Opinion
NOT TO BE PUBLISHED
Super. Ct. No. SDR005518
Butz , J.
This is an appeal from an order after a judgment in a marital dissolution action directing sale of the marital home. Appellant Mark Silva (Silva) contends that the trial court erred in construing the marital settlement agreement to require equal sharing of the proceeds of the sale in the circumstances of this case. Respondent Nancy Seaver-Silva (Seaver-Silva) makes no appearance on appeal. Finding no merit in Silva’s contentions of error, we shall affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The judgment of dissolution was entered July 19, 1996. It incorporates a marital settlement agreement. The agreement has the following provision concerning the marital residence:
“Residence at 1209 McIntosh Way, Roseville, CA 95678[.] [Silva] is to remain in the house and will maintain the property until it is sold. [He] is assuming the financial responsibility on the property in exchange for having a residence, and a tax write-off. The future sale or refinance of the residence is to be accomplished on or before 12/01/97. At the time property is sold/refinanced, parties will share equally in the gain or loss from the sale.”
The agreement has the following provision concerning cooperation needed to carry out other terms of the agreement:
“Each party agrees upon demand of the other party to execute or deliver any instrument, or furnish any information, or perform any other acts reasonably necessary to carry out the provisions of this Agreement without undue delay or expense. If either party should fail to comply with the other’s request, that party shall reimburse the other party for any expense, including any attorneys fees or Court costs.”
On July 3, 2006, Seaver-Silva filed a motion, in pertinent part, to compel the listing of the house for sale. Silva, eventually, was properly served, obtained counsel, and filed an opposition on January 29, 2007. He asked the court to order Seaver-Silva to sign the house over to him on equitable grounds, because she had failed to cooperate in refinancing the home in a timely manner. The matter finally came on for hearing on October 12, 2007.
Silva testified in essence as follows. When the marital settlement agreement was executed he asked Seaver-Silva what would happen if it turned out that there was no equity in the house and she had assured him that she would simply sign the house over to him. When he reminded her about the order to sell or refinance in December of 1997 she reaffirmed this assurance.
In June of 1998 a loan consultant, Brett Bradley, sent him a solicitation letter about a potential loan to refinance the house. Under the terms of the potential loan the principal and interest portion of the payment would have been reduced to $885 per month. The letter contains no information on the value of the house or whether Silva would have to make any down payment to obtain the loan. Thereafter, Silva called Seaver-Silva and told her there was no equity in the house and that she needed to sign it over to him. He based the opinion that there was no equity on his conversations with Bradley. He never checked with a real estate agent or sought an appraisal. She declined to sign the house over to him.
The parties had put approximately $6,000 down at the time of purchase in 1993. Their original obligation on the mortgage appears to have been $128,000. They had paid down approximately $6,000 of the mortgage by March of 1998, when the remaining principal obligation was $121,657.27. Silva adduced testimony of an appraiser who opined the house was worth $118,000 on December 1, 1997.
In December of 1998 he was laid off. Thereafter, he told Seaver-Silva that he should have refinanced before he lost his job. She replied, “Don’t worry about it. I’ll--when you get back on your feet, I’ll still sign it over.”
Seaver-Silva testified in essence as follows. The delay provided for in the marital settlement agreement for sale or refinancing of the house was to allow her to keep the children in the school they had been attending. She did not remember any conversation with Silva in December of 1997 about refinancing. The origin of the discussion in June 1998 was that he learned she was going to buy a home of her own. He called and informed her that since she was going to have a home of her own she should sign the marital residence over to him. “[W]e weren’t even discussing the refinance at that point--he had found out that I was buying a house. He said, ‘Now that you’re getting your own house, you should just sign this one over to me.’”
When Silva found out he was going to be laid off later in 1998, he called and asked if she could wait a while before the sale of the home so that he could have a place to live. “[W]e knew that there wasn’t any equity in there, and that was one of the reasons he wanted to wait.” When they discussed the sale of the house he would tell her, “If you want any part of the house, you need to take me to court.” She delayed in doing so because she did not have the money to hire an attorney.
The matter was submitted after a second day of trial on December 10, 2007. On December 27, 2007, the court issued a written decision explaining its reasoning, with findings and directions, in pertinent part, as follows:
The marital settlement agreement provides that the parties would share equally in the gain or loss from the sale. Silva contended that, in light of the provision requiring sale by December 1, 1997, the equity in the home, if any, should be valued as of that date. In the court’s view the time for sale provision did not conflict with the provision for equal shares of the sale proceeds. The equal shares provision is unambiguous and governs the issue.
Seaver-Silva did not obstruct the refinancing of the property. She was entitled to verify the alleged absence of equity in the property through a qualified appraisal. The delay that occurred is attributable to a lack of diligence by both parties. Therefore, the court directed the house be appraised and refinanced or listed for sale by specified dates and that the parties would share equally in the equity at the time of sale or refinancing.
Silva appeals from this decision.
DISCUSSION
I. Equal Sharing of Gain or Loss
Silva contends that the trial court erred in interpreting the marital settlement agreement to provide for equal sharing of gain or loss from the sale after the December 1, 1997 date provided in the agreement for sale or refinancing. He argues that this construction improperly subordinates the sale date provision and is inconsistent with a recital the agreement is “intended to be consistent with provisions of California Code.” The arguments are unpersuasive and the contention is not meritorious.
Silva notes that in reading a contract, “The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.” (Civ. Code, § 1641.) His central claim is that the sale date provision conflicts with a reading permitting equal sharing of profit or loss at a later date. He argues that the court’s interpretation of the marital settlement agreement allows the property to remain undivided for more than 10 years after judgment, which is “completely at odds with the provision that the sale or refinance is to occur on or before December 1, 1997.”
Silva’s view of the meaning of the sale date provision is unpersuasive. The sale date provision is a requirement for sale by a date certain. Its objective purpose is to limit the period when Silva was entitled, of right, to possession of the marital residence without compensation for Seaver-Silva’s equity. At that point, Seaver-Silva could legally enforce a demand for sale or refinancing. That purpose sheds no light on the question of what occurs if the parties fail to sell or refinance the house by the date provided. Thus, there is no force to the argument that it should be read to prevent sharing of profit or loss revealed at the time of a later sale. The sale date provision is not inconsistent with the court’s reading because it provides no implication of an agreement on what should occur if the property was not timely sold or refinanced.
The marital settlement agreement cannot be read retrospectively in light of the circumstances of this case. If the delay here occurred in a declining market, Silva would likely insist that Seaver-Silva accept her share of loss on the property. As recent events have demonstrated, it is not inevitable that property will appreciate, or that it will appreciate more rapidly than other forms of investment. If there was $100,000 in equity on the day stated in the sale-by-a- date-certain provision and the market collapsed, Silva would be vehemently protesting any effort by Seaver-Silva to backdate the time for valuation of the equity split.
Silva argues that the court’s reading is inconsistent with the agreement because of the recital that it is “intended to be consistent with provisions of the California Code.” He points to Family Code section 2552, subdivision (a), which states, “For the purpose of division of the community estate upon dissolution of marriage or legal separation of the parties,... the court shall value the assets and liabilities as near as practicable to the time of trial.” There is no inconsistency. Section 2552 only addresses a valuation by the court for purposes of a division by the court. That occurs only where there is no “written agreement of the parties.” (§ 2550.) Here the division was by such a written agreement and section 2552 simply has no application.
Undesignated statutory references are to the Family Code.
Even in a court determination of community property rights it is possible to defer the sale of a residence and to value the respective community equities as of the date of later sale or refinancing. The reach of section 2552 is subject to equitable adjustment by the court under section 2601. (See § 2600; In re Marriage of Duke (1980)101 Cal.App.3d 152, 156-157.) In In re Marriage of Teichmann (1984) 157 Cal.App.3d 302, the family residence was ordered sold with the net balance (after paying off equity stakes) to be divided equally between the parties. However, it was not sold for 19 months due to unfavorable market conditions. Nonetheless, the court ordered the remaining proceeds equally split, despite wife’s claim for interest on her higher equity stake. (Id. at p. 307.)
Suppose the parties in this case had decided in June of 1998 to sell the residence and the sale took six months. If Silva made a similar claim that the contract should be read to require he receive any appreciation during the year because Seaver-Silva’s share must be determined as of a year earlier under the sale-date provision, he would receive short shrift. For all the foregoing reasons, there is no error in the trial court’s interpretation of the marital settlement agreement.
II. Alleged Breaches of the Marital Settlement Agreement
Silva contends that the trial court erred in enforcing the equal-shares-on-sale provision of the marital settlement agreement because Seaver-Silva breached her obligations under the agreement. He suggests that in refusing to agree to sign the property over to him she breached the provision of the marital settlement agreement requiring her, “upon demand of the other party, to execute or deliver any instrument, or furnish any information, or perform any other acts reasonably necessary to carry out the provisions of this Agreement.” He argues that Seaver-Silva was obliged to get her own appraisal of the property showing equity to justify refusal to sign the house over to him and that, in any event, her concession that there was no equity in the house made her refusal wrongful. The arguments are unpersuasive and the contention of error lacks merit.
A. Breach of Obligation to Obtain an Appraisal
Silva’s sole support for his argument that Seaver-Silva was obliged to obtain an appraisal is an unelaborated citation, In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 34-35. In Heggie the couple entered into a stipulated judgment filed in September 1999 in which the husband was to transfer a sum certain from his individual retirement account (IRA) to the wife’s IRA to balance the accounts based on the value of the two high-tech stocks in husband’s IRA as of June 30, 1999. (Id. at p. 30.) In March of 2000 the wife filed a motion to set aside that part of the judgment dividing the community property in the couple’s respective IRA accounts. (Id. at p. 31.) The Heggie opinion said that relief could not be predicated on hiding or lack of disclosure of assets because the contents of the husband’s IRA were known and there was no obligation on the part of the husband to update the wife on the fluctuating values of the two stocks in his IRA where the information was readily obtainable publicly. (Id. at pp. 34-35.)
Heggie is inapposite. Unlike stock, the value of a house is not readily obtainable publicly. More importantly, the issue here is not lack of disclosure of objective information known to one party and supposedly not to the other, but the obligation to obtain verified subjective information known precisely to neither party.
The marital settlement agreement in this case does not address how the refinancing or sale was to occur. Thus, with the exception of the specification of attorney fees as a remedy, it provides no guidance as to duties of the parties (“[to] perform any other acts reasonably necessary to carry out the [other] provisions”) in effecting the sale or refinancing required under the sales or refinancing provision. In essence, that clause is an express covenant of good faith and fair dealing.
“Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” (Rest.2d Contracts (1981) § 205.) The question is: On these facts, did Seaver-Silva breach this covenant in refusing Silva’s demand to sign the house over to him? Or, in obverse form: Was she required by good faith and fair dealing to obtain her own appraisal in order to justify the refusal of the demand?
The marital settlement agreement, on these facts, gave Silva two options: either seek a sale of the home or seek to arrange for a refinancing that would leave him as the sole owner. If the sale route were taken, the parties’ interests in maximizing the sale price would be aligned; both would desire the highest selling price to avoid loss and maximize their profit. The value of the house would be ascertained and verified by the process of sale. Moreover, each party’s interest in equity in the property would be secured by the property and escrow procedures.
However, if Silva invoked the refinancing option, the parties’ interests in valuation of the house would not be aligned. Silva’s interest would be in refinancing solely the amount due on the mortgage. Even an appraisal in a refinancing would only be required to justify sufficient value in the property to cover the exposure of the prospective lender. Moreover, Seaver-Silva’s interest in equity in the property would be unsecured thereafter.
Silva did not ask that Seaver-Silva agree to cooperate in obtaining refinancing of the house. He simply demanded that she sign over her interest to him. Insofar as he was invoking the refinancing option in June of 1998, he was seeking to obtain the benefit of sole ownership of the property without paying anything to Seaver-Silva.
It is reasonable in these circumstances to assign the duty to Silva, as the moving party and the party choosing an alternative path fraught with conflict of interest, to demonstrate to Seaver-Silva that his proposal that she relinquish her ownership interest was fair and reasonable. (See Civ. Code, § 3521 [“He who takes the benefit must bear the burden”].) Thus, the trial court was correct in deciding that Seaver-Silva could reasonably decline to simply sign the house over to Silva for nothing, without reasonable objective assurance that equity in the property was zero. Or, stated in obverse form, she was not required by good faith and fair dealing to obtain her own appraisal showing positive equity in order to justify the refusal of his demand to release the property to him.
B. Breach Because of Admission of No Equity
Silva argues Seaver-Silva must be deemed to have breached the marital settlement agreement in refusing his demand to sign the house over to him because she admitted she knew there was “no equity” in the property. We are not persuaded.
We imply in favor of the judgment that the trial court found all the facts necessary to support it. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 355, pp. 409-410 (Witkin).) No examination was made at trial of the meaning of the phrase “no equity.” In common parlance “no equity” can mean not much equity, e.g., not substantial enough to warrant forcing Silva to sell when he was laid off, or it can mean zero equity. Even if Seaver-Silva had a relatively small equity stake, she was entitled to an assurance that it would be paid. The trial court could reasonably find that notwithstanding her “no equity” concession Seaver-Silva was entitled to refuse Silva’s demand that she simply sign the house over to him without any verification that she was entitled to nothing in return.
III. Reimbursement Rights
Silva contends that the trial court erred by “refusing” him reimbursement rights for the payments and improvements on the house during the period after termination of the marriage. He argues that the court had no authority to “refuse” to award him “any reimbursement rights for the principal and taxes he had paid and the improvements.” The argument is unpersuasive because as Silva never sought such an award, the trial court did not refuse him.
Seeking to make a virtue of a vice, Silva notes, “Here, no evidence was offered by either party as to (1) the reasonable rental value of the Residence; (2) the amount [Silva] had paid toward principal since 1996; (3) the amount he had expended on maintenance, taxes, or upkeep; or (4) any improvements he had made to the property since 1996.”
That is to say, he never raised a reimbursement claim in the trial court.
For a requirement of reversal in these circumstances Silva cites In re Marriage of Reilley (1987) 196 Cal.App.3d 1119, 1122, 1124, where the husband was ordered to be reimbursed the entire $55,977 he had separately paid to improve the property under an incorrect version of the rule governing reimbursement. However, that case is inapposite. In Reilley the reimbursement claim was raised at trial, evidence was adduced to support reimbursement, reimbursement was awarded, and reversal was predicated on use of the incorrect rule for the amount of reimbursement.
Here, the marital settlement agreement provided: “[Silva] is assuming the financial responsibility on the property in exchange for having a residence, and a tax write off.” The implication is he was not entitled to reimbursement. Assuming arguendo, this might be overcome in light of the unforeseen protracted period of possession, there was neither a claim nor a showing that any increment to equity attributable to Silva exceeded the offsetting fair market rental value of the premises, and no claim or showing of improvements. In these circumstances an appellate claim of reimbursement rights was waived under the doctrine of theory of trial. (See 9 Witkin, Cal. Procedure, supra, § 407, p. 466.)
DISPOSITION
The judgment (order directing sale of the marital home) is affirmed. Silva shall bear his own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(5).)
We concur: SCOTLAND , P. J., RAYE , J.