{"id":443,"date":"2010-12-24T18:53:12","date_gmt":"2010-12-24T18:53:12","guid":{"rendered":"http:\/\/fresnolawyerblog.com\/?p=443"},"modified":"2010-12-24T18:53:12","modified_gmt":"2010-12-24T18:53:12","slug":"starr-v-starr-sterling-analysis-of-effect-of-confidential-relationship-part-1","status":"publish","type":"post","link":"http:\/\/fresnolawyerblog.com\/?p=443","title":{"rendered":"Starr v. Starr – Sterling Analysis of Effect of Confidential Relationship (Part 1)"},"content":{"rendered":"

In Starr v Starr<\/strong> (Sept. 30, 2010) 189 Cal.App.4th 277, the court was confronted with division of assets at the time of divorce.\u00a0 In an excellently-reasoned opinion, the court found in favor of the wife, and held that she was entitled to a 50% interest in the family residence, even though title was held in the husband\u2019s name.<\/p>\n

Interestingly, the court also may have interposed a defense to a claim of undue influence (which defense did not help the husband).<\/p>\n

The court reviewed the law thoroughly, and its analysis is worthy of a two\u2013part review.<\/p>\n

Here is the issue before the court.\u00a0 \u201cRon Starr appeals from the judgment entered after the family law court found that the house he bought in his name only while married to former wife Martha Starr was community propert<\/a>y and ordered him to convey the property to them both as tenants in common.\u201d<\/p>\n

The holding, in a nutshell.\u00a0 \u201cThe evidence shows that Martha quitclaimed her interest in the house based on Ron’s promise to put her on title after the purchase was completed, but that Ron failed to do so.\u00a0 As a result, the evidence supports a finding that the house was community property based on Ron’s violation of his fiduciary duties to Martha.\u201d<\/p>\n

Ron\u2019s claim was based on record title. \u201cRon testified that the house was bought in his name only because the $50,000 down payment came from his separate property funds, and he and Martha intended all along that the house would be his separate property.\u00a0 In accord with that plan, Martha quitclaimed her interest in the house before escrow closed.\u00a0 Property taxes and mortgage payments came from community property earnings, Ron testified.\u201d<\/p>\n

Not so fast, said the court.\u00a0 Husbands and wives owe fiduciary duties to each other. \u201cUnder Family Code section 721, Ron had the burden of proving that the quitclaim transaction satisfied his fiduciary duties to Martha<\/strong>.\u00a0 She testified that because of her poor credit history, the lender recommended she agree to the quitclaim so she and Ron could qualify for a better interest rate.\u201d<\/p>\n

Martha testified that, \u201cThe loan broker told Martha and Ron they could add Martha back onto the title by way of a quitclaim deed within 45 days of the close of escrow.\u00a0 Martha had a discussion with Ron about adding her onto the title, and he said he would do that.\u00a0 Martha said she and Ron jointly offered to buy the house, and that the deed to Ron was mailed to them both after it had been recorded.\u201d<\/p>\n

\"Camelback<\/a><\/p>\n

The critical fact, at least as it relates to the fiduciary relationship.\u00a0 \u201cAlthough Ron never added Martha onto the title, she never worried about it because \u2018He’s my husband.\u00a0 I just don’t . . . mistrust him.\u00a0 You know, it was our house.\u2019\u00a0 She signed the quitclaim deed freely and voluntarily.\u201d<\/p>\n

The trial court stretched to rule in favor of Martha. finding that \u201cRon did not meet his burden of proof that Martha’s quitclaim deed was signed freely and voluntarily.\u00a0 The reason Martha did not sign the quitclaim deed freely and voluntarily was because the intent of the lender controlled title to the house when the lender suggested that Martha’s name be left off of the mortgage for the purposes of financing, and Martha agreed to execute the quitclaim deed based on the lender’s suggestion.\u201d<\/p>\n

Well, that doesn\u2019t sound like the husband overreached in his dealings with Martha.\u00a0 Rather, Martha took action (i.e., signed the quitclaim deed<\/a> in favor of Ron) based on information she received from the lender.\u00a0 The court of appeal dismantled that argument.<\/p>\n

Explained the court of appeal, \u201cAlthough spouses may enter transactions with each other, such transactions are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other.\u201d<\/p>\n

Thus, transactions between spouses arise in the context of a confidential relationship. \u201cThis confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other<\/strong>.\u00a0 This confidential relationship is a fiduciary relationship subject to the same rights and duties of unmarried business partners, including the right of access to records and information concerning their transactions.\u201d<\/p>\n

\u201cBecause of this, our courts have long held that when an interspousal transaction advantages one spouse, public policy considerations create a presumption that the transaction was the result of undue influence<\/a>.\u00a0 A spouse who gained an advantage from a transaction with the other spouse can overcome that presumption by a preponderance of the evidence.\u201d<\/p>\n

See part 2 for the conclusion of this case.<\/p>\n

Starr v Starr<\/strong> (Sept. 30, 2010) 189 Cal.App.4th 277<\/p>\n","protected":false},"excerpt":{"rendered":"

In Starr v Starr (Sept. 30, 2010) 189 Cal.App.4th 277, the court was confronted with division of assets at the time of divorce.\u00a0 In an excellently-reasoned opinion, the court found in favor of the wife, and held that she was entitled to a 50% interest in the family residence, even though title was held in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,8],"tags":[],"class_list":["post-443","post","type-post","status-publish","format-standard","hentry","category-case-law","category-real-property"],"_links":{"self":[{"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/443"}],"collection":[{"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=443"}],"version-history":[{"count":2,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/443\/revisions"}],"predecessor-version":[{"id":446,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/443\/revisions\/446"}],"wp:attachment":[{"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=443"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=443"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=443"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}