Marriage of Abdou and Malak CA2/7 ( 2024 )

Filed 5/13/24 Marriage of Abdou and Malak CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
In re the Marriage of ATEF B330540
ABDOU and MARIAM ABDEL
MALAK. (Los Angeles County
Super. Ct. No. BD559444)
ATEF ABDOU,
Plaintiff and Respondent,
v.
MARIAM ABDEL MALAK,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los
Angeles County, Alexander C.D. Giza, Judge. Affirmed.
Leslie L. Niven for Defendant and Appellant.
Atef Abdou, in pro. per., for Plaintiff and Respondent.
__________________________
Mariam Abdel Malak appeals from an order denying her
request for order (RFO), in which she sought division of United
No. 1, LLC, and United’s real property asset located at
1303 S. Western Avenue (1303 Western property) as community
property pursuant to Family Code section 2556 (allowing a
postjudgment motion to adjudicate community property assets).1
Malak contends the family court erred in denying her request
because the judgment entered after a family court trial on
reserved issues did not allocate to her a community property
interest in United and its real property, and therefore, the court
had continuing jurisdiction to adjudicate community property
assets owned by her and her former husband, Atef Abdou.
Because the family court already awarded Malak the
monetary amount equal to her 50 percent interest in the
1303 Western property in the judgment, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Marital Dissolution, Judgment, and Family Court
Trial on Reserved Issues
Abdou and Malak were married on January 8, 2004. On
February 25, 2009 Malak filed a petition for dissolution of the
marriage. Abdou and Malak reconciled and then separated
again. On February 22, 2012 Abdou filed a petition for
dissolution, and Malak filed her petition shortly thereafter. The
family court consolidated the matters, and on November 7, 2013
the court entered a judgment dissolving the marriage but
1 Further undesignated statutory references are to the
Family Code.
2
reserving multiple issues for a later determination, including the
division of property.
On December 26, 2018, in advance of a January trial date
on reserved issues, Malak submitted a statement of issues and
contentions in which she indicated that the characterization and
disposition of the 1303 Western property was an issue to be
resolved at trial. She argued the 1303 Western property was
“wholly community property,” but any debt owed on the property
“should be deemed [the] separate property debts of” Abdou.
Malak also requested the family court find Abdou breached his
fiduciary duty to Malak based on his actions concerning the
property.
The family court2 presided over a five-day bench trial
commencing on January 2, 2019. The matter was deemed
submitted on April 8, 2019, after supplemental briefing on the
issue of attorneys’ fees.
B. Consolidation of Malak’s Quiet Title Action with This
Action
On December 18, 2018 (prior to commencement of the
family court trial) Malak filed a civil action (LASC Case no.
18STCV08878) against United seeking to quiet title in the 1303
Western property.3 Malak alleged the 1303 Western property
was community property because it was acquired during Abdou
and Malak’s marriage, with United holding title to the property.
2 Judge Shelley Kaufman presided over the trial and issued
the statement of decision.
3 In the quiet title action, Malak identified herself as
“Mariam S. Mena aka Mariam Abdel Malak.”
3
On December 20 Malak filed an ex parte application to
consolidate the quiet title action with this action. The family
court denied the ex parte application without prejudice,
explaining the quiet title action “is filed in the civil division and
therefore related case or consolidation requests must be
addressed by the Supervising Judge of Civil in Department 1.
See LASC Local Rule 3.3(f) and (g).”
On January 11, 2019, after the family law trial concluded,
Malak filed a notice of related cases listing this action and the
quiet title action. On March 4 the supervising judge of the civil
division of the superior court4 related the two cases, and on June
24 the family court5 consolidated the quiet title action with this
action.
C. The Statement of Decision and Judgment in This Action
On July 30, 2019 the family court issued its final statement
of decision. The court found United acquired the 1303 Western
property, on which is a gas station, food center, and car wash, on
September 7, 2004 (during the marriage); at the time of the
purchase Abdou was the sole member of United; rental income
and depreciation on the property were reported on Abdou and
Malak’s joint tax returns starting in 2005; and Malak worked
with Abdou at the gas station and food center. The court noted
United was not joined in this action and the parties had
stipulated that United was no longer in Abdou’s name. In
addition, at the time of the trial, the quiet title action had not yet
been consolidated with the marital dissolution action. Thus, the
4 Judge Samantha P. Jessner.
5 Judge Alexander C.D. Giza.
4
family court stated, the court “can only adjudicate the matters
presented at trial.”
The family court rejected Abdou’s claim that his mother,
Sohei Youssef Moussa,6 provided the 10 percent down payment
United used to purchase the 1303 Western property and that
Moussa was the actual owner of United with Abdou only
managing the business investment for her. The court reasoned,
“[Abdou’s] conduct does not comport with his claim that 1303
Western was owned by his mother through the entity United 1.
Why would he then execute a transfer agreement in 2010 and
2011 for remuneration from his mother if she was the actual
owner? This transfer occurred shortly after [Malak] left the
family home in 2009 and filed for dissolution. [Abdou] filed his
response to the dissolution on March 11, 2009 and indicated that
he was seeking to confirm as his separate property United 1,
including all personal and real property assets. . . . Even if
[Abdou’s] mother provided money to [Abdou] for the down
payment, there is insufficient evidence as to the characterization
of this money, or that this establishes she was the owner of
United 1, and not [Abdou].”
The family court found Abdou failed to rebut the
presumption in Evidence Code section 662 that “[t]he owner of
the legal title to property is presumed to be the owner of the full
beneficial title.” The court explained, “The Court does not find
sufficient credible evidence that United 1 belonged to [Abdou’s]
6 The family court granted Malak’s request to join Moussa
and Abdou’s brother, Adel Hanna, but not United and other
business entities. Moussa was not properly served with the
summons and complaint before her death, and Malak did not
amend her petition to join Moussa’s estate.
5
mother at the time of acquisition. [Abdou] has provided little to
no documentary evidence of this claim other than his testimony.”
The family court also found Abdou failed to rebut the
presumption in section 760 that all real or personal property
acquired during marriage is community property. The court
explained, “The 1303 Western property was in fact acquired
during marriage by United 1, wherein [Abdou] was the only
member. In a reply argument, [Abdou] states if 1303 Western
was his property through United 1, the ownership was only
obtained from funds that were a gift from his mother, and thus
should be deemed his separate property . . . . While testimony
was provided that he received funds from his mother to be used
for the down payment, [Abdou] did not provide further testimony
as to how the loan payments were made or applied to the
purchase of 1303 Western. [Abdou] had the burden to do the
appropriate tracing if this was his claim; he did not. Further,
Abdou admitted to working at the location, and managing the
property. He used community efforts thus to maintain the
property. [¶] By 2011, [Abdou] transferred all his interest in
United 1 to his mother for a total of $55,000. The property was
purchased for approximately $1,400,000 in 2004. No evidence
was presented as to why [Abdou] would sell his interest for such
little money.”
The family court concluded Malak met her burden to prove
Abdou breached his fiduciary duty by “selling his interest in
United and consequently 1303 Western.” The court found, “The
community held an asset from date of marriage which had a
value of more than one million dollars. By 2011, not for
comparable value, the asset was sold. Pursuant to Family
6
Code section 1101(g), [Malak] is entitled to 50% of the value of
the transferred asset.”
In determining the value of the transferred asset, the court
relied on the testimony of Malak’s experts: real estate appraiser
James Willard and certified public accountant John Gustavson.7
Willard testified the market value of the 1303 Western property
was $2,107,000 as of February 16, 2012 and $3,160,000 as of
December 12, 2018. Gustavson calculated the equity in the
property was $1,274,000 by taking the current market value of
the property ($3,160,000) less the encumbrances reflected in the
property records. The family court determined that Abdou owed
Malak $637,000 (half of the $1,274,000 valuation) for his breach
of fiduciary duty.
On March 4, 2020 the family court entered judgment on
reserved issues, which provided in part, “[Malak] is entitled to
50% of the value of the transferred asset, namely 1303 S.
Western Avenue, Los Angeles, CA 90006 property. [Malak] is
awarded $637,000 payable by [Abdou] to [Malak] for his breach of
fiduciary duty related to the property 1303 S. Western Ave, Los
Angeles, CA 90006; [¶] [Abdou] shall pay $106,196.26 to [Malak]
for attorney’s fees and costs.”
Abbou appealed, and we affirmed. (In re Marriage of
Abdou and Malak (May 14, 2021, B304087) [nonpub. opn.].)
Abdou filed a petition for review, which the Supreme Court
denied. This court issued a remittitur on September 2, 2021.
7 The family court found Abdou’s accounting expert, Jackie
Adams-Ings, “did not assign a value to the loss of this property,
asserting the property belonged to [Abdou’s] mother.”
7
D. Transfer of Quiet Title Action to Civil Court
On May 19, 2021 United filed a motion to expunge Malak’s
lis pendens on the 1303 Western property, which Malak opposed.
On October 14, 2021 the family court8 ordered the quiet title
action, including United’s motion to expunge lis pendens,
transferred back to Department 1 for reassignment. The court
found “the family law matter ha[d] been completed by trial” and
remittitur had been issued in the appeal from the judgment on
reserved issues. On November 1 Department 1 reassigned the
quiet title action to Department 589 for all purposes.
E. Malak’s RFO and the Family Court Ruling
On June 1, 2022 Malak filed a postjudgment RFO seeking
to adjudicate and divide as community property United and the
1303 Western property pursuant to section 2556. Malak
requested in the alternative the family court find that the civil
court could determine the proper division of the property in the
quiet title action by applying section 2556 instead of the statute
of limitations that would otherwise govern. Malak argued the
family court (Judge Kaufman) previously characterized United
and the 1303 Western property as community property but did
not divide the assets. In opposition, United argued it was not a
party, and therefore the family court did not have jurisdiction
over it. Further, even though it was not a party, United “could be
negatively affected by the requested action.” United also
8 Judge Giza presided over the proceedings in family court
following the remittitur.
9 Judge John P. Doyle.
8
asserted that section 2556 did not apply to Malak’s quiet title
action against United.10
On March 20, 2023 the family court denied Malak’s RFO on
the basis the treatment of United and the 1303 Western property
had been previously adjudicated in the trial. The court observed
that following the bench trial, the court (Judge Kaufman) in four
pages of its statement of decision “addressed the parties’ interest
in United/Western” and found Abdou “breached his fiduciary duty
to [Malak] and awarded her $637,000, which is one-half the value
of Western as determined by [Malak’s] expert.” Further,
“[d]uring the [RFO] hearing, [Malak] admitted that if the
judgment had been paid by [Abdou, then Malak] would have been
made whole. [Malak] argues, however, that because [Judge
Kaufman] did not divide the asset at trial, this sub-issue was not
adjudicated and so can still be addressed under § 2556.”
The family court explained in denying the RFO that at trial
the “judge confirm[ed] with [Malak’s] counsel that she [was]
arguing that (1) United and Western were community property
up until 2010 or 2011; (2) [Abdou] got rid of this community
property asset in breach of his fiduciary duty; and (3) [Malak]
was not seeking a ruling on how to divide ownership of
United/Western. Because [Malak] did not seek ownership of
United/Western at the trial, the [court] addressed the issues as
framed by [Malak’s] counsel. In doing so, the [court] found for
[Malak] and awarded her one-half the value of United/Western.
The United/Western issue was adjudicated, and its value
divided.”
10 The appellate record does not include a response by Abdou
to Malak’s RFO. Malak’s process server was unable to locate
Abdou to serve him with Malak’s reply to United’s opposition.
9
Accordingly, the family court continued, “[Malak’s] current
request to ‘divide’ these assets is an attempt to modify the
judgment. Generally, once a martial dissolution judgment has
become final, the court loses jurisdiction to modify or alter it.
Under Fam. Code § 2556, the court has continuing jurisdiction to
award to the parties community estate assets or community
estate liabilities that have not been previously adjudicated by a
judgment in the proceeding. For example, the court ‘may divide a
community property asset not mentioned in the judgment.’ As
noted above, United/Western was more than mentioned in the
judgment, it was extensively addressed at the trial, and the
judgment divided its value and awarded [Malak] one half. This
judgment has become final. This court lacks jurisdiction to
modify the judgment as to United/Western.” (Fns. omitted.)
Malak timely appealed.
DISCUSSION
A. Governing Law and Standard of Review
“‘Generally, once a marital dissolution judgment has
become final, the court loses jurisdiction to modify or alter it.’”
(In re Marriage of Huntley (2017) 10 Cal.App.5th 1053, 1059
(Huntley); accord, In re Marriage of Thorne & Raccina (2012)
203 Cal.App.4th 492, 499.) But “‘under settled principles of
California community property law, “property which is not
mentioned in the pleadings as community property is left
unadjudicated by decree of divorce, and is subject to future
litigation, the parties being tenants in common meanwhile.”’
[Citations.] This rule applies to partial divisions of community
property as well as divorces unaccompanied by any property
10
adjudication whatsoever.” (Henn v. Henn (1980) 26 Cal.3d 323,
300; accord, Huntley, at p. 1059.)
Section 2556 provides, “In a proceeding for dissolution of
marriage, for nullity of marriage, or for legal separation of the
parties, the court has continuing jurisdiction to award community
estate assets or community estate liabilities to the parties that
have not been previously adjudicated by a judgment in the
proceeding. A party may file a postjudgment motion or order to
show cause in the proceeding in order to obtain adjudication of
any community estate asset or liability omitted or not
adjudicated by the judgment. In these cases, the court shall
equally divide the omitted or unadjudicated community estate
asset or liability, unless the court finds upon good cause shown
that the interests of justice require an unequal division of the
asset or liability.” (See Huntley, supra, 10 Cal.App.5th at p. 1061
[“section 2556 applies to community property not actually
adjudicated in the previously entered dissolution judgment”]; In
re Marriage of Thorne & Raccina, supra, 203 Cal.App.4th at
p. 501 [“the trial court may divide a community property asset
not mentioned in the judgment”].)
“In providing courts with continuing jurisdiction,
section 2556 imposes no time limit on former spouses to seek to
adjudicate omitted or unadjudicated community property after a
dissolution judgment [is] entered.” (Huntley, supra,
10 Cal.App.5th at p. 1060.) Therefore, “[t]here is no statute of
limitations imposed by Family Code section 2556 on a former
spouse who seeks adjudication of omitted or unadjudicated
community property.” (Ibid.) “Section 2556 applies even when
former spouses were aware of the community property at the
time the dissolution judgment was entered.” (Ibid.; accord,
11
Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564, 1569
[“Regardless of whether the parties know of, or discuss, the
vested pension, if the ‘court was not called upon to award it, and
did not award it, as community property, separate property, or
any property at all’ [citation], then the pension is a missed asset
subject to a postdissolution claim.”].)
“We review the interpretation of a statute and its
application to undisputed facts de novo.” (In re Marriage of
Bonvino (2015) 241 Cal.App.4th 1411, 1422; In re Marriage of
Petropoulos (2001) 91 Cal.App.4th 161, 169.)
B. The Community Property Was Adjudicated by the
Judgment
Malak contends the family court erred in denying her RFO
to adjudicate United and the 1303 Western property as
community property because the judgment did not divide United
or the 1303 Western property; the court erred in finding Malak
did not seek ownership of United and the 1303 Western property
at trial; and the court erred in determining that Malak’s RFO
under section 2556 was a request to modify the judgment.
Malak’s assertion that at trial she sought to obtain a
50 percent ownership interest in United and the 1303 Western
property is inconsistent with the record. At the start of the
January 2019 bench trial, the family court sought to clarify the
scope of the trial. The court inquired, “So what you are putting
on for this case . . . is that United and Western were community
property up until 2010, 2011, and [Abdou] in breaching his
fiduciary duty got rid of community asset[s]?” Malak’s attorney
responded, “Correct.” The court then stated, “But this court,
Department 60, has nothing to do with consolidation, so the fact
12
that there is a motion brought [to consolidate], . . . and there is no
ruling on it and the ex parte was denied, that’s just another piece
that is not involved in this trial.” Malak’s attorney replied,
“That’s fine.” The court then asked, “Okay. So I just want to be
clear that this court is not ruling on, at least the way it is being
explained in opening, how to divide United—I’ll say Western or
Ovian.[11] But this court is deciding on whether United and
Western were community property at some point and that
[Abdou] breached his fiduciary duty in getting rid of community
assets, right? Malak’s attorney answered, “Correct.” The family
court therefore correctly observed in denying the RFO that the
court addressed the breach of fiduciary duty issue as framed by
Malak’s attorney at trial.
In addition, Malak never challenged the March 2020
judgment entered following the trial. Abdou appealed from the
judgment, we affirmed, and the judgment is now final. (See In re
Marriage of Abdou and Malak, supra, B304087.) Malak did not
argue in the prior appeal that the family court should have
awarded her a 50 percent ownership in United and the
1303 Western property instead of awarding her $637,000 for
Abdou’s breach of fiduciary duty. Further, Malak stated in her
respondent’s brief in her prior appeal that she “does not allege
that the [c]ourt made an incorrect decision to go forward with the
[t]rial” (given the failure to consolidate the action with the quiet
title action). Accordingly, Malak’s RFO, in seeking a division of
United and the 1303 Western property, was an improper request
to modify the now-final judgment.
11 At the hearing, Malak’s attorney informed the court that
“[t]he sole member of United now, I believe, is Ovian
Development.”
13
Moreover, the family court did not err in finding it had no
jurisdiction to divide United and the 1303 Western property
because the March 2020 judgment already adjudicated these
community property assets. As discussed, the court found in its
statement of decision and judgment that as a result of Abdou’s
breach of fiduciary duty, under section 1101, subdivision (g),12
Malak was entitled to 50 percent of the value of the transferred
asset (the 1303 Western property), and the court awarded
$637,000 to Malak.13 The court’s award of half of the value of the
1303 Western property under section 1101, subdivision (g),
constituted an adjudication of the community property asset, and
12 Section 1101, subdivision (g), provides, “Remedies for
breach of the fiduciary duty by one spouse, including those set
out in Sections 721 and 1100, shall include, but not be limited to,
an award to the other spouse of 50 percent, or an amount equal to
50 percent, of any asset undisclosed or transferred in breach of
the fiduciary duty plus attorney’s fees and court costs. The value
of the asset shall be determined to be its highest value at the date
of the breach of the fiduciary duty, the date of the sale or
disposition of the asset, or the date of the award by the court.”
13 The court found Abdou’s breach did not fall “within the
ambit of Civil Code section 3294, which requires proof of fraud,
malice or oppression by clear and convincing evidence.” Had
Malak made this showing, she would have been entitled to an
award of 100 percent of the transferred asset as a remedy for
Abdou’s breach of fiduciary duty. Section 1101, subdivision (h),
provides, “Remedies for the breach of the fiduciary duty by one
spouse, as set forth in Sections 721 and 1100, when the breach
falls within the ambit of Section 3294 of the Civil Code shall
include, but not be limited to, an award to the other spouse of
100 percent, or an amount equal to 100 percent, of any asset
undisclosed or transferred in breach of the fiduciary duty.”
14
therefore, the court did not have continuing jurisdiction under
section 2556 to divide United and the 1303 Western property as
community property. (In re Marriage of Gilbert-Valencia and
McEachen (2023) 98 Cal.App.5th 520, 526 [“The 50 percent
award under subdivision (g) is ‘an alternative to an award of
50 percent of the asset itself’ and ‘must be the same 50 percent
interest that would be awarded in the overall division of
community assets.’”]; In re Marriage of Schleich (2017)
8 Cal.App.5th 267, 286-287 [same] (Schleich).)
Schleich is directly on point. There, the family court
awarded the wife in a marital dissolution action 50 percent of the
sales proceeds of a vehicle under section 1101, subdivision (g), for
the husband’s breach of fiduciary duty. (Schleich, supra,8 Cal.App.5th at p. 285.) The wife “also received half of the sale
proceeds in the court’s division of community property.” (Ibid.)
The Court of Appeal concluded the family court erred in awarding
the wife her community interest in the proceeds of the vehicle
“twice—once as a section 1101 remedy for [the husband’s]
fiduciary breach and again in the division of community
property.” (Id. at p. 287.) The court reasoned, “The claimant and
breaching spouses’ collective interest in a community asset
cannot exceed 100 percent. Given that the fiduciary duty
recognized under section 1101 is a duty intended to preserve each
spouse’s one-half interest in the community estate [citations], the
50 percent interest awarded under subdivision (g) must be the
same 50 percent interest that would be awarded in the overall
division of community assets. After a claimant is awarded his or
her interest in an asset under subdivision (g), there is no longer an
asset to divide in the dissolution proceedings.” (Id. at p. 286-287,
italics added.) Further, once the court awards a spouse
15
50 percent of a community asset under section 1101,
subdivision (g), “the breaching spouse would retain the asset as
separate property, the claimant spouse would receive an award
equivalent to his or her community interest in the asset, and
there would be no community asset to divide upon dissolution.”
(Id. at p. 287.)
Here, as in Schleich, after the family court awarded Malak
$637,000, which was one-half the value of the 1303 Western
property, the 1303 Western property (and United) were no longer
community property assets subject to further division.
DISPOSITION
The order is affirmed. Abdou is to recover his costs on
appeal from Malak.
FEUER, J.
We concur:
SEGAL, Acting P. J.
RAPHAEL, J.*
* Judge of the San Bernardino Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
16