Wiese v. Wiese

322 Cal.Rptr.3d 336

102 Cal.App.5th 917

IN RE the MARRIAGE OF Jill and Grant WIESE.

Jill Wiese, Appellant,

v.Grant K. Wiese, Appellant.

G060819, G061168

Court of Appeal, Fourth District, Division 3.

Filed June 20, 2024

As Modified on Denial of Rehearing July 16, 2024

Certified for Partial Publication.^*

Appeals from judgments of the Superior Court of Orange County, Nancy Wieben Stock, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed in part, reversed in part, and remanded. Requests for judicial notice denied. (Super. Ct. No. 14D010350)

Complex Appellate Litigation Group, Claudia Ribet, Beverly Hills, Charles Kagay and Robert A. Roth, San Francisco, for Appellant Jill Wiese.

Law Offices of Steven E. Briggs, Steven E. Briggs, Newport Beach; Greines, Martin, Stein & Richland, Robert Olson and Jeffrey E. Raskin, Los Angeles, for Appellant Grant Wiese.

OPINION

O’LEARY, P. J.

Family Code section 1101, subdivision (d)(2) provides that "[a]n action may be commenced under this section … in conjunction with an action for … dissolution of marriage."¹ This provision exempts claims for breach of fiduciary duty involving community property from an otherwise applicable statute of limitations. This marriage-dissolution case requires us to decide whether this exemption also extends to claims involving a spouse’s separate property. We hold that it does not.

Jill and Grant Wiese were married and worked together for almost 30 years before dissolving their marriage in 2016.² When they married, Grant already possessed substantial real estate wealth, whereas Jill had relatively minimal assets. Shortly before the marriage, the parties executed a premarital agreement (PMA), which among other things, provided for near-total separation of the couple’s assets and earnings. The PMA also required Grant to provide for the parties’ reasonable support.

During most of the marriage, Jill worked as an independent agent for Grant’s real estate brokerage, under an agreement that entitled her to 100 percent of her commissions, after deductions for business expenses and income taxes. As Jill earned her commissions, Grant would deduct amounts for business expenses and estimated taxes, as well as for amounts he believed Jill owed him for personal expenses exceeding his reasonable-support obligations. However, the amounts Grant deducted for taxes did not correspond with the amounts he ultimately paid based on the parties’ joint tax returns. And even when the total tax Grant paid on their combined incomes was lower than what he had deducted from Jill’s commissions, he provided her no refund.

In these dissolution proceedings, and after an unsuccessful attempt to invalidate the PMA, Jill brought various claims against Grant. As particularly relevant here, she claimed that his deductions from her commissions constituted breaches of his spousal fiduciary duty and impaired her separate-property interests. Grant countered, inter alia, that Jill’s claims for decades of allegedly improper deductions were time-barred. He also contended the claims were meritless, and as to her taxwithholding claims, he asserted he actually deducted too little from her commissions.

The trial court concluded that Jill’s fiduciary duty claims were timely based on section 1101, subdivision (d)(2). The court proceeded to find that Grant breached his fiduciary duty by withholding excessive amounts for taxes from her commissions throughout the marriage. It awarded Jill over $1.3 million for these claims. Both parties appealed, challenging various aspects of these and other rulings by the court.

In the published portion of this opinion, we rely on the structure and text of section 1101, its location in the Family Code, the relevant legislative history, and applicable precedents to conclude that this section encompasses only breaches involving community property. Subdivision (d)(2)’s exemption from an otherwise applicable statute of limitation therefore does not extend to Jill’s separate-property claims. Thus, most of Jill’s fiduciary duty claims are barred by the applicable four-year statute of limitations.

In the unpublished portion of this opinion, we address the parties’ remaining contentions and conclude: (1) as relevant to Jill’s surviving claims, the trial court did not err by determining that Grant breached his fiduciary duty by deducting excessive amounts for taxes from Jill’s commissions; (2) the court must fashion a new damages award for these claims; (3) the court must reconsider Jill’s claims concerning Grant’s deductions for her personal expenses; (4) the PMA did not require Grant to provide Jill additional support for her future retirement needs, nor was the court required to consider Grant’s separate-property investments in determining the marital standard of living; (5) under the PMA, a mortgage loan on a lot the parties jointly owned was Grant’s sole obligation; (6) under the PMA, the court erred by ordering Jill to reimburse Grant for exclusively occupying the marital home while they were separated but still married; (7) the court must reconsider its determination that Grant was the prevailing party on the PMA in light of its new judgment on remand; and (8) the court did not err by limiting Jill’s attorney fees and costs under section 2030 based on its view that she had engaged in overlitigation. Accordingly, we affirm in part, reverse in part, and remand for further proceedings.

FACTS

I. The Marriage and the PMA

The parties married in 1987 and separated for the final time in late December 2015. The marriage produced two daughters, who are now adults. The marriage was dissolved in early August 2016 by a judgment on marriage-status only.

At the time of the parties’ marriage, Grant already had substantial wealth, consisting primarily of interests in real estate assets, with a total value of over $2.5 million. Jill’s assets were relatively minimal. Shortly before they married, the parties executed the PMA. The PMA provided that any property belonging to one of the parties at the time of marriage and any property earned or acquired by that party during the marriage would remain that party’s separate property. It directed that either party’s transfer of property to the other must be in writing, and it provided that filing joint income tax returns would not be deemed a transmutation of separate property to community property.

Under the heading, "Support During Marriage," the PMA imposed two obligations on Grant alone. (Underscoring omitted.) First, it stated, "Grant will provide for the reasonable support of the parties during their marriage[,] and it shall not be necessary for Jill to use any of her property for such purpose." Second, the PMA instructed, "Grant shall indemnify Jill from and against any and all debts incurred during the marriage by him or by her with his express advance consent." The PMA provided that if it became necessary to enforce the agreement in court, the prevailing party would be awarded costs and reasonable attorney fees.

II. The Parties’ Financial Relationship During the Marriage

During most of the marriage (until they separated), the parties resided together in a house Grant owned. They never shared a common bank account or credit card, but they filed joint tax returns. The parties jointly owned a vacant lot adjacent to the family residence, purchased with a mortgage they both undertook.

As part of his reasonable-support obligations under the PMA, Grant paid for the household’s major expenses, such as the costs of family vehicles, medical expenses, and the children’s private education. He also provided Jill an allowance for use on other household expenses that fell under his reasonable-support obligations. In the later years of the marriage, this allowance amounted to about $6,000 to $7,000 per month. Grant also allowed Jill to use his credit card for certain household purchases. As discussed more fully below, when he believed certain charges exceeded his reasonable-support obligations, he sought to recover those amounts from Jill.

Early in the marriage, the parties also developed a business relationship. Grant held a real estate broker’s license, which he later transferred to one S corporation he wholly owned and then to another.³ By 1988, Jill began working for Grant as a real estate agent under a commission agreement.⁴ Under the commission agreement, Jill was an independent contractor and was to receive, "after expenses and income tax[,] 100% of commissions."⁵ (Capitalization omitted.) The agreement provided that it could be amended only in writing.

As Jill earned her commissions, Grant would deduct amounts for business expenses and estimated taxes. He would also deduct amounts he concluded Jill owed him for personal expenses he believed exceeded his reasonable-support obligations. Jill often disagreed with Grant’s deductions. Regarding the deductions for taxes, she later testified she and Grant "had dis- cussions or arguments almost every month because [she] always felt like [the withholdings] were way higher than they should have been." She recounted that Grant would tell her he was acting on his accountant’s instructions and asked her to speak with the accountant. She did not do so because she "didn’t think [she] was going to get anywhere with that." We discuss Grant’s deductions from Jill’s commissions in greater detail in the appropriate sections below.

III. Jill’s Dissolution Petition and Challenge to the PMA’s Validity

In November 2014, before the parties’ final separation, Jill filed a petition to dissolve the marriage.⁶ In her petition, she asked that her "[p]roperty rights be determined" and requested that assets "to be determined" be confirmed as her separate property. (Capitalization omitted.) She also sought a determination that the PMA was "void, invalid, and unenforceable." The matter was bifurcated for a trial on the validity of the PMA. Following the trial, the court (Judge Clay M. Smith) concluded that the PMA...