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Case of the Month (from CFLR Monthly)

November 2018
[Archive]

Downpayment’s being funneled from Kuwait through Husband’s bank account was a “cultural” thing . . .

 

In reversal, Fourth District holds that trial court erred by determining that interspousal transfer grant deed did not qualify as a transmutation

 

In re Marriage of Kushesh and Kushesh-Kaviani

(September 21, 2018)

California Court of Appeal 4 Civil G054936 (Div 3) 27 Cal. App. 5th 449, 238 Cal. Rptr. 3d 174, 2018 FA 1857, per Bedsworth, Acting PJ (Ikola and Thompson, JJ, concurring). Orange County: Miller, J, reversed and remanded with directions. For appellant: Alan Yockelson, CALS. (949) 290-6515. For respondent: no appearance. CFLP §§J.48.0.1, J.48.5, J.48.7.

 

Wishtasb Kushesh and Farima Kushesh-Kaviani were married in January 2010, but separated two weeks after their only child, Bahram, was born in April 2011. In August of that year, Wishtasb filed for divorce. One bone of contention in the disso was the characterization of a condo in Laguna Niguel acquired in May 2010. Evidence showed that the condo was three doors down from the condo in which the parties lived, had a purchase price of $265,000, and was purchased with a downpayment of $134,000. The deed to the condo was in Farima’s name as “‘a Married Woman as Her Sole and Separate Property,’” and the loan application and loan were in Farima’s sole name. Moreover, on May 21, 2010, Wishtasb signed an Interspousal Transfer Grant Deed (ITGD) stating that he granted the condo described therein to Farima as her sole and separate property. In the disso, however, both parties claimed the condo as separate property.

 

At trial, testimony indicated that the downpayment for the condo had come from Farima’s father’s funds, but had been funneled from Kuwait through Wishtasb’s bank account. When the trial court asked why the money had been transferred to Wishtasb’s account and not to Farima’s, Farima stated that her father trusted Wishtasb and relied on his expertise as a real estate investor, and also followed the cultural considerations which made him prefer to deal with a man. The trial court found that the condo was presumed to be community property since it was acquired during marriage, and that the title presumption was of no concern. The court further found that the ITGD did not contain the “‘magic words’” that would make it a transmutation. The court then ordered the condo sold, with Farima to receive reimbursement for her separate property contribution and the parties to equally divide the remaining proceeds.

 

Farima appealed, and the Fourth District reversed and remanded with directions.

 

The magic is there . . .
The justices began by tracing the history of the transmutation statute through the years to its present provisions in Fam C §852, which requires a transmutation to be in a writing that contains an “‘express declaration’” of transmutation, and is “‘made, joined in, consented to, or accepted’ by the adversely affected spouse.” They noted that in Estate of Bibb (2001) 87 Cal.App.4 th 461, 104 Cal.Rptr.2d 415, 2001 CFLR 8693, 2001 FA 988, a case that closely resembles this one, the appellate court determined that a grant deed signed by a deceased husband transferring his separate property interest in an apartment to himself and his wife as joint tenants was a valid transmutation of that interest to community property. Those justices reasoned that historically, the word “grant” operates to transfer interests in real property. Here, the panel reasoned, the deed not only says “transfer grant,” but also says interspousal, which indicates “a spouse-to-spouse transaction” and specifically states that the transfer is to make the condo Farima’s sole and separate property. Summing up, the justices found that the lower court erred in determining that the ITGD did not contain sufficient language to constitute a valid transmutation of Wishtasb’s interest in the condo to Farima.

 

When you come to a fork in the road . . .
The justices speculated that the lower court “might have taken a wrong turn” in reasoning that the title presumption was irrelevant. They believed that the court “read too much into” In re Marriage of Valli (2014) 58 Cal.4 th 1396, 171 Cal.Rptr.3d 454, 2014 CFLR 12749, 2014 FA 1640, where the majority held that Family Code transmutation statutes took precedence over the title presumption in the Evidence Code. They pointed out that that didn’t mean that the Evidence Code title presumption wouldn’t apply in some other context. The panel reasoned that “ITGD’s have dual roles.” They are both title documents and writings that transfer property interests between spouses. Thus, the trial court need not “worry” about the title presumption because the ITGD reflected the title of the property, but that did not preclude it from meeting the transmutation requirements in Fam C §852. There was, however, another issue to consider. A transfer from one spouse to another gives rise to a rebuttable presumption of undue influence. Here, the panel found, the trial court had not considered whether Farima might have obtained an unfair advantage in this transfer or whether she had successfully rebutted the presumption. Accordingly, the panel held that the ITGD validly transmuted the condo to Farima as her sole and separate property, and reversed and remanded for the lower court to consider whether she can rebut the presumption of undue influence.

 

 

Comment

  

This is a nice little case that answers a question of first impression. The result is not surprising; it seems like an ITGD should contain all the elements for a valid transmutation. Now, it is not just intuitive; we have a published case that says so. Keep this one in your files for future reference.

 

 

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