Wednesday, December 2, 2009
C.A.: Wife’s ‘Gift’ to Husband Still Community Property
By STEVEN M. ELLIS, Staff Writer
The Fourth District Court of Appeal yesterday reversed a family law court’s ruling that a woman who bought a Porsche for her ex-husband during their marriage with her own money lost her rights in the vehicle by virtue of the gift.
Reasoning that the 2001 sports car was not tangible property of a personal nature, Div. One held the gift did not transmute the vehicle from community to separate property and said the former wife had a right to reimbursement for the purchase.
Walter Neighbors bought the Porsche 996 with funds drawn on the account of his then-wife, Tatia C. Buie, for approximately $60,000 shortly before his birthday, apparently considering it to be a gift. After the pair divorced, Neighbors sought a determination classifying the automobile as his sole property, rather than property of the marital estate.
San Diego Superior Court Judge Joseph P. Brannigan granted Neighbors’ request, ruling that the transfer was a gift which changed the property’s nature under Family Code Sec. 852(c) because the Porsche was a “tangible article[ ] of a personal nature.”
In community property jurisdictions like California, most property acquired during marriage is automatically presumed to be owned jointly by both spouses under the idea of recognizing their mutual contributions to the creation and operation of the family unit. Community property can be transmuted into separate property under Sec. 852 by a gift between spouses.
However, that generally requires an express declaration in writing by the spouse whose interest is affected unless the transfer involves “clothing, wearing apparel, jewelry, or other tangible articles of a personal nature…used solely or principally” by the recipient spouse. Such property must also be “not substantial in value taking into account the circumstances of the marriage.”
On appeal, Buie noted the absence of any writing stating she intended to transmute the Porsche to Neighbor’s separate property. Neighbors did not appear in the proceedings and the court, in an opinion by Justice Joan Irion, agreed that Brannigan’s conclusion that the Porsche was a tangible article of a personal nature was error.
Holding the statutory text ambiguous on whether an automobile could qualify, the justice examined the legislative history and wrote that the Porsche did not qualify because the Legislature, in enacting the statute, relied on a recommendation of the California Law Revision Commission which commented that “an automobile is not an article of a personal nature.”
She also agreed that Buie deserved reimbursement, as part of the division and equalization of the community estate, for contributing separate property funds to purchase the Porsche.
Family Code Sec. 2640(b) allows reimbursement for a party’s contributions to the acquisition of community property to the extent the party traces the contributions to a separate property source so long as the party has not waived reimbursement in writing.
Applying the section, Irion explained:
“It is undisputed that the Porsche was bought entirely with funds that were Buie’s separate property. It is further undisputed that Buie did not sign a document waiving her right to reimbursement for her separate property contribution to the purchase of the Porsche. Here, because the purchase of the Porsche can be traced entirely to Buie’s separate property funds, Buie has a substantive right to reimbursement of those separate property funds.”
Presiding Justice Judith McConnell and Justice Terry B. O’Rourke joined Irion in her opinion.
The case is Marriage of Buie and Neighbors, D053925.
Copyright 2009, Metropolitan News Company