Filed 9/28/15 Marriage of Lakdawala CA4/1
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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                    COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                  DIVISION ONE

                                           STATE OF CALIFORNIA



In re the Marriage of JIMMY and JANICE
LAKDAWALA.
                                                                 D065936
JIMMY LAKDAWALA,

         Appellant,                                              (Super. Ct. No. DN162271)

         v.

JANICE LAKDAWALA,

         Respondent.


         APPEAL from a judgment of the Superior Court of San Diego County, Jeannie

Lowe, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.

         Stephen Temko and Dennis Temko for Appellant.

         Linda Cianciolo for Respondent.
                                              I.

                                     INTRODUCTION

       Jimmy Lakdawala (Jimmy) appeals from a judgment in a marital dissolution

proceeding involving Jimmy and Janice Lakdawala (Janice). On appeal, Jimmy contends

that the record does not contain substantial evidence to support the trial court's valuation

of equipment owned by a printing company that Jimmy and Janice own as community

property. Jimmy also contends that the trial court erred in finding that an entity called

Golden Girl, LLC (Golden Girl), which was formed during the marriage, is community

property. Finally, Jimmy contends that the trial court erred in finding that he failed to

establish that certain real property that Golden Girl owns is his separate property. We

affirm the judgment.

                                              II.

                   FACTUAL AND PROCEDURAL BACKGROUND

A.     Procedural background

       Jimmy and Janice were married in 1995. Jimmy filed a petition for dissolution of

marriage in September 2010. The trial court held a trial on the petition in the fall of 2013

and issued an intended statement of decision in October 2013. After considering each

party's objections to the intended statement of decision, the trial court issued a final

statement of decision in December 2013.



                                              2
B.      Factual background

        On appeal, Jimmy raises three challenges to the trial court's final statement of

decision. We offer a brief overview of the facts relevant to each issue below and provide

additional factual background in our discussion of Jimmy's legal claims in part III.A.-C.,

post.

        1.     The valuation of the printing company's equipment

        LAK Advertising, Inc. (LAK) is an integrated marketing communications

company formed by Jimmy's family prior to his marriage to Janice. In August 2013, by

way of a bifurcated trial, the court determined that LAK is Jimmy's separate property

pursuant to the terms of a prenuptial agreement.

        Jimmy and Janice formed VDP Direct, LLC (VDP) in 2004. VDP provides

printing services, primarily to LAK clients. Both parties agree that VDP is a community

asset. In its statement of decision, the trial court reserved jurisdiction for the purpose of

determining the value of VDP in dividing the community estate. The trial court

appointed its own expert to assist the court in determining the value of VDP1 and stated

that the court's expert was to value VDP's equipment at $1,900,810. In determining this

amount, the court explained that it had relied on an appraisal of the equipment performed

by Marcus Pigrom, an expert hired by Janice.




1      The court explained that the opinions of the parties' experts as to the value of VDP
were so divergent that it was "unable to render a decision on the value of VDP without
the assistance of its own expert."
                                             3
       2.     The characterization of Golden Girl as a community asset

       Golden Girl is an entity formed after the parties' marriage for the purpose of

purchasing a commercial building on Ruffin Road (the Ruffin Road property) to house

LAK and several other tenants. At the time of its formation, Jimmy contributed $20,000

to Golden Girl, and his mother contributed $200. Jimmy became a 99 percent member of

Golden Girl and his mother became a one percent member. Jimmy's mother transferred

her interest to Jimmy in 2002. The court found that Golden Girl is 99 percent community

property and one percent Jimmy's separate property. In support of this determination, the

court found that Jimmy had failed to establish that the initial $20,000 contribution used to

fund Golden Girl came from Jimmy's separate property.

       3.     The Ruffin Road property

       Shortly after its formation, Golden Girl purchased the Ruffin Road property for

$935,000. The purchase was financed with several different loans. Golden Girl obtained

two loans from the Small Business Administration (SBA) to fund the bulk of the

purchase price. Golden Girl also financed the purchase with a smaller loan from Jimmy's

parents.2 In addition, Jimmy testified that he contributed two additional sources of

financing toward the purchase of the Ruffin Road property—$68,005 from a home equity




2      The trial court found that the Ruffin Road property was financed in part with a
"loan" from Jimmy's parents in the amount of $160,000. Jimmy testified that his parents
financed the purchase in part with two loans totaling $141,000. Janice testified that
Jimmy's parents partially financed the purchase with a loan in the amount of $80,000.
                                              4
line of credit on a house that he purchased prior to the marriage, and $25,000 from a line

of credit maintained by LAK.

                                             III.

                                       DISCUSSION

A.     There is substantial evidence in the record to support the trial court's
       determination of the value of VDP's equipment

       Jimmy contends that there is not substantial evidence in the record to support the

trial court's valuation of VDP's equipment. Specifically, Jimmy maintains that the trial

court erred in basing its valuation on Janice's expert's appraisal of the equipment,

contending that the appraisal is "speculative" and "useless" since it "failed to account for

wear and tear."

       1.     Factual and procedural background

       At trial, the court received in evidence an appraisal of VDP's equipment prepared

by Pigrom, Janice's expert. Pigrom's appraisal contained detailed information with

respect to both the equipment that he appraised and the process he used to prepare the

appraisal. Pigrom stated in the appraisal that "[t]he level of maintenance [of the

equipment] was observed as well as the method of installation." In addition, Pigrom

indicated that he used a cost approach to value some of the equipment, in which the value

of the "equipment was based on its estimated replacement cost new less depreciation."

Pigrom explained that "[d]epreciation is based on effective age, remaining economic life,

observed physical condition and economic and functional obsolescence." The appraisal


                                              5
also contained a certification stating that it had been prepared in conformity with the

Uniform Standards of Professional Appraisal Practice. Pigrom valued VDP's equipment

at $1,970,810.

       Pigrom testified at trial concerning his appraisal. Pigrom stated that he is an

accredited senior appraiser of the American Society of Appraisers and that he has

performed fixture and equipment appraisals since 2005, including four or five involving

printing companies.

       Pigrom explained that there are three valuation methods established by the

American Society of Appraisers: cost approach, market approach. and income

approach. Pigrom used a combination of the market approach and cost approach in

valuing VDP's equipment. Consistent with the description provided in the appraisal,

Pigrom explained that when utilizing the cost approach, an appraiser determines the

item's replacement cost and then decreases that value by some amount in order to

account for depreciation. Pigrom explained the methods that may be used to

determine depreciation, as follows:

          "There [are] different things you can use. There's functional
          obsolescence, physical obsolescence and . . . there's wear and tear on
          machinery when it's in use, so you have to account for that, and the
          most . . . common way to depreciate those assets is based on an age-
          life analysis."

       Pigrom described the manner by which he performed an age-life analysis with

respect to VDP's equipment, stating:

                                             6
          "Well, I had some information from the asset list or the depreciation
          schedule so I was familiar [with] when some of the equipment was
          acquired, the age of the equipment, and so . . . you come up with an
          estimated normal life of the equipment and you do that age-life
          analysis, and you can depreciate the equipment using that age-life
          analysis."

       On cross-examination, Pigrom acknowledged that he had not determined the

number of impressions3 that each piece of printing equipment had performed.

       On redirect, the following colloquy occurred:

          "[Janice's counsel]: So if you didn't get to consider the number of
          impressions, what did you consider about the usable life of the
          equipment?

          "[¶] . . . .[¶]

          "[Pigrom]: Right. Well, while I was there, I saw the majority of the
          equipment in use and it was doing its job and it seemed like it was in
          good condition, so I had to make assumptions that the equipment
          that I saw was in good working order or good working condition, so
          that's . . . what I used."

       Pigrom confirmed that making such assumptions is consistent with standard

appraisal practices and said that he had used a depreciation schedule in calculating the

value of VDP's equipment. Jimmy's counsel "stipulate[d] the report [i.e. Pigrom's

appraisal] complies with the uniform professional standards."

       The trial court also received in evidence a valuation of VDP's equipment

performed by Kian Hemmen, a salesman for a company from which Jimmy had

3      Jimmy testified that the term "impressions" refers to the number of "printouts [a
printer] has printed out," and explained that a printer's "counter" records the number of
impressions that the printer has performed.
                                              7
purchased printing equipment in the past. Hemmen valued VDP's equipment at

$1,202,100. Hemmen testified that he performed the valuation by comparing VDP's

equipment to similar equipment that his company or other similar companies had sold.

Hemmen acknowledged that he and Jimmy had "become good friends" and said that

Jimmy was "one of my favorite customers."

      The trial court issued an intended statement of decision in which it valued VDP's

equipment at $1,900,810. The court explained that it based its valuation on Pigrom's

appraisal. Jimmy filed an objection to the memorandum of decision in which he

contended that the court erred in relying on Pigrom's analysis for numerous reasons,

including that Pigrom "failed to check the counters on any of the printing machines" and

was thus "blindly guessing as to the actual value of such equipment."

      The court issued a final statement of decision that was consistent with its

memorandum of intended statement of decision. The final statement of decision stated

in relevant part:

          "The court relies on Mr. Pigrom's report based on his training,
          experience, accreditation as a senior appraiser and his compliance
          with uniform standards of a professional appraiser. Based on
          evidence received, the court has adjusted the appraised value
          downward by a reduction of $70,000 for items 55 and 56, which are
          tenant improvements. The revised value of the VDP equipment,
          including vehicles is $1,900,810."




                                            8
       With respect to Hemmen's valuation, the court noted that Hemmen was an

equipment consultant and not an appraiser, and that Hemmen did not have the same

training or qualifications as Pigrom. The court also stated that it did not consider

Hemmen to be "unbiased" in light of his personal and professional relationship with

Jimmy.

       2.     Governing law and standard of review

       In a marital dissolution action, a trial court " 'has broad discretion . . . to fix the

value of assets and liabilities in order to accomplish an equal division. [Citations.] The

trial court's determination of the value of a particular asset is a factual one and as long as

that determination is within the range of the evidence presented, we will uphold it on

appeal.' " (In re Marriage of Campi (2013) 212 Cal.App.4th 1565, 1572.)

       " 'Substantial evidence' is evidence of ponderable legal significance, evidence that

is reasonable, credible and of solid value. [Citation] . . . Inferences may constitute

substantial evidence, but they must be the product of logic and reason. Speculation or

conjecture alone is not substantial evidence. [Citations.] . . . [¶] The ultimate test is

whether it is reasonable for a trier of fact to make the ruling in question in light of the

whole record." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651-652.)

       3.     Application

       Jimmy contends that Pigrom's appraisal is speculative because Pigrom lacked

evidence as to the actual wear and tear of the equipment. Jimmy further maintains that

Pigrom's reliance on a depreciation schedule is not an adequate substitute for evidence of

                                                9
actual wear and tear because it bears no relation to the actual condition or value of the

equipment at issue. We are not persuaded.

       Pigrom testified that the most "common way used to depreciate . . . assets is based

on an age-life analysis," and said that he performed such an analysis in this case. Pigrom

also testified that he observed VDP's equipment to be in a good working order, that he

made assumptions concerning the useful life of the equipment based on a depreciation

schedule, and that making such assumptions is consistent with standard appraisal

practices. We are aware of no authority, and Jimmy cites none, that supports Jimmy's

contention that an appraisal issued in conformity with such standard practices does not

"rise to the dignity of substantial evidence."

       Jimmy's arguments in support of his claim are not persuasive. He notes that the

definition of depreciation provided in Pigrom's appraisal states: "A loss in value from all

causes, including factors of deterioration and functional and/or economic obsolescence,

as of a specific date." (Emphasis added by Jimmy.) Jimmy asserts, without any citation

to authority, that a depreciation schedule measures only functional or economic

obsolescence and fails to account for deterioration. However, as Pigrom's testimony

indicated, a depreciation schedule is used to measure the "estimated normal life of the

equipment," and thus provides an estimate of the average deterioration of the appraised




                                             10
item. Accordingly, we reject Jimmy's contention that, "Pigrom did not follow the

standards applicable to his own field as stated in his report."4

       In Texaco, Inc. v. County of Los Angeles (1982) 136 Cal.App.3d 60 (Texaco), the

court rejected an argument similar to the one Jimmy advances. In that case, an assessor

valued an oil refinery owned by the plaintiff. The plaintiff contended that the assessor's

valuation "should have been substantially less" (id. at p. 62), and that the assessor's

valuation was improper because "the assessor did not use a separate factor for computing

depreciation due to normal wear and tear from that used to compute depreciation due to

obsolescence." (Id. at p. 63.) The Texaco court rejected this argument, noting that the

assessor had testified that "his formula had taken into account both elements of

depreciation." (Ibid.)

       The Texaco court also distinguished Bret Harte Inn, Inc. v. City and County of San

Francisco (1976) 16 Cal.3d 14, upon which Jimmy relies in his reply brief. In Bret Harte

Inn, "the assessor had applied a common depreciation ratio to all buildings of the same class

regardless of the age of obsolescence among them." (Texaco, supra, 136 Cal.App.3d at p.

63.) In contrast, in Texaco, "the assessor evaluated each divisible unit of the plant

separately, the use of the same estimated life thereby resulting in a different ultimate value

for each unit." (Ibid.) Similarly in this case, Pigrom appraised each piece of equipment

separately using a depreciation schedule.


4      Jimmy's counsel stipulated at trial that Pigrom's appraisal complied with these
standards.
                                             11
       Jimmy also contends that the "absurd[ity]" of relying solely on a depreciation

schedule rather than evidence of actual wear and tear with respect to each piece of

equipment is demonstrated by a hypothetical situation in which one attempts to value a car

without knowing the number of miles the car has been driven. Jimmy maintains that "the

same princi[ples] apply" with respect to valuing the equipment at issue in this case. We are

not persuaded. Pigrom testified that he used a depreciation schedule in a manner consistent

with standard appraisal practices. To paraphrase the Texaco court, "[t]he law requires only

that an [appraiser] adopt and use a reasonable method." (Texaco, supra, 136 Cal.App.3d at

p. 63.) Jimmy cannot establish that the trial court erred in relying on an appraisal based on

the use of a depreciation schedule "merely because, in [Jimmy's] nonexpert opinion, another

method might have been better." (Ibid.)

       Finally, In re Marriage of Rives (1982) 130 Cal.App.3d 138 and Pacific Gas &

Electric Co. v. Zuckerman (1987) 189 Cal.App.3d 1113, which Jimmy cites in his brief,

both involved valuation issues distinct from that present in this case. Rives involved an

expert's valuation of a business's goodwill (Rives, supra, at p. 152), and Zuckerman

involved the valuation of storage rights to a gas reservoir in an eminent domain action

(Zuckerman, supra, at p. 1121). Neither case provides support for the contention that the

record in this case lacks substantial evidence to support the trial court's finding as to the

value of VDP's equipment.

       Accordingly, we conclude that there is substantial evidence in the record to

support the trial court's determination of the value of VDP's equipment.

                                              12
B.     The trial court did not err in finding that 99 percent of Golden Girl is community
       property

       Jimmy contends that the trial court erred in finding that 99 percent of Golden Girl

is a community property asset.5 Specifically, he argues that the court applied the "wrong

standard" in determining that Golden Girl is community property. Jimmy also maintains

that he met his burden to demonstrate that Golden Girl was funded with separate

property.

       1.     Standards of review

       Jimmy's contention that the trial court applied the "wrong standard" is a legal

question that we review de novo. (See In re Marriage of Ettefagh (2007) 150

Cal.App.4th 1578, 1584 ["The trial court's selection of what legal principles to apply is

subject to de novo review"].)

       We apply the substantial evidence standard of review to Jimmy's contention that

he demonstrated that Golden Girl was funded with separate property. (See In re

Marriage of Walker (2012) 203 Cal.App.4th 137, 152 [" ' "Appellate review of a trial

court's finding that a particular item is separate or community property is limited to a

determination of whether any substantial evidence supports the finding" ' "].)




5       The trial court found that one percent of Golden Girl became Jimmy's separate
property by virtue of Jimmy's mother's transfer of her one percent interest in the entity.
The court found that the remaining interest in Golden Girl was community property. The
trial court's finding that 99 percent of Golden Girl is community property is the only
finding at issue in this appeal. Thus, in referring to "Golden Girl" throughout this section
we refer solely to that 99 percent of Golden Girl at issue in this appeal.
                                              13
       2.      Governing law

       In In re Marriage of Valli (2014) 58 Cal.4th 1396 (Valli), the Supreme Court

outlined the following law governing a trial court's characterization of the parties'

property in a marital dissolution action:

            "In a marital dissolution proceeding, a court's characterization of the
            parties' property—as community property or separate property—
            determines the division of the property between the spouses.
            [Citations.] Property that a spouse acquired before the marriage is
            that spouse's separate property. [Citation.] Property that a spouse
            acquired during the marriage is community property [Fam. Code,
            § 760][6] unless it is (1) traceable to a separate property source
            [citations], (2) acquired by gift or bequest [citation], or (3) earned or
            accumulated while the spouses are living separate and apart
            [citation]. A spouse's claim that property acquired during a marriage
            is separate property must be proven by a preponderance of the
            evidence." (Valli, supra, at p. 1399, italics added.)

       3.      The trial court did not apply the wrong standard in determining that
               Golden Girl is 99 percent community property

       Jimmy contends that the trial court applied the "wrong standard" in requiring that

he "perform a strict document trace" in order to prove that Golden Girl was initially

funded with his separate property. Quoting In re Marriage of Ficke (2013) 217

Cal.App.4th 10, 25 (Ficke), Jimmy notes that the "need for specific record tracing arises




6      Section 760 provides, "Except as otherwise provided by statute, all property, real
or personal, wherever situated, acquired by a married person during the marriage while
domiciled in this state is community property."

                                               14
when there is a commingled account,"7 and argues that there was no need for such tracing

in this case because "[i]t was uncontroverted [Jimmy] funded Golden Girl with a separate

property account that was never commingled with community funds."

       We are not persuaded. To begin with, it was far from "uncontroverted" that

Jimmy initially funded Golden Girl with his separate property. The manner by which

Golden Girl was funded was a hotly contested issue at trial. During closing argument,

Janice's counsel cited the community property presumption in Family Code section 7608

and argued that the "$20,000 [used to initially fund Golden Girl] was not traced to a



7     A commingled account is one in which separate and community property funds
have been combined. (See Ficke, supra, 217 Cal.App.4th at p. 25.) There are two
methods that California courts use to trace separate property contained in a commingled
account—the direct tracing method and the family living expense or recapitulation
method:
          "Under the 'direct tracing' method, the disputed asset . . . is traced to
          the withdrawal of separate property funds from the commingled
          account. This method requires specific records reconstructing each
          separate and community property deposit, and each separate and
          community property payment as it occurs. . . . [¶] Under the 'family
          living expense' or 'recapitulation' method, it is assumed that family
          living expenses are paid out of community property funds.
          [Citations.] Payments may be traced to a separate property source
          by showing community income at the time of the payments or
          purchase was exhausted by family expenses, so that the payments or
          purchase necessarily must have been made with separate property
          funds. [Citations.]" (In re Marriage of Braud (1996) 45
          Cal.App.4th 797, 823.)

8       All statutory references are to the Family Code unless otherwise specified.
        Janice's counsel argued, "The foundation of community property law in California
is [section] 760, that everything you acquire during marriage is presumed to be
community property."
                                              15
separate property source." In contrast, Jimmy's counsel argued that "tracing all the

transactions indicates that Golden Girl, Inc., is Jimmy's separate property."

       The trial court similarly did not apply the "wrong standard" in finding that Jimmy

had not successfully rebutted the community property presumption. The trial court

indicated that the absence of any documentary evidence that Jimmy maintained a bank

account containing separate property funds at the time of Golden Girl's initial funding

was relevant in determining whether he had rebutted the community property

presumption,9 but did not require that Jimmy produce such evidence. There is nothing in

Ficke that would suggest that the trial court's reasoning is erroneous.

       In Ficke, the Court of Appeal affirmed a trial court's finding that a husband had

established that certain mortgage payments made during his marriage on a piece of real

property (Boardwalk) that the husband had purchased prior to the marriage were made

with the husband's separate property. (Ficke, supra, 217 Cal.App.4th at p. 26.) The

Ficke court rejected the wife's contention that the trial court had erred because the

husband "was required to produce specific records (e.g., bank account statements) which

would have shown the rents from Boardwalk were used to make the mortgage payments,


9      The trial court stated:
          "Jimmy was unable to submit any documents to prove he held a
          separate bank account in 1997. According to Jimmy, his $20,000
          contribution was drawn on a separate account held at Glendale
          Federal and that the bank has subsequently changed hands making
          his ability to provide bank statements, cancelled checks or any
          documentary evidence of the withdrawal of these funds from a
          separate source impossible."
                                            16
and that absent such specific documentation, the court was necessarily required to

assume the mortgage payments came from community property." (Id. at p. 25, italics

added.) The Ficke court rejected the wife's claim because "[t]he need for specific record

tracing arises when there is a commingled account" (ibid.), and there was substantial

evidence that there was no such commingled account in Ficke. (Id. at p. 26.)

       However, the Ficke court did not state that bank statements demonstrating that the

mortgage payments came from separate property would have been irrelevant in proving

the husband's contention. Rather, the Ficke court merely stated that such statements were

not required. Further, the Ficke court emphasized that it was the trial court's role, as the

trier of fact, to weigh the conflicting evidence as to the characterization of the source of

the mortgage payments and determine whether the payments had come from a

community or separate property source:

          "The evidence before the trial judge as to whether there was a
          commingled account from which mortgage payments had been made
          (e.g., an account into which both rents and salary had been
          deposited), or alternatively, a community account from which
          mortgage payments were made, was in conflict. Based on
          [husband's] testimony alone, the trial court was perfectly entitled to
          believe [husband] rather than [wife], and impliedly find there was no
          commingling or payments from a community account." (Ficke,
          supra, 217 Cal.App.4th at pp. 26-27.)

       So, too, in this case, it was up to the trial court to weigh Jimmy's evidence and

determine whether he had rebutted the community property presumption contained in

section 760. The trial court did not err under Ficke in suggesting that the absence of any

documentary evidence of the existence of a bank account containing separate property at

                                             17
the time of Golden Girl's funding was relevant in determining whether Jimmy had funded

Golden Girl with separate property.

       Further, the trial court did not state that the only way that Jimmy could establish

that Golden Girl was his separate property was through bank statements and/or either the

"direct tracing" or "family expense" method of tracing. (In re Marriage of Braud, supra,

45 Cal.App.4th at p. 823.) In fact, the court did not mention "specific record tracing" at

all in its statement of decision. (Ficke, supra, 217 Cal.App.4th at p. 25.) The trial court

specifically discussed evidence other than bank statements in finding that Jimmy had not

adequately established that the initial contribution to Golden Girl came from his separate

property. For example, the court explained its determination that evidence from Golden

Girl's ledger was inadequate to establish that Golden Girl's initial funding came from

Jimmy's separate property, as follows:

          "Jimmy relies on a single entry from the Golden Girl ledger . . .
          which indicates a contribution from Jimmy Lakdawala in the sum of
          $20,000. Jimmy asks the court to distinguish this single ledger entry
          with 'Jimmy Lakdawala' as proof the funds came from his separate
          funds from later entries on the ledger when funds came from or to
          both parties [where] both names were entered, 'Janice and Jimmy
          Lakdawala.' The court is unable to draw this distinction as no
          evidence of who prepared this ledger was provided nor was there
          any evidence whether the same person also prepared the later entries
          upon which Jimmy now relies."

       The fact that the trial court stated in its decision, "Jimmy has not sufficiently

traced the $20,000 initial contribution," does not demonstrate, as Jimmy maintains, that

the trial court "based its decision on a requirement that [Jimmy] provide a direct or family


                                             18
expense tracing." Both Jimmy's counsel and a family law forensic accounting expert that

Jimmy called to testify used forms of the word "trace" in describing Jimmy's attempt to

demonstrate that Golden Girl had been funded by separate property. The forensic

accountant expert testified that "[t]racing is the key to this case," and claimed that he had

examined the "tracing of the capital investment in Golden Girl." Jimmy's counsel argued

that "tracing all the transactions indicates that Golden Girl, LLC, is Jimmy's separate

property." In a trial brief, with respect to the character of Golden Girl, Jimmy argued,

"[Jimmy] is permitted to trace his separate property into the establishment of the

company and by so doing establish its separate property character." Thus, both Jimmy's

counsel and his expert used forms of the word "trace" to refer generally to efforts to

establish that a disputed property was funded with separate property. Further, California

courts often use forms of the word "trace" in a manner similar to that employed by

Jimmy's counsel and his expert. (See, e.g., Valli, supra, 58 Cal.4th at p. 1399 ["Property

that a spouse acquired during the marriage is community property . . . unless it is . . .

traceable to a separate property source" (italics added)]; In re Marriage of Finby (2013)

222 Cal.App.4th 977, 983-984 ["Cases have recognized that . . . section 760 creates ' "a

general presumption that property acquired during marriage by either spouse . . . is

community property unless traceable to a separate property source" ' " (italics added)].)

       The most reasonable interpretation of the trial court's statement that "Jimmy has

not sufficiently traced the $20,000 initial contribution," is merely that Jimmy did not



                                              19
establish that Golden Girl was funded with separate property, and not, as Jimmy claims,

that the court required direct or family expense tracing.

       Accordingly, we conclude that the trial court did not apply the "wrong standard "in

determining that Golden Girl is community property.

       4.     There is substantial evidence to support the trial court's finding that
              Golden Girl is a community asset

       It is undisputed that Golden Girl was acquired during the marriage and that the

community property presumption contained in section 760 therefore applies.10 (See fn.

6, ante.) It was therefore Jimmy's burden to rebut the presumption by a preponderance of

the evidence. (See In re Marriage of Ettefagh, supra, 150 Cal.App.4th at p. 1591.)

There is substantial evidence in the record to support the trial court's finding that Jimmy

failed to rebut this presumption.

       As the trial court noted in its statement of decision, Jimmy did not provide any

documentary evidence establishing the existence of a bank account containing Jimmy's

separate property, much less bank statements or cancelled checks demonstrating that such

an account was used to fund Golden Girl. Jimmy's evidence as to the source of Golden

Girl's initial funding was equivocal—he stated that he "believed" that the check was

drawn on an account at a bank called "Great Western." However, Jimmy also offered the




10     Regarding the characterization of Golden Girl, in a trial brief, Jimmy stated,
"[Janice] is correct that because [Jimmy] formed Golden Girl, LLC during marriage, the
presumption arises that [it] is community property under [section 760]."
                                            20
declaration of Louis Cumming, a commercial banking expert,11 who stated, "It appears

that the $20,000 cash was drawn from [Jimmy's] sole and separate property in the form of

a 'draw' on a home equity line of credit on the separate Penasquitos residence or a

$25,000 draw on LAK Advertising, Inc. line of credit."12 The trial court reasonably

considered these deficiencies in Jimmy's evidence in finding that he had failed to rebut

the community property presumption. Finally, the trial court provided a reasonable

explanation for why it did not find the Golden Girl ledger evidence to be compelling (see

pt. III.B.3., ante). The court was not required to credit Jimmy's testimony that he had

funded Golden Girl with his separate property. (In re Marriage of Hofer (2012) 208

Cal.App.4th 454, 460 ["The trier of fact may reject even uncontradicted evidence as not

credible"].)

       Accordingly, we conclude that there is substantial evidence to support the trial

court's finding that Golden Girl is community property.




11     Cumming stated his opinion concerning the intent of the lender who made the
SBA loans that were the primary source of financing for the purchase of the Ruffin Road
property. We discuss Cumming's testimony in detail in part III.C.2., post.

12     We are not persuaded by Jimmy's contention that his "ability to produce records"
supporting his contention that he funded Golden Girl with separate property was
"hindered" by the fact that the parties' house was destroyed in a fire. While Jimmy cites
to evidence in the record that the parties' house was destroyed in a fire, he cites to no
evidence that the fire impeded efforts to support his contention that he funded Golden
Girl with separate property.
                                              21
C.     The trial court did not err in failing to grant Jimmy a separate property interest in
       the Ruffin Road property pursuant to the lender intent doctrine

       Jimmy contends that the trial court erred in failing to grant him "a separate

property interest in Ruffin Road." Jimmy argues that he was entitled to such interest

because the evidence presented at trial demonstrated that the lenders who financed the

purchase of the Ruffin Road property relied "solely upon [Jimmy's] separate property."

       We apply the substantial evidence standard of review to Jimmy's claim. (See In re

Marriage of Grinius (1985) 166 Cal.App.3d 1179, 1187 (Grinius) [concluding record

lacked substantial evidence to support trial court's characterization of real property as

husband's separate property by way of the lender intent doctrine].)

       1.     Governing law

       As discussed in part III.B., ante, section 760 creates a general presumption that

property acquired during marriage is community property. "The character of property as

separate or community is determined at the time of its acquisition." (See v. See (1966) 64

Cal.2d 778, 783 (See).)

       "[T]he character of credit acquisitions during marriage is 'determined according to

the intent of the lender to rely upon the separate property of the purchaser or upon a

community asset.' " (Grinius, supra, 166 Cal.App.3d at p. 1186.) "Loan proceeds

acquired during marriage are presumptively community property; however, this

presumption may be overcome by showing the lender intended to rely solely upon a




                                             22
spouse's separate property and did in fact do so. Without satisfactory evidence of the

lender's intent, the general presumption prevails." (Id. at p. 1187.)13

       2.     Application

       Jimmy contends that he is entitled to a separate property interest in the Ruffin

Road property because the "lenders intended to rely solely on [Jimmy's] property when

Golden Girl was extended credit to purchase the property." We disagree.

       To begin with, it is undisputed that Golden Girl, not Jimmy and Janice

individually, purchased the Ruffin Road property. Ruffin Road thus became an asset of

Golden Girl. Since we have concluded that there is substantial evidence to support the

trial court's finding that Golden Girl is community property (see pt. III.B., ante), even

assuming that Jimmy contributed loans secured by his separate property to Golden Girl,

that would not change the community nature of the ownership of Golden Girl. (See See,

supra, 64 Cal.2d at p. 783 [character of property is determined at the time of its




13      In Grinius, this court noted that in Gudelj v. Gudelj (1953) 41 Cal.2d 202 (Gudelj),
the Supreme Court stated, " 'In the absence of evidence tending to prove that the seller
primarily relied upon the purchaser's separate property in extending credit, the trial court
must find in accordance with the [community property] presumption.' " (Grinius, supra,
166 Cal.App.3d at pp. 1186-1187, quoting Gudelj, supra, at p. 210, italics added by
Grinius.) The Grinius court nevertheless held that the proper standard is whether the
"lender intended to rely solely upon a spouse's separate property" (Grinius, supra, at p.
1187, italics added) rather than "primarily relied" on a spouse's separate property (Gudelj,
supra, at p. 210, italics added by Grinius). The Grinius court reasoned that the Gudelj
court cited "no authority" for this "apparent change" and that the Gudelj court "had no
opportunity to apply the standard since no evidence of lender reliance on separate
property was proffered [in Gudelj]." (Grinius, supra, at p. 1187.) For the reasons stated
in the text, Jimmy's claim fails under either standard.
                                              23
acquisition].)14 The trial court thus did not err in including Ruffin Road among the

assets owned by Golden Girl, and dividing the 99 percent of Golden Girl owned by the

community equally between Jimmy and Janice.

       Even assuming that the lender intent doctrine could potentially apply in this

context, the trial court did not err in finding that Jimmy failed to establish that the lenders

who funded the purchase of the Ruffin Road property relied primarily on Jimmy's

separate property. Jimmy's argument on appeal is based on his testimony and that of

commercial banking expert Louis Cumming. Cumming opined that the lender who made

the SBA loans relied entirely on Jimmy's separate property in financing the Ruffin Road

acquisition. However, Cumming's opinion was based on the premise that the loans were

"made to Golden Girl, which is owned by Jimmy." (Italics added.) Cumming testified,

"The primary source of repayment for [the SBA loans] is the income to Golden Girl as

the owner of the property, which would then become the rental stream from one or more

tenants in the building." Since we have concluded that there is substantial evidence to

support the trial court's finding that Golden Girl is community property, Cumming's

14       In his brief, Jimmy made no claim that he is entitled to reimbursement for separate
property contributions that he made to Golden Girl. (See § 2640, subd. (b) ["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"].) At oral argument, Jimmy's counsel suggested for the
first time on appeal that Jimmy would potentially be entitled to such reimbursements if
the court were to conclude that Golden Girl is community property. It is well established
that " '[w]e do not consider arguments that are raised for the first time at oral argument.' "
(Palp, Inc. v. Williamsburg National Ins. Co. (2011) 200 Cal.App.4th 282, 291, fn. 2.)
                                             24
testimony that the primary source of payments on the loans would be Golden Girl's

income (i.e. community income) not only does not support a finding that the lender

intended to rely solely on Jimmy's separate property in making the SBA loans, but

supports a contrary finding. The trial court could have reasonably rejected Cumming's

testimony in part on the additional ground that Cumming acknowledged that he had not

seen the loan application that Jimmy submitted to the lender and acknowledged that he

had not received any documents directly from the lender. In sum, Cumming's testimony

does not establish that the trial court erred in failing to grant Jimmy a separate property

interest in Ruffin Road pursuant to the lender intent doctrine.

       With respect to Jimmy's testimony, Jimmy stated that the purchase of the Ruffin

Road property was financed in part from two loans from his parents and additional funds

that he claimed were secured by his separate property. However, given the lack of

documentary evidence supporting such testimony, the trial court could have reasonably

found that Jimmy had not adequately established that the lenders that provided such loans

intended to rely solely upon Jimmy's separate property.15 The trial court could therefore

have reasonably found that Jimmy's evidence did not constitute "satisfactory evidence of


15      In a supplemental brief, Jimmy contends that his parents loaned "$141,000 to
Golden Girl" for the purchase of the Ruffin Road property and that, since the loans were
made to "Golden Girl and not [Jimmy], the parents did not rely upon the community
credit." This claim fails in light of our conclusion in part III.B., ante, that there is
substantial evidence to support the trial court's finding that Golden Girl is community
property and not Jimmy's separate property. Even assuming that Jimmy established that
his parents' loans were made to Golden Girl, this evidence would not establish that
Jimmy's parents relied solely on Jimmy's separate property in making the loans.
                                              25
the lender's intent," and thus, that "the general presumption prevail[ed]." (Grinius, supra,

166 Cal.App.3d at p. 1187.)

       Accordingly, we conclude that the trial court did not err in failing to grant Jimmy a

separate property interest in the Ruffin Road property pursuant to the lender intent

doctrine.

                                            IV.

                                      DISPOSITION

       The judgment is affirmed.


                                                                                AARON, J.

WE CONCUR:



            McINTYRE, Acting P. J.



                    O'ROURKE, J.




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