was not offered to prove the truth of her friend’s statement.
Hal’s Sleeping Habits: Under direct examination, Cecillia was asked
whether she gave Hal prior notice before entering the Hidalgo house. Cecillia
responded that Hal had given her a key to the house, but she always tried to
give him a “heads up” before coming over. She explained that Hal often slept
during the day, and would get up some time in the afternoon. Cecillia
testified that this was Hal’s “habit” throughout the time he was married to
Chi Zen.
Hal contends Cecillia’s testimony was character testimony that was
inadmissible to prove his “conduct on a specified occasion.” (Evid. Code,
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§ 1101, subd. (a).) The evidence was offered to explain Cecillia’s conduct, not
Hal’s conduct on a specific occasion. Nor are we persuaded by Hal’s rote
contention that this testimony prejudiced him.
VIII. Cecillia’s Claim Regarding the Denial of Damages
Cecillia’s appeal challenges part of the judgment denying her damages
for Hal’s refusal to vacate Hidalgo after Chi Zen’s death. She argues that
there is no evidence in this record to support the trial court’s “implicit”
finding that the trust is entitled to $0 for Hal’s occupancy of Hidalgo since
May 2018.
Cecillia mischaracterizes the trial court’s finding. The March 2020
order that was incorporated into the judgment makes clear that Cecillia’s
claim for back-rent from the date that Chi Zen died was denied for failure of
proof. Specifically, the court found that (1) Cecillia’s posttrial brief did not
cite persuasive evidence to establish a “fair market rental value” for Hidalgo,
but nevertheless (2) the court would order Hal to “vacate” the property.
On appeal, Cecillia argues that her damages claim against Hal was
proven by evidence establishing that Hidalgo and Madrid are similar
properties and the current occupants of the Madrid house pay $4,125 per
month in rent. Because Cecillia elected to omit her posttrial brief from her
appendix, we cannot determine whether this argument was presented to the
trial court. Assuming this damages theory was asserted below, it does not
compel us to reverse part of the judgment.
Cecillia’s damages claim rests on an assumption that Hal’s possession
of Hidalgo became unlawful on the day Chi Zen died. She cites no evidence
supporting this view and ignores testimony suggesting otherwise. Cecillia
testified that Chi Zen, Hal, and Hal’s son made a plan that after Chi Zen
died, Hal would move to Oregon to live with his son. Cecillia did not testify
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that anybody agreed Hal would vacate the house immediately. Further,
Cecillia admitted that after her mother died, she agreed to let Hal stay in the
house at least until September, which was when she wanted to find renters
for the property. In late August, she asked Hal when he was moving because
she “saw no sign” that he had “packed anything other than his record
albums.” At that point, Hal became angry, disclosed that he had a lawyer,
and demanded an eviction notice. Cecillia testified that she was angered by
this altercation, but she did not testify that she demanded that Hal vacate
the house.
Cecillia’s damages claim also rests on an assumption that, from the
date Chi Zen died, Hidalgo could have generated the same rental income that
the trust receives from the current occupants of Madrid. This assumption
was supported by some evidence; Cecillia produced appraisals of Hidalgo and
Madrid, which show that the properties are located in the same area and
have comparable fair market values. However, Cecillia ignores that a
property’s sale value could be very different from its rental value. In her
trust petition, Cecillia stated that the Hidalgo house had fallen into disrepair
before Chi Zen died. This allegation was confirmed by Chi Hwa, who testified
that while Chi Zen was alive Hal “trashed” the Hidalgo house and did not
“upkeep the house” once he found out that he did not have an interest in it.
Also, Cecillia testified that while Chi Zen and Hal were married, Hal had a
“hoarding problem,” which adversely affected the condition of the Hidalgo
house. In light of this testimony, the trial court was not compelled to accept
Cecillia’s claim that the trust could have received the same rent for Hidalgo
as was paid for Madrid.
In her Cross-Appellant’s reply brief, Cecillia argues that the finding by
the trial court that the trust is entitled to possession of Hidalgo necessarily
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means the trust is also entitled to damages for “unauthorized occupation” of
the property. This argument is not supported by legal authority and appears
to ignore the fact that the trust’s right to possession of Hidalgo was
established when judgment was entered in this case.
DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on
appeal.
TUCHER, J.
WE CONCUR:
POLLAK, P. J.
BROWN, J.
Liu v. Wang (A160649, 161583)
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