Filed 7/14/15 Marriage of Kaur and Dhillion CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
In re the Marriage of SURINDER KAUR H040621
and MAKHAN SINGH DHILLON. (Santa Cruz County
Super. Ct. No. FL034272)
SURINDER KAUR,
Respondent,
v.
MAKHAN SINGH DHILLON,
Appellant.
I. INTRODUCTION
Appellant Makhan Singh Dhillon is the former husband of respondent Surinder
Kaur. They were married for over 30 years and have two adult children. The parties
separated in 2009 and Kaur filed a petition for dissolution of marriage in 2012. At issue
in the present appeal is the judgment entered on the trial court’s statement of decision on
trial of remaining issues.
On appeal, Dhillon contends that the trial court erred in (1) denying his claim for
reimbursement of the post-separation mortgage payments he made on the parties’ home;
(2) improperly characterizing and valuing the parties’ real property in India; and
(3) finding that Dhillon’s trucking business had a goodwill value of $25,000. For the
reasons stated below, we find no merit in Dhillon’s contentions and we will affirm the
judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
Kaur and Dhillon married in 1976 and have two adult children, son Davillon and
daughter Manjit. Kaur left school in India after the fifth grade and does not read or
speak English. Since 2003, Kaur has had seasonal employment as a produce packager.
Dhillon left India before completing high school and speaks limited English. He is the
sole proprietor of a trucking business, Dhillon & Sons Trucking, which he has operated
since 1993.
During their marriage, the parties owned a home in Watsonville. Dhillon made
the mortgage payments on the home and Kaur paid for their household expenses from her
wages. This arrangement continued after the parties separated on February 15, 2009.
Dhillon lived in the Watsonville home after separation for approximately three years.
On May 21, 2012, Kaur filed a petition for dissolution of marriage. At that time,
Dhillon moved out of the parties’ Watsonville home and began living at his son’s house.
The parties entered into a stipulation effective June 1, 2012, whereby Kaur became
responsible for the mortgage payments on the Watsonville home and Dhillon began
paying her temporary spousal support of $465 per month.
A court trial on remaining issues was held on March 29, 2013 and April 11, 2013.
The trial court issued a tentative statement of decision to which both parties objected. On
October 7, 2013, the court filed its statement of decision on trial of remaining issues.
Pertinent here, the court rejected Dhillon’s claim under Family Code section 26401 for
reimbursement of the post-separation mortgage payments he made on the Watsonville
home. The court found that the post-separation mortgage payments were in the nature of
1
All statutory references hereafter are to the Family Code unless otherwise
indicated.
2
temporary spousal support. As to the parties’ claims regarding the real property in India,
the court confirmed all of the property to Dhillon and ordered him to make an equalizing
payment to Kaur in the amount of $60,000. The court also confirmed the trucking
business to Dhillon, found that the business had an overall value of $40,000 and a
goodwill value of $25,000, and ordered him to make an equalizing payment of $20,000 to
Kaur.
A judgment incorporating the statement of decision on trial of remaining issues
and the parties’ “stipulation for status divorce” was entered on February 26, 2014.
III. DISCUSSION
A. Appealability
Although the parties have not addressed the issue of appealability, “since the
question of appealability goes to our jurisdiction, we are dutybound to consider it on our
own motion.” (Olson v. Cory (1983) 35 Cal.3d 390, 398; Huh v. Wang (2007) 158
Cal.App.4th 1406, 1413.) Dhillon filed a notice of appeal from the “judgment after court
trial” on January 30, 2014. However, the judgment incorporating the statement of
decision on trial of remaining issues and the parties’ “stipulation for status divorce” was
not entered until nearly one month later, on February 26, 2014.
California Rules of Court, rule 8.104(d)(2) provides: “The reviewing court may
treat a notice of appeal filed after the superior court has announced its intended ruling,
but before it has rendered judgment, as filed immediately after entry of judgment.”
Additionally, the California Supreme Court has instructed that a notice of appeal
“ ‘ “shall be liberally construed in favor of its sufficiency.” ’ ” (Walker v. Los Angeles
County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, 20.) We will
therefore exercise our discretion under California Rules of Court, rule 8.104(d)(2) to
deem this appeal to have been taken from the February 26, 2014, judgment.
3
B. Reimbursement Claim
In his trial brief, Dhillon stated that he sought “reimbursement for pay down of
principal from August 2009 through and including May 2010 ($14,456.04). (See,
Attached Exhibit A[.])” Exhibit A included Dhillon’s calculation of his “SP Mortgage
Payments” from March 2009 through May 2010, as well as copies of mortgage account
statements for that period.
In the statement of decision filed on October 7, 2013 and incorporated in the
judgment, the trial court made the following findings on Dhillon’s reimbursement claim:
“The parties had a practice for a number of years by which Mrs. Kaur would make
payment of various household expenses including food from her wages, and Mr. Dhillon
would pay the mortgage. This continued after separation. Mr. Dhillon continued to live
in the house for three years after separation. Shortly after the case was filed, the parties
entered into a stipulation effective June 1, 2012, by which Mr. Dhillon began making
temporary spousal support payments of $465 to Mrs. Kaur, and she became responsible
for making the mortgage and other payments related to the home, which she did and has
continued to do.”
Based on these findings, the trial court determined that Dhillon’s “mortgage
payments prior to the June 1st agreement were in the nature of temporary spousal
support” and ruled that “no §2640 reimbursement due to Mr. Dhillon on account of
these payments.”
On appeal, Dhillon contends that the trial court erred in denying his
reimbursement claim. According to Dhillon, under section 2640, subdivision (b), he is
entitled to reimbursement of all of the separate property contributions that he made
during the post-separation period of February 2009 to May 2010 to the extent that his
payments reduced the principal on the parties’ mortgage, in the amount of $12,589.75.
Alternatively, Dhillon contends that he is entitled to reimbursement because his post-
separation monthly mortgage payments of $1,403.53 greatly exceeded the reasonable
4
amount of temporary spousal support in light of the parties’ June 1, 2012, stipulation that
Kaur would receive $465 per month in temporary support.
Kaur argues that the trial court properly denied Dhillon’s reimbursement claim
because he failed to prove that his post-separation mortgage payments came from a
separate property source, noting that Dhillon had presented no evidence of the source of
the funds he used to make the mortgage payments.
To evaluate Dhillon’s contentions of trial court error, we apply the following
standard of review. On appeal, the judgment is presumed to be correct. (In re Marriage
of Arceneaux (1990) 51 Cal.3d 1130, 1133.) Further, “in reviewing a judgment based
upon a statement of decision following a bench trial, ‘any conflict in the evidence or
reasonable inferences to be drawn from the facts will be resolved in support of the
determination of the trial court decision. [Citations.]’ [Citation.]” (Estate of Young
(2008) 160 Cal.App.4th 62, 75-76.) We also “ ‘uphold judgments if they are correct for
any reason, “regardless of the correctness of the grounds upon which the court reached its
conclusion.” ’ ” (Howard v. Thrifty Drug & Discount Stores (1995) 10 Cal.4th 424, 443.)
We agree with Dhillon that his reimbursement claim is governed by section 2640,
which authorizes reimbursement of separate property contributions prior to the division
of community property. (In re Marriage of Walrath (1998) 17 Cal.4th 907, 912-913
(Walrath).)
Section 2640 provides in part: “(a) ‘Contributions to the acquisition of property,’
as used in this section, include downpayments, payments for improvements, and
payments that reduce the principal of a loan used to finance the purchase or improvement
of the property but do not include payments of interest on the loan or payments made for
maintenance, insurance, or taxation of the property. [¶] (b) In the division of the
community estate under this division, unless a party has made a written waiver of the
right to reimbursement or has signed a writing that has the effect of a waiver, the party
shall be reimbursed for the party’s contributions to the acquisition of property of the
5
community property estate to the extent the party traces the contributions to a separate
property source. The amount reimbursed shall be without interest or adjustment for
change in monetary values and may not exceed the net value of the property at the time
of the division.”2
In the landmark decision In re Marriage of Epstein (1979) 24 Cal.3d 76, the
California Supreme Court stated that “ ‘as a general rule, a spouse who, after separation
of the parties, uses earnings or other separate funds to pay preexisting community
obligations should be reimbursed therefor out of the community property upon
dissolution. However, there are a number of situations in which reimbursement is
inappropriate, so reimbursement should not be ordered automatically. [¶] . . . [¶] . . .
[R]eimbursement should not be ordered where the payment on account of a preexisting
community obligation constituted in reality a discharge of the paying spouse’s duty to
support the other spouse or a dependent child of the parties.’ ” (Id. at pp. 84-85; see also
In re Marriage of Garcia (1990) 224 Cal.App.3d 885, 892 [where wife lived in the
family home post-separation husband could be ordered to pay all or part of monthly
mortgage to meet wife’s need for housing]; In re Marriage of Hebbring (1989) 207
Cal.App.3d 1260, 1271 [absent a temporary support order, a spouse’s support obligation
is considered before reimbursement for post-separation payments on community
obligations].)
However, we need not determine whether the trial court properly denied Dhillon’s
claim under section 2640 for reimbursement on the ground that his post-separation
mortgage payments were in the nature of temporary spousal support. As Kaur has
pointed out, Dhillon did not present any evidence to prove that the source of the funds he
2
“Section 2640 was originally enacted in 1983 as Civil Code section 4800.2. It
was recodified without substantive change as section 2640 when the Family Code was
created in 1992. [Citation.]” (Walrath, supra, 17 Cal.4th at p. 912, fn.3.)
6
used to make the mortgage payments was his separate property. We agree with Kaur that
this omission is fatal to Dhillon’s section 2640 reimbursement claim.
Section 2640, subdivision (b), expressly provides that “the party shall be
reimbursed for the party’s contributions to the acquisition of property of the community
property estate to the extent the party traces the contributions to a separate property
source.” “If the paying spouse simply sits back and does nothing, there will be no
reimbursement.” (In re Marriage of Feldner (1995) 40 Cal.App.4th 617, 625.) Thus, a
husband’s claim for reimbursement of his contributions of separate property to acquire or
improve the family home was properly denied under section 2640 where the husband
failed to meet his burden to trace his contributions to a separate property source. (In re
Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1288-1289; In re Marriage of Braud
(1996) 45 Cal.App.4th 797, 825 [same].)
In this case, the record reflects that during trial court proceedings Dhillon did not
attempt to trace the funds he used to make the post-separation mortgage payments on the
Watsonville home to a separate property source. Moreover, he has not directed us to any
evidence in the record showing that the source of the funds was separate property. We
therefore determine that Dhillon did not provide sufficient evidence to meet his burden to
trace his post-separation mortgage payments to a separate property source as required for
reimbursement under section 2640, subdivision (b). For that reason, we conclude that the
trial court did not err in denying Dhillon’s reimbursement claim.
B. India Real Property
Dhillon stated in his trial brief that there were two real properties in India at issue
in this marital dissolution case. He asked the trial court to determine the community
interest in three acres and to order that the community acreage be split between the
parties. Dhillon also stated that he had inherited a house and land in India, and requested
that Kaur be required to make her claim to that property in India where the other owners
of the property could be joined and his mother’s legal interest ascertained.
7
Kaur asserted in her trial brief that the parties had acquired seven acres and a
house in India during their marriage. She asked that Dhillon be required to make a full
disclosure regarding the India properties; that the India properties be presumed to be
community property absent proof of Dhillon’s separate property interest; and that the
India properties be sold and the proceeds divided.
At the outset, the trial court rejected Dhillon’s argument, made for the first time in
his post-trial brief, that the court should apply the property laws of India in deciding the
characterization of the India real properties and determined that the India property issues
should be decided on the facts and California law.
The trial court then noted the lack of evidence regarding the India properties:
“During the course of the marriage, the Mr. Dhillon invested community property funds
in several properties in India. The evidence about these properties, entirely in the control
of Mr. Dhillon as all involve his family members as co-owners, was extremely sketchy.
No meaningful value evidence was provided. No accounting has ever been provided to
Mrs. Kaur regarding any actual use of the funds, nor of any income from the investments
or the cost, if any, of maintaining the investments. The money transferred was all in
cash. No title documents or receipts of any type were produced. No opinions were
provided as to any current value.”
According to the statement of decision, the parties’ daughter, Manjit, testified that
Dhillon purchased seven acres of agricultural land in India in 1999 with $60,000 to
$70,000 in community funds. At that time, Manjit was the bookkeeper for Dhillon’s
trucking business. Manjit also testified that sometime prior to 2008, Dhillon spent
$60,000 to $70,000 in community funds to build a house on real property inherited by
Dhillon, his mother, and two of his brothers. Manjit further testified that she had been
taken to see three retail shops in India, one of which belonged to Dhillon. In his
testimony, as reflected in the statement of decision, Dhillon disagreed with Manjit
8
regarding the amount of his investments in the India properties and denied owning a
shop.
The trial court found, “[b]ased on the prima facie evidence presented by
Mrs. Kaur, through Manjit, that at least $120,000 was invested in these two properties,
and the failure of Mr. Dhillon to provide any receipts for either transaction, any
information as to how the funds were used in building the house, the current value of
either property, the rental value of either property, or the expenses of continuing to own
either property, the Court finds that he has breached his fiduciary obligations regarding
disclosures and the management of these investments, and finds that the agricultural land
and Mr. Dhillon’s interest in the residential improvements constructed on the land he co-
owns with his family are community properties having a value of $120,000. (The Court
finds there is insufficient information about the existence of an interest in a retail shop in
the face of the denial that any such shop exists by Mr. Dhillon, and makes no finding
regarding any community interest in such a shop.) The Court confirms all of the property
in India to Mr. Dhillon. He is required to make an equalizing payment to Mrs. Kaur in
the amount of $60,000.”
On appeal, Dhillon argues that the trial court erred in shifting the burden of proof
to him as the managing spouse and disregarding his testimony as to the value of the India
properties, because Kaur failed to meet her burden of showing that a community asset
under his control had disappeared. Dhillon further argues that the evidence showed that
Kaur was aware of all of the India property transactions; the agricultural acreage should
be confirmed to him with a value of $42,000 on the date of trial, based on his trial
testimony; the inherited land is his separate property; and the community should be
reimbursed $23,000 for its contributions to developing the inherited land. Dhillon relies
on section 2552, subdivision (a) which provides: “For the purpose of division of the
community estate upon dissolution of marriage or legal separation of the parties, except
9
as provided in subdivision (b), the court shall value the assets and liabilities as near as
practicable to the time of trial.”
Kaur rejects Dhillon’s contention that the trial court improperly shifted the burden
of proof to him, arguing that burden shifting was appropriate because Dhillon had sole
control of the facts regarding the India properties and he had breached his fiduciary duties
regarding disclosure and management of the properties. She also argues that the trial
court’s findings of fact regarding property values were appropriate based upon the
amount of community funds that Dhillon had diverted.
We review the trial court’s rulings regarding the India properties under the
substantial evidence standard. “The trial court possesses broad discretion to determine
the value of community assets as long as its determination is within the range of the
evidence presented. [Citation.] The valuation of a particular asset is a factual question
for the trial court, and its determination will be upheld on appeal if supported by
substantial evidence in the record. [Citation.] All issues of credibility are for the trier
of fact, and all conflicts in the evidence must be resolved in support of the judgment.
[Citation.] The trial court’s judgment is presumed to be correct on appeal, and all
intendments and presumptions are indulged in favor of its correctness. [Citation.]”
(In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 670.)
Burden shifting was addressed in the decision In re Marriage of Prentis-Margulis
& Margulis (2011) 198 Cal.App.4th 1252. The appellate court ruled that “ ‘ “ ‘[w]here
the evidence is necessary to establish a fact essential to a claim lies peculiarly within the
knowledge and competence of one of the parties, that party has the burden of going
forward with the evidence on the issue although it is not the party asserting the claim.’
[Citations.]” [Citation.]’ [Citations.] [¶] Concerns over ‘unequal access to evidence’
[citation] are particularly pressing in the context of a marital dissolution where financial
records can be crucial to ensuring the equal division of property required by Family Code
section 2550.” (Id. at p. 1268.)
10
However, we need not consider whether the trial court properly shifted the burden
of proof in this case. We find no merit in Dhillon’s contentions that the trial court erred
in shifting the burden of proof to him as the managing spouse and disregarding his
testimony as to the value of the India properties, since Dhillon did not include a reporter’s
transcript in the record on appeal. “Where no reporter’s transcript has been provided and
no error is apparent on the face of the existing appellate record, the judgment must be
conclusively presumed correct as to all evidentiary matters. To put it another way, it is
presumed that the unreported trial testimony would demonstrate the absence of error.
[Citation.] The effect of this rule is that an appellant who attacks a judgment but supplies
no reporter’s transcript will be precluded from raising an argument as to the sufficiency
of the evidence. [Citations.]” (Estate of Fain (1999) 75 Cal.App.4th 973, 992 (Fain); see
also Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 187 [failure to
provide an adequate record on an issue requires the issue to be resolved against
appellant].)3
We find no apparent error on the face of the existing appellate record, since the
trial court could properly rely on the testimony of one witness, Manjit, regarding the
community funds that had been invested in the India properties. (See In re Marriage
of Mix (1975) 14 Cal.3d 604, 614 [the testimony of one witness may be sufficient].)
Dhillon’s argument that the trial court erred in disregarding his testimony concerning the
3
We grant Kaur’s motion to strike the declaration of Dhillon’s attorney, Liliana
Diaz, that Dhillon attached to his reply brief to explain the lack of a reporter’s transcript.
“It has long been the general rule and understanding that ‘an appeal reviews the
correctness of a judgment as of the time of its rendition, upon a record of matters which
were before the trial court for its consideration.’ [Citation.]” (In re Zeth S. (2003) 31
Cal.4th 396, 405.)
We deny Kaur’s motion for sanctions on the ground that the appeal is frivolous in
the absence of a reporter’s transcript. On the record before us, we do not find that the
appeal was taken for an improper purpose, or that this is a case of sufficiently “egregious
conduct.” (See In re Marriage of Flaherty (1982) 31 Cal.3d 637, 651.)
11
India properties is unavailing since he is precluded from challenging the sufficiency of
the evidence due to the lack of a reporter’s transcript. (See Fain, supra, 75 Cal.App.4th
at p. 992.) We therefore find no merit in Dhillon’s contention that the trial court erred in
its characterization and valuation of the India properties.
C. Goodwill Value
In her trial brief, Kaur sought one-half the value of Dhillon’s trucking business,
including the operating assets and goodwill, since the business was created during their
marriage. Dhillon did not address the trucking business in his trial brief.
The trial court made several findings of fact regarding the trucking business, as
follows. Dhillon has been a truck driver for 26 years and has operated Dhillon & Sons
Trucking since 1993. The only asset of the business is a tractor-trailer that he uses to do
sub-hauling work provided by his cousin’s company, Reliable Transportation. Dhillon’s
tax records for 2011 showed that his trucking business grossed $147,145, he netted
$42,829, and he claimed $10,667 for meals and entertainment. The trial court determined
that the expenses claimed for meals and entertainment were not legitimate and found that
Dhillon’s actual annual income from his business was $65,000.
Regarding the goodwill valuation of the trucking business, the trial court
determined that the business was a community asset and rejected Dhillon’s contention
that the business had no goodwill value because his continued business was based on his
relationship with his cousin. The trial court further determined that “[w]hat Mr. Dhillon
enjoys is the value of knowing that he has no marketing expense for his business as his
repeat business with his cousin is based on his reputation for dependability, a reputation
built up over the 23 years of marriage up to the date of separation that allows his cousin
to know that he can be counted on, a cousin who is able to provide him with sufficient
business to place his earnings at least at an average amount for truckers, if not more, all
without having to expend anything on marketing. The ‘silent partner’ spouse is entitled
to have a value attributed to this, as it is this ‘goodwill’ that will enable Mr. Dhillon to
12
continue earning at this rate so long as he wishes to continue driving. The Court finds
that the business has a ‘goodwill’ value for the purpose of this case of $25,000, and an
overall value of $40,000. The Court confirms this property to Mr. Dhillon. He is
required to make an equalizing payment to Mrs. Kaur in the amount of $20,000.”
On appeal, Dhillon contends that his trucking business cannot have a goodwill
value because he is a natural person and he has only one customer, Reliance
Transportation (named Reliable Transportation in the statement of decision). Dhillon
also contends that there is not substantial evidence to support the trial court’s finding that
his business has a goodwill value of $25,000 since no evidence was presented to support
the goodwill calculation, such as a truck driver’s average salary or an appropriate
capitalization factor.
Kaur responds that it is well established that goodwill can attach to any kind of
business and Dhillon’s substantial evidence challenge to the trial court’s goodwill
calculation is foreclosed due to the lack of a reporter’s transcript.
Our review of Dhillon’s challenge to the trial court’s goodwill valuation is
governed by the following general rules. “No rigid rule applies for determining the value
of goodwill. [Citation.] Rather, it ‘may be measured by “any legitimate method of
evaluation that measures its present value by taking into account some past result,” so
long as the evidence “legitimately establishes value.” [Citation.]’ [Citation.] ‘[E]ach
case must be determined on its own facts and circumstances and the evidence must be
such as legitimately establishes value. [Citations.]’ [Citation.] Because goodwill value
of a business is a question of fact for the trial court, its determination will be upheld if
supported by substantial evidence. [Citation.]” (In re Marriage of Ackerman (2006)
146 Cal.App.4th 191, 200.)
We are not convinced by Dhillon’s argument, as we understand it, that his
trucking business does not have a goodwill value because he is a natural person, he is not
a professional, and the trucking business therefore cannot be considered a business to
13
which goodwill attaches. Dhillon relies on the decision in In re Marriage of McTiernan
& Dubrow (2005) 133 Cal.App.4th 1090 (McTiernan), but that decision does not support
his position. In McTiernan, the husband contended there was no goodwill value in his
career as a motion picture director and the appellate court agreed, finding that “[a]
business is a professional, commercial or industrial enterprise with assets; ‘a business’ is
not earning capacity or professional reputation.” (Id. at p. 1102.) Based on the trial
court’s findings, Dhillon’s trucking business satisfies the McTiernan definition of a
business to which goodwill may attach since it is a commercial enterprise (as shown by
Dhillon’s tax records claiming business expenses) and has an asset (the tractor trailer).
As to Dhillon’s contention that there is not substantial evidence to support the trial
court’s finding that his business has a goodwill value of $25,000, our review is again
constrained by the rule that “[w]here no reporter’s transcript has been provided and no
error is apparent on the face of the existing appellate record, the judgment must be
conclusively presumed correct as to all evidentiary matters. . . . The effect of this rule is
that an appellant who attacks a judgment but supplies no reporter’s transcript will be
precluded from raising an argument as to the sufficiency of the evidence. [Citations.]”
(Fain, supra, 75 Cal.App.4th at p. 992.) We find no apparent error on the face of the
existing appellate record, which indicates that the trial court’s goodwill valuation was not
arbitrary because the court based its goodwill calculation on the income tax records for
Dhillon’s trucking business.
We therefore conclude that Dhillon’s contention that the trial court erred in finding
that his trucking business had a goodwill value of $25,000 lacks merit.
IV. DISPOSITION
The February 26, 2014 judgment is affirmed.
14
___________________________________________
BAMATTRE-MANOUKIAN, ACTING P.J.
WE CONCUR:
__________________________
MIHARA, J.
__________________________
GROVER, J.