Community Versus Separate Property Appealed
In Re Marriage of Buie-Neighbors – Community Versus Separate Property Appealed
Colleagues of mine, Jim and Tony Dunne of Dunne and Dunne Family Law, recently won a reversal of an interesting property division issue on appeal to the Fourth Appellate District of California. The case was certified for publication and Filed December 1st 2009. Following is my summary of the details and important points.
The couple, Tatia Buie (Wife) and Walter Neighbors (Husband), were married in 1999. During the marriage, Husband purchased a 2001 Porsche 996 using a check written from Wife’s bank account. Wife’s bank account held funds derived from the sale of her separate property residence. Husband argued the $60,000 expended for the Porsche was a gift since the purchase occurred in close proximity to his birthday. The family court agreed with Husband at trial and actually awarded the Porsche to him as his Separate Property.
Ms. Buie disagreed with the Family Court decision and appealed contending 1) the Porsche was community property and 2) that she was entitled to reimbursement under section 2640 for the use of her separate property funds to acquire the Porsche on behalf of the community.
The appeal court ruled there was no transmutation from community property to Husband’s separate property citing there had been no express declaration of intent to gift the property to Husband. Transmutation of real or personal property is not valid unless made in writing by the spouse whose interest is adversely affected. According to the appeal court, there are sections of California code that allow for gifts to be made from spouse to spouse without express written documentation but they must be a “tangible article of a personal nature” and not be “substantial in value”.
The appeal court found 1) that there was no evidence of a written document stating intent to gift the Porsche and 2) the automobile did not fall under the definition of “tangible article of a personal nature”. They did not discuss the issue of substantial value in their decision but I imagine it would be easy to convince the court a Porsche carries substantial value.
In short, the Court of Appeal concluded the Family Court had erred in awarding the Porsche to Husband as his separate property and therefore must be included as community property.
Ms. Buie went on to argue that she should be reimbursed as part of the division of the community estate for her separate property funds used to purchase the Porsche since it was confirmed as a community asset. Section 2640, subdivision (b) provides: “In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party shall be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source.” I am often hired to provide the necessary tracing to prove or refute such a claim. Wife was able to prove that 100% of funds used to purchase the Porsche were her separate property and the Court of Appeal ruled she had a right to reimbursement of the separate property funds under section 2640. They did not render opinion as to how much the reimbursement should be. That is a question for another day.
Justin A. Reckers can be reached at:
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Tags: Asset Division, California Divorce Dictionary, Community Property, Divorce Financial Planning, Justin Reckers, Pacific Divorce Management, Section 2640, Separate Property, Transmutation
This entry was posted on Friday, July 9th, 2010 at 4:51 pm and is filed under Asset Division, California Divorce Dictionary, Community Property vs. Separate Property, Divorce Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
