Markovic v. Cook (In re Marriage of Cook)

In re Marriage of MARY COOK and MARINKO MARKOVIC.

MARINKO MARKOVIC, Appellant, v. MARY COOK, Respondent.

B312121

California Court of Appeals, Second District, Second Division

December 13, 2022

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County No. 19STFL08962, Doreen B. Boxer, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed in part reversed in part and remanded.

Joel S. Seidel for Appellant.

Gorman & Miller and Kenneth L. Heisz for Respondent.

CHAVEZ, J.

Marinko Markovic appeals from a judgment granting Mary Cook's petition for dissolution of marriage and determining that a July 25, 2013 quitclaim deed (quitclaim deed) was not a valid transmutation of real property under Family Code section 852 subdivision (a) (section 852(a)). We find that the quitclaim deed, on its face, was a valid transmutation of property under section 852(a). As required, our decision is made without consideration of extrinsic evidence. We therefore reverse the portion of the judgment declaring the quitclaim deed void and remand the matter for further proceedings on the question of undue influence and any other relevant factual circumstances.

FACTUAL BACKGROUND

As many of the background facts are not relevant to the issue before us, we keep them brief. Cook and Markovic first met in approximately 2009.^[1] Cook was living in Idaho, and Markovic was a traveling salesman who came to Cook's door to sell her meat. Cook was 84 years old at that time, and Markovic is 35 years Cook's junior.^[2]

Markovic returned to the residence, and eventually Cook offered him employment as an assistant, doing home maintenance, driving her to the doctor, getting groceries and cooking. Cook paid him $5,000 per month. Markovic moved into Cook's Idaho property in approximately 2010.

The parties married on June 28, 2013. There was neither a wedding ceremony nor witnesses. Instead, someone came to Cook's Malibu, California residence and had her sign a document that was a marriage certificate. The testimony concerning whether Cook wanted to marry Markovic was disputed. At the time of the marriage, Cook had a sole and separate property interest in real property located on Shearwater Lane, Malibu California.

On July 25, 2013, Cook and Markovic signed a quitclaim deed. The quitclaim deed provided:

"FOR NO CONSIDERATION, MARY M. COOK, Trustee of The Mary Cook Revocable Trust, dated February 6, 1998, hereby REMISES RELEASES AND QUITCLAIMS to MARY M. COOK and MARINKO MARKOVIC Wife and Husband as Community Property, with Right of Survivorship the following described real property in the City of Malibu, County of Los Angeles, State of California:

"SEE LEGAL DESCRIPTION ON EXHIBIT 'A' ATTACHED HERETO AND INCORPORATED HEREIN BY THIS REFERENCE FOR ALL PURPOSES.

"(commonly known as 6817 Shearwater Lane, Malibu CA 90265)" (Boldface omitted.)

Cook signed the document in her capacity as trustee of the Mary Cook Revocable Trust. Cook and Markovic signed the documents as grantees, accepting delivery of the transfer document.

PROCEDURAL HISTORY

On July 29, 2019, Cook filed a petition for dissolution and nullity of the marriage. The petition included a request for a judicial determination that the July 25, 2013 quitclaim deed did not effectuate a transmutation of Cook's Malibu residence and should be set aside.

The matter proceeded to a one-day bench trial on October 13, 2020.

On January 5, 2021, the trial court issued its "Tentative Statement of Decision After Trial Re: Characterization of Specified Property," which became the "Final Statement of Decision after Trial." The trial court's statement of decision was limited to the issue of whether the quitclaim deed constituted sufficient evidence that the Malibu property was transmuted from Cook's sole and separate property to the parties' community property. The trial court determined that the quitclaim deed did not constitute a valid transmutation because it did not expressly state that Cook intended to change the character of the property as required by section 852(a). Further, the trial court found, the quitclaim deed did not specify what interest the Mary Cook Revocable Trust had in the property before or after the quitclaim deed, and what interest was being transferred. Thus the quitclaim deed was ordered set aside.^[3]

On February 19, 2021, the trial court entered its judgment granting Cook's petition for dissolution of the marriage, determining that the quitclaim deed was not a valid transmutation and was therefore void, and reserving all other issues for trial.

Notice of entry of judgment was served on February 19, 2021. On April 1, 2021, Markovic filed a notice of appeal from the judgment.

DISCUSSION

I. Standard of review

The sole question in this case is whether the quitclaim deed met the requirements of section 852(a) and therefore effectuated a transmutation of Cook's interest in the Malibu residence from Cook's separate property to the parties' community property.

"'In deciding whether a transmutation has occurred, we interpret the written instruments independently, without resort to extrinsic evidence.'" (In re Marriage of Begian & Sarajian (2018) 31 Cal.App.5th 506, 512 (Begian & Sarajian).) We are not bound by the trial court's interpretation. (Ibid.) "Thus, we review the question de novo, exercising our independent judgment to determine whether the proffered writing contains the requisite language to effectuate a transmutation under section 852(a)." (Ibid.)

II. Section 852(a)

Section 852(a) provides that "[a] transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." The Legislature enacted the writing requirement "to remedy problems which arose when courts found transmutations on the basis of evidence the Legislature considered unreliable." (Estate of MacDonald (1990) 51 Cal.3d 262, 269 (MacDonald).)

In MacDonald, the Supreme Court explained that the transmutation requirements are not satisfied by "just 'any writing.'" (In re Brace (2020) 9 Cal.5th 903, 935 (Brace), quoting MacDonald, supra, 51 Cal.3d at pp. 269, 272.) Instead, "[t]he adversely affected party must make an '"express declaration"' in an instrument that 'contains language which expressly states that the characterization or ownership of the property is being changed.'" (Brace, at p. 935, quoting MacDonald, at p. 272.) In MacDonald, the high court held that a wife's signatures on certain IRA account agreements were insufficient to transmute her community property interest in the accounts to become her husband's separate property. (MacDonald, at pp. 266-267.)

The MacDonald court specified that it was not holding that "use of the term 'transmutation' or any other particular locution" was required. (MacDonald, supra, 51 Cal.3d at p. 273.) Although such a writing "might very well contain the words 'transmutation,' 'community property,' or 'separate property,' it need not." (Ibid.) The high court noted that a sentence as simple as, "'I give to the account holder any interest I have in the funds deposited in this account,'" would suffice to effectuate a transmutation. (Ibid.)

The requirements for a valid transmutation under section 852(a) "can be divided into two basic components: (1) a writing that satisfies the statute of frauds; and (2) an expression of intent to transfer a property interest." (Estate of Bibb (2001) 87 Cal.App.4th 461, 468 (Bibb).) In Bibb, a grant deed conveying real property from a husband to himself and his wife as joint tenants validly transmuted the real property from the husband's separate property into property held in joint tenancy. (Id. at pp. 466-469.)

III. The quitclaim deed

There is no dispute in this case that the quitclaim deed, which was signed by Cook both as grantor, in her capacity as trustee, and grantee, was "made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected." (§ 852(a).) "Thus, we need only determine whether the deed, independent of extrinsic evidence, contains a clear and unambiguous expression of intent to transfer an interest in the property." (Bibb, supra, 87 Cal.App.4th at p. 468.)

Deeds are commonly used to transfer interests in real property. (See Bibb, supra, 87 Cal.App.4th at pp. 468-469; see also Estate of Stephens (2002) 28 Cal.4th 665, 671-672 ["A deed is a written instrument conveying or transferring the title to real property; it is an executed conveyance and operates as a present transfer of the real property."].) To effectively transfer real property, a deed "'"must be written and must name a grantor and a grantee. It must be subscribed by the grantor or the grantor's agent, and it must be delivered to, and accepted by, the grantee."'" (In re Marriage of Wozniak (2020) 59 Cal.App.5th 120, 133-134.) The quitclaim deed at issue met these "'essential requirements to convey real property [pursuant to a deed] under California law.'" (Id. at p. 133.)

Section 852(a) provides additional requirements to effectuate a transmutation of property between married individuals. Pursuant to section 852(a), the deed must also contain language that expressly states that the characterization or ownership of the property is being changed. (Brace supra, 9 Cal.5th at p. 935.) The quitclaim deed at issue satisfies this requirement. Cook, in her capacity as trustee, quitclaimed the property to herself and Markovic as community property, with right of survivorship. The quitclaim deed, by which Cook as trustee indicated that the trust "remise[d], release[d] and quitclaim[ed]" the property "to Wife and...