Estate of Williams CA1/1 ( 2014 )

Filed 10/30/14 Estate of Williams CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 ONE
Estate of ROOSEVELT WILLIAMS,
Deceased.
OLEVIA STEWART-WILLIAMS, as
Administrator, etc.,
A138724
Petitioner and Appellant,
v. (Alameda County
Super. Ct. No. RP10533844)
DIONNE WILLIAMS et al,
Objector and Respondent.
Roosevelt Williams acquired a San Francisco taxi medallion in 1978 and had a
long ensuing career as a taxi driver. He married Olevia1 in 1992, and he died intestate in
April 2010. Roosevelt had three children from a prior marriage, including Dionne.2
Shortly before he died, Roosevelt surrendered his taxi medallion, and it was placed on a
list to be sold under a program allowing for such sales. The sale occurred after
Roosevelt’s death.
The issue in this case is how the proceeds from the sale are to be distributed. The
probate court determined that they are separate marital property and are to be shared
1
We refer to the involved parties by their first names because they share the same last
name.
2
The other children are Billy Williams and Natalie Carter. Dionne alone has filed a brief
on appeal.
1
among the children and Olevia. On appeal, Olevia contends that the proceeds are
community property to which she is solely entitled. We agree with her and therefore
reverse.
FACTUAL BACKGROUND
AND PROCEDURAL HISTORY
In 1978, Roosevelt was issued a taxi medallion authorizing him to operate a taxi in
San Francisco.3 Shortly before he died, Roosevelt surrendered his medallion under the
Taxi Medallion Sales Pilot Program of the San Francisco Municipal Transportation
Authority (SFMTA) that allowed medallion holders to surrender their medallions if they
were disabled or would be over 70 years of age as of December 31, 2010. Under that
program, surrendered medallions were placed on a waiting list and sold to the next
qualified buyer. When Roosevelt’s medallion sold, the sale netted about $250,000,
although $50,000 was used to pay medallion-transfer expenses and a mandatory taxi-fund
fee. The balance went to Roosevelt’s estate.
Dionne objected to Olevia’s petition for a final distribution of Roosevelt’s estate.
She claimed that the proceeds from the medallion’s sale should be characterized as
separate marital property since the medallion was acquired by Roosevelt long before his
marriage to Olevia. The probate court agreed with Dionne.
DISCUSSION
I. The Standard of Review.
The factual findings that underpin the characterization of property as either
community or separate are reviewed for substantial evidence. (In re Marriage of Rossin
(2009) 172 Cal. App. 4th 725, 734 (Rossin).) But “[i]nasmuch as the basic ‘inquiry
requires a critical consideration, in a factual context, of legal principles and their
underlying values,’ the determination in question amounts to the resolution of a mixed
question of law and fact that is predominantly one of law. [Citation.] As such, it is
examined de novo.” (In re Marriage of Lehman (1998) 18 Cal. 4th 169, 184 (Lehman).)
3
San Francisco Transportation Code sections 1101, subdivision (a)(1)(B)(i) and 1102
(Transportation Code).
2
II. The Proceeds from the Medallion’s Sale Are Community Property.
Whether the proceeds from the medallion’s sale are community or separate
property matters here because of Probate Code section 6401, which controls the
distribution of assets when a person dies without a will (intestate).4 If the proceeds are
deemed to be separate property under this section, Roosevelt’s three children are entitled
to share two-thirds and Olevia is entitled to the other third. But if the proceeds are
deemed to be community property, then Olevia is entitled to the entire amount.
We begin with an overview of the law governing the characterization of property
as community or separate. “In general, all property that a spouse acquires during
marriage before separation is community property.” (In re Marriage of Green (2013)
56 Cal. 4th 1130, 1134; see also Fam. Code, § 760.5) Correspondingly, Family Code
section 770, subdivision (a)(1) provides that “[s]eparate property of a married person
includes . . . [¶] [a]ll property owned by the person before marriage.” This statute creates
“ ‘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.’ ” (Rossin, supra, 172 Cal.App.4th at p. 731.)
“Generally speaking, property characterization depends on three factors: (1) the
time of acquisition; (2) the ‘operation of various presumptions, particularly those
concerning the form of title’; and (3) the determination ‘whether the spouses have
transmuted’ the property in question, thereby changing its character. [Citation.] In some
cases, a fourth factor may be involved: whether the parties’ actions short of formal
transmutation have converted the property’s character, as by commingling to the extent
4
Probate Code section 6401 provides, in part: “(a) As to community property, the
intestate share of the surviving spouse is the one-half of the community property that
belongs to the decedent. . . . [¶] . . . (c) As to separate property, the intestate share of the
surviving spouse . . . is as follows: [¶] . . . [¶] (3) One-third of the intestate estate in the
following cases: [¶] (A) Where the decedent leaves more than one child.”
5
Family Code section 760 provides: “Except 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.”
3
that tracing is impossible. [Citation.]” (Rossin, supra, 172 Cal.App.4th at p. 732.) But
“[p]erhaps the most basic characterization factor is the time when property is acquired in
relation to the parties’ marital status. [Citation.]’ In the words of the California Supreme
Court, ‘what is determinative is the single concrete fact of time.’ [Lehman, supra,
18 Cal.4th at p. 183.] Applying the proper analytic focus, therefore, the ‘court first looks
to see if the right to the payment accrued during marriage’ [Citation.] If not, ‘it is
separate property.’ [Citation.]” (Rossin, at pp. 735-736.)
Olevia claims that Roosevelt had no property interest in his medallion until the
Pilot Program became effective, which occurred during their marriage. She argues that
until then the medallion itself was not “property” subject to categorization as either
community or separate. According to her, the SFMTA’s resolution that adopted the Pilot
Program “created a new property right” for qualifying medallion holders, namely, the
ability to surrender and sell a previously unsellable medallion. We agree.
Our colleagues in Division Two recently described the Pilot Program and its
history. (Yesson v. San Francisco Municipal Transportation Agency (2014)
224 Cal. App. 4th 108 (Yesson).) Before 1978, San Francisco “taxi permits could be
inherited, sold, assigned and transferred.” (Id. at pp. 111-112.) But in “1978, San
Francisco voters passed Proposition K, an initiative ordinance establishing a new system
of regulation for city-issued taxi medallions. Proposition K barred the inheritance, sale,
assignment or transfer of taxi medallions. Under Proposition K, all taxi medallions
belonged to the City, had to be held by working drivers, and were distributed as they
became available to individuals on the medallion waiting list.” (Id. at p. 112, italics
added.)
But problems with the system arose. Demand for medallions far outstripped
supply, and the number of drivers on the waiting list grew to include thousands who were
required to wait many years for a medallion. (Yesson, supra, at p. 112.) Some of these
applicants did not receive a medallion until they reached an advanced age. (Ibid.) But
every medallion recipient was obligated to comply with a local law requiring them to
“actually drive his or her taxi for at least 156 four-hour shifts, or for 800 hours, during a
4
single calendar year,” and this obligation could be particularly burdensome on older
medallion recipients. (Id. at pp. 112-113; Transportation Code, § 1102.)
“In 2007, San Francisco voters passed Proposition A, giving the San Francisco
Board of Supervisors the power to transfer regulatory authority over taxi affairs to
SFMTA. Authority to regulate San Francisco taxis passed to SFMTA in March 2009.
Subsequently, the SFMTA Board of Directors . . . recodified Proposition K’s
requirements, as well as additional taxi regulations, in the Transportation Code, division
II, article 1100 et seq. Proposition A also gave the SFMTA Board the power to adopt
taxi regulations that would override ‘any prior ordinance,’ including the provisions of
Proposition K.” (Yesson, supra, 224 Cal.App.4th at p. 112.) Acting under this authority,
the SFMTA Board on February 26, 2010, “approved resolution No. 10-029 [the
resolution], adopting amendments to [the Transportation Code] to implement the Pilot
Program. The resolution explained that the ‘. . . Pilot Program represents an interim
measure that would allow the San Francisco taxi industry to gradually transition away
from the Waiting List system of Medallion distribution that has characterized the San
Francisco taxi industry for 32 years. . . .’ ” (Id. at p. 113, fn. omitted.)
As applied to Roosevelt, this legislative evolution means that until 2010 he held
his medallion subject to Proposition K and the local law enacted under it.6 Proposition K
explicitly designated taxi medallions as the property of the People of San Francisco.
Section 1, subdivision (a) of the proposition declared: “All taxicab permits and other
vehicle for hire permits issued by the City and County of San Francisco are the property
of the people of the City and County of San Francisco and shall not be sold, assigned or
transferred.” (Italics added.) And section 1105, subdivision (a)(3) of San Francisco’s
Transportation Code provides that “[p]ermits granted pursuant to this Article constitute a
privilege and are not the property of the Permit Holder.” (Italics added.)
Subdivision (a)(4) states that “[e]xcept as expressly provided in this Article or in permit
6
Roosevelt first acquired his medallion in 1978, the same year that Proposition K was
enacted. The parties do not argue that the rights Roosevelt acquired at this time were
governed by pre-Proposition K law.
5
conditions, no permit issued pursuant to this article shall be transferable or assignable,
either expressly or by operation of law.”7
Thus, before 2010, Roosevelt held an exclusive right to operate a taxi and generate
income under his medallion, but he lacked a property interest in the medallion itself. The
question we must answer, therefore, is whether he acquired a property interest in the
medallion when the Pilot Program became effective. We conclude he did.
In Yesson, the plaintiff was the successor trustee of her father’s estate, and she
petitioned for authority to sell a taxi permit, later replaced with a medallion, that her
father acquired in 1968. (Yesson, supra, 224 Cal.App.4th at p. 111.) The father died on
March 23, 2010—25 days after the SFMTA approved the resolution authorizing the Pilot
Program. (Id. at p. 113.) The court of appeal in Yesson concluded that the father never
acquired a right to sell his medallion because he died before the Pilot Program became
effective. (Id. at pp. 116, 122-124.) According to the court, the resolution did not
become effective until the expiration of the 30-day referendum period mandated under
the California Constitution for legislative acts. (Ibid.) This period did not expire until
five days after the father’s death.
Unlike the father in Yesson, 224 Cal. App. 4th 108, Roosevelt was alive when the
Pilot Program became effective. Accordingly, he acquired a right to sell the medallion.
And since he acquired the right during his marriage to Olevia, the proceeds from the sale
of the medallion are community property.
Olevia rightly points to Lehman, supra, 18 Cal. 4th 169 and Rossin, supra,
172 Cal. App. 4th 725 in support of her contention that timing of the accrual of a property
interest is the decisive factor in characterizing it as either separate or community. Rossin
held that a wife’s disability insurance policy was her separate property even though the
wife started collecting benefits during marriage because the policy was purchased and all
7
Proposition K originally stated at section 4, subdivision (a): “No permit issued under
this Ordinance shall be transferrable or assignable, either expressly or by operation of
law. All such permits and all rights granted under them may be rescinded and ordered
revoked by the Police Commission for good cause.”
6
premium payments were paid before the marriage. (Id. at p. 735.) Thus, her right to
receive payment was perfected before the marriage.
In Lehman, the husband’s employer offered a defined-benefit plan to its
employees. (18 Cal.4th at pp. 174-175.) After the couple divorced, the employer
offered, and the husband accepted, an enhanced retirement program designed to
encourage early retirement. (Id. at p. 175.) The wife later sought a determination that
she owned a community property interest in the enhanced benefits. (Id. at p. 176.) The
trial court awarded the wife her proportionate community share of the retirement benefits
based on the length of the marriage, including an amount attributable to the enhancement.
(Ibid.) Both the court of appeal and the Supreme Court affirmed. (Id. at pp. 176-177.)
The Supreme Court reasoned that a defined-benefit pension plan can be apportioned
between separate property and community property based on the number of years that the
employed spouse worked during the marriage: “It follows that a nonemployee spouse
who owns a community property interest in an employee spouse’s retirement benefits
owns a community property interest in the latter’s retirement benefits as enhanced. That
is because, practically by definition, the right to retirement benefits that accrues, at least
in part, during marriage before separation underlies any right to an enhancement.
[Citation.]” (Lehman, at p. 179-180.)
Applying these principles here, the proceeds from the medallion’s sale are
properly characterized as community property because Roosevelt acquired his property
interest in the medallion in 2010 while he was married to Olevia. Thus, under the
provisions of Probate Code section 6401, subdivision (a), Olevia has a 100 percent
ownership interest in the proceeds from the medallion’s sale because Roosevelt died
intestate.
DISPOSITION
The order of the probate court is reversed and the case is remanded for
proceedings consistent with this opinion.
7
_________________________
Humes, P.J.
We concur:
_________________________
Dondero, J.
_________________________
Banke, J.
8