Marriage of Alexis CA2/3

Filed 3/25/15 Marriage of Alexis CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
In re Marriage of ANNA and BRIAN B248594 consolidated with
ALEXIS. B250859
_____________________________________
(Los Angeles County
ANNA ALEXIS, Super. Ct. No. BD431906)
Respondent,
v.
BRIAN ALEXIS,
Appellant.
APPEAL from a judgment and orders of the Superior Court of Los Angeles
County, Thomas Trent Lewis and Randall Pacheco, Judges. Affirmed.
Brian Alexis, in pro. per., for Appellant.
Anna Alexis, in pro. per., for Respondent.
_________________________
This appeal arises from the dissolution of the marriage of Anna Alexis (Wife) and
Brian Alexis, also known as Blagoy Petrov Alexiev (Husband). Husband challenges the
trial court’s judgment determining the date of separation and the characterization,
valuation, and division of real property and other assets, and contends the trial court erred
in excluding evidence at trial addressing his health issues associated with radiation
poisoning to support his theory that Wife poisoned him. Husband, representing himself
in this appeal, raises more than 30 claims of error during trial. Husband also challenges
an interim ruling concerning the division and management of the couple’s apartment
buildings before judgment was entered, and postjudgment orders related to enforcement
of the judgment.
As we shall explain, given the limited appellate record in this judgment roll
appeal, Husband did not meet his burden to demonstrate reversible trial court error.
Accordingly, we will affirm the judgment and postjudgment orders.
BACKGROUND
Wife initiated these proceedings in August 2005, and eight years later judgment
was entered on the division of the couple’s property. The clerk’s transcript consists of 42
volumes as numerous discovery disputes and other filings delayed bringing this case to
trial. We therefore limit our background recitation of facts to the circumstances relevant
to the contentions on appeal. Moreover, because Husband elected to proceed with this
appeal on the clerk’s transcript, without a reporter’s transcript of the trial or an agreed
statement of facts,1 the relevant facts are taken from the trial court’s findings and
conclusions. (Krueger v. Bank of America (1983) 145 Cal. App. 3d 204, 207.)
1
The trial on the reserved property issues was nine court days, ending on
December 11, 2012. The appellate record includes reporter’s transcripts for numerous
hearings leading up to trial, and one reporter’s transcript dated December 11, 2012, the
last day of trial. Husband, however, does not cite to this trial transcript in support of any
claims of error.
2
1. Facts
Husband and Wife were married for 18 years. Husband was born in Bulgaria, and
Wife was born in the former Soviet Union, Republic of Ukraine. They moved to the
United States in 1989.
Wife filed a petition for legal separation in August 2005. Husband’s response to
the petition sought dissolution of the marriage. A judgment dissolving the marriage
(status only) was filed on January 13, 2009, and the court retained jurisdiction over
spousal support, property division, and attorney fees. Throughout these proceedings,
each party accused the other of inappropriate conduct associated with the management of
the couple’s property and other assets.
Although Husband contended that the date of separation was January 2005, the
trial court determined that the date of separation was August 25, 2005. The trial court
noted, however, that the date is not significant because “the family business, including
the parties’ three apartment buildings and the property in Colorado, is entirely
community property.”
a. The Family Business – Pharmabul Inc., Pharmabul-Bulgaria EEOD,
Eskabal
In 1996, Husband and Wife formed Pharmabul, a company that marketed a dietary
supplement called Trilovin. Pharmabul was incorporated in 1997, and they obtained a
patent for Trilovin in 1998. They marketed and obtained orders for Trilovin through a
website managed by a third party. Trilovin sales generated gross income of
approximately $500,000 per year from 1999 through 2005.
In August 2005, Husband transferred an unknown quantity of Pharmabul
inventory to Hiro Kawaguchi or his company KAZ International. The trial court valued
that inventory at $50,000 based upon the number of boxes and the retail sale price of a
bottle of Trilovin.
Husband also transferred a substantial amount of Pharmabul inventory valued at
$798,000 to Dr. Iraj Kiani, along with $500,000 that he withdrew from a Pharmabul bank
account. In September 2005, Husband gave Kiani an additional $40,000 to conduct a
3
clinical study. Husband, despite claiming to have abandoned the business, continued to
operate Pharmabul.
Husband transferred control of the Trilovin and Pharmabul websites to his son
Peter Alexon so that the internet orders were routed to a different web address that Wife
could not access. Alexon also attempted to transfer the patent for the name Pharmabul.
Before separation, Husband started another company, Pharmabul-Bulgaria EOOD.
The KAZ International website states the operation of Pharmabul was moved in 2005 to
Bulgaria under the control of Pharmabul-Bulgaria EEOD. Pharmabul-Bulgaria EEOD
continues to operate, and KAZ International continues to sell Trilovin.
Wife transferred approximately $120,000 from two Pharmabul bank accounts into
two new accounts in which she was the sole signatory. Wife continued to fill orders for
Trilovin from August 2005 to October 2005, until she no longer had access to the
Trilovin or Pharmabul websites or to inventory.
Husband and Wife disputed whether Pharmabul should be characterized as
community or separate property. The trial court concluded that Pharmabul, Pharmabul-
Bulgaria EEOD, another entity called Eskabul, also known as Exabul, and any patents
and trademarks obtained during the marriage were community property.
b. Apartment Buildings
The couple owned apartment buildings located at 1250 Chelsea Avenue, Santa
Monica (Chelsea Property), 836 N. Fuller Avenue, Los Angeles (Fuller Property), and
2415-2421 Arizona Avenue, Santa Monica (Arizona Property). In 2012, pursuant to a
court order, the Arizona Property was sold to pay attorney fees.
Wife resided in a unit at the Chelsea Property and had exclusive management and
control over all three apartment buildings until a receiver was appointed in March 2009.
One of the rental units at the Chelsea Property remained available to Husband by court
order from February 2006 through April 2009, but he never lived in the unit.
4
The receivership was terminated effective March 31, 2013. On March 7, 2013,
after the conclusion of trial, Wife was awarded use, management and control of the
Chelsea Property and the Fuller Property.2
Before trial, Husband and Wife both maintained that the fair market value of the
Chelsea Property was $950,000, with $880,000 in net equity. While Husband attempted
to change his opinion at trial, the court determined that he did not make the necessary
showing to support his new opinion. Husband also changed his opinion about the fair
market value of the Fuller Property, but he did not make the necessary showing at trial.
Wife valued the Fuller Property at $1.2 million with net equity of $1.1 million. Before
trial, Husband valued the Fuller Property at $1 million with net equity of $870,000.
Husband sought to charge Wife the fair rental value of the use of one of the units
at the Chelsea Property since the date of separation, and her use of the rental income
before the appointment of the receiver to support herself and assist their son in obtaining
a college education. The trial court found, however, that Husband’s income from
Pharmabul, the community property family business, was equivalent to Wife’s income
from the rental property, and the rental value of her unit at the Chelsea Property. In
making this finding, the trial court noted that Husband did not present sufficient evidence
to establish his income, having failed to provide meaningful discovery regarding his
finances since the date of separation. In addition to the failure of proof, the trial court
refused to order reimbursement for Husband’s community share of the benefits Wife
received from the apartment buildings as an evidentiary sanction for failure to respond to
discovery.
2
The statement of decision reads: “This was done prior to preparation of the full
Tentative Statement of Decision primarily to avoid incurring further receivership fees.”
Husband appeals from this March 7, 2013 order (B248594). The trial court’s interim
ruling is not an appealable order, thus we treat the appeal as being taken from the
judgment entered on August 6, 2013 from which Husband appeals (B250859). These
appeals have been consolidated for briefing and disposition.
5
c. Colorado Real Property and Bulgarian Real Property
During the marriage, husband purchased real property in Colorado. Despite
numerous discovery requests, Husband failed to identify property believed to be located
in Alamoso County, Colorado. Through other sources, Wife obtained a warranty deed
for property located in Costilla County, Colorado. Husband paid $90,500 in community
funds to obtain the Costilla County, Colorado property.
Husband purchased substantial real property in Bulgaria in 2005. He purchased
additional real property in Bulgaria in 2006 and 2007. Husband initially failed to
disclose these properties. Husband maintained that he had inherited the funds to purchase
the Bulgarian property, but he previously had testified at his deposition that he bought the
property with Pharmabul funds. Despite numerous discovery requests, Husband did not
produce any documents showing how he obtained the funds to purchase the real property
in Bulgaria. Husband took title to the Bulgarian property in his name, or in the name of
Pharmabul-Bulgaria EEOD, or Eskabul.
The trial court determined that Husband failed to present sufficient evidence that
all of the Bulgarian property he eventually disclosed in these proceedings was his
separate property. Moreover, as an evidentiary sanction, all of the Bulgarian property
was determined to be community property, with the exception of four properties in the
village Ognyanova and the village Daganovo. The trial court found that these four
properties were inherited and never transmuted into community property. Consistent
6
with prior orders of the court, the trial court ordered the community property in Bulgaria
sold.3
The trial court rejected Husband’s request for reimbursement under Family Code
section 26404 for separate property contributions to the purchase of the Bulgarian
property. Husband’s evidence that he used his separate property to purchase property in
Bulgaria was inconsistent and not supported by any documentary evidence. In addition
to the failure of proof, the trial court denied reimbursement as an evidentiary sanction.
d. Bank Accounts and Loans
Wife and Husband both accused the other of bad faith in withdrawing and hiding
large amounts of money. In addition to the $120,000 withdrawn from Pharmabul
accounts, Wife withdrew $50,000 from an account in her own name and deposited it in a
six-month CD, which the trial court concluded was community property.
In June 2005, Husband obtained a loan from Wife’s daughter in the amount of
$50,000. Wife attempted to pay back the loan, but her daughter refused. The trial court
determined that the $50,000 was a community property debt owed to Wife’s daughter.
Husband admitted at trial that he took $50,000 from a security deposit box. The
trial court rejected Husband’s claim that Wife accessed $100,000 (approximately
3
On May 13, 2013, the trial court ordered the sale of the Bulgarian property,
making a finding that all property owned in whole or in part by Husband, Pharmabul-
Bulgaria, Global Center of Innovative Technology, or Eskabul (aka Exabul) is
community property. The trial court found by clear and convincing evidence that
Husband, willfully and intentionally took community funds for his own use, with the
intention of depriving Wife of her share of community assets. The trial court’s order
“empower[s]” Wife “with the authority of the Court to sell and liquidate, at a reasonable
price,” the Bulgarian property located in Krumovgrad, Xarmanli, Stranjevo, Sofia, and
Elin-Pelin, held under Husband’s name, Pharmabul-Bulgaria, and Global Center of
Innovative Technology. Husband appealed that order, which is modified and
incorporated into the judgment. Thus, the appeal is deemed to be taken from the
judgment.
4
Unless otherwise indicated, all further statutory references are to the Family Code.
7
$97,000) in community funds from a bank account, finding those funds belonged to
Wife’s daughter, and were not community property.
e. Evidentiary Sanctions
Before trial, the court issued sanctions (In re Marriage of Feldman (2007)
153 Cal. App. 4th 1470, 1479) in the amount of $50,000 against Husband for failure to
disclose real property in Bulgaria, and in the amount of $75,000 for discovery
noncompliance. Those Feldman sanctions were paid to Wife’s counsel from a
community property line of credit obtained on the couple’s apartment buildings.
Husband also was ordered to pay a total of $14,385 in discovery sanctions, which were
paid from the community property line of credit. Accordingly, the trial court concluded
that Husband owed Wife $69,693.
f. Attorney Fees
Wife incurred $870,000 in attorney fees and costs, which the trial court
determined was reasonable based upon the “inordinate amount of work [Husband’s]
obstruction and serial accusations have caused.” The trial court made numerous findings
that Husband breached his fiduciary duty of disclosure during the dissolution proceedings
and specifically relied on section 1101, subdivision (g), which mandates an attorney fees
award. The trial court also made a finding under section 1101, subdivision (h), which
allows attorney fees as an additional sanction.
In addition to Husband’s obstruction and serial accusations, the trial court found
that Husband “willfully and purposely engaged in a campaign to seize the family
business.” Husband then “surreptitiously continued to operate the business directly or
through surrogates, and used business income and assets to purchase real property that he
intended to keep for himself.” Based upon these findings, the court assessed attorney
fees and costs in the amount of $435,000 payable by Husband to Wife pursuant to
sections 271, 1101, subdivisions (g) and (h).
8
2. Proceedings
a. Trial on Division of Property (Reserved Issues), Statement of Decision
After the nine-day trial, the court issued a tentative statement of decision. Both
parties filed objections. Husband submitted a 68-page document attempting to add new
evidence and reargue the case, which the trial court concluded did not warrant
modification of the tentative statement of decision. The statement of decision was filed
on June 3, 2013.
b. Judgment on Division of Property (Reserved Issues), Appeal
Notice of entry of judgment was filed on August 6, 2013. The judgment states the
Bulgarian property “shall be sold as soon as possible. Except as set forth in this
Judgment, the net sales proceeds of the Bulgarian Properties shall be divided evenly
between the parties.” Husband “shall promptly cooperate with [Wife] regarding the sale
of the Bulgarian Properties.” The judgment provided that Husband’s share of the sale
proceeds “shall first be taken by [Wife] to pay the equalization payment set forth in this
Judgment, to pay sanctions and attorney fees awarded to [Wife] in this proceeding, and to
pay any other unpaid debt owed by [Husband] pursuant to this Judgment.”
The trial court retained jurisdiction over “any and all issues related to and arising
out of the sale or ownership of the Bulgarian Properties and division of the proceeds
related thereto.”
Husband timely filed a notice of appeal from the judgment.
c. Order on Reserved Issues, Ex Parte Order, Appeal
On August 20, 2013, the trial court made findings and orders in connection with
taxes owed and the community line of credit extended on the Arizona Property. The trial
court also ordered and instructed the Deputy Clerk of Court to sign the following
documents: (1) quitclaim deed on the Costilla County, Colorado property; (2) quitclaim
deed on the Alamosa County, Colorado property; (3) interspousal transfer deed on the
Fuller Property; (4) interspousal transfer deed on the Chelsea Property; and (5) request
for taxpayer identification in connection with the sale of the Arizona Property.
Husband timely filed a notice of appeal.
9
d. Motion to Vacate, Appeal
On September 19, 2013, Husband filed a motion to vacate the August 20, 2013
order and ex parte order pursuant to Code of Civil Procedure section 663 on the grounds
the orders were taken in violation of the law. The trial court denied the motion with
prejudice.
Husband timely filed a notice of appeal.
CONTENTIONS
Husband contends that the trial court abused its discretion in excluding evidence at
trial, erred in determining the date of separation, erred in its characterization of
Pharmabul and the related entities, erred in its characterization and valuation of the
Chelsea Property and the Fuller Property, erred in awarding Wife the Colorado properties
as a sanction, erred in its allocation of bank account assets, and erred in awarding Wife
attorney fees. In addition, Husband contends that the trial court lacked jurisdiction to
determine that the Bulgarian property was a community asset and to thereafter order the
sale and distribution of the proceeds.5
DISCUSSION
1. Standard of Review
Husband did not provide a reporter’s trial transcript and elected to proceed with
this appeal based upon a clerk’s transcript. This is known as a judgment roll appeal.
(Allen v. Toten (1985) 172 Cal. App. 3d 1079, 1082-1083; Krueger v. Bank of America,
supra, 145 Cal.App.3d at p. 207.) “In a judgment roll appeal based on a clerk’s
transcript, every presumption is in favor of the validity of the judgment and all facts
consistent with its validity will be presumed to have existed. The sufficiency of the
evidence is not open to review. The trial court’s findings of fact and conclusions of law
are presumed to be supported by substantial evidence and are binding on the appellate
5
Husband appealed from the postjudgment orders dated August 20, 2013, and the
denial of his statutory motion to vacate those orders, but he has failed to address these
orders in his opening brief and therefore any claim of error has been forfeited. (Julian v.
Hartford Underwriters Ins. Co. (2005) 35 Cal. 4th 747, 761, fn. 4.)
10
court, unless reversible error appears on the record.” (Bond v. Pulsar Video Productions
(1996) 50 Cal. App. 4th 918, 924; see also Cal. Rules of Court, rule 8.163.)
“[T]he record before us consists properly of only the judgment, findings of fact
and conclusions of law in support thereof, and the pleadings; we are not concerned with
evidence taken in the trial court, either orally or through the admission of exhibits
(whether or not said exhibits are incorporated into the clerk’s transcript). . . .” (Millbrae
Assn. for Residential Survival v. City of Millbrae (1968) 262 Cal. App. 2d 222, 226-227.)
Husband cannot enlarge the scope of appellate review by designating for inclusion in the
clerk’s transcript documents not properly a part of the judgment roll, such as the exhibits
received in evidence. (Tibbets v. Robb (1958) 158 Cal. App. 2d 330, 337.)
Further, a judgment or order of the trial court is presumed to be correct, and all
intendments and presumptions are indulged to support it on matters as to which the
record is silent. (Denham v. Superior Court (1970) 2 Cal. 3d 557, 564; In re Marriage of
Gray (2002) 103 Cal. App. 4th 974, 977-978.) It is Husband’s burden to affirmatively
demonstrate reversible error by: (1) providing an adequate record that affirmatively
demonstrates error; (2) supporting all appellate arguments with legal analysis and
appropriate citations to the material facts in the record; and (3) showing exactly how the
error causes a miscarriage of justice, or else his contentions are deemed forfeited.
(Maria P. v. Riles (1987) 43 Cal. 3d 1281, 1295-1296; City of Lincoln v. Barringer (2002)
102 Cal. App. 4th 1211, 1240; In re Marriage of McLaughlin (2000) 82 Cal. App. 4th 327,
337.)
Husband’s appellate record is not adequate, and his opening brief lacks both
citations to pertinent legal authority and coherent legal argument demonstrating
reversible error. (See Cal. Rules of Court, rule 8.204(a)(1)(B)-(C)). Although Husband
appears in this court without counsel, that does not entitle him to special treatment. (See,
e.g., Rappleyea v. Campbell (1994) 8 Cal. 4th 975, 984-985.)
These procedural rules are not mere technical requirements; they are essential to
the appellate process. Husband must “ ‘present [his] cause systematically and so
arranged that those upon whom the duty devolves of ascertaining the rule of law to apply
11
may be advised . . . of the exact question under consideration, instead of being compelled
to extricate it from the mass.’ ” (Opdyk v. California Horse Racing Bd. (1995) 34
Cal. App. 4th 1826, 1830-1831, fn. 4.)
With our standard of review and these procedural rules in mind, we turn to the
contentions on appeal.
2. Exclusion of Evidence
Husband contends the trial court erred in excluding evidence related to his theories
that Wife attempted to kill him by poisoning him, and that Wife forged his signature to
certain documents to hide assets. The court’s rulings on the exclusion of particular
evidence are not matters appearing on the face of the record and cannot be reviewed in a
judgment roll appeal. (See Clemmens v. Clemmens (1936) 14 Cal. App. 2d 31.) Thus, the
law compels us to assume the trial court’s decisions are correct.
3. Sufficiency of the Evidence
Husband’s claims of error concern the trial court’s determination of the date of
separation and its rulings on the characterization, valuation, and division of property.
These errors address the sufficiency of the evidence, which is not subject to attack on a
judgment roll appeal. We cannot review the sufficiency of the record if the record does
not contain all the evidence. Under these circumstances, we must presume the evidence
submitted was sufficient to sustain the trial court’s decision.
a. Date of Separation
Husband contends the trial court erred in determining that August 25, 2005 was
the date of separation, as he claims to have presented sufficient evidence that the date of
separation was in January 2005. The significance of this fact affects Husband’s
contentions regarding the characterization of the family business and the Bulgarian
property.
“[L]egal separation requires not only a parting of the ways with no present
intention of resuming marital relations, but also, more importantly, conduct evidencing a
complete and final break in the marital relationship.” (In re Marriage of von der Nuell
(1994) 23 Cal. App. 4th 730, 736.) Thus, a court decides the date of separation by
12
examining two components, one subjective and the other objective. (In re Marriage of
Norviel (2002) 102 Cal. App. 4th 1152, 1158-1159.) The subjective component examines
whether either party harbors the subjective intent to end the marriage. The objective
component examines whether there is objective conduct in furtherance of that intent. (Id.
at p. 1159.) The determination of a date of separation is proven by a preponderance of
evidence. (In re Marriage of Peters (1997) 52 Cal. App. 4th 1487, 1489, 1491-1494.) In
this case, we review the trial court’s determination of disputed facts related to the date of
separation under the substantial evidence standard. (In re Marriage of Norviel, at
p. 1158.) As a reviewing court, we must view the evidence in the light most favorable to
the prevailing party, giving Wife the benefit of every reasonable inference, and resolving
all conflicts in her favor. (In re Marriage of Mix (1975) 14 Cal. 3d 604, 614.)
The appellate record indicates that the trial court followed the law in determining
the date of separation. Because Husband failed to provide an adequate record to
determine whether substantial evidence supports the trial court’s factual findings, we are
required to resolve the issue against him and presume that the trial court’s decision is
supported by substantial evidence.
b. Characterization and Valuation of Pharmabul and Related Entities
Husband raises numerous errors concerning the characterization of Pharmabul,
Pharmabul-Bulgaria EEOD, and Eskabul. “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; Fam. Code, § 760 [“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.”].)
“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
13
that tracing is impossible. [Citation.]” (In re Marriage of Rossin (2009) 172 Cal. App. 4th
725, 732.) The factual findings that underpin the characterization of property as either
community or separate are reviewed for substantial evidence. (Id. at p. 734.)
The trial court made a determination that “[w]ith the possible exception of pre-
existing real property in Europe and [Husband’s] possible inheritance . . . , all of the
parties’ assets and debts at the time of separation, including everything related to the
dietary supplement business, were acquired during the marriage and are community
property.” Given the appellate record, we must conclusively presume that the evidence is
sufficient to sustain the trial court’s finding. Accordingly, Husband’s additional claims
of error addressing the trial court’s characterization of community property assets
purchased with Pharmabul funds also fail.6
Husband next contends that the trial court legally erred by concluding that he
owed a fiduciary duty to Wife in connection with his management of Pharmabul. This
argument is based upon Husband’s assertion that Pharmabul was his separate property
and he owed no duty to Wife. Under section 721, subdivision (b), spouses “are subject to
the general rules governing fiduciary relationships that control the actions of persons
occupying confidential relations with each other. This confidential relationship imposes
a duty of the highest good faith and fair dealing on each spouse, and neither shall take
any unfair advantage of the other. This confidential relationship is a fiduciary
relationship subject to the same rights and duties of nonmarital business partners, as
provided in Sections 16403, 16404, and 16503 of the Corporations Code.” Fiduciary
duties are made specifically applicable during dissolution proceedings by section 1110,
6
Husband claims as error the trial court’s characterization of the apartment
buildings as community assets based upon his assertion that Pharmabul funds were used
to renovate the apartment buildings. He further claims that the Colorado properties and
two vehicles should have been characterized as separate property because they were
purchased with funds drawn from Pharmabul accounts.
14
subdivision (e).7 Section 721, subdivision (b) “makes clear that the duty to disclose
relevant information concerning transactions affecting the community property is an
affirmative and broad obligation.” (In re Marriage of Prentis-Margulis & Margulis
(2011) 198 Cal. App. 4th 1252, 1269.)
The trial court’s factual finding that Husband breached his fiduciary duty owed to
Wife when, for example, Husband engaged in a “clandestine campaign” to take over the
family business and surreptitiously used community funds to buy property in Bulgaria in
his own name, cannot be challenged on a judgment roll appeal. Given the appellate
record, Husband has presented no grounds on the face of the appellate record to show
reversible error.8
Finally, Husband argues that the trial court erred in valuing Pharmabul at “zero
value.” In making this argument, Husband cites to the section of the trial court’s
statement of decision entitled “Conclusion,” but he fails to reference the lengthy
valuation discussion in the statement of decision where the trial court valued Pharmabul
and the Bulgarian entities at $136,000.
7
Section 1100, subdivision (e) provides: “Each spouse shall act with respect to the
other spouse in the management and control of the community assets and liabilities in
accordance with the general rules governing fiduciary relationships which control the
actions of persons having relationships of personal confidence as specified in Section
721, until such time as the assets and liabilities have been divided by the parties or by a
court. This duty includes the obligation to make full disclosure to the other spouse of all
material facts and information regarding the existence, characterization, and valuation of
all assets in which the community has or may have an interest and debts for which the
community is or may be liable, and to provide equal access to all information, records,
and books that pertain to the value and character of those assets and debts, upon request.”
8
Although Husband claims the trial court erred in assessing attorney fees as
sanctions against Pharmabul, Pharmabul-Bulgaria EEOD, and Eskabul, as discussed post,
the attorney fees were assessed against Husband.
15
c. Valuation and Division of Apartment Buildings to Wife, Section 1101,
Subdivision (h) Remedy
Husband contends that the trial court erred in its valuation of the Chelsea Property
and the Fuller Property. He further contends that the trial court erred in dividing the
community property insofar as the trial court should have assessed Wife with the rental
income she earned while managing the apartments.
“The trial court possesses broad discretion to determine the value of community
assets as long as its determination is within the range of the evidence presented.
[Citation.] The valuation of a particular asset is a factual question for the trial court, and
its determination will be upheld on appeal if supported by substantial evidence in the
record. [Citation.] All issues of credibility are for the trier of fact, and all conflicts in the
evidence must be resolved in support of the judgment. [Citation.] The trial court’s
judgment is presumed to be correct on appeal, and all intendments and presumptions are
indulged in favor of its correctness. [Citation.]” (In re Marriage of Nichols (1994)
27 Cal. App. 4th 661, 670.)
The trial court also is vested with considerable discretion to divide community
property to achieve an equitable resolution. (In re Marriage of Duncan (2001)
90 Cal. App. 4th 617, 625.) Where the court is vested with discretion, we review its ruling
for abuse of that discretion. (In re Marriage of Reuling (1994) 23 Cal. App. 4th 1428,
1435.) “As long as the court exercised its discretion along legal lines, its decision will be
affirmed on appeal if there is substantial evidence to support it.” (In re Marriage of
Duncan, at p. 625.)
The trial court valued the Chelsea Property and the Fuller Property based on
evidence presented by both parties. The trial court did not credit Husband’s change of
opinion on the value of these assets. Given the appellate record, the law compels us to
16
assume the evidence presented to the trial court supports the valuation of these
properties.9
The trial court’s decision not to award Husband a share of profits from the
apartment buildings during the period that Wife managed the properties (2006-2009) is
also presumed to be supported by substantial evidence. During this period, neither party
paid spousal support. In weighing the evidence, the trial court concluded that Husband’s
income from Pharmabul was equivalent to Wife’s income from the apartment buildings
and the rental value of the unit she occupied at the Chelsea Property. The charge against
Wife for the use of the unit also would have been offset by the rental unit that was made
available to Husband during the same period.
In addition, the trial court declined to order reimbursement for Husband’s
community share of the benefits Wife received from the rental income as an evidentiary
sanction for failure to disclose basic records concerning the operation of Pharmabul after
separation. As noted above, section 721, subdivision (b), provides that spouses are
subject to the general rules governing fiduciary relationships “that control the actions of
persons occupying confidential relations with each other.” Section 1101, subdivision (h)
permits an award to the other spouse for breach of fiduciary duty “as set forth in Section
721 and 1100 . . . of 100 percent, or an amount equal to 100 percent, of any asset
undisclosed or transferred in breach of the fiduciary duty.” Here, the trial court awarded
Wife 100 percent of the value of the community property interest in the rental income
because Husband continued to realize significant income from Pharmabul during the
same period and breached his fiduciary duty of disclosure.
9
The Chelsea Property and the Fuller Property indisputably are community assets.
Thus, contrary to Husband’s opening brief, the trial court’s decision to award the
apartment buildings to Wife was not a sanction but an equal division of community
property.
17
d. Section 1101, Subdivision (h) Remedy of Value of Undisclosed
Colorado Properties
Husband contends the trial court erred in awarding the vacant Colorado properties
to Wife. Although Husband does not develop this argument further, he cites to the record
to show a transfer of $90,500 from a Pharmabul account, which the trial court determined
was community property. He failed to produce any documents at trial to substantiate his
claim that the Colorado properties were his separate property. Husband’s challenge to
the sufficiency of the evidence fails for lack of an adequate appellate record.
To the extent Husband challenges the sanction, Husband did not disclose the
Colorado properties in any schedule of assets and debts he prepared in violation of his
fiduciary duty owed to Wife. Husband “surreptiously” purchased the Colorado properties
in his own name with community funds. Based upon this finding, Wife was awarded the
Costilla County, Colorado property valued at $10,000. The trial court determined by
clear and convincing evidence that Husband breached his fiduciary duty owed to Wife
because he failed to disclose any information regarding the Alamosa County, Colorado
property. Pursuant to section 1101, subdivision (h), Wife was awarded 100 percent of
any real property in Colorado.
e. Characterization and Division of Bank Accounts, Cash, and Other
Assets
Husband contends there was insufficient evidence to support the trial court’s
separate property characterization that an account containing approximately $97,000
belonged to Wife’s daughter. The trial court, however, credited Wife’s testimony that the
account belonged to her daughter. The trial court also credited Wife’s testimony that she
used $50,000 in community funds for expenses on the Chelsea property and the Fuller
Property. It is up to the trial court to make that credibility determination, and given the
appellate record, the law compels us to conclude that substantial evidence supports the
trial court’s decision.
Husband further contends there was insufficient evidence to support the trial
court’s order dividing community property assets and debts, awarding him the $50,000
18
loan from Wife’s daughter, and $50,000 in cash taken from a security deposit box. The
trial court made a finding that Husband received the $50,000 loan, which is a community
debt.10 Husband did not deny at the time of trial that he took at least $50,000 from the
security deposit box. Although Husband cites to Wife’s deposition testimony to support
his argument, presumably for purposes of impeaching her testimony at trial on this point,
Husband has not shown this deposition testimony was admitted into evidence, and in any
event, he cannot challenge the sufficiency of the evidence on a judgment roll appeal.
We have reviewed Husband’s additional contentions in his opening brief and
conclude that he has not shown reversible error.
Because Husband is confined to showing errors that affirmatively are
demonstrated by the record, “showing any such error is extraordinarily hard to do, given
that a challenge to the sufficiency of the evidence cannot be made.” (In re Marriage of
Hall (2000) 81 Cal. App. 4th 313, 316.) Here, Husband has not met his burden on appeal.
4. Attorney Fees Award and Evidentiary Sanctions
Husband challenges the trial court’s order awarding attorney fees and costs to
Wife, along with the evidentiary sanctions previously awarded in this action. Husband
mistakenly argues that the trial court awarded Wife $870,000 and an additional $435,000.
Wife reasonably incurred $870,000 in attorney fees and costs. The trial court ordered
Husband to pay Wife $435,000 for the purpose of compensating Wife’s counsel based on
section 271, which permits the award of attorney fees for conduct that frustrates the
policy of the law to promote settlement of litigation, and section 1101, subdivisions (g)
and (h). Subdivision (g) provides that remedies for breach of a fiduciary duty by one
10
Husband also claims the trial court actually should have charged Wife
$100,959.46 in connection with this loan transaction. As the trial court stated, Husband
claimed two checks were used to repay the loan. Wife produced records showing that the
first check for $50,959.40 (which included interest) was “written but exchanged for two
separate checks: one for $50,000 and one for $956.40.” “The back of the check for
$50,959.40 specifically states it was not used for intended purpose.” Although Wife
attempted to repay the loan, her daughter did not accept the funds and they were
deposited into Wife’s account.
19
spouse include attorney fees and costs. The trial court concluded that Husband’s
“obstruction, obfuscation, and one unfounded accusation after another,” along with his
breach of fiduciary duty owed to Wife in “willfully and purposefully engag[ing] in a
campaign to seize the family business” and thereafter “surreptitiously continued to
operate the business . . . and used business income and assets to purchase real property
which he intended to keep himself,” warranted the award of attorney fees to Wife.
Husband presents no reasoned argument or citation to legal authority to show the award
was reversible error.
Husband apparently challenges the June 2010 sanctions order in the amount of
$50,000, and the April 2012 sanctions order in the amount of $75,000 against him. These
sanctions already have been paid from the community property line of credit taken on the
apartment buildings. Even if a challenge to these sanctions orders were timely, our
standard of review is an abuse of discretion. (In re Marriage of Feldman, supra,
153 Cal.App.4th at pp. 1478-1479.) We review any finding of fact that formed the basis
for the award of sanctions under a substantial evidence standard. (Id. at p. 1479.) Based
upon the applicable standard of review, Husband has failed to meet his burden to show
reversible error.
5. Jurisdiction over Characterization and Division of Bulgarian Real Property
Husband appears to contend the trial court lacked jurisdiction to determine that the
Bulgarian property was community property because only the Bulgarian courts can make
that determination. Property “wherever situated” acquired by a married person during
marriage while domiciled in this state is community property. (§ 760.) While the court
lacks jurisdiction to enter an order directly affecting title to property outside its borders, it
may declare the interests in such property and can make such orders to a person over
whom it has personal jurisdiction. (See Rozan v. Rozan (1957) 49 Cal. 2d 322, 330.) The
trial court further determined that in acquiring the Bulgarian property in his name or the
name of a third-party entity, Husband violated his fiduciary duty owed to Wife. In
support of the judgment, we interpret the decree as a declaration of entitlement to the
20
property.11 There can be no question as to a trial court’s authority to order the sale of
community property assets where such a sale is necessary in order to effect the equal
division of the community estate mandated by section 2550.
Husband also contends that the Bulgarian property was purchased with money
from the sale of two properties he owned before marriage, his inheritance, and money
borrowed from his son. The trial court, however, concluded that Husband failed to
submit any documents evidencing when he purchased the real property in Bulgaria or the
source of funds used to purchase the property.12 The trial court also determined
Husband’s testimony denying that he used community property funds to purchase the
Bulgarian property lacked credibility. We do not second guess the trial court’s credibility
determination on appeal. Moreover, given the appellate record, the trial court’s findings
of fact are presumed to be supported by substantial evidence and are binding on this
court. Accordingly, Husband has not met his burden of demonstrating reversible error on
the face of the appellate record.
11
Husband also claims that the judgment must be reversed because the trial court
determined that the four properties in the village Ognyanova and the village Daganovo
are his separate property, when these properties actually belong to “16 Heirs not to
Brian.” In support of the judgment, we interpret the decree entered as determining the
interest in these properties as between Husband and Wife.
12
Husband also claims that he purchased the Bulgarian real property after January
2005, which he maintains is the date of separation. The trial court, however, determined
that the date of separation was August 25, 2005. That finding is presumed correct given
the appellate record before us.
21
DISPOSITION
The judgment and postjudgment orders are affirmed. Wife is awarded costs on
appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
ALDRICH, J.
We concur:
EDMON, P. J.
KITCHING, J.
22