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In Re Marriage of Sandra and Edward Fossum. v. Edward Fossum

January 28, 2011

IN RE MARRIAGE OF SANDRA AND EDWARD FOSSUM. SANDRA FOSSUM, RESPONDENT,
v.
EDWARD FOSSUM, APPELLANT.



(Los Angeles County Super. Ct. No. BD382683) APPEAL from a judgment of the Superior Court of Los Angeles County, Scott M. Gordon, Judge.

The opinion of the court was delivered by: Johnson, J.

CERTIFIED FOR PUBLICATION

Affirmed in part; reversed in part.

Appellant Edward Fossum and his ex-wife, respondent Sandra Fossum purchased a house in 1994. To obtain the best interest rate, the property was purchased in Edward's*fn1 name alone, but later title was placed in both spouses' names. In 1998, the parties agreed to enter into the same arrangement in order to obtain a good interest rate on a loan to refinance their home. Sandra quitclaimed her interest in the property to Edward, but he never restored Sandra's name to title. Following trial in this action, the trial court determined the house was community property. Edward contends that ruling was in error. We affirm.

Prior to the parties' separation, Sandra took a cash advance on a credit card of $24,000, but never disclosed the transaction to Edward. The trial court found Sandra had breached her statutory fiduciary duty to her spouse. (Fam. Code, § 721, subd. (b).)*fn2 Edward contends the trial court erred when it refused to award him attorney fees, which are mandated under section 1101, subdivision (g), for Sandra's fiduciary violation. On this point, we conclude Edward is correct.

FACTUAL AND PROCEDURAL BACKGROUND

Edward and Sandra Fossum were married in September 1994, after having lived together since 1992. They separated in November 2002.*fn3 The parties had no children together, although Sandra had a minor child from a prior relationship. Sandra filed a petition for dissolution in January 2003. Trial was conducted on various dates during February, March, June and October 2007. The primary dispute at trial, and on appeal, involves the characterization of real property located at 21557 Placerita Canyon Road, Santa Clarita (the "property," or "house"). Escrow on the property closed in October 1994. The down payment on the property was between $30,000-$38,000. The funds for the down payment came from the Fossums's joint savings account.

The first quitclaim deed

Sandra's testimony

At trial, Sandra testified that the source of the down-payment funds was money she and Edward earned together working in Edward's construction business during 1994, repairing homes after the Northridge earthquake. Sandra worked primarily as a "laborer," laying floors, repairing cracks, working on stone, and assisting Edward with design work and shower, kitchen and complete home remodels. She and Edward traveled together to and from work each day. The funds had been kept in a savings account that previously belonged to Edward. Sandra's name was added to the account after the marriage.

In October 1994, Sandra first saw the house and she and Edward decided to buy it. They discussed how to take title to the property. Edward had a better credit rating than Sandra. Because of that, a lender recommended, and Edward and Sandra agreed, that Edward should finance the house and take title to the property in his name, in order to obtain a better interest rate than the one for which they could qualify if Sandra's name was also on title. Edward recommended that Sandra execute a quitclaim deed in his favor and promised Sandra that, once the loan closed, he would deed the house back to Sandra so that title would be in both of their names. Sandra believed Edward and agreed to this arrangement.

Sandra signed a quitclaim deed in favor of Edward on October 17, 1994 (the first quitclaim deed). A grant deed executed on October 27, 1994 and recorded in January 1995, shows title to the residence taken in the name of Edward Fossum, a married man, as his sole and separate property.

Edward's testimony

Edward did not recall having discussed with Sandra the issue of the manner in which title to the property would be taken in 1994. The loan was intended to be in his name alone because his credit was better and because the funds used for the down payment were earned by Edward in his construction business during 1994. The funds used for the down payment were transferred from Edward's separate accounts into a savings account to which Sandra's name had been added after the marriage. Edward and Sandra also combined their checking and credit card accounts after they married.

The second quitclaim deed

Sandra's testimony

After the loan closed in October 1994, Edward kept his promise and executed a quitclaim deed, dated August 16, 1995, in favor of Edward and Sandra Fossum, as joint tenants (the second quitclaim deed). Edward gave this deed to Sandra, and told her he was doing so based on their earlier discussion. Sandra and Edward went to the notary together at the time the second quitclaim deed was signed, and later sent it to be recorded. For reasons unimportant here, the deed was not recorded until January 28, 1997.

Edward's testimony

After escrow closed in 1994, Edward executed the second quitclaim deed, placing the property into both his name and Sandra's, and took it to be notarized. Edward did not recall whether he and Sandra had agreed whether the handwritten deed should be recorded. Edward was not aware the handwritten deed had been recorded until this action was initiated, and his attorney instructed him to obtain title documents. Edward was not, however, ...


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