Judge Teresa A. Beaudet, Case Number: 20STCV21561, Date: 2024-05-20 Tentative Ruling

This matter came on for trial on March 15-16, 2023, May 3-4, 2023 and July 18, 2023, in Department 50 of the above-entitled Court before the Hon. Teresa A. Beaudet, sitting without a jury. The Court, having considered the evidence and read the arguments of counsel, issues this tentative and proposed Statement of Decision. This tentative and proposed Statement of Decision will become the Statement of Decision unless, within 15 days hereafter, a party serves and files objections to the proposed Statement of Decision.

On April 28, 2022, the parties filed a Second Revised Joint List of Stipulated Facts

1. On January 6, 2006, before marriage, Plaintiff contributed $208,000 to the purchase of real property in Cherry Valley, California. The purchase price of the Cherry Valley Property was $769,000.

2. On January 6, 2006, Mariano Aguirre closed escrow for the Cherry Valley Property and title was placed in his name alone.

3. Mariano Aguirre was the sole borrower with regard to the purchase money mortgage used to purchase the Cherry Valley Property.

5. During the marriage, Plaintiff and Mariano Aguirre, resided on and operated a farm on the Cherry Valley Property.

6. On or about December 9, 2015, Plaintiff retained family law attorney, Casey Olsen, to represent her interests regarding a potential dissolution action.

8. On January 11, 2016, Casey Olsen filed a dissolution action in the Superior Court for the County of Los Angeles on behalf of Plaintiff to dissolve her marriage with Mariano Aguirre (the “Dissolution Action”).

9. During the Dissolution Action, Mariano Aguirre was represented by Gerard A. Fierro.

10. On January 20, 2017, Elba Romo hired Joni Salomon as her attorney in the Dissolution Action in the place of Casey Olsen.

11. Joni Salomon is a member of the California Bar and licensed to practice law in all of the courts of the State of California and is a Certified Family Law Specialist.

12. On October 15, 2017, Capital Realty Analysts appraised the value of the Cherry Valley Property at $480,000.

13. On December 2, 2017, Quality Appraisal Service appraised the value of the Cherry Valley Property at $285,000.

14. During the Dissolution Action, Mariano Aguirre contended that the $208,000 Plaintiff contributed towards the purchase of the Cherry Valley Property was a gift while Plaintiff contended that there was an agreement that her name would be placed on title after marriage.

15. On April 17, 2019, a mediation was conducted before a retired family law judge with regard to the settlement of issues between Plaintiff and Mariano Aguirre including those in the Dissolution Action.

16. On April 17, 2019, the parties signed a written settlement agreement which provides in part as follows, “...D. Cherry Valley: As set forth herein, the real property located at Cherry Valley is confirmed to Respondent as his sole and separate property. In the event, Cherry Valley is lost to foreclosure or sold by short sale or it is offered to be sold to a third party or transferred, Petitioner shall have the right of first refusal to purchase Cherry Valley prior to sale, transfer, foreclosure, and/or short sale. Respondent shall provide to Petitioner 30-day notice and the right to buy said property prior to any listing for sale, transfer, short sale listing, or foreclosure notice and listing for sale.

If Cherry Valley appreciates over the amount owed on the mortgage at the time husband offers the property for sale on the open market, Petitioner has the right of first refusal to purchase said property from him with a credit for up to $208,000 over and over the amount owning on the mortgage...”

17. On August 22, 2019, Joni Salomon ceased representing Plaintiff in the Dissolution Action.

On February 15, 2023, the court ordered in part as follows: “…The Court will decide the legal issue of whether the Civil Court or the Family Law Court had jurisdiction regarding the $208,000 transaction…” The trial was bifurcated and the parties presented their evidence and briefs on this sole legal issue.

II. Did the Civil Court or the Family Law Court have jurisdiction regarding the $208,000 transaction?

The Court finds that, under the facts of this case, the Family Law Court, and not the Civil Court, had jurisdiction regarding the $208,000 transaction. The trial evidence establishes that Romo and her then-spouse, Mariano Aguirre (“Aguirre”) consented to the family court’s jurisdiction by (1) voluntarily submitting the issue for decision by way of their submissions in the dissolution action; (2) resolving “all issues” between them (including issues from “prior to the marriage”) in the family law proceeding pursuant to a comprehensive settlement whose terms included a negotiated division of all property, with Romo receiving a right of first refusal to purchase the Cherry Valley Property, which demonstrated the parties’ purposeful consideration of how to address the $208,000 payment; and (3) the parties then converting the settlement to a binding and enforceable judgment (which the parties made enforceable by the family law judge under Code of Civil Procedure section 664.6).

The “Family Law Division” (the “family court”) of the superior court is not a court of “special” or “limited” jurisdiction, but rather “the superior court performing one of its general duties” (i.e., handling litigation under family law). (See In re Chantal S. (1996) 13 Cal.4th 196, 200-201 [distinguishing family courts from “special” juvenile courts with specially-defined jurisdictional limits. When parties to a dissolution proceeding voluntarily submit an issue to a family court, the court has the same jurisdiction over the issue as in any superior court. (In Re Marriage of Saslow (1985) 40 Cal.3d 848 [disapproved on other grounds].)

The issue in Saslow was whether the family court had jurisdiction regarding pre-marital loans from the wife to the husband. In finding that jurisdiction did exist in that case, the Saslow court stated:

Normally the jurisdiction of the trial court in a dissolution proceeding is limited to division of community property.… However, since both parties have apparently “voluntarily submitted the matter to a court having general jurisdiction to pass upon the question…under pleadings which properly raise[] [the] issue”… it was permissible for the trial court to render judgment on the issue.

In the case of In re Marriage of Gagne (1990) 225 Cal.App.3d 277, the Court affirmed the family court’s jurisdiction over matters voluntarily submitted by the parties. In Gagne, the Court of Appeal upheld the trial court’s jurisdiction to decide issues regarding a premarital loan on the ground that the parties submitted the issue to the court.

In that case, the husband (James) argued that the family court lacked jurisdiction to decide issues concerning a premarital loan involved in the disposition of a house. During trial, James objected that the California Rules of Court prohibited introduction of evidence of the loan. (Id. at 287.) The court held that James waived any jurisdictional objection by failing to object before trial.

On October 14, 1986, when [wife] Alexandria filed her response, James became aware Alexandria wanted the issue of her premarital loan resolved in the dissolution hearing. Almost two years elapsed before the case came to trial, and James never objected by filing a motion to sever or by filing a motion to strike under the California Rules of Court, rule 1229, Family Law Rules.

Thus, the trial court could properly find the pleadings raised the issue of the premarital loan and that both parties “apparently voluntarily submitted the matter” for its decision. Not until James's attorney made his first objection to testimony at trial did the court become aware James wanted to reserve the issue for a separate civil trial.

At trial, the experts on both sides acknowledged that divorcing spouses may submit any property issues they wish to a family court. According to Mr. Levin, Romo’s expert, “the parties can always stipulate to have a family court hear a particular issue as long as it’s based upon informed consent.”[1] (RT, 3/15/23, at 30:7-14.) Ms. Tour-Sarkissian, Salomon’s expert, testified that divorcing parties can submit any property issues they wish to a family law court that they choose, citing Saslow. (RT, 7/18/23, at 34:14-24.)

Similar to the circumstances in Saslow, Romo and Aguirre voluntarily submitted the $208,000 payment issue to the family court by way of their pleadings and disclosures in the Dissolution Action. Specifically, Romo and Aguirre listed the Cherry Valley Property in their respective Schedules of Assets and Debts. (Exh. 511-001 [Aguirre’s FL-142 Amended Schedule of Assets and Debts]; Exh. 547-001 [Romo’s FL-142 Schedule of Assets and Debts].) Romo designated the Cherry Valley Property as community property while Aguirre classified it as his separate property. (Ibid.) Neither party annotated or supplemented their respective schedules to indicate that the Cherry Valley Property was outside the family court’s jurisdiction.

Romo in her disclosures went further than simply designating the Cherry Valley Property as community property. She proposed a division of the property that would give her $130,000, which is the amount she identified as the net fair market value of the property. (Exh. 506-001 [Romo’s FL-160 Community Property Declaration].) Romo also annotated the FL-160 with a double asterisked reference to her “$208,000” claim, followed by a citation to “P’s FC 2640” – a reference to Family Code 2640. Regarding the significance of Romo’s FL-160 to her opinion, Ms. Tour-Sarkissian testified, “the importance of this document is that she's putting the issue of the Cherry Valley Property at issue before the family court. That is the $208,000 that has to be decided, as well as her reimbursement claims under 2640.” (RT, 7/18/23, at 32:4-33:2.)

Regarding Romo’s claimed community interest in the Cherry Valley Property, Mr. Levin acknowledged as a general matter that “if community income is used to pay a separate property debt, the community could acquire an interest in the separate property or seek reimbursement for that debt.” (RT, 5/03/23, at 57:12-19.) He further acknowledged that these circumstances were present in this matter. Specifically, Mr. Levin acknowledged that proceeds from the operation of the couple’s farm were used to pay down indebtedness on the Cherry Valley Property, that Romo asserted a claimed community interest based on those payments, and that the family court had jurisdiction over Romo’s resultant community property claim. (RT, 5/03/23, at 56:22-59:24.)

When considering whether a party has reserved a pre-marital issue for a separate civil trial, courts will consider the party’s lack of timely objection to the family court’s exercise of jurisdiction. (See In re Marriage of Gagne (1990) 225 Cal.App.3d 277, 287 discussed above.) Here, no evidence was presented at trial that either party objected to the family court exercising jurisdiction over all issues involving the Cherry Valley Property. This is a further indication of the parties’ mutual consent to place the $208,000 payment before the family court. Consistent with controlling case law, Ms. Tour-Sarkissian expressed her view that

the family law court had jurisdiction -- total jurisdiction not only to divide the marital assets, characterize what is separate, what is community, determine the reimbursement rights and divide the community estate, but also to make decisions on the separate asset, in this case the Cherry Valley property, for all of the reasons that we mentioned earlier in terms of the fact that the schedule of assets and debts had been put at issue before the family law court. And there was no necessity to file a separate action.

Ms. Tour-Sarkissian testified that, as a matter of custom and practice, there are no documents or forms used in family law matters by which the parties could have communicated the giving or withholding of consent over certain issues to family court jurisdiction. (RT, 7/18/23, at 74:12-75:25, 42:24-43:7.)

The settlement negotiated by Romo and Aguirre and then their conversion thereof into a consent judgment demonstrates their assent to resolve all issues between them in a single family law proceeding. The settlement, which included a negotiated division of real and personal property and resolved all other issues between the parties, was documented in a detailed settlement agreement executed by Romo, Aguirre and each of their counsel (and initialed on each page by Romo). (Exh. 501 [Settlement Agreement].)

The parties expressly demonstrated their intent to resolve all issues through expansive settlement language and releases. The breadth of the settlement is stated in the first section, “Settlement of All Issues,” which provides, in part:

a. The following agreement is intended to be a settlement of all of the issues in this matter, as a result of the party’s [sic] marriage and relating to their marriage including issues relating to the parties’ cohabitation both prior to the marriage and after the date of separation. The terms of this agreement shall be incorporated into a Judgment “(JUDGMENT”) to be filed in this matter.

Citing the language in section 1.a. of the settlement agreement, Ms. Tour-Sarkissian testified that, “So my opinion is, when Ms. Romo enters into the settlement, she's knowingly putting this issue of the [$208,000 payment] or more, precisely the Cherry Valley property, at issue before the Court. The same thing happened with Mr. Aguirre.” (RT, 7/18/23, 43:8-45:8.)

Significantly, the settlement agreement contains explicit terms that addressed the $208,000 payment. Specifically, the parties agreed that the Cherry Valley Property would be confirmed to Aguirre as his sole property with Romo to receive the right of first refusal (ROFR) if Aguirre ever decided to sell it, as well as a $208,000 credit to be applied to Romo’s future purchase if the property were to appreciate over the mortgage value.

As set forth herein, the real property located at Cherry Valley is confirmed to Respondent as his sole and separate property. In the event Cherry Valley is lost to foreclosure or sold by short sale or it is offered to be sold to a third party or transferred, Petitioner shall have the right of first refusal to purchase Cherry Valley prior to sale, transfer, foreclosure, and/or short sale. Respondent shall provide to Petitioner 30-day notice and the right to buy said property prior to any listing for sale, transfer, short sale listing, or foreclosure notice and listing for sale.

Ms. Tour-Sarkissian opined that the ROFR provision reflects that the parties considered and addressed the $208,000 payment as part of their decision to resolve the issue in the matter then-pending family law proceeding. (RT, 7/18/23, at 46:5-46:26.)

As part of the settlement, the parties expressly reserved the right to claim omitted assets, but reserved no other rights or interests, including with respect to the $208,000 payment. (Exh. 501-009, section 6.e. and Exh. 501 in passim.) The parties also agreed to submit to the family court’s jurisdiction to enforce the settlement under Code of Civil Procedure section 664.6. (Exh. 501-013.) Mr. Levin acknowledged that the parties agreed to submit the issues of the Cherry Valley Property to the family court by way of enforcement. (RT, 5/03/23, at 51:1-25.) The comprehensiveness of the settlement, which resolved “all issues” between the parties (arising both before and after marriage), left nothing to be adjudicated relative to the $208,000 payment.

As noted above, the parties then converted the settlement into a consent judgment during the pendency of this legal malpractice case. The stipulation attached to the judgment incorporates the material terms of the settlement as recited above. (Exh. 542-003 to 542-016.) It also includes the following provision affirming the finality of the judgment with respect to “all rights” to any property in which Romo or Aguirre claimed interest:

4. This Stipulated Judgment covers all issues in dispute in the Action and is intended to be an all-inclusive expression of the parties’ agreement and settlement. The purpose of this Stipulated Judgment is to make a full, final and complete settlement and adjustment of all rights in and to all property owned by Husband and/or Wife, or in which either or both of them have an interest of any kind, nature and/or extent; all of the parties’ reciprocal rights relating to spousal support and maintenance; all rights, and any and all claims and demands of whatever kind or nature that either party may have against the other, including rights as to property hereafter acquired.

No evidence was presented at trial to show that Romo or Aguirre sought relief from the settlement or judgment.

In Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 400, the court explained that courts refer to a “consent judgment” as “a judgment entered by a court under the authority of, and in accordance with, the contractual agreement of the parties [citation], intended to settle their dispute fully and finally [citation].” The Norgart court further notes that “by consenting to the judgment or order the party expressly waives all objection to it, and cannot be allowed afterwards, on appeal, to question its propriety, because by consenting to it he has abandoned all opposition or exception to it.”

Here, the parties’ settlement and judgment are dispositive of the issue of consent. As discussed, there is no dispute that California law allows divorcing spouses to voluntarily submit a property issue to the family court irrespective of whether the issue would otherwise fall within its jurisdiction. The issue of the $208,000 payment was plainly raised in the settlement and resulted in the consent judgment. Given that the parties were empowered to submit the $208,000 payment to the family court, and they negotiated a settlement addressing the same issue without reservation and within the confines of a then-pending family law proceeding (while also making the settlement enforceable by the family law judge under Code of Civil Procedure section 664.6), Romo cannot now complain that the family court lacked jurisdiction over that issue.

As discussed above, the Court finds in favor of Salomon on the sole legal issue of whether the Civil Court or the Family Law Court had jurisdiction regarding the $208,000 transaction. More specifically, the Court finds that, under the facts of this case, the Family Law Court and not the Civil Court had jurisdiction regarding the $208,000 transaction.

Within ten days after this Statement of Decision becomes final, Salomon is ordered to file and serve a proposed judgment in accordance with these findings (with a courtesy copy delivered to Dept. 50). The Court hereby dismisses the Doe defendants.

Salomon is ordered to give notice of this tentative and proposed Statement of Decision.

[1] Defendant (“Salomon”) discusses the issue of informed consent in her Closing Trial Brief (Phase One), but Romo acknowledges in her Reply thereto (pp. 6:17-7:1) that “[i]nformed consent has no relation to the issue of jurisdiction under discussion...” Moreover, the issue of informed consent was not identified as an issue for this Court to determine in this bifurcated phase of the trial.

Superior Court of California

County of Los Angeles

Department 50