Burwell v. Burwell

Filed 10/31/13

CERTIFIED FOR PARTIAL FOR PARTIAL PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

In re the Marriage of BECKY and GARY
BURWELL.

BECKY BURWELL, F064265

Movant and Appellant, (Kern Sup. Ct.
No. S1501-FL-591767)
v.
OPINION
CYNTHIA BURWELL,

Objector and Appellant.

APPEAL from a judgment of the Superior Court of Kern County. Susan M. Gill,
Judge.
Bowman and Associates, Stacy H. Bowman; Klein, DeNatale, Goldner, Cooper,
Rosenlieb & Kimball, Catherine E. Bennett, and Thomas V. DeNatale, Jr., for Objector
and Appellant.
Stephen Temko for Movant and Appellant.
-ooOoo-


Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is
certified for publication with the exception of parts III through IX of the Discussion.
 INTRODUCTION
Are the proceeds of a term life policy community property or separate property of
the spouse who pays the final premium? Our answer is an all too familiar one: it
depends. We hold that the characterization “will depend on the … premium for the final
term of the policy.” (Minnesota Mut. Life Ins. Co. v. Ensley (9th Cir. 1999) 174 F.3d
977, 983 (Minnesota Mut. Life Ins. Co.).) The effect of the rules governing
characterization of term life insurance proceeds depends on multiple factors, including
whether the policy contains certain contractual provisions, and the insurability of the
insured spouse. The result is an unfortunately intricate methodology for allocating
proceeds of term life insurance policies. Were we free to abandon community property
jurisprudence and craft a simpler holding we might do so. We are not.
Here, the trial court failed to make findings sufficient to determine proper
characterization of the proceeds. Therefore, we vacate the court’s order, and remand for
further factual findings and application of the rules we set forth herein.1
FACTS
In 1996, during the marriage of Becky J. Burwell2 and Gary J. Burwell, a term life
insurance policy was purchased (hereafter the “term life policy” or “the policy.”) Gary
was the insured and Becky was the named beneficiary until October 7, 2008.
In September 2004, Becky petitioned for dissolution of her marriage with Gary.
Automatic Temporary Restraining Orders
Gary was served with a summons along with Becky’s petition. The summons
contained a number of automatic temporary restraining orders (ATROs). (See Fam.

1The parties’ remaining contentions do not alter this disposition. We discuss
those contentions in the unpublished portion of our Discussion in parts III through IX.
2 Because Becky, Gary and Cynthia Burwell are referenced in the record at one
point or another by the same last name, we use their first names for clarity.

2.
Code, § 2040; Cal. Rules of Court, rule 5.50(b).) The ATROs included the following
text:
“Starting immediately, you and your spouse are restrained from: [¶] … [¶]

“2. cashing, borrowing against, cancelling, transferring, disposing of, or
changing the beneficiaries of any insurance or other coverage
including life, health, automobile, and disability held for the benefit
of the parties and their minor child or children;

“3. transferring, encumbering, hypothecating, concealing, or in any way
disposing of any property, real or personal, whether community,
quasi-community, or separate, without the written consent of the
other party or an order of the court, except in the usual course of
business or for the necessities of life; and

“4. creating a nonprobate transfer or modifying a nonprobate transfer in
a manner that affects the disposition of property subject to the
transfer, without the written consent of the other party or order of the
court. Before revocation of a nonprobate transfer can take effect, or
a right of survivorship to property can be eliminated, notice of the
change must be filed and served on the other party.”
Gary Remarries
A status-only judgment of dissolution was entered in August 2005, and the court
retained jurisdiction over all other issues. In November 2006, 3 Gary married Cynthia
Burwell (Cynthia).
August 2008 Stipulated Judgment
In August 2008, Gary and Becky stipulated to a “further” judgment resolving
some property issues. Though the stipulated judgment indicates that “the parties have
reached an agreement with regard to the division of their marital property,” five issues
were explicitly reserved for a trial. One of the issues reserved for trial was “claims for
breach of spousal fiduciary duty.”

3 Both parties agree in their briefs that Gary married Cynthia in November 2006.

3.
 The stipulated judgment, signed by both parties, also states:

“16. Full Disclosure of Assets and Gifts. Each party has warranted
to the other that he or she has no ownership interest in or claim to any
property of any kind, other than the property described in this Further
Judgment, and that he or she has not made, without the knowledge of the
other, any gift or transfer of community property within the past five years
for less than full and adequate consideration.

“17. After-Discovered And Concealed Assets. If additional assets
of a community property nature are subsequently discovered, the existence
of which were in good faith unknown or forgotten by both parties, such
assets shall be divided equally between the parties. All other after-
discovered assets shall be divided as determined by a court of competent
jurisdiction. This court specifically retains jurisdiction over all concealed or
after-discovered assets.”
The judgment also fixed the separation date at September 21, 2004.
Change of Beneficiary
On October 7, 2008, Gary changed the beneficiary on the term life policy from
Becky to Cynthia. Gary had not listed the policy in his preliminary or final disclosure
declarations in the dissolution action. (See Fam. Code, §§ 2104, 2105.)
Trial on Reserved Issues
The trial on reserved issues contemplated by the prior stipulated judgment
commenced in June 2009 before Judge John Somers and continued over several months.
Several issues were adjudicated at the trial. The most contentious issue involved a
community-asset business called Burwell Concrete, Inc. (BCI). The court was tasked
with deciding whether approximately $2.5 million in postseparation income from BCI
was community income or Gary’s separate income. The trial also dealt with claims of
breach of fiduciary duty.
The court eventually issued its ruling on May 16, 2011. First, the court ruled that
(1) BCI had been awarded to Gary on August 21, 2008, and (2) postseparation income
from BCI prior to August 21, 2008, was community income.

4.
 The court then ruled on the breach of fiduciary duty claims as follows:

“[T]he court does not find a breach of fiduciary obligation in this case.
There is no evidence that petitioner failed to meet her obligations of
disclosure, or of good faith and fair dealing, in any way. Respondent’s
[i.e., Gary’s] conduct is more problematic. Despite counsel’s best efforts,
there were often significant delays or problems in the disclosure of relevant
financial information.… The disclosure issues, while problematic, are not
sufficient in the court’s view to establish breach of a fiduciary obligation in
this case.”
The court also ruled that Gary owed Becky (1) $105,195.49 in “back [spousal]
support payments and interest”; (2) $125,000 in attorney fees; (3) $1,524,531 in
reimbursements and credits for Becky’s portion of community property less $44,283.14
in Gary’s reimbursements; and (4) $95,102 in previously ordered equalization payments.
Gary’s Suicide and Becky’s Civil and Probate Actions
In April 17, 2010, after trial had commenced, but before the court had issued its
aforementioned ruling, Gary committed suicide. Shortly after Gary’s death, Becky filed
a civil action to prevent the term life policy’s proceeds from going to Cynthia. Becky
also filed a probate action seeking letters of administration for Gary’s estate.
Becky moved to consolidate the civil action with the dissolution proceeding.
Cynthia opposed consolidation. In her opposition papers, Cynthia argued that there were
“no remaining issues left to be determined in the family law matter.” Her opposition
papers further stated that she “is not a party to the action nor does she have any real
interest in the outcome.” The court denied the motion to consolidate, but ordered the
civil action stayed.
Becky’s Motion Regarding the Insurance Policy
Concurrent with her motion to consolidate, Becky filed a motion seeking
adjudication of the insurance policy as an omitted asset. (See Fam. Code, § 2556.)
Becky contended that she was entitled to 100 percent of the proceeds. She acknowledged

5.
that she was aware of the policy when it was purchased, but assumed Gary had let it
lapse.
Becky argued she was entitled to the proceeds under three legal theories. First,
Gary’s purported change of beneficiary from Becky to Cynthia was void because it was
made in violation of the ATROs. As a result, Becky was still the operative beneficiary
under the policy. Second, Gary’s failure to disclose the insurance policy in his
disclosures violated Family Code section 1101, and therefore the proceeds should be
awarded entirely to Becky under subdivision (h) of that section. Third, the court retained
jurisdiction over omitted community property assets under the August 2008 stipulated
judgment. She argued she was entitled to half the proceeds as her share of the
community asset. She also claimed the other half of the proceeds because they exceeded
the amount of debt Gary owed her. These included amounts Gary allegedly owed her
under the August 2008 stipulated judgment and “anticipated amounts [Gary] will owe
[Becky] once Judge Somers makes his ruling [after the trial on reserved issues].” Becky
subsequently filed a “Supplemental Memorandum of Points and Authorities” raising a
fourth theory of recovery. In that filing, Becky argued that Gary’s purported change of
beneficiary must be set aside as a fraudulent transfer under section 3439.04 of the Civil
Code.
Cynthia filed briefing in opposition to the motion and her counsel appeared at oral
argument. She contended that the policy was Gary’s separate property. She also argued
that to the extent the ATROs apply to separate property, they conflict with Family Code
section 2010. Cynthia contended that section 2010 provides that “the court has no
jurisdiction over a spouse[’]s separate property.”

6.
 Court’s November 9, 2011, Order
Judge Susan M. Gill ruled on the motion in an order dated November 9, 2011. 4 It
is from this order that both parties appeal.
The court found that Gary failed to disclose the policy and thereby violated his
fiduciary duty to Becky. As a result, the policy was deemed an omitted asset and was
“neither distributed in the Judgment on Reserved Issues, nor included in Judge Somers’
ruling of April 1, 2010.” Therefore, the ATROs continued to apply to the asset, and
Gary’s change of beneficiary to Cynthia “is void.”
The court ruled that the policy was a community asset. The ruling contained no
analysis of the characterization issue, but did cite to Estate of Logan (1987) 191
Cal.App.3d 319, 326 (Logan) and In re Marriage of Gonzalez (1985) 168 Cal.App.3d
1021, 1024-1026.
The court ordered one-half of the $1 million proceeds distributed to Becky “as her
share of this community property asset.” The court ordered that the remaining half of the
proceeds “shall become part of [Gary’s] estate.” The order notes that Becky is a creditor
of the estate “and the Probate Court must resolve the issue of what priority to give
[Becky’s] creditor claims against [Gary’s] estate.”
Postruling Filings Below
Cynthia filed a notice of intent to move for a new trial, seeking an order “(1)
setting aside the ruling signed on November 7, 2011, that awards one-half of the term life
insurance proceeds to Becky [] and (2) granting [a] new trial.” (See fn. 6, post.)
Cynthia also filed a notice of appeal from the November 9, 2011, order. Becky
filed a notice of cross-appeal from the same order.

The minute order cover sheet on the court’s letterhead is dated November 9,
4
2011. The attached ruling was on pleading paper and was dated November 7, 2011.

7.
 Motions Filed on Appeal
Cynthia filed a motion to augment the appellate record with an October 22, 2009,
transcript of testimony from the trial on reserved issues. Becky opposed the motion to
augment and requested that we strike certain portions of Cynthia’s opening brief
referencing the transcript and certain portions of appellant’s appendix, volume II. Becky
contends these documents pertained to the trial on reserved issues before Judge Somers
and were not before Judge Gill when she issued the appealed order. We granted the
motion to augment the record, but did not “resolve the transcript’s relevance to any issue
on appeal or whether the court will consider the reporter’s transcript on review.” We
previously deferred ruling on Becky’s motion to strike pending further order of this court.
We now deny it.5 (See People v. Preslie, supra, 70 Cal.App.3d at pp. 490-491.)
Becky moved this court to dismiss Cynthia’s appeal for lack of standing. We
previously deferred ruling on the dismissal motion. For the reasons explained below, we
now deny that motion as well.

5 Becky moved to strike portions of Cynthia’s opening brief that refer to exhibits
Nos. 22, 22a, 23, 24 and 25 of appellant’s appendix, and the October 22, 2009, reporter’s
transcript. She contends the exhibits and transcript are “not properly before” this court
because they were not “before” Judge Gill when she issued the appealed order. Rather,
they had been lodged earlier in the case during the trial on reserved issues before Judge
Somers.
The exhibits are properly before us. We may augment the record to include “[a]ny
document filed or lodged in the case in superior court .…” (Cal. Rules of Court, rule
8.155(a)(1)(A), italics added.) “By the explicit terms of the rule it is not a prerequisite to
augmentation that the requested documents be offered or used on the trial or hearing
below.” (People v. Preslie (1977) 70 Cal.App.3d 486, 490.) Becky’s motion to strike
portions of appellant’s appendix and opening brief is denied.

8.
 DISCUSSION
I.
CYNTHIA IS A “PARTY” FOR PURPOSES OF APPELLATE STANDING
In California, the right to appeal civil actions is statutory. (Jordan v. Malone
(1992) 5 Cal.App.4th 18, 21.) In order to exercise that statutory right, an appellant must
have standing. (Ibid.)
Appellate standing is conferred by section 902 of the Code of Civil Procedure.
(Rao v. Campo (1991) 233 Cal.App.3d 1557; see Code Civ. Proc., § 902.) That statute
provides, in relevant part, that “[a]ny party aggrieved may appeal .…” (Code Civ. Proc.,
§ 902.) By its plain language, Code of Civil Procedure section 902 limits appellate
standing in two important ways. To have appellate standing, one must (1) be a party and
(2) be aggrieved. (Ibid.; see also Conservatorship of Gregory D. (2013) 214 Cal.App.4th
62, 67.)
In her motion to dismiss, Becky argues Cynthia was not a “party” to the action
below and therefore lacks standing. She does not contend Cynthia was not “aggrieved”
by the order from which she ostensibly appeals.
The general rule is that “only a party of record to the proceedings in the trial court
may appeal.” (Newman v. Wells Fargo Bank (1996) 14 Cal.4th 126, 131, fn. 5.) But, a
party of record includes “ ‘one who takes appropriate steps to become a party of record in
the proceedings.’ ” (In re Silvia R. (2008) 159 Cal.App.4th 337, 345, fn. 3.) For
example, when a person or entity moves to vacate a judgment pursuant to Code of Civil
Procedure section 663, they become a “party” for purposes of appellate standing.
(County of Alameda v. Carleson (1971) 5 Cal.3d 730, 736 (Carleson).)
The California Supreme Court held in Carleson that “one who is legally
‘aggrieved’ by a judgment may become a party of record and obtain a right to appeal by
moving to vacate the judgment pursuant to Code of Civil Procedure, section 663.”
(Carleson, supra, 5 Cal.3d at p. 736.) As Becky argues in her motion, “Cynthia did not

9.
move to vacate the judgment under Code of Civil Procedure section 663.” But, Cynthia
did file a motion seeking to “set aside” the subject order under Code of Civil Procedure
section 657. 6 Thus, if the Carleson rule applies to any motion to vacate or set aside an
order and is not limited to motions brought under Code of Civil Procedure section 663,
then Cynthia would be a party of record for purposes of appellate standing. In
accordance with the general rule that doubts as to standing are resolved in favor of the
right to appeal (Apple, Inc. v. Franchise Tax Bd. (2011) 199 Cal.App.4th 1, 13), we hold
that the Carleson rule does apply here.
For the reasons explained below, we view the Supreme Court’s reference to Code
of Civil Procedure section 663 in Carleson (Carleson, supra, 5 Cal.3d 730) as merely
identifying one type of motion to vacate that will confer “party” status on the movant for
purposes of appellate standing. In this context, we see no relevant distinction between a

6 On its own motion, this court has augmented the record to include Cynthia’s
notice of intent to move for a new trial. (See Cal. Rules of Court, rules 8.155(a)(1)(A),
8.124(b)(1)(A), 8.122(b)(1)(D).) We notified the parties of our intent to augment the
record in this manner and permitted the filing of objections. Becky (through counsel)
filed a letter indicating that she did not have an objection to the augmentation. But, she
advised this court of additional proceedings regarding the motion for new trial. The letter
and its attachments indicate that after filing the notice of intent, Cynthia requested an
extension of time to “file a Motion for New Trial.” The letter and its attachments further
indicate that the court denied the request for an order extending time and that “no Motion
for New Trial was ever filed.” Even if we were to consider this information, it is not
relevant for purposes of determining standing.
The notice of intention to move for a new trial is itself the motion for a new trial.
(Code Civ. Proc., § 659, subd. (b).) Cynthia very well may have failed to file a
memorandum of points and authorities or supporting affidavits or some other documents
to support the motion. And, if true, that failure alone could have been grounds for denial.
(See Cal. Rules of Court, rule 3.1600(b).) But for purposes of standing, we are concerned
with whether Cynthia made the subject motion, not whether it was successful. That is,
we are determining whether Cynthia took “ ‘appropriate steps to become a party of record
in the proceedings’ ” (In re Silvia R., supra, 159 Cal.App.4th at p. 345, fn. 3) not
whether those efforts were meritorious.

10.
motion seeking to set aside a decree (Code Civ. Proc., § 663) and a motion seeking to
“vacate[]” a “decision” (Code Civ. Proc., § 657). Thus, we believe the most faithful
application of Carleson would permit an appeal here, where the appellant moved to set
aside the judgment in the lower court.
In support of its holding in Carleson, the Supreme Court cited to five cases:
Eggert v. Pac. States S. & L. Co. (1942) 20 Cal.2d 199, 201 (Eggert); In re Elliott (1904)
144 Cal. 501 (Elliott); In re Estate of Partridge (1968) 261 Cal.App.2d 58 (Estate of
Partridge); In re Estate of Sloan (1963) 222 Cal.App.2d 283 (Estate of Sloan); and
Butterfield v. Tietz (1966) 247 Cal.App.2d 483 (Butterfield). (Carleson, supra, 5 Cal.3d
at pp. 736-737.)
In all of these cases, there was no indication that a person must file a motion
seeking to vacate the judgment under a particular statute. To the contrary, in Estate of
Sloan, the court described Eggert and other cases as holding that a party must “move to
vacate or otherwise formally oppose the judgment appealed from below.” (Estate of
Sloan, supra, 222 Cal.App.2d at p. 292, italics added.) Likewise, the remainder of the
cases do not require the motion to vacate be made pursuant to any particular statute.7
Thus, we view Carleson’s reference to Code of Civil Procedure section 663 as
merely identifying the statute under which that case’s particular motion was brought. We
do not view the statutory citation as limiting the scope of Carleson’s holding. (Carleson,
supra, 5 Cal.3d 730.)

7 See Eggert, supra, 20 Cal.2d at page 201 (holding appellants lacked standing,
and noting they had ample opportunity “to become parties of record by moving to vacate
the orders to which they objected”); Elliott, supra, 144 Cal. at pages 509-510 (a person
can “make himself a party by moving to set aside such judgment or order”); Estate of
Partridge, supra, 261 Cal.App.2d at pages 60-61 (“proper procedure” was to “move to
set aside or vacate such order” (italics added.); Butterfield, supra, 247 Cal.App.2d at
pages 484-485 (“Ordinarily, if an appellant is not a party of record at the time of
judgment or order from which appeal is taken, an appeal is not in order without first
filing a motion to vacate the adverse ruling”).

11.
 The Fourth District arrived at a similar conclusion in Shaw v. Hughes Aircraft Co.
(2000) 83 Cal.App.4th 1336 (Hughes Aircraft). The Court of Appeal applied the
Carleson rule where the appellant had moved for a judgment notwithstanding the verdict
and for a new trial. (Hughes Aircraft, supra, 83 Cal.App.4th at pp. 1342-1343.) In
Hughes Aircraft, the appellant’s motions challenging the judgment below were brought
under Code of Civil Procedures sections 629 and 657, not Code of Civil Procedure
section 663. (Hughes Aircraft, supra, at pp. 1342-1343.) Nonetheless, the court held that
motions for judgment notwithstanding the verdict and a new trial are similar to the Code
of Civil Procedure section 663 motion in Carleson, in that they “ask the trial judge to
vacate a verdict or judgment and enter a new one.” (Hughes Aircraft, supra, at p. 1343.)
We agree with this approach, where reviewing courts determine the applicability of the
Carleson rule by looking to the nature of the underlying motion, not its statutory basis.
(Carleson, supra, 5 Cal.3d 730.)
Here, Cynthia’s motion sought to “set[] aside the ruling signed November 7,
2011 ...,” and was therefore a motion seeking to vacate the order for purposes of the
Carleson rule. Contrary to Becky’s contention in her motion to dismiss, Cynthia is a
“party” for purposes of appellate standing. (See Carleson, supra, 5 Cal.3d at pp. 736-
737.) 8
Next, we address the characterization of term life insurance proceeds.
II.

THE POLICY PROCEEDS CANNOT BE CHARACTERIZED ON THIS
FACTUAL RECORD
Unless otherwise provided by statute, all property acquired during marriage while
domiciled in California is community property. (Fam. Code, § 760.) One category of
separate property is the “earnings and accumulations of a spouse … while living separate

8 Becky’s motion to dismiss the appeal is denied.

12.
and apart from the other spouse, are the separate property of the spouse.” (Fam. Code,
§ 771, subd. (a).) But, “property attributable to community earnings must be divided
equally when the community is dissolved.” (In re Marriage of Brown (1976) 15 Cal.3d
838, 847-848 (Marriage of Brown), italics added.)
Here, we must apply these principles to term life insurance proceeds.
“Term life insurance policies typically contain two elements, dollar coverage
payable in the event of death and a right to renewal for future terms without proof of
current medical eligibility.” (Logan, supra, 191 Cal.App.3d at p. 324.) “At the
expiration of the term of years, the policy expires without retaining cash value.” (Ibid.)
There is a split of authority in California regarding the characterization of term life
insurance proceeds as community or separate property. (See In re Marriage of Spengler
(1992) 5 Cal.App.4th 288, 292-293 (Marriage of Spengler).) On one side is Logan,
supra, 191 Cal.App.3d at page 325.
Logan decision
In Logan, the First District held that term life insurance policies only remain
community property after separation for as long as community funds are used to pay the
premium. (Logan, supra 191 Cal.App.3d at p. 325.) Otherwise, if the insured remains
insurable, the term policy is not a divisible community asset because “the policy is of no
value and the community has fully received what it bargained for.” (Id. at pp. 325-326.)
In dictum, Logan indicated that “[i]f the insured becomes uninsurable during the term
paid with community funds, then the right to future insurance coverage which cannot
otherwise be purchased is a community asset to be divided upon dissolution.” (Id. at
p. 325.) In Marriage of Spengler, supra, 5 Cal.App.4th 288, the Third District agreed

13.
with the holding of Logan but disagreed with its dictum. (Marriage of Spengler, supra,
at p. 293.)9
Biltoft and Woodmen decisions
Conversely, in Biltoft v. Wootten (1979) 96 Cal.App.3d 58 (Biltoft), the Fourth
District held that proceeds from term life insurance “must be apportioned between
community and separate property in the same ratio that the amount of premiums paid
from community earnings bears to the amount of premiums paid from separate property.”
(Id. at p. 62.) It rejected the notion “that no person has an interest in a term life insurance
policy beyond the date the premium is due .…” (Id. at p. 61.) It disagreed with the
argument that “each premium payment is a new contract,” citing Modern Woodmen of
America v. Gray (1931) 113 Cal.App. 729 (Modern Woodmen). (Biltoft, supra, at p. 61.)
With a few exceptions, we agree with Logan. The coverage and premium
provisions of term life insurance policies “provide[] dollar coverage only for the specific
term for which the premium was paid.” (Logan, supra, 191 Cal.App.3d at p. 324.)
Therefore, the characterization of the proceeds “will depend on the … premium for the

9 Two Court of Appeal cases deal with a different issue: the valuation of a term
life policy at the time of dissolution while the insured spouse is still alive. (In re
Marriage of Lorenz (1983) 146 Cal.App.3d 464, 466-468; In re Marriage of Gonzalez,
supra, 168 Cal.App.3d at p. 1025.) The Second District held a term life insurance policy
was not divisible community property because it was “worthless” until its benefits were
payable. (In re Marriage of Lorenz, supra, 146 Cal.App.3d at pp. 466-468.) The Fourth
District held term life insurance policies may have replacement value when the
“ ‘insurability of the insured is lessened because of advancing age or declining health,
and the existing policy cannot be cancelled or contains a guaranty of insurability.’ ” (In
re Marriage of Gonzalez, supra, 168 Cal.App.3d at p. 1025.) These cases are not directly
on point. (See In re Marriage of Havins (1996) 43 Cal.App.4th 414, 419, fn. 3.) Here,
we are dealing with “the division of proceeds of the policy upon death,” not the division
of the policy while the insured is still alive. (See ibid.) This distinction is important, as
explained below. (See fn. 12, post.)

14.
final term of the policy.” (Minnesota Mut. Life Ins. Co., supra, 174 F.3d at p. 983.)10
When the final premium is paid solely with community property, “the proceeds of the
policy are community property.” (Logan, supra, 191 Cal.App.3d at p 321.) Conversely,
when the separate estate pays for the final premium with no help from the community,
the proceeds are a separate asset. (Id. at pp. 321, 325.)
We believe Biltoft and Woodmen err in analyzing the relevant property interests at
the wrong level of abstraction. That is, those opinions generally identify the property
interest as the entire insurance policy. We believe the proper unit of analysis is the
individual contractual rights conferred by the policy. As was said in an analogous
context, “[t]he Court of Appeal’s … analysis rests on the erroneous legal assumption that
[the asset] was … unitary and indivisible .… It is not.” (In re Marriage of Sonne (2010)
48 Cal.4th 118, 127.)11 Similarly, a term life insurance policy is not a unitary and
indivisible asset giving rise to a unitary and indivisible property interest. Rather, the
relevant property interests are the individual enforceable contractual rights derived from
the policy. (See Civ. Code, § 953; cf. Marriage of Brown, supra, 15 Cal.3d at p. 845 [“a
contractual right is … a chose in action, a form of property (see Civ. Code, § 953)”].)
“An insurance policy is a contract between an insurer and an insured …, the
insurer making promises, and the insured paying premiums, the one in consideration for
the other, against the risk of loss .…” (Buss v. Superior Court (1997) 16 Cal.4th 35, 44-

10 In its characterization of the term life proceeds at issue, Minnesota Mut. Life
Ins. Co., supra, 174 F.3d 977 relied heavily on Logan. (Minnesota Mut. Life Ins. Co.,
supra, 174 F.3d at p. 983.) However, the case distinguishes Logan’s medical
uninsurability exception. (Minnesota Mutual Life Ins. Co., supra, at pp. 983-984.)
11 In Marriage of Brown, supra, 15 Cal.3d 838, our Supreme Court held that the
contractual right to receive pension payments was a form of property for dissolution
purposes. Marriage of Brown held “the employee’s right to [pension] benefits is a
contractual right, derived from the terms of the employment contract. [This] contractual
right is … a form of property (see Civ. Code, § 953; [citation.]).” (Id. at p. 845, italics
added.)

15.
45, citations omitted.) One of the insurer’s promises in a term life policy is the
agreement to pay the policy proceeds if the insured dies between dates x and y. The
payment of the subsequent premium is consideration for another promise from the
insurer: to pay the proceeds if the insured dies between dates y to z. In other words, the
“ ‘premium is the amount paid for … a certain period of coverage.’ ” (Troyk v. Farmers
Group, Inc. (2009) 171 Cal.App.4th 1305, 1324, italics added.)
Each premium payment gives rise to an enforceable contractual right of coverage
for an additional period of time. As premiums are paid over the life of the policy, distinct
property interests in coverage for various periods of time arise. Of those distinct property
interests, only one is worth anything in hindsight: coverage for the term during which the
insured dies. 12 Thus, the relevant inquiry is who obtained the specific contractual right
to coverage for the final term,13 and how. (Minnesota Mut. Life Ins. Co., supra, 174 F.3d
at p. 983 [characterization of proceeds “will depend on the … premium for the final term
of the policy”].)

12 Prior terms of coverage only lack value in hindsight (i.e., when it is certain the
contingency has failed). Prospectively, all coverage terms have at least expected value.
(But cf. In re Marriage of Lorenz, supra, 146 Cal.App.3d 464.) That is why it is
important to maintain a distinction between cases involving the characterization of a term
life policy while the insured is still alive (e.g., In re Marriage of Lorenz, supra, 146
Cal.App.3d 464; In re Marriage of Gonzalez, supra, 168 Cal.App.3d 1021), and cases
involving the characterization of term life policy proceeds after the insured has died (e.g,
Logan, supra, 191 Cal.App.3d 319; Biltoft, supra, 96 Cal.App.3d 58). (See In re
Marriage of Havins, supra, 43 Cal.App.4th at p. 419, fn. 3.)
13Our use of the phrases “final term” or “final coverage term” refers to the term
during which the insured dies. We refer to the corresponding premium as the “final
premium payment” or “final premium.” We recognize that when the insured does not die
during the entire term of the overall policy, then even the final term has no substantive
value. But that is not the situation here, so our use of these phrases presumes that the
insured has died during a term of the policy.

16.
 As we will explain, Biltoft and Woodmen’s misidentification of the relevant
property interests leads to their erroneous characterization of the proceeds and the
needless deaths of countless straw men.
Biltoft and Woodmen first reject the argument that each premium payment does
not create a new contract. They are correct to discredit this notion. The relevant
“property” is not a unitary and indivisible interest in the entire policy contract, but in the
individual enforceable contractual rights derived from it. (See Civ. Code, § 953; cf.
Marriage of Brown, supra, 15 Cal.3d at p. 845 [“a contractual right is … a chose in
action, a form of property (see Civ. Code, § 953)”].) While each premium payment does
not create a new contract, it does give rise to a new enforceable contractual right and thus
a distinct property interest. By way of analogy, consider a one-year apartment lease.
Each rent payment does not create a new lease, but paying January’s rent does not entitle
a tenant to live there in October. 14
Biltoft and Woodmen next assert “it would be unreasonable to hold that the
payment of the premiums … would convert the entire proceeds .…” (Biltoft, supra, 96
Cal.App.3d at p. 61; Woodmen, supra, 113 Cal.App. at p. 732.) This is true, as far as it
goes. The separate estate’s subsequent payment of the premium does not “convert” the
community’s “proceeds.” But the point is they were never the community’s proceeds to
begin with. The proceeds belong to whomever the insurance company is contractually
obligated to pay. In other words, the valuable property interest is the enforceable

14 The rationale of Biltoft and Woodmen does lend itself well to other contexts
where the community pays into an asset that retains cash value. For example, whole life
insurance policies “provide both insurance and cash value accumulation.” (Chabner v.
United of Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042, 1045, fn. 1, italics added.)
In that situation, the community is paying for dollar protection against a contingency and
the right to a portion of the policy’s cash value accumulation. In that way, a whole life
policy is more akin to a home mortgage than an apartment lease.

17.
contractual right to compel payment of the proceeds. (See Civ. Code, § 953; cf.
Marriage of Brown, supra, 15 Cal.3d at p. 845 [“a contractual right is … a chose in
action, a form of property (see Civ. Code, § 953)”].) In this context, that contractual right
is the coverage during which the insured dies. The community did not acquire this
contractual right. Instead, the community paid for, and received in full, a different
contractual right: the right to be paid upon a contingency that ultimately failed. The
important aspect of this contractual right is not that it has been converted or appropriated
by the separate estate (it has not). The pivotal attribute of the community’s interest is its
complete lack of value. It does not entitle its holder to the policy proceeds and never
will. The right to be paid if the insured dies between January 1 and 31 becomes forever
worthless on February 1 if the insured is alive. That is how term insurance works.
Even Logan briefly falls prey to this erroneous “conversion theory.” Logan states:
“If, as is usually the case, the insured is insurable at the end of the term purchased with
community funds, the renewed policy, that is, the term policy purchased by the payment
of the premium with postseparation earnings which are separate property … changes
character from community to separate property.” (Logan, supra, 191 Cal.App.3d at
pp. 324-325, italics added.) We disagree. The reason the community is not entitled to
the proceeds is not because contractual rights have changed in character. It is because the
separate and community estates have different contractual rights; one valuable and the
other not. The community has the worthless right to payment upon a contingency that
has failed. The separate estate has the valuable right to payment upon a contingency that
has occurred. The point is “the community has fully received everything it bargained
for” (id. at p. 325), not that the community’s rights have become separate property.
These principles only bring us so far. It is clear that characterization of the
proceeds as separate or community “will depend on the … premium for the final term of
the policy.” (Minnesota Mut. Life Ins. Co., supra, 174 F.3d at p. 983.) Complications

18.
arise when the separate estate uses a community asset to acquire the final term of
coverage.
“[I]t is … well established that, upon separation of the parties or dissolution of
marriage, one spouse is not entitled to appropriate a community asset for his or her own
use without reimbursing the community for the value of the appropriated asset.” (In re
Marriage of Elfmont (1995) 9 Cal.4th 1026, 1039 (conc. & dis. opn. of George, J.)
(Marriage of Elfmont).) The community must be reimbursed to the extent it owns or has
an interest in the contractual rights used by the separate estate to obtain the final coverage
term. As explained, post, this concept is relevant where the insured spouse becomes
medically uninsurable during a term paid for by the community.
Medical Uninsurability and the Right of Renewal
A person is medically uninsurable if they are “unable to obtain individual life
insurance.” (Spengler, supra, 5 Cal.App.4th at p. 291.) A person may become
uninsurable because of the condition of their health. (Cf. United States v. Ryerson (1941)
312 U.S. 260, 262.) Sometimes, a person who becomes medically uninsurable may
nonetheless continue existing coverage by virtue of a contractual right to renew their
policy. (Marriage of Elfmont, supra, 9 Cal.4th at p. 1034.) This is referred to as the
“right of renewal.” (Ibid.)
The right of renewal is an enforceable contractual right and a property interest.
(See Civ. Code, § 953; see also Marriage of Brown, supra, 15 Cal.3d at p. 845 [“a
contractual right is … a chose in action, a form of property (see Civ. Code, § 953)”].)
The community initially purchased this right of renewal, and maintained it for a period of
time through subsequent premiums. The right of renewal is therefore, at least in part,
community property. (Fam. Code, § 760.)
When the insured spouse becomes medically uninsurable during the community’s
terms of coverage, his or her separate estate can only acquire subsequent terms of
coverage by appropriating the community’s contractual right to renew. By definition, the

19.
uninsurable spouse would be unable to continue coverage without it. Thus, the
acquisition of the final coverage term is dependent on both the separate estate’s payment
of premiums and the community’s renewal right. Both the separate and community
estates are contributing towards the purchase of subsequent coverage terms (including the
all-important final coverage term). The community’s contribution is represented by the
premiums it has paid over the life of the policy, which are the funds expended to acquire
and retain the renewal right. Once the premiums are paid solely by separate funds, it is
the separate estate that is maintaining the renewal right. Given the joint effort of
community and separate assets in acquiring the relevant asset (i.e., the final coverage
term), the proceeds obtained therewith must be apportioned. “[I]t is … well established
that, upon separation of the parties or dissolution of marriage, one spouse is not entitled
to appropriate a community asset for his or her own use without reimbursing the
community for the value of the appropriated asset.” (Marriage of Elfmont, supra, 9
Cal.4th at p. 1039 (conc. & dis. opn. of George, J.).)15
This view is consistent with dicta from the Supreme Court’s decision in Marriage
of Elfmont. In discussing term life insurance, the Supreme Court stated: “To provide for
a former spouse’s participation in [the] proceeds, when premium payments from

15 Marriage of Spengler is distinguishable on this point. Marriage of Spengler
dealt with an “employment-related group term life insurance policy .…” (Marriage of
Spengler, supra, 5 Cal.App.4th at p. 290.) In Marriage of Spengler, the court held that
the renewal right “was a mere expectancy rather than a contingent property interest”
because the right “depended not only on continued employment by husband but also on
continued offering of the plan by the employer.” (Id. at p. 298.) An expert had testified
that “any group term life insurance policy can be terminated by the employer at any time,
with 30 days notice.” (Ibid.) Thus, “the prospect of renewal of the policy by the
employer was a beneficence to which the husband had no enforceable right.” (Id. at
p. 299.)
Here, there is no provision for unilateral termination of the policy by the insurer.
Nor do we find any analogous provision that would render the contractual right a mere
expectancy.

20.
community funds have purchased policy renewal rights necessary to keep the insurance
in force, may well be appropriate.” (Marriage of Elfmont, supra, 9 Cal.4th at p. 1034.)
In this situation, where the insured spouse becomes uninsurable during a term paid
for by the community, the proper apportionment of the proceeds is “between community
and separate property in the same ratio that the amount of premiums paid from
community earnings bears to the amount of premiums paid from separate property.”
(Biltoft, supra, 96 Cal.App.3d at p. 62.)16
Premium Caps
There is another scenario wherein the separate estate could appropriate the
community’s contractual rights. Over time, a spouse may remain insurable but become
more expensive to insure “because of advancing age or declining health.” (In re
Marriage of Gonzalez, supra, 168 Cal.App.3d at p. 1025.)17 That is why some term
insurance policies, like the policy at issue here, provide for a cap on premiums during a
particular period of time. With a cap provision, the premium for a particular term may
not solely reflect actuarial considerations relative to the insured’s likelihood of dying
during that term. The price may be “artificially” low in accordance with the premium
cap. The cap has value when the premiums would otherwise exceed the maximum it
allows.
The cap itself is a contractual right to be charged premiums at or below a
maximum amount. Both the separate and community estates have paid premiums to

16 To this we would add that the premium-paying spouse should be credited with
half of the final premium payment. While the Biltoft method addresses the separate and
community estates’ relative contributions towards the renewal right, there is no
recognition of the separate estate’s unique contribution to the final coverage term by
paying the final premium.
17 Sometimes, this is referred to as “lessened” insurability. (Ibid.) While this
diction conflicts with the arguably binary nature of insurability, it is a convenient term
and we employ it here.

21.
maintain this contractual right. Thus, if the insured spouse renews the policy
postseparation, and the premiums would have been higher without the premium cap, the
insured spouse has necessarily appropriated property which the community acquired and
helped maintain.18
As noted ante, the characterization of the proceeds as separate or community “will
depend on the … premium for the final term of the policy.” (Minnesota Mut. Life Ins.
Co., supra, 174 F.3d at p. 983.) In the case of lessened insurability, the final premium
obligation is met by the joint effect of (1) the funds expended by the separate estate to
pay the premium and (2) the “discount” embodied in the premium cap, which is a partial-
community asset. Thus the community should receive a fraction of the proceeds based
on two factors: (1) the community’s role in maintaining the contractual right to a
premium cap; and (2) the premium cap’s role in the separate estate’s acquisition of the
final term of coverage. That fraction would be calculated as follows:19
(percentage of total premiums paid by community)
x (effective premium discount for final term of coverage)

(actual premium paid for the final term of coverage)
+ (effective premium discount for final term of coverage)

For example, consider the following hypothetical. The community pays 50
percent of the premiums over the life of a policy. Without the premium cap, the insured

18In this situation, the insured spouse is not wholly dependent on the community’s
contractual rights as in the case of complete uninsurability. Rather, the insured spouse is
appropriating the community’s property and thereby receiving what is effectively a
discount on premiums.
19 The numerator is the percentage of premiums paid by the community
throughout the life of the policy multiplied by the premium discount the separate estate
received by virtue of the premium cap when it purchased the final term of coverage. The
denominator is the entire premium discount received by the separate estate by virtue of
the premium cap when it purchased the final term of coverage plus the actual amount
paid for the final premium. The premium discount would likely need to be established by
expert testimony.

22.
spouse would have had to pay $1,000 for the premium for the final coverage term.
However, because of the premium cap, the insured spouse only had to pay a $400
premium for the final coverage term.
50% x $600 $300 3

$600 + $400 $1,000 10

In this scenario, the community would be entitled to three-tenths, or 30 percent, of
the proceeds.
Summary
In sum, the proper characterization of term life insurance proceeds depends on a
number of factors. The proceeds are entirely community when the final premium is paid
solely with community property. (Logan, supra, 191 Cal.App.3d at p. 321.) The
proceeds are entirely separate property when: (1) a separate estate has paid the final
premium with separate funds; and (2) the insured spouse was insurable at the end of the
last term paid for by community funds; and (3) either (a) the insured spouse’s health was
such that he or she could have purchased a comparable policy at a comparable price when
the separate estate began paying the premiums, or (b) the policy did not contain a
premium cap when the separate estate began paying the premiums. The proceeds are part
community and part separate where (1) the separate estate has paid the final premium
with funds that are part community and part separate; or (2) the insured spouse has
become medically uninsurable before he or she began paying the premiums with separate
property; or (3) the insured spouse could not have purchased a comparable policy at a
comparable price when he or she began paying the premiums with separate property. 20
(See appendix A, post.)

20We understand this holding is burdensome. But “the claim of … administrative
burden surely cannot serve as support for an inequitable substantive rule .…” (Marriage
of Brown, supra, 15 Cal.3d at p. 849.) While we wish a simpler holding were possible,
we believe it is compelled by the application of community property principles to the

23.
 We cannot apply these principles to the proceeds at issue here because there is an
insufficient factual record. To determine which characterization and/or apportionment
method applies, there must be findings of fact on (1) whether Gary paid the
postseparation premiums with (a) separate funds, (b) funds attributable to his community
estate with Becky, or (c) funds attributable to his community estate with Cynthia (or
some combination); (2) if Gary paid the premiums with separate funds, whether he was
medically insurable when he began doing so; and, if so, (3) whether Gary could have
purchased a comparable policy at a comparable price when he began paying premiums
with separate funds (and if not, how much more expensive would the premiums have
been without the premium cap).
We therefore vacate the order adjudicating the policy proceeds. We remand for
the trial court to make these factual findings, and to apply the law as expressed in this
opinion to the facts so found.
None of the parties’ remaining contentions alter this disposition, as we will now
explain in the unpublished portion of the opinion.
III.

WE CANNOT RESOLVE BECKY’S CLAIM ON CROSS-APPEAL THAT SHE IS
ENTITLED TO 100 PERCENT OF THE PROCEEDS AS THE SOLE VALID
BENEFICIARY ON THE FACTUAL RECORD BEFORE US
There are a number of contentions that Becky raises on cross-appeal that we
cannot address given that we remand for reconsideration of the characterization issue.
Becky claims she is entitled to 100 percent of the proceeds because she is the effective
beneficiary on the policy. She argues that while Gary purported to change the

various iterations of term life policies. Presumably, the Legislature is free to eschew
these tenets and provide for a simpler methodology for allocating term life insurance
proceeds. Until such a time, existing community property principles must govern.
 See footnote, ante, page 1.

24.
beneficiary from Becky to Cynthia, that designation was void because it violated the
ATROs. (See Fam. Code, § 2040.) She also contends the designation is independently
void because it was a fraudulent conveyance. (See Civ. Code , §§ 3439.04, 3439.07,
subd. (a)(1).) As explained post, we cannot determine whether Becky is entitled to 100
percent of the proceeds on these theories.
Under the principles outlined in section II, ante, it is possible that Gary and
Cynthia’s community estate has an interest in the insurance proceeds. If so, then Cynthia
may have a right to some of the proceeds even though Gary’s change of beneficiary from
Becky to Cynthia was voided by the trial court. Cynthia’s interest in the proceeds “may
not be defeated by a gift of the policy proceeds to a third party named as beneficiary”
without her consent. (See Life Insurance Co. of North America v. Cassidy (1984) 35
Cal.3d 599, 605.)21 “The surviving spouse is therefore entitled to set aside his or her
community share in life insurance proceeds even where the decedent spouse designated
another person as beneficiary. [Citations] This rule applies to term life insurance
policies .…” (Emard v. Hughes Aircraft Co. (9th Cir. 1998) 153 F.3d 949, 955-956,
abrogated on other grounds by Egelhoff v. Egelhoff (2001) 532 U.S. 141.)
Thus, the resolution of Cynthia’s claim to 100 percent of the proceeds must await
proper characterization of the proceeds.
IV.

WE CANNOT RESOLVE CYNTHIA’S CLAIM THAT EVEN IF THE PROCEEDS
MUST BE SPLIT, SHE SHOULD RECEIVE HALF
Cynthia claims that even if the trial court properly split the proceeds between Gary
and Becky, it should have awarded Gary’s share to Cynthia. We cannot reach this claim

21 On the unusual facts of this case, Becky is the “third party” in that she is not a
party to Gary and Cynthia’s marriage.
 See footnote, ante, page 1.

25.
either. If the proceeds were property of Gary and Cynthia’s community estate, then
Cynthia herself is entitled to at least a portion of the proceeds. (See Prob. Code, § 100,
subd. (a); see also part III, ante.) But if the proceeds are entirely property of Gary and
Becky’s community estate, then Cynthia may not be entitled to the requested relief
because the trial court voided the change of beneficiary. Therefore, this issue may need
to be considered on remand depending on the ultimate characterization of the proceeds.
We note that the parties, in their opening appellant’s briefs, do not challenge the
trial court’s finding that Gary violated the ATROs, nor its ruling that the change of
beneficiary from Becky to Cynthia is void. Those rulings remain intact on remand. The
trial court will determine the practical effect of those rulings, if any, once it characterizes
the policy proceeds.22
V.

THE TRIAL COURT DID NOT ABUSE ITS DISCRETION BY LEAVING BECKY’S
CREDITOR CLAIM AGAINST GARY’S ESTATE TO THE PROBATE COURT
As an alternative argument, Becky claims the trial court should have awarded her
100 percent of the proceeds because she was entitled to 50 percent for her portion of the
community’s interest and 50 percent as a creditor of Gary’s estate. The family court did

22 In her reply brief, Cynthia contends Becky is estopped from asserting Gary
violated the ATROs because “in her previous litigation conduct, she claimed the term life
policy was Gary’s separate property.” A threshold requirement for the application of
collateral estoppel is that “the issue sought to be precluded from relitigation must be
identical to that decided in a former proceeding.” (Lucido v. Superior Court (1990) 51
Cal.3d 335, 341.) The issue of characterizing the funds used to pay the life insurance
premiums is not identical to the issue of whether Gary violated the ATROs in changing
the beneficiary on that policy. Collateral estoppel does not apply here. Similarly,
estoppel by conduct requires a representation or concealment of material facts “ ‘to a
party ignorant, actually and permissibly, of the truth .…’ ” (Hill v. Kaiser Aetna (1982)
130 Cal.App.3d 188, 195.) There is no evidence that this element was satisfied.
 See footnote, ante, page 1.

26.
award Becky 50 percent as a member of the community, but left it to the probate court to
adjudicate Becky’s creditor claim. Becky claims it was error for the court not to award
her “the balance of the policy to offset [her] existing judgment.…”
First, we note that this particular issue may become moot depending on
proceedings following remand. However, if on remand the court again arrives at the
conclusion that Becky is entitled to less than all of the proceeds, then this issue will
remain relevant. Therefore, we discuss it briefly. (Cf. Code Civ. Proc., § 43.)
Becky’s postjudgment motion to adjudicate the life insurance proceeds was
brought under Family Code section 2556. That section requires the court to “equally
divide” omitted or unadjudicated community assets, “unless the court finds upon good
cause shown that the interests of justice require an unequal division of the asset .…”
(Fam. Code, § 2556.) Because the trial court equally divided the asset, it necessarily did
not find upon good cause shown that the interests of justice require an unequal division of
the asset. Instead, the court determined that Becky was entitled to 50 percent of the
proceeds. It left the adjudication of Becky’s claim to the remainder of the proceeds on a
debtor-creditor theory to the probate court. We find no abuse of discretion.
The family court would have likely violated due process if it had simply awarded
the proceeds to Becky as a creditor without proper notice to other claimants against
Gary’s estate. (See Tulsa Professional Collection Services, Inc. v. Pope (1988) 485 U.S.
478, 490.) Moreover, Becky provided no evidence to the trial court regarding the priority
of her debt vis-à-vis other creditors. (See Prob. Code, § 11420.) It was appropriate for
the family court to have the probate court determine the resolution of Becky’s claims as a
creditor of Gary’s estate.

27.
 VI.

DISCLOSURE REQUIREMENTS ARE SET BY STATUTE, NOT THE
FORMAT OF A JUDICIAL COUNCIL FORM
Cynthia argues that Gary did not improperly fail to disclose the policy during the
dissolution proceeding. She contends that the judicial council form for disclosures (Form
No. FL-142), only contemplates disclosure of life insurance policies with a cash
surrender value. And, because the policy had no cash surrender value, Gary’s failure to
“specify” the term life policy was “consistent” with the form.
Disclosure requirements are set by statute, not by the format of judicial council
forms. (See Fam. Code, §§ 2104, 2105.) The statutes require disclosure of “all assets in
which the declarant has or may have an interest … regardless of the characterization of
the asset … as community … or separate.” (Fam. Code, § 2104, subd. (c)(1), italics
added.) The format of a judicial council form does not change statutory requirements for
a particular filing. (Cf. People ex rel. Dept. of Transportation v. Superior Court (1992) 5
Cal.App.4th 1480, 1484 [“ ‘Adoption of Official Forms for the most common civil
actions has not changed the statutory requirement that the complaint contain “facts
constituting the cause of action” ’ ”].)
Even if the form’s wording had been determinative, Cynthia’s argument fails. At
most, the form’s language regarding cash surrender value suggested the policy should not
be listed in that particular section. But the form also had a section entitled “Other
Assets.” In sum, the form does not prohibit the listing of life insurance policies with no
cash surrender value, and the Family Code requires it. (See Fam. Code, § 2104,
subd. (c)(1).) We see no basis for disturbing the trial court’s finding that Gary violated
disclosure requirements.

 See footnote, ante, page 1.

28.
 VII.
FAMILY CODE SECTION 1101 SANCTIONS
On cross-appeal, Becky contends that she should have been awarded 100 percent
of the proceeds due to Gary’s failure to disclose. (See Fam. Code, § 1101, subd. (h).) As
the court found, Gary failed to disclose the term life policy and thereby violated his
fiduciary duty.
When the court finds a breach of fiduciary duty, the remedies “shall include, but
not be limited to, an award to the other spouse of 50 percent, or any amount equal to 50
percent, of any asset undisclosed … in breach of the fiduciary duty .…” (Fam. Code,
§ 1101, subd. (g).) When the breach “falls within the ambit of Section 3294 of the Civil
Code,” the remedies “shall include, but not be limited to, an award to the other spouse of
100 percent, or an amount equal to 100 percent, of any asset undisclosed .…” (Fam.
Code, § 1101, subd. (h).)
Here, the trial court did find that Gary breached his fiduciary duty by “fail[ing] to
disclose the … policy pursuant to Family Code sections 2104 and 2105.” However, it
awarded only 50 percent of the asset to Becky. Thus, the court impliedly found that
Gary’s breach did not fall within the ambit of section 3294 of the Civil Code.
We review findings regarding “oppression, fraud, or malice” (Civ. Code, § 3294)
under the “ ‘substantial evidence’ ” standard of review. (In re Marriage of Rossi (2001)
90 Cal.App.4th 34, 40.) We review a trial court’s implied findings of fact under the
substantial evidence test as well. (Smith v. Adventist Health System/West (2010) 182
Cal.App.4th 729, 739.)
While Gary failed to disclose the policy on his disclosure declarations, he did state
at his deposition: “I think I have a million-dollar policy.” Becky contends this “was not

 See footnote, ante, page 1.

29.
enough” because Gary had a duty to “augment his disclosures and to be strictly
transparent.” We agree that Gary’s deposition testimony did not bring him into
compliance with disclosure requirements under the Family Code. (See Fam. Code,
§§ 2104, 2105.) But a 100 percent award under subdivision (h) requires finding a breach
of fiduciary duty and oppression, fraud or malice. (Fam. Code, § 1101, subd. (h); Civ.
Code, § 3294, subd. (a).) Gary’s deposition testimony is relevant to the latter
determination. While Gary’s deposition testimony did not preclude the trial court’s
finding that he had breached his duty of disclosure, it similarly did not preclude the trial
court from finding that the same breach was not a result of oppression, fraud or malice.
To the contrary, Gary’s deposition testimony is substantial evidence supporting that
implied finding. Therefore, we will not disturb it on appeal.
VIII.
STATUTE OF LIMITATIONS WAS NOT RAISED BELOW
Cynthia claims Becky’s motion to adjudicate the proceeds was barred by the
statute of limitations. However, she failed to raise this issue below. It is clear that when
a party fails to raise the expiration of the statute of limitations in the trial court, “such a
waiver cannot be overcome on appeal even if the undisputed facts demonstrate that a
timely challenge would have been meritorious as a matter of law.” (Poster v. Southern
Cal. Rapid Transit Dist. (1990) 52 Cal.3d 266, 273, fn. 3; see also In re Marriage of
Hanley (1988) 199 Cal.App.3d 1109, 1121.)
IX.
JUDICIAL ESTOPPEL WAS NOT RAISED BELOW
Cynthia claims Becky is judicially estopped from claiming the proceeds are
community property. Cynthia did not raise this argument below. “As a general rule,

 See footnote, ante, page 1.
 See footnote, ante, page 1.

30.
‘issues not raised in the trial court cannot be raised for the first time on appeal.’
[Citations.] On a number of occasions, however, appellate courts have … permitted a
party to raise belatedly ‘a pure question of law which is presented on undisputed facts.’
[Citations.]” (Sea & Sage Audubon Society, Inc. v. Planning Com. (1983) 34 Cal.3d 412,
417.)
“Only when the issue presented involves purely a legal question, on an
uncontroverted record and requires no factual determinations, is it appropriate to address
new theories.” (Mattco Forge, Inc. v. Arthur Young & Co. (1997) 52 Cal.App.4th 820,
847 (Mattco Forge, Inc.) Judicial estoppel is not such an issue. “A trial court’s
determination on the issue of estoppel is a factual finding ....” (In re Marriage of Dekker
(1993) 17 Cal.App.4th 842, 850.) Because the estoppel determination is factual, we
cannot address it as a new theory on appeal. (See Mattco Forge, Inc., supra, 17
Cal.App.4th at p. 850.)
While Cynthia styles this argument as judicial estoppel in her opening brief, her
counsel raised a similar but distinct contention at oral argument. She contends that Judge
Somers had made an implied finding that the policy was separate property when he
purportedly ordered Gary to reimburse Becky for premium payments. Even if we were to
address this contention on its merits, it fails. The evidence Cynthia cites from the trial
before Judge Somers pertains to reimbursements for various premiums paid from 2005 to
2008. Gary died in April 2010. As we explained above, the characterization of term life
insurance proceeds “will depend on the … premium for the final term of the policy.”
(Minnesota Mut. Life Ins. Co., supra, 174 F.3d at p. 983.) A threshold requirement for
the application of collateral estoppel is that “the issue sought to be precluded from
relitigation must be identical to that decided in a former proceeding.” (Lucido v. Superior
Court (1990) 51 Cal.3d 335, 341.) Even if the evidence cited by Cynthia and offered
before Judge Somers properly raised the issue of whether the 2005 to 2008 premiums
were paid with separate or community funds while Gary was alive, that issue is not

31.
identical to the one relevant here: the proper characterization of the policy’s proceeds
once Gary died in 2010. Collateral estoppel does not apply.
Moreover, Cynthia’s estoppel argument assumes Becky claimed the policy was
Gary’s separate property before Judge Somers. The record before us is not so clear.
Before Judge Somers, Becky acknowledged that Gary was permissibly withdrawing
$20,000 from BCI, and giving $10,000 of that sum to her. But, she alleged that Gary
began taking out more than the agreed-upon $20,000 per month from BCI. Believing the
income generated by BCI was a community asset, Becky asked Judge Somers to
reimburse her in connection with the amounts Gary withdrew in excess of the agreed-
upon $20,000 per month. Thus, Becky’s response to Cynthia’s estoppel argument on
appeal is that she “made claims for payments made by the business that she believed
were of a personal nature and not business related” and when she “could not identify the
payment as business related, she simply included it in her list of items.” (Italics added.)
For example, Becky listed her claims for reimbursement in an exhibit offered
before Judge Somers. Under the heading “Excess Amounts Paid to or for the Benefit of
Gary J. Burwell from Burwell Concrete During Calendar Year 2007,” Becky listed a
$10,000 transfer Gary allegedly made on January 8, 2007. Through one of Gary’s
exhibits, it is shown that the $10,000 was credited to an account from which multiple
payments were made including a term life policy premium payment. Becky’s claim for
reimbursement does not list the premium payment as a line item, only the $10,000
transfer which Gary apparently used for many purposes, including paying the premium.
On this record, we cannot find the character of policy proceeds was an issue litigated
before Judge Somers or that Becky took inconsistent positions vis-à-vis the character of
the policy.

32.
 DISPOSITION
The trial court’s order that the “term life insurance policy was a community asset
of the parties” is vacated. The matter is remanded for further evidentiary proceedings to
determine the proper characterization and distribution of the term life insurance policy
proceeds in accordance with this opinion.

_____________________
Poochigian, Acting P.J.
WE CONCUR:

_____________________
Franson, J.

_____________________
Peña, J.

33.
34.
APPENDIX
A.

35.
36.