In re Marriage of Denton

Page 1

In re the Marriage of DEBRA DENTON and MICHAEL ANDERSON DEBRA M. DENTON, Appellant, v. MICHAEL ANDERSON, Respondent.

H025146.

Court of Appeals of California, Sixth District.

Filed October 29, 2003.

Appeal from Santa Clara County, Superior Court No. FL057847.

RUSHING, P.J.

This is an appeal from an order issued in a marital dissolution action that resulted from an order to show cause (OSC) proceeding filed by Michael Anderson, the former husband (hereafter "Husband"), against his former wife, Debra Denton (hereafter "Wife") in which the trial court made various orders regarding the disposition of the parties' marital property. Wife contends that the trial court erred when it failed to enforce the parties marital settlement agreement, when it ordered an unequal division of the property and awarded Husband $170,000 for Wife's misconduct in the management of marital assets, when it found that its awards in favor of Husband were in the nature of spousal support, when it took judicial notice of a ruling of the bankruptcy court in Husband's bankruptcy action, and when it excluded certain documents from evidence. Wife also challenges the trial court's findings related to the value of certain real property, the method used by the trial court to determine the value of the property, and the court's ruling regarding the parties' personal property and retirement accounts.

We conclude that Wife has not met her burden of demonstrating error related to the court's award of $170,000 for the loss of the real property, based on Wife's mismanagement and misconduct during the marital proceedings. We also hold that the court erred in characterizing its award as spousal support and strike that portion of the order. We conclude that the court abused its discretion in failing to award Wife her share of some bonds, in awarding Husband a share of Wife's retirement and 401K funds without first determining whether her obligation to him had been discharged in bankruptcy, and in failing to determine whether Wife had any rights in Husband's 401K and pension plans. We shall therefore reverse and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

In April 1996, after 11 years of marriage, Wife petitioned for dissolution of marriage. Husband filed a response. The parties have two children. The petition and response raised issues as to custody and visitation, as well as the division of the parties' property.

Early Disagreements Regarding Property

The divorce proceedings were contentious and the parties disagreed about the division of their property. The parties agreed that Wife could remove specific items of personal property from the former family home in May 1996. Husband boxed up some of the property for Wife. Husband's mother was present when Wife arrived, to make a record of what Wife took. The police were called, allegedly because Wife refused to let Husband's mother record what she was taking. Husband and Husband's mother claimed Wife took things that she was not supposed to take. Wife denied doing so.

Husband alleged that Wife took $1,642 that had been set aside to pay the rent out of a credit union account, that the rent was not paid, and that this caused a chain of events that led to Husband's bankruptcy. Wife admitted to taking the funds, but claimed that she had used the money to pay the rent and that when the bank refused to accept the payment, she paid the landlord directly.¹

In October 1996, while Wife was at work, Husband took the van that Wife customarily drove from the parking lot at her place of employment. Wife obtained an order from the court, finding that she was entitled to exclusive, temporary use of the van. Husband never returned the van and Wife opted not to file a contempt proceeding. The parties later agreed that Husband could keep the van, if he made the payments. Wife obtained a court order, ordering Husband to pay her $750 in attorney fees as a result of the van incident.

Settlement of Property Issues

The parties agreed to a division of their personal property and furnishings at mediation on October 21, 1996. The parties' marital status was terminated pursuant to an interlocutory judgment filed on November 15, 1996. Shortly thereafter, Husband placed some of the property that was to go to Wife in storage, along with his own property.

On January 30, 1997, shortly before trial of the property the issues, the parties attended a settlement conference before Judge Pro Tem Dennis Del Ponte and settled the property issues. The terms of their settlement agreement were memorialized in a handwritten memorandum that was signed by both parties, their counsel, and the pro tem judge. The parties agreed that their settlement would be reduced to a stipulated judgment. The pro tem judge wrote the words "It is so ordered" on the memorandum and ordered Wife's attorney, Barbara Brock, to prepare the stipulated judgment.

Terms of Property Settlement Agreement

According to the handwritten memorandum, Wife was to quitclaim any interest she had in the real property located at 2701 Gum Drop Drive, San Jose (hereafter Gum Drop)² in exchange for Husband's signature on the stipulated judgment. Husband was to keep the assets of a photography business.³ Husband was to receive the van and to assume all debt related to the van. Wife was to maintain temporary possession of a Cougar automobile, which was not encumbered by any debt. The parties' pension funds and 401K plans with Lockheed were to be the subject of a qualified domestic relations order (QDRO). The parties were to share all tax liabilities incurred during the marriage equally. The value of bonds, credit card balances, and marital debt as of the date of separation were to be divided equally. The memorandum contained an equalization provision that provided that Wife would take 100 percent of the marital debt and credit card debt plus one half of the value of the bonds as of the date of separation in exchange for one half of the value of those assets and liabilities rolling over from Husband's 401K into Wife's 401K.⁴

The memorandum noted that the parties had previously stipulated to the division of their personal belongings and furnishings. Husband was to pay all storage fees for the property that was in storage. Husband was to "immediately" make the storage space available to Wife so that she could retrieve the items that were to go to her. This was to be accomplished within 30 days of signing the judgment.

The court reserved the issue of attorney fees, which was to be submitted by declaration by March 20, 1997. The court also reserved the issue of spousal support until after the custody and visitation issues were resolved.

Preparation of Stipulated Judgment Based On Settlement Agreement

Wife's attorney prepared a draft stipulated judgment. The parties appeared for an early disposition conference before Judge Pro Tem James Cox on February 28, 1997, at which time they discussed the draft judgment. The judge pro tem ordered Wife's attorney to rewrite the judgment and to provide proof of the debts and bonds.

There was no evidence that further drafts of the stipulated judgment were ever prepared. The parties never signed a stipulated judgment.

Discovery and Discovery Motions; Bankruptcy Filings

Sometime after February 1997, both parties' attorneys withdrew. In March 1997, Wife signed a quitclaim deed transferring her interest in Gum Drop to Husband.

By July 1997, Wife had a new attorney, Walter Hammon. Husband was in pro per. Rather than finalize the stipulated judgment or file a motion to enforce the parties' settlement agreement, Hammon propounded discovery on Husband, including every question on the family law set of form interrogatories. Hammon also noticed Husband's deposition and asked him to prepare a schedule of assets and debts.⁵ Husband did not respond to the discovery.

In August 1997, Wife filed for bankruptcy because nothing had been done to address the parties' debt in the six months since they had made their settlement agreement and she did not want to leave the debt "in suspension waiting for something to happen." After Wife filed for bankruptcy, the parties' creditors came to Husband to satisfy the debt. Husband, who was unable to handle the debt, was forced to seek protection in bankruptcy in August 1997. That same month, he also retained a new attorney in the dissolution action, Phyllis Rafter.

After Husband retained counsel, Wife's attorney decided to propound the discovery again. On September 25, 1997, Wife's counsel propounded all of the family law form interrogatories, including a request to prepare a schedule of assets and debts, propounded 35 requests for production of documents, and noticed Husband's deposition. The document requests asked for information regarding Husband's income, assets, and liabilities. The deposition was continued once at the request of Husband's counsel. The attorneys discussed the possibility of continuing the deposition a second time, but never reached an agreement. Husband did not appear for his December 15, 1997 deposition, did not answer the interrogatories, and did not produce any documents.

On December 31, 1997, Wife's attorney filed a motion to compel Husband to answer interrogatories, produce documents, and appear for a deposition. Wife's attorney alleged that Husband had a history of being uncooperative, which had resulted in delays and unnecessary court appearances related to the child custody and visitation issues.

On March 18, 1998, the court granted Wife's motion to compel and ordered Husband to respond to the discovery and pay Wife $ 2,400 in attorney fees. The court reserved jurisdiction to consider issue sanctions, in the event Husband did not comply with the order.

Husband did not comply with the court order and did not respond to the discovery. On May 4, 1998, Wife filed a motion requesting further discovery sanctions. By this time, Husband was once again in pro per. In ...