Dalgleish v. Selvaggio (In re Dalgleish)

17 Cal.App.5th 1172

225 Cal.Rptr.3d 900

IN RE the MARRIAGE OF Stacy DALGLEISH AND Piero SELVAGGIO.

Stacy Dalgleish, Plaintiff and Appellant,

v.Piero Selvaggio, Defendant and Appellant.

B266579

Court of Appeal, Second District, Division 1, California.

Filed November 1, 2017

Law Office of Leslie Ellen Shear, Julia C. Shear Kushner and Leslie Ellen Shear, Encino for Plaintiff and Appellant.

Law Offices of James R. Eliaser, James R. Eliaser and Joanne D. Ratinoff, Los Angeles for Defendant and Appellant.

LUI, J.

Stacy Dalgleish, the petitioner in a marital dissolution proceeding, and Piero Selvaggio, the respondent in that proceeding, both appeal from postjudgment orders of the trial court. Those orders enforced one of the terms of the parties' stipulated judgment, which required an equalization payment from Selvaggio to Dalgleish following a joint appraisal of certain real property. Dalgleish claims that the trial court erred in awarding interest on that payment from the date of the trial court's ruling rather than the date the payment was due, about 19 months earlier. In his cross-appeal, Selvaggio claims that the trial court erred in finding that the appraisal in fact was a joint appraisal as required by the judgment. We agree with Dalgleish's claim and reject Selvaggio's. We therefore reverse the trial court's orders only with respect to the date when interest on the equalization payment began to accrue.

BACKGROUND

1. The Appraisal

On December 7, 2009, the parties executed and the trial court approved a 37-page "Stipulated Further Judgment on Reserved Issues" (Judgment) addressing property division and other topics. The Judgment stated that it was "the entire agreement of the parties exclusive of the issues of custody and visitation." The Judgment was filed on December 9, 2009.

In paragraph 1.C.iii, under the heading, "Equalizing Payments," the Judgment directed that: "The parties shall forthwith engage a joint real estate appraiser to appraise the real properties located at 3115 and 3125 Pico Boulevard, Santa Monica, California as of September 2, 2008 and their fair market values at the time of the Transmutation Agreement executed by the parties on May 1, 2003. If there was an increase in the fair market value of said properties between those two dates, then Respondent shall, within ten (10) days of receipt of the appraisal report, pay Petitioner, tax free, a sum equal to one-half (½) of the increase in value of said properties as determined by the appraiser." The Judgment did not provide any right or describe any procedure to challenge the results of the joint appraisal for purposes of calculating this payment (the Equalization Payment).

In late 2012 and early 2013, Judith Forman, counsel for Dalgleish, and James Eliaser, counsel for Selvaggio, had various communications with each other and with Larry Sommer, an appraiser, about retaining Sommer to conduct an appraisal of the properties on Pico Boulevard (the Pico Property). Sommer did not send out an engagement letter, but he understood that he had been retained by both parties and proceeded to work on appraising the Pico Property. During the course of his work he communicated with both parties jointly concerning the status of the project and when he would finish.

Sommer completed his work on the appraisal of the Pico Property (the Appraisal) and prepared a report that he sent to both parties on July 26, 2013. The Appraisal valued the Pico Property at $1,618,542 as of May 1, 2003, and $3,810,645 as of September 2, 2008. One-half the amount of the appreciation was therefore $1,096,051.50.

After the Appraisal was completed, the parties had various communications with each other about clearing title on the Pico Property. Then, in February 2014, a business lawyer for Selvaggio wrote to Sommer, raising questions about the methodology and the results of the Appraisal. In communications with Forman, Selvaggio's lawyer also questioned whether the parties had in fact jointly retained Sommer. The parties had further communications about the Appraisal and the Equalization Payment, but reached no agreement about the adequacy of the Appraisal and whether Sommer had been jointly retained.

2. Dalgleish's Request for Order Enforcing the Judgment

On August 6, 2014, Dalgleish filed a Request for Order (RFO), seeking enforcement of the Judgment with respect to the Equalization Payment. The RFO asked the trial court to find that the "amount of $1,095,000 was due from Respondent to Petitioner on August 5, 2013 under Paragraph 1.C.iii of the Judgment," and that under Code of Civil Procedure ¹ section 685.010, "statutory interest at the rate of 10% per annum has been accruing on the amount of $1,095,000 since August 5, 2013 and shall continue to accrue until paid in full." Selvaggio opposed the motion on the ground that Dalgleish had never agreed to retain Sommer and the Appraisal was therefore not a joint appraisal as required by the Judgment.

The court held a hearing on the RFO on October 31, 2014. The court announced its tentative findings that: (1) there was no right under the Judgment to challenge the Appraisal; (2) Sommer was hired as a joint appraiser pursuant to paragraph 1.C.iii of the Judgment; and (3) even if there had been no agreement to hire Sommer, Selvaggio was equitably estopped from challenging whether the Appraisal was joint. During the argument that followed the court's tentative ruling, Selvaggio's counsel, Eliaser, made a request to cross-examine Sommer. After some discussion about the consequences of Selvaggio's failure to file a written request for cross-examination under Family Code section 217, the court asked Dalgleish's counsel, Forman, whether she was willing to agree to an evidentiary hearing at which Sommer would testify, or whether she was satisfied with the record as it stood. The court stated that, if it were to enter a judgment without further proceedings, interest would run from the current date, "not last summer." Forman asked the court to confirm that, if she agreed to a further evidentiary hearing and Dalgleish prevailed, interest would be retroactive to October 31, 2014. The court replied, "Yes, it would be retroactive to today." Forman stipulated to the further hearing on Dalgleish's behalf.

The evidentiary hearing took place on March 11, 2015. Sommer testified that he understood he was jointly retained by Forman and Eliaser. At the conclusion of the hearing, the trial court announced its findings that the Appraisal was joint and that Selvaggio was to pay Dalgleish one-half of the $2,192,103 appreciation amount pursuant to paragraph 1.C.iii of the Judgment. The court stated that, although the Judgment required payment within 10 days, "[t]he court can alter that to be 90-day period with interest accruing as of October 31, 2014 pursuant to the court's prior order."

Eliaser asked to be heard on the issue of interest. He argued that interest could start to accrue only "from the date on which there is a ruling as to a sum certain," and that there was no sum certain until the court's ruling that day. The court accepted that argument and modified its ruling to order interest on the Equalization Payment beginning March 11, 2015. After some additional argument on the issue of interest, the court explained its reasoning that "today's ruling is a type of final judgment at which time the court is entering a specific amount of money that is due," and that therefore interest could not have accrued earlier.

The court declined further briefing on the issue. Dalgleish nevertheless filed a motion to change the court's order with respect to the date when interest began to accrue. After a hearing on May 12, 2015, the court denied Dalgleish's motion. The court found that Selvaggio "had a good faith basis to challenge the Appraisal such that there was no amount certain for a monetary judgment in existence until the court's ruling on March 11, 2015." The court also stated that "the judgment in terms of the amount of appreciation was contingent and there was no amount certain when the judgment was entered back in 2009. And the court has also found that the judgment was not self-executing, given these particular set of facts."

The court subsequently filed written orders setting forth its findings of fact and rulings on the issues of the joint Appraisal and interest on the Equalization Payment. The court found that "[t]here is ample evidence to determine through words, emails, and conversations and exchanges between the parties and the appraiser that the objective intent of the parties was to, and they did, jointly retain Mr. Sommer as their expert." Based upon the Appraisal and paragraph 1.C.iii of the Judgment, the court therefore found that the increase in fair market value of the Pico Property from May 1, 2003, to September 2, 2008, was $2,192,103, and that Selvaggio owed half that amount to Dalgleish.

Consistent with the trial court's oral findings at the May 12, 2015 hearing, the court's final order also stated that the "March 11, 2015 Ruling is a type of final judgment under CCP § 665.020(a)^{[2 ]} at which time the Court is entering a specific amount of money that is due, and therefore interest entered under this Code section could not have accrued prior to [March 11, 2015]." The court ordered that the amount of $1,096,051.50 was payable from Selvaggio to Dalgleish, with interest accruing at the statutory rate of 10 percent from March 11, 2015.

DISCUSSION

1. Interest Began to Accrue on the Amount of the Equalization Payment When It Was Due Under the Judgment

The parties agree that the issue of when interest begins to accrue on an amount included in a monetary judgment is a question of law that we review de novo. (See Chodos v. Borman (2015) 239 Cal.App.4th 707, 712, 190 Cal.Rptr.3d 889 ( Chodos ).) We also independently interpret a marital settlement agreement incorporated into a dissolution judgment unless there is conflicting parol evidence affecting its meaning. ( In re...