Welch v. Welch ( 2022 )


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  • Filed 5/31/22
    CERTIFIED FOR PUBLICATION
    IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
    SECOND APPELLATE DISTRICT
    DIVISION FIVE
    BRENDON WELCH et al.,                     B311507
    Plaintiffs and Appellants,       (Los Angeles County
    Super. Ct. No. ND075582
    v.                               & 18STPB10412)
    FREEMAN H. WELCH,
    Individually and as Trustee, etc.,
    Defendant and Respondent.
    APPEAL from orders of the Superior Court of Los Angeles
    County, Ana Maria Luna, Judge. Reversed and remanded.
    FEM Law Group and F. Edie Mermelstein for Plaintiffs
    and Appellants.
    California Appellate Law Group, Charles M. Kagay and
    Claudia Ribet; Velasco Law Group, Peter Ali Sahin and Sindee
    M. Smolowitz for Defendant and Respondent.
    __________________________________
    Appellants Brendon Welch (Brendon) and Jeanne Donohoe
    (Jeanne) appeal the probate court’s January 14, 2021 orders: (1)
    1
    denying Brendon’s Petition for Recovery of Property under
    Probate Code section 8501 and sustaining objections thereto by
    respondent Freeman H. Welch (Freeman); and (2) denying
    Brendon’s Petition for Letters of Administration and granting
    Freeman’s Petition for Probate of Will.
    At issue is whether a mediation settlement agreement that
    Freeman and his now-deceased wife Patricia Ann Welch
    (Patricia) entered into after separation and in anticipation of
    dissolution of their marriage is a “complete property settlement”
    within the meaning of section 145, which operates as a statutory
    waiver of certain of Freeman’s rights as a surviving spouse
    enumerated in section 141, including the right to inherit from
    Patricia and to be appointed as the personal representative of her
    estate.2 We reverse the probate court’s orders and remand the
    matter for further proceedings consistent with this opinion.
    FACTUAL AND PROCEDURAL BACKGROUND3
    The Family Court Action
    In September 2015, after 36 years of marriage, Freeman
    and Patricia separated. Freeman filed a petition for dissolution
    1 Allfurther statutory references are to the Probate Code
    unless otherwise indicated.
    2 Brendon  is one of Patricia and Freeman’s two adult sons.
    Jeanne is Patricia’s sister and the successor trustee and alternate
    executor named in Patricia’s estate planning documents.
    3 Wetake judicial notice of the appellate record in Case No.
    B295880, and our prior unpublished opinion in Welch v. Welch
    2
    of marriage, and requested that the court make a determination
    of rights to the couple’s community and quasi-community
    property, which he listed in an attachment to the petition.
    Patricia filed a response, also requesting dissolution of the
    marriage and division of their property, as well as an award of
    spousal support payable to her from Freeman. In November
    2016, Freeman and Patricia each verified that they had served a
    Preliminary Declaration of Disclosure.
    In October 2017, the parties participated in mediation and
    executed a five-page, predominantly handwritten settlement
    agreement (MSA), dividing the couple’s property and addressing
    other financial issues, including spousal support. The MSA was
    dated October 6, 2017, and it was signed by both parties and
    their respective attorneys. It included the following provisions
    for division of their property:
    Property Division
    Petitioner shall receive the following items subject to
    equalization:
    1. Book of Wells Fargo business at a value of $995,700
    subject to equalization
    2. 1/2 of current IRA at Wells Fargo Advisors XXX5235
    with a current value of $62,657 (all account amounts subject to
    confirmation)
    3. 1/2 of DoS value of Farmers acct XX8131 valued at
    $26,859
    (Jun. 3, 2020, B295880), from which portions of the facts and
    procedural history are taken.
    3
    4. 1/2 of Pet’s Deferred Comp Plan with current value of
    $7,858
    5. Pet’s S.P. and C.P. portion of his 401K Plan per QDRO[4]
    to be prepared by Nancy Bunn, Atty, using DOS of 9/29/2015
    6. Marriott timeshare XX5190 at value of $2,750
    7. Mercedes SLK 320 at value of $3,324
    8. Household items attached hereto at 0 value.
    Respondent shall receive the following items:
    1. 6333 E. Colorado Street, Long Beach, CA with est FMV
    net $854,530.
    2. 1/2 of items # 2-4 inclusive set forth above in Petitioner’s
    items
    3. Respondent’s C.P. share of Pet’s 401K to be divided by
    QDRO by Nancy Bunn, Atty, using DOS of 9/29/2015.
    4. Marriott timeshare XX8041 at 0 value (Resp’s SP)
    5. Mercedes GL450 at value of $10,686.
    6. Equalization payment in an amount to be determined
    after running Propertizer[5]
    7. All furniture, furnishings and personal property in her
    possession except for items on Pet’s list
    Parties shall sell Kona Coast timeshare and equally divide
    net proceeds.
    4 QDRO   is an acronym for “qualified domestic relations
    order.”
    5 “Propertizer”
    is commercial software that divides
    community assets and debts.
    4
    Respondent reserves the right to review and verify the
    documents and amounts to each party as the result of the
    November 2015 splitting of accounts (Wells Fargo) #8858, 5961,
    5185 now held by petitioner and respondent in Wells Fargo
    Accounts #4655 and 2472.
    Nancy Bunn, as QDRO attorney, shall be instructed to tax
    impact division of QDRO regarding the equalization payment to
    be paid by Petitioner to Respondent from his SP and CP portion
    of the account.
    Parties will prepare a Propertizer using the above
    referenced dates to determine the precise Amount of the
    equalization payment. (Sept 29, 2015 DOS)
    Parties will prepare a formal Jdgmnt for submission to
    David Weinberg, Commissioner (ret.) who shall serve as the
    judicial officer regarding all issues arising from this settlemt;
    entry of Jdmt and post-Judgment matters.
    All other credits and reimbursements waived.
    HOUSEHOLD AND GARAGE ITEMS
    Entire garage office contents
    Tools-Parts-Cables-Hardware, etc.
    Workbench with all contents including shelves of Coke
    crates
    All neon signs, art, license plates, banners and
    miscellaneous decorations, etc. in garage
    Monitor audio speakers
    SAE speaker switch
    Yamaha turntable (in box above office)
    5
    Photographs and videotapes (I was cameraman on all.
    Happy to share cost of making copies of whatever Patsy
    wants.)
    Sand bottles and rack
    Trunk with electric trains
    Jax beer opener
    Safe contents that belong to or are related to Petitioner
    One-half silver coins (located in kitchen cabinet)
    The MSA stated: “We have read the entire stipulation and
    agreement. We understand it fully and request the court to make
    our stipulation and agreement the Court’s order. . . . We waive all
    further notice of this order.”
    In November 2017, Freeman drafted a proposed formal
    judgment and sent it to Patricia. The judgment provided for the
    dissolution case to proceed as an uncontested matter. In January
    2018, Patricia informed Freeman that she did not agree with the
    draft judgment and itemized numerous objections to its
    provisions in a letter from counsel.
    On January 19, 2018, Freeman filed a request for order to
    enforce the settlement and enter judgment pursuant to Code of
    Civil Procedure section 664.6. The motion attached both the
    MSA and Freeman’s proposed judgment.
    On March 6, 2018, Patricia filed an opposition to the
    motion to enforce the MSA and to enter judgment, arguing that,
    pursuant to the MSA, any dispute between the parties regarding
    the terms of their settlement or entry of judgment must be
    brought before the mediator, not the trial court; the court had no
    authority to enter Freeman’s proposed judgment because the
    MSA required preparation of an agreed-upon formal judgment;
    6
    Freeman’s proposed judgment contained additional material
    terms that were not included in the mediation agreement, and
    were contrary to it; and the procedure for Patricia to object to the
    draft judgment’s provisions necessarily depended on whether the
    trial court or the mediator would resolve those disputes. Patricia
    requested that the court deny Freeman’s request to enforce the
    settlement terms in the MSA and deny entry of judgment
    thereon. Patricia also requested that the court enforce the
    provision in the MSA for resolution of disputes, by ordering the
    parties back to the mediator to resolve any disputes about the
    settlement terms.
    On March 14, 2018, Freeman filed a reply, arguing there
    was no need for additional mediation because the proposed
    judgment faithfully reflected the mediation agreement.
    On March 19, 2018, the parties appeared for the hearing on
    Freeman’s motion. The hearing on the motion to enforce
    settlement and enter judgment was continued to June 25, 2018.
    The court set a trial setting conference for the same day.
    On May 21, 2018, Freeman filed a declaration of his
    counsel in support of the pending motion for entry of judgment.
    In the declaration, Freeman’s counsel noted: “This is a dispute
    about (1) who has the authority to resolve this Motion for Entry
    of Judgment and (2) a dispute about the contents of the
    Judgment. [Freeman] contends this Court has the authority to
    resolve the dispute and enter the Judgment filed concurrently
    herewith and that this Judgment is consistent with the terms of
    the parties’ written agreement dated October 6, 201[7]. [Patricia]
    disagrees and/or has refused to respond.”
    With the declaration of counsel, Freeman lodged a second
    proposed judgment. Counsel stated in the declaration that
    7
    Freeman had “agreed to adopt nearly all of [Patricia’s] changes to
    Judgment #1” and the second proposed judgment was “the
    mirror-image of the parties’ agreement [reached in mediation].”
    Freeman’s counsel further stated that counsel had personally
    delivered a copy of the second proposed judgment to Patricia’s
    attorney, along with Freeman’s final declaration of disclosure,
    and a waiver of Patricia’s final declaration of disclosure.
    Freeman asked the court to enter the second proposed judgment
    at the hearing pursuant to Code of Civil Procedure 664.6 and Los
    Angeles County Local Rule 5.16.
    Patricia did not respond to Freeman’s counsel’s declaration.
    On June 16, 2018, Patricia died. Neither the hearing on the
    motion nor the trial setting conference occurred on June 25, 2018.
    On July 6, 2018, the trial court signed and filed the second
    proposed judgment dissolving the parties’ marriage and
    distributing their property.
    On August 6, 2018, counsel for both parties appeared in
    court. Patricia’s counsel informed the court that her client had
    died. Freeman’s counsel stated his client’s position that the case
    was dismissed by operation of law. Neither party’s counsel nor
    the court raised the existence of the judgment signed by the court
    the prior month. The court dismissed the case without objection
    from either party.
    On October 22, 2018, Freeman moved to set aside the
    judgment signed in July under Code of Civil Procedure section
    473 and Family Code section 2105. Brendon, acting as the
    proposed administrator of Patricia’s estate and represented by
    his own counsel, opposed the motion.
    On December 17, 2018, the court filed a notice of ruling and
    order on the motion to vacate judgment, which included its
    8
    findings that Freeman’s Motion to Enter Judgment under Code of
    Civil Procedure 664.6 was never submitted for decision, Patricia
    died on June 16, 2018, the Court erroneously signed Freeman’s
    proposed Judgment submitted in conjunction with the Motion to
    Enter Judgment on July 6, 2018 unaware of Patricia’s death.
    The court ruled that the Judgment entered on July 6, 2018, was
    void, vacated, and set aside.
    Brendon appealed. On June 3, 2020, this Court issued an
    opinion affirming the family court’s order setting aside the
    dissolution judgment. We concluded that the matter had not
    been submitted to the family court prior to Patricia’s death and,
    as a result, the family court lacked jurisdiction to enter the
    judgment.
    The Probate Court Action
    On November 8, 2018, Brendon filed a Petition for Letters
    of Administration. He was appointed Special Administrator of
    Patricia’s estate on February 11, 2019.
    On April 2, 2019, Brendon filed a Section 850 Petition for
    (1) Recovery of Property Wrongfully Held By Trust And
    Assessment of Double Damages; (2) Declaration of Heirship; (3)
    Constructive Trust; (4) Accounting; and (5) Quiet Title. On
    January 13, 2021, Brendon filed a Verified Supplement to
    Section 850 Petition seeking a declaration of heirship under
    sections 141 and 145, nominating Jeanne to be the executor over
    Patricia’s estate and successor trustee over Patricia’s assets held
    in trust pursuant to section 141.
    On May 23, 2019, Freeman opposed Brendon’s Petition for
    Letters of Administration and filed a Petition for Probate of
    9
    Patricia’s pour over will.
    On June 17, 2019, Freeman objected to Brendon’s Section
    850 Petition.
    On June 24, 2019, the court continued the probate action
    pending this court’s decision in the family law appeal. As stated
    above, we issued our opinion on June 3, 2020.
    On January 14, 2021, the above petitions came on for
    hearing before the probate court.
    The court granted Freeman’s Petition for Probate of Will
    filed on May 23, 2019 and admitted a pour-over will dated May
    22, 1996. The court over-ruled all objections to the petition and
    found that Freeman was a surviving spouse within the meaning
    of section 78, subdivision (b).
    The court denied Brendon’s Probate Petition, filed on
    November 8, 2018, and sustained the objections filed by Freeman
    on April 17, 2019.
    The court denied Brendon’s Section 850 Petition for
    Recovery of Property filed April 2, 2019, and it sustained the
    objections filed by Freeman on June 17, 2019. The court found
    that Freeman was a surviving spouse within the meaning of
    section 78, subdivision (b), and did not waive his right to inherit
    under sections 141 and 145. The court also found that “‘this
    Petition seeks to accomplish in the probate court that which
    could not be accomplished in the Family Law court.’” At the
    hearing, the court found that the MSA was not a complete
    property settlement within the meaning of section 145. This is
    reflected in the minute order, but not the Notice of Entry of
    Judgment.
    10
    DISCUSSION
    The parties do not contest that Freeman is a surviving
    spouse under section 78, subdivision (b). The issue before us is
    whether, by entering the MSA, Freeman waived the rights of a
    surviving spouse enumerated in section 141, subdivision (a). We
    hold that the MSA did effect a waiver of those rights. As
    explained below, based on our independent review of the MSA
    and the undisputed record evidence, the written MSA signed by
    Freeman and Patricia, each with the advice of counsel,
    constituted a “complete property settlement” within the meaning
    of section 145. Further, the MSA is an enforceable waiver of his
    rights as a surviving spouse, as Freeman fails to point to any
    evidence he was not provided with “[a] fair and reasonable
    disclosure of the property or financial obligations” of Patricia,
    prior to signing the MSA, as required by section 143, subdivision
    (a).
    Standard of Review
    We resolve matters of statutory interpretation de novo.
    (People v. United States Fire Ins. Co. (2012) 
    210 Cal.App.4th 1423
    , 1426.) “‘The general principles that guide interpretation of
    a statutory scheme are well[ ]settled. [Citation.] “Our function is
    to ascertain the intent of the Legislature so as to effectuate the
    purpose of the law. [Citation.] To ascertain such intent, courts
    turn first to the words of the statute itself [citation], and seek to
    give the words employed by the Legislature their usual and
    ordinary meaning. [Citation.] When interpreting statutory
    language, we may neither insert language which has been
    11
    omitted nor ignore language which has been inserted. [Citation.]
    The language must be construed in the context of the statutory
    framework as a whole, keeping in mind the policies and purposes
    of the statute [citation], and where possible the language should
    be read so as to conform to the spirit of the enactment.
    [Citation.]”’ [Citation.]” (Jaime Zepeda Labor Contracting, Inc.
    v. Department of Industrial Relations (2021) 
    67 Cal.App.5th 891
    ,
    905.)
    “Marital property settlement agreements are favored under
    California law [citation], and governed by general contract
    principles [citation].” (Safarian v. Govgassian (2020) 
    47 Cal.App.5th 1053
    , 1063, fn. omitted.) A settlement “‘“must be so
    interpreted as to give effect to the mutual intention of the parties
    as it existed at the time of contracting, so far as the same is
    ascertainable and lawful.” (Civ. Code, § 1636; [citation].) The
    intention of the parties must be first determined from the
    language of the contract itself. (Civ. Code, § 1638; [citation].)
    However, where the language of the contract is ambiguous, it is
    the duty of the court to resolve the ambiguity by taking into
    account all the facts, circumstances and conditions surrounding
    the execution of the contract. (Civ. Code, § 1647; [citation].)’”
    (Chacon v. Litke (2010) 
    181 Cal.App.4th 1234
    , 1252 (Chacon).)
    The standard of review when construing a contract is de
    novo, “including where conflicting inferences may be drawn from
    undisputed extrinsic evidence, ‘unless the interpretation turns
    upon the credibility of extrinsic evidence.’ [Citations.] Put
    simply, ‘“when the competent extrinsic evidence is not in conflict,
    the appellate court independently construes the contract.’
    [Citation.]” (Hewlett-Packard Co. v. Oracle Corp. (2021) 
    65 Cal.App.5th 506
    , 531.)
    12
    Surviving Spouse’s Waiver of Rights Under the Probate
    Code
    Sections 140 through 147 comprise the Surviving Spouse’s
    Waiver of Rights, and are codified as Chapter 1 of Division 2,
    Part 3 of the Probate Code. Section 145, entitled “Waiver of ‘all
    rights,’” is “directed at two types of situations: (1) where the
    parties do not intend an agreement to be merged into a
    dissolution judgment; and (2) where one party dies after both
    have executed a marital settlement agreement but before the
    court has heard the matter for the purpose of rendering a
    judgment incorporating the agreement.” (Estate of Gibson (1990)
    
    219 Cal.App.3d 1486
    , 1492 (Estate of Gibson).)
    Section 145 provides that “a complete property settlement
    entered into after or in anticipation of separation or dissolution
    or annulment of marriage, is a waiver by the spouse of the rights
    described in subdivision (a) of Section 141”, unless the property
    settlement provides to the contrary. The surviving spouse’s right
    to inherit and right to be appointed as the personal
    representative of the deceased spouse’s estate that are at issue in
    this case are among the enumerated rights waived under section
    141.6 (§ 141, subd. (a).)
    6 Section 141, subdivision (a) states:
    “The right of a surviving spouse to any of the following may
    be waived in whole or in part by a waiver under this chapter:
    “(1) Property that would pass from the decedent by
    intestate succession.
    “(2) Property that would pass from the decedent by
    testamentary disposition in a will executed before the waiver.
    “(3) A probate homestead.
    13
    Under section 142, a waiver of a surviving spouse’s rights
    under the Probate Code must be (1) in writing, (2) signed by the
    surviving spouse, and (3) enforceable under either section 143 or
    144. (§ 142, subds. (a) & (b).)
    Pursuant to section 143, subdivision (a), a waiver is
    enforceable unless the surviving spouse can demonstrate “(1) A
    fair and reasonable disclosure of the property or financial
    obligations of the decedent was not provided to the surviving
    spouse prior to the signing of the waiver unless the surviving
    spouse waived such a fair and reasonable disclosure after advice
    by independent legal counsel” or “(2) The surviving spouse was
    not represented by independent legal counsel at the time of
    signing of the waiver.” As relevant here, section 142 provides,
    “[e]nforcement of the waiver against the surviving spouse is
    subject to the same defenses as enforcement of a contract, except
    that. . . [] [l]ack of consideration is not a defense to enforcement of
    the waiver.” (§ 142, subd. (c).)
    “(4) The right to have exempt property set aside.
    “(5) Family allowance.
    “(6) The right to have an estate set aside under Chapter 6
    (commencing with Section 6600) of Part 3 of Division 6.
    “(7) The right to elect to take community or quasi-
    community property against the decedent’s will.
    “(8) The right to take the statutory share of an omitted
    spouse.
    “(9) The right to be appointed as the personal
    representative of the decedent’s estate.
    “(10) An interest in property that is the subject of a
    nonprobate transfer on death under Part 1 (commencing with
    Section 5000) of Division 5.”
    14
    Alternatively, a waiver is enforceable pursuant to section
    144, subdivision (a), if a court determines either: “(1) The waiver
    at the time of signing made a fair and reasonable disposition of
    the rights of the surviving spouse”; or “(2) The surviving spouse
    had, or reasonably should have had, an adequate knowledge of
    the property and financial obligations of the decedent[.]”7
    The MSA Is a Complete Property Settlement Within the
    Meaning of Probate Code Section 145
    Freeman contends that the MSA is not a “complete”
    property settlement because “[a] complete property agreement
    must identify itself as such,” and the MSA does not expressly
    state that it is a complete property settlement. Freeman’s
    construction of section 145 is contrary to the statutory language.
    Section 145 sets forth two distinct mechanisms for a spouse to
    waive the rights of a surviving spouse: (1) by making an express
    statement waiving “‘all rights’ (or equivalent language) in the
    property or estate of [the other spouse]”; or (2) by “a complete
    property settlement entered into after or in anticipation of
    separation or dissolution or annulment of marriage.” It is
    significant that the first mechanism—what we refer to as an
    express waiver—requires specific language; however, the second
    mechanism—what we refer to as a statutory waiver—is effected
    7 Section 144 includes an exception to enforceability of a
    waiver if the decedent spouse violated his or her fiduciary duties
    as specified in Family Code section 721, subdivision (b), or if a
    probate court finds enforcement of the waiver would be
    unconscionable. These exceptions are not argued or presented
    here, and we omit further discussion of them.
    15
    by entry into a property settlement, with no direction in section
    145 that any express language must be used by the parties.
    Here, we are presented only with this second mechanism, and we
    decline to read into the statute a requirement for parties to use
    any specific language when making a complete property
    settlement.
    In the absence of support in the language of section 145,
    Freeman cites to Miller v. Miller (1949) 
    94 Cal.App.2d 785
    (Miller), in which the Court of Appeal held that the decedent’s
    former wife did not waive her interest as a beneficiary under the
    decedent’s life insurance policies pursuant to a property
    settlement agreement that the couple entered into prior to
    divorce. Freeman represents that Miller held the property
    settlement was incomplete because the property settlement did
    not state that all of the couple’s property had been included in the
    agreement. (Id. at 790.)
    We note that Miller, a case decided over seventy years
    ago, did not involve interpreting the language of the Probate
    Code provision at issue here, which was added to the code in the
    early 1980’s. (Estate of Gibson, supra, 219 Cal.App.3d at p.
    1491.) Even looking to Miller for guidance, however, it is clear
    that the determination of whether an agreement is a complete
    resolution of property issues between spouses who are separating
    requires consideration of the totality of the circumstances; the
    determination does not turn solely on whether the parties’
    agreement includes an express statement that it is “complete.”
    In Miller, a husband and wife entered a written agreement
    dividing specified property between them. The agreement
    included a provision stating that each spouse waived certain
    rights against the other arising from the marriage, including any
    16
    right to inherit from, or administer the estate of the other.
    (Miller, supra, 94 Cal.App.2d at pp. 786–787.) After the filing of
    a divorce action and issuance of an interlocutory decree, the
    husband died. The wife then sought to collect on four insurance
    policies, two that named her as the designated beneficiary and
    two that provided for inheritance by a widow; the husband’s
    siblings contested the wife’s status as a beneficiary, contending
    the property agreement the wife and husband had entered
    constituted a waiver of the wife’s rights to inherit under the
    insurance policies.8 The Miller court concluded that the wife was
    entitled to collect on the insurance policies. In reaching its
    decision, the court noted that the agreement made no mention of
    the insurance policies, and no waiver of any interest in any
    property not mentioned. But the absence of language covering all
    potential property was not alone conclusive. The court also
    8 At the time of Miller, divorce proceedings in California
    involved first issuing an interlocutory judgment declaring that an
    innocent spouse was entitled to dissolution, but the marriage was
    not dissolved until entry of a final judgment. (See In re Marriage
    of Goldberg (1994) 
    22 Cal.App.4th 265
    , 273.) The death of a
    party spouse after interlocutory judgment but before final
    judgment abated a divorce action as to the status of the parties,
    but did not as to any division of property in the interlocutory
    degree. (Id. at p. 274; McClenny v. Superior Court (1964) 
    62 Cal.2d 140
    , 144 [“The death destroys the cause of action for the
    dissolution of the marriage; it does not liquidate the property
    rights which crystallized in the interlocutory decree”]; Klebora v.
    Klebora (1931) 
    118 Cal.App. 613
    , 618.) As a result, in Miller, the
    property agreement entered into between the spouses survived
    the husband’s death, but the wife nevertheless qualified as a
    widow, because the husband’s death, and not the interlocutory
    decree of divorce, terminated their marriage.
    17
    looked at the nature of the omitted property and the husband’s
    conduct: insurance policies create only an expectancy interest for
    the beneficiary, which can be changed. The court found that “the
    failure of the husband to exercise his power to change the
    beneficiary ordinarily indicates that he did not wish to effect such
    a change.” (Id. at p. 790.) In addition, the court looked at other
    extrinsic evidence of the parties’ intent: shortly prior to his death,
    “the husband handed the policies to the [wife] saying, ‘Here is
    some papers that belong to you.’ Two days later, in the presence
    to two other witnesses, she offered to return the policies to him
    and he refused to take them, saying that they belonged to her.”
    (Id. at p. 791.)
    In sum, Miller does not stand for the proposition that a
    property settlement must state on its face that it is intended to be
    a complete property settlement if it is to be treated as such. To
    the contrary, Miller teaches that where such a clear expression of
    intent is not contained in the language of the agreement, the
    court looks to other evidence, including other language in the
    agreement, the nature of the property at issue, and the actions of
    the parties, to determine whether the settlement was intended to
    be complete.
    Here, the fact that the property settlement does not
    expressly identify itself as either “partial” or “complete” does not
    compel the conclusion that the settlement was intended to be
    only partial. (See Series AGI West Linn of Appian Group
    Investors DE, LLC v. Eves (2013) 
    217 Cal.App.4th 156
    , 164; see
    also Levi Strauss & Co. v. Aetna Casualty & Surety Co. (1986)
    
    184 Cal.App.3d 1479
    , 1486 [“The court . . . cannot insert in the
    contract language which one of the parties now wishes were
    there”].)
    18
    Absent a clear expression of intent in the language of the
    agreement, we look to other evidence to discern the parties’
    intent. (Chacon, supra, 181 Cal.App.4th at p. 1252.) The parties’
    actions and surrounding circumstances demonstrate that Patricia
    and Freeman considered the MSA to be a complete property
    settlement. Freeman’s Petition for Dissolution and Patricia’s
    response thereto both requested that the family court divide their
    community and quasi-community property. Freeman listed this
    property in an attachment to the petition. The same list is set
    forth in more detail in the MSA, and, as Brendon points out,
    allocates very specific items of personal property, including the
    contents of the couple’s garage. The MSA additionally contains a
    “catch-all” provision for items of personal property that are not
    specifically identified—all items of personal property that were in
    Patricia’s possession (Patricia lived in the marital home) were
    awarded to her. The MSA states that all other credits and
    reimbursements are waived. Finally, the MSA contains a
    provision requesting that the family court make the MSA its
    order, which is consistent with the couple’s requests in the
    dissolution petition and response that the court divide their
    community and quasi-community property. In short, nothing in
    the parties’ actions or the language of the MSA indicates that it
    was intended to be a partial settlement; the evidence fully
    supports that the MSA was intended to be a complete property
    settlement.
    Nothing that occurred after the MSA was executed
    suggests the parties did not have a meeting of the minds
    regarding whether the property settlement was complete.
    Although Freeman now makes much of Patricia’s objections to his
    proposed judgment during the family court proceedings,
    19
    Patricia’s objections were to a draft judgment, not the division of
    property set forth in the MSA.9 Patricia did not view the
    proposed judgment as faithful to the parties’ agreement, and to
    the extent that disputes over the terms of the judgment could be
    seen as implicating the terms of the MSA, she requested that the
    mediator resolve those issues—as the MSA provided—prior to
    judgment. She did not argue that the MSA’s division of property
    was incomplete or void—she argued that the version of the
    judgment drafted by Freeman’s counsel should not be enforced
    because there were disputes regarding judgment provisions and
    the meaning of the MSA’s terms that the mediator had to first
    resolve before the court could enter a judgment of dissolution.
    For his part, Freeman expressed no concerns regarding the
    completeness of the MSA. Rather, he submitted a second
    proposed judgment, which he said was “‘the mirror-image of the
    parties’ agreement . . . .’” (Welch v. Welch (June 3, 2020,
    B295880) [nonpub. opn.].) He then sought entry of the judgment
    9 We note that the probate court’s “finding” that there was
    not a complete property settlement appears to have been based
    on a misunderstanding of our prior opinion: at the hearing, the
    court concluded that the various disputes of the parties over
    entry of judgment in the dissolution action, and highlighted in
    our prior opinion, meant there was no meeting of the minds when
    the parties entered the MSA. The probate court’s analysis
    confuses the MSA with the draft judgment. Moreover, there is no
    substantial evidence in the record that would support a finding
    that the parties did not have a meeting of the minds when
    entering the MSA.
    20
    of dissolution pursuant to the terms of the MSA under Code of
    Civil Procedure 664.6.10
    Freeman next argues that the MSA was not a complete
    property settlement because it left certain terms to be
    determined in the future and omitted some property from
    allocation. With respect to his argument that some terms were
    left undetermined, Freeman asserts that the balances of financial
    accounts that were identified in the MSA for division were
    subject to confirmation; Patricia reserved the right to review and
    verify the documents and amounts of all accounts; the exact
    amounts of an equalization payment had not been calculated; a
    Propertizer had not been prepared; and the tax impact division of
    retirement benefits under the QDRO had not yet been calculated
    by attorney Nancy Bunn, as the MSA provided.
    The MSA’s terms were not uncertain simply because
    verifications and calculations had yet to be performed. The MSA
    set forth the percentages that each of the parties would receive
    from each of the accounts and/or items of property identified.
    Those percentages were fixed regardless of the valuation
    ultimately placed on the property. The methods of valuation are
    also sufficiently set forth to permit future performance (i.e.,
    Propertizer, fair market value, calculations by a specific attorney,
    etc.).
    When asked to identify specific property that was omitted
    from the settlement agreement, Freeman is unable to do so.
    Conceding that there is no evidence establishing the existence of
    10 We note that although the respondent’s brief argues that
    the MSA is not a complete property settlement, it does not
    contend that Freeman did not intend the MSA to be a complete
    property settlement when he entered into it.
    21
    an omitted asset, Freeman contends that we can infer the
    property settlement was not complete because Patricia lodged
    objections to his motion to enforce the family law judgment.
    Pressed further on which of Patricia’s objections comprise
    sufficient evidence to support a finding that a specific, material
    asset was omitted, Freeman highlights that Patricia sought to
    include in the draft family court judgment boilerplate provisions
    addressing choses in action, encumbrances and liens, insurance
    policies, and social security benefits. But none of Patricia’s
    suggested provisions are more than generic: they certainly do not
    offer any basis to conclude the parties failed to account for an
    actual, known asset or liability, or a chose in action or
    encumbrance that needed to be dealt with separately from an
    asset that one of them was to take through the settlement
    agreement. While the existence of social security benefits might
    be assumed, it is of no moment as federal law “bars Social
    Security benefits from being characterized as community
    property and divided in a dissolution proceeding.” (In re
    Marriage of Peterson (2016) 
    243 Cal.App.4th 923
    , 931; In re
    Marriage of Cohen (1980) 
    105 Cal.App.3d 836
    , 843 [social
    security benefits are “not an asset of the community” and “not
    subject to division”].)
    Our Supreme Court has emphasized that, “few contracts
    would be enforceable if the existence of subsequent disputes were
    taken as evidence that an agreement was never reached.” (Patel
    v. Liebermensch (2008) 
    45 Cal.4th 344
    , 351–352.) As a practical
    matter, many property settlements that parties intend to be
    complete overlook or disregard some items of property. If we
    were to judge the “completeness” of a property settlement based
    solely on whether it provided for the precise allocation of every
    22
    item of community or quasi-community property, no matter how
    immaterial, it would be a rare property settlement that could be
    deemed complete, despite the parties’ intentions that the
    settlement be treated as such. It is clear from Freeman’s actions
    that any objections Patricia may later have had were not
    material to him when the couple entered into the settlement
    agreement, or, indeed, at any time prior to the erroneous entry of
    judgment. It is also clear that Patricia believed that the
    allocation of these items would in fact be decided per the terms of
    the MSA—i.e. that any ambiguity in the agreed-upon allocation
    could be clarified with a ruling from the mediator. The contents
    of the MSA with respect to the division of property, actions of the
    parties, and the surrounding circumstances all indicate that the
    parties intended for the property settlement to be complete.
    Moreover, the record supports that Freeman and Patricia
    succeeded: the agreement itself does not suffer from material
    omissions that would undermine that intent. We therefore
    conclude that the property settlement is a “complete property
    settlement” within the meaning of section 145.
    The MSA Operates as an Enforceable Waiver
    Having concluded that Freeman and Patricia effected a
    statutory waiver by entering into the MSA, we now turn to
    whether that waiver is enforceable in this probate proceeding, as
    required by section 142. First, the MSA is a written agreement,
    which Freeman signed; this is all that is required by section 142,
    subdivision (a).
    Section 142, subdivision (b), additionally provides that a
    waiver is only enforceable if it satisfies either section 143 or
    23
    section 144. Under section 143, subdivision (a), a waiver of the
    rights enumerated in section 141 is enforceable, “unless the
    surviving spouse proves either [that] (1) A fair and reasonable
    disclosure of the property or financial obligations of the decedent
    was not provided to the surviving spouse prior to the signing of
    the waiver unless the surviving spouse waived such a fair and
    reasonable disclosure after advice by independent legal counsel”
    or that “(2) The surviving spouse was not represented by
    independent legal counsel at the time of signing of the waiver.”
    Freeman has not met his burden under either subdivision (a)(1)
    or (a)(2) of section 143.
    Freeman does not point to evidence in the record
    identifying any particular property or financial obligation that
    Patricia failed to disclose to him prior to entering the MSA. The
    only reasonable inference from the record is that Patricia made a
    fair and reasonable disclosure; specifically, it is undisputed that
    Patricia and Freeman each filed and served the information
    required by Family Code section 2104, also known as a
    preliminary declaration of disclosure, prior to holding their
    mediation and signing the MSA. By statute, “[a] preliminary
    declaration of disclosure shall set forth with sufficient
    particularity, that a person of reasonable and ordinary
    intelligence can ascertain, . . . the identity of all assets in which
    the declarant has or may have an interest and all liabilities for
    which the declarant is or may be liable, regardless of the
    characterization of the asset or liability as community, quasi-
    community, or separate.” (Family Code, § 2104, subd. (c)(1).)
    Freeman not only concedes he had Patricia’s preliminary
    disclosure prior to entering the MSA, he repeatedly argued to the
    family court that the exchange of that information was sufficient
    24
    for obtaining a dissolution judgment. Indeed, Freeman was
    sufficiently satisfied with Patricia’s preliminary declaration of
    disclosure, that he subsequently waived receipt of her final
    declaration of disclosure. Moreover, he has not made any
    argument or offered any evidence since Patricia’s death
    suggesting any deficiencies in the disclosures she made prior to
    signing the MSA. We find this uncontroverted evidence sufficient
    to defeat any contention that Patricia did not make a fair and
    reasonable disclosure of the information required to make a
    waiver enforceable under section 143.11
    Defenses to Enforcement of the Waiver
    Freeman additionally contends that because certain issues
    were never resolved or completed in the dissolution action in
    family court, the MSA cannot be enforced in this probate action.
    We reject these contentions.
    11 In light of our conclusion that the statutory waiver is
    enforceable pursuant to section 143, we need not address whether
    the waiver would alternatively be enforceable pursuant to section
    144. We note that, unlike section 143, which places the burden
    on the surviving spouse to prove a lack of disclosure, section 144
    makes a waiver enforceable where a court determines either that:
    (1) the MSA when signed made “a fair and reasonable disposition
    of the rights of the surviving spouse”; or (2) “the surviving spouse
    had, or reasonably should have had, an adequate knowledge of
    the property and financial obligations of the decedent[.]” There is
    no indication in this record that Freeman has ever contended
    that the MSA did not, when made, make a fair and reasonable
    disposition of his rights; nor has he ever contended that he lacked
    knowledge of Patricia’s property and financial obligations.
    25
    The Property Settlement Provisions of the MSA Are
    Not Dependent Upon Entry of a Judgment of
    Dissolution
    Freeman first contends that the MSA never became
    effective because the family court did not enter a judgment of
    dissolution, and could not have entered a judgment because it
    lost jurisdiction upon Patricia’s death. He argues that the MSA
    was void under Civil Code 1598 because it had a single purpose—
    entry of the judgment—which was wholly impossible of
    performance. This contention lacks merit.
    Civil Code section 1598 provides: “Where a contract has
    but a single object, and such object is unlawful, whether in whole
    or in part, or wholly impossible of performance, or so vaguely
    expressed as to be wholly unascertainable, the entire contract is
    void.” In this case, the MSA included several distinct objectives,
    however—including setting spousal support, dividing the couple’s
    property, facilitating the entry of a judgment dissolving the
    marriage, and providing procedures to resolve any subsequent
    disputes. Civil Code section 1598 is therefore inapplicable.
    Freeman points to no provision in the MSA that states that
    the entry of judgment is a condition of formation of the MSA.
    Although the parties agreed to prepare a formal judgment to
    submit to the mediator and agreed that the mediator would serve
    as the judicial officer with respect to all issues that arose from
    the settlement, entry of the judgment, and postjudgment matters,
    the plain language of the MSA does not condition the division of
    the couple’s property on either the preparation or the entry of a
    judgment. The property settlement is not altered simply because
    26
    a judgment of dissolution was not entered and is now impossible
    to enter as a result of Patricia’s death.12
    Moreover, contrary to Freeman’s assertions, we did not
    hold that the “object of the [MSA]” was impossible of performance
    or void in our prior opinion in the family court action. We held
    that the judgment could not be entered because the family court
    had lost jurisdiction, which is an entirely separate issue. Our
    prior opinion does not foreclose the possibility that the MSA
    operates as a waiver of Freeman’s rights as a surviving spouse
    under the Probate Code.
    Lack of Decedent’s Final Declaration of Disclosure
    Freeman also argues that the MSA is unenforceable
    because Patricia did not make and serve her final declaration of
    disclosure in the dissolution action and never entered into a
    mutual waiver of disclosures with him pursuant to Family Code
    section 2105, subdivision (a). Family Code section 2105,
    subdivision (a) states: “Except by court order for good cause,
    before or at the time the parties enter into an agreement for the
    12 Freeman also appears to argue in a conclusory manner,
    and without development, that because the MSA addressed
    spousal support in addition to the division of property, the fact
    that no judgment was entered ordering spousal support somehow
    undermines the validity of the property settlement. We disagree.
    The spousal support provision included in the MSA, consistent
    with spousal support generally, included a provision never
    disputed by the parties that spousal support would terminate
    upon the death of either party. This provision underscores that
    the property division settlement was intended to, and did,
    operate independently of any payment of support.
    27
    resolution of property or support issues other than pendente lite
    support . . . each party, or the attorney for the party in this
    matter, shall serve on the other party a final declaration of
    disclosure and a current income and expense declaration,
    executed under penalty of perjury on a form prescribed by the
    Judicial Council, unless the parties mutually waive the final
    declaration of disclosure. . . .” Section 2105 permits a family
    court to set aside the judgment if the parties fail to comply with
    its terms or with the requirements of Family Code sections 2102
    and 2104. (Fam. Code, § 2105, subd. (d).)
    Freeman cites to section 142, subdivision (c), in support of
    this argument, presumably likening the requirement for an
    exchange of final declarations of disclosure in a dissolution action
    to a defense against enforcement of a contract. His argument is
    belied by the statutory scheme of Chapter 1. Nothing in sections
    140 through 147 suggests that waivers under the chapter are
    subject to the requirements set forth in the Family Code, or
    states that a waiver is subject to enforceability requirements
    additional to those listed. Indeed, attempting to import a
    requirement of strict compliance with the Family Code’s
    prerequisites to a completed dissolution judgment into Chapter 1
    would undermine both the purpose and language of the Probate
    Code’s statutory scheme. Significantly, section 145’s waiver
    provision applies to agreements between spouses not only in
    anticipation of dissolution of a marriage, but also “after . . .
    separation.” (§ 145 (emphasis added).) There is no dispute that
    happened here: Freeman and Patricia separated in September
    2015 and signed their property agreement in October 2017.13
    13
    Waivers under Chapter 1 even apply to pre-marital
    agreements, which are made without the service of declarations
    28
    Given that Chapter 1 applies even when the parties separate
    without initiating a case in family court, it would make no sense
    to interpret the Probate Code to require compliance with Family
    Code provisions that only become operative upon the filing of a
    petition for dissolution or legal separation. (See Fam. Code,
    § 2103 [requiring declarations of disclosure only in proceedings
    for dissolution or legal separation].)
    Moreover, attempting to import into the Probate Code the
    Family Code’s specific requirements of the final declaration of
    disclosure would be at odds with Chapter 1’s provision that there
    can be a valid waiver of rights of survivorship even absent any
    disclosure about property by the decedent. (See § 144, subd.
    (a)(2) [providing for a valid waiver where “the surviving spouse
    had, or reasonably should have had, an adequate knowledge of
    the property and financial obligations of the decedent,” or where
    the waiver included a reasonable disposition of the surviving
    spouse’s rights.) These provisions would be rendered
    meaningless if we were to adopt Freeman’s position that strict
    compliance with the disclosure obligations set forth in the Family
    Code are prerequisites to a valid waiver of rights under the
    Probate Code.
    Section 145’s disclosure requirements are less stringent
    than the disclosure requirements of Family Code section 2105,
    and would be subsumed within its requirements if both statutes
    applied. Had the Legislature intended for Family Code section
    2105’s disclosure requirements to apply, section 145’s treatment
    of statutory waivers would be redundant and unnecessary—a
    of disclosure. (§ 140 [making waivers of the rights of a surviving
    spouse applicable to pre-marital agreements]; see Estate of
    Gibson, supra, 219 Cal.App.3d at p. 1492.)
    29
    construction that we avoid when interpreting statutes. (State ex
    rel. Bartlett v. Miller (2016) 
    243 Cal.App.4th 1398
    , 1410.) We
    therefore hold that compliance with Family Code section 2105 is
    unnecessary to effectuate a waiver pursuant to section 145;
    disclosure requirements for statutory waiver under section 145
    are governed by the provisions of the Surviving Spouse’s Waiver
    of Rights chapter of the Probate Code.14
    14 We  also reject Freeman’s assertion that, to the extent
    that the MSA operates to revoke the nonprobate transfer
    contemplated in the couple’s revocable trust and eliminates his
    right of survivorship, it violates the notice requirements of
    Family Code 2040—another Family Code section that is not
    referenced in the Surviving Spouse’s Waiver of Rights chapter of
    the Probate Code. The restraining orders put in place by Family
    Code 2040 prohibit unilateral actions of the parties that would
    have these effects “without the written consent of the other party
    or an order of the court.” (Fam. Code, § 2040, subd. (a)(1).)
    Under section 142, subdivision (a), a complete property
    settlement cannot operate as a waiver without the written
    consent of the other spouse by definition—a complete property
    settlement must be written and signed by both parties to operate
    as a waiver of the surviving spouse’s rights.
    30
    DISPOSITION
    We reverse the probate court’s January 14, 2021 orders: (1)
    denying Brendon’s Petition for Recovery of Property and
    sustaining Freeman’s objections thereto, and (2) denying
    Brendon’s Petition for Letters of Administration and granting
    Freeman’s Petition for Probate of Will. We remand to the
    probate court for further proceedings consistent with this opinion.
    Appellants Brendon Welch and Jeanne Donohoe are awarded
    their costs on appeal.
    MOOR, J.
    We concur:
    RUBIN, P. J.
    KIM, J.
    31
    

Document Info

Docket Number: B311507

Filed Date: 5/31/2022

Precedential Status: Precedential

Modified Date: 5/31/2022