In re the Marriage of Murray

• Decision Date: 26 August 2002
• Docket Number: No. F038685.,F038685.
• Court: California Court of Appeals Court of Appeals
• Parties: In re the MARRIAGE OF Bearl Edward and Carole MURRAY. Bearl Edward Murray, Appellant, v. Carole Murray, Respondent.

124 Cal.Rptr.2d 342

101 Cal.App.4th 581

In re the MARRIAGE OF Bearl Edward and Carole MURRAY.

Bearl Edward Murray, Appellant, v. Carole Murray, Respondent.

No. F038685.

Court of Appeal, Fifth District.

August 26, 2002.

Certified for Partial Publication.^*

Steven R. Grecco and Dawn E. Wardlaw, for Appellant.

No appearance, for Respondent.

OPINION

BUCKLEY, Acting P.J.

Bearl Edward Murray appeals from an order in this dissolution action deciding reserved issues of spousal support, the division of community property, and attorney fees and costs. We will affirm.

The case began in 1991, when Bearl petitioned for a divorce from his estranged wife, Carole, who was then living in Texas.¹ On Carole's request, the court ordered Bearl to pay her $800 per month in temporary spousal support. The order was based in large part on the court's finding Bearl had been evasive and untruthful in disclosing his income and assets.

The court also ordered the Murrays, pursuant to a stipulation between them, to sell their house in Southern California. The house was sold later that year for $170,000. The Murrays' net recovery from the sale, approximately $82,000, was immediately attached by one of Bearl's creditors to help pay off business and personal debts.

Bearl asked the court in 1992 to modify the support order on the ground both his health and his business had since failed, and he was deeply in debt. On June 25, 1992, the court (Judge Oberholzer) "suspended" Bearl's support obligation but reserved the right to reinstate it retroactively.

Bearl filed a voluntary chapter 7 bankruptcy petition two months later in August. The petition was eventually dismissed, based once again on a finding, made this time by the bankruptcy court, that Bearl had attempted to defraud his creditors by concealing his assets.

In 1997, evidently after the bankruptcy had been dismissed, Bearl petitioned the court to bifurcate support and property issues and grant the dissolution as to marital status only. A judgment of dissolution was entered accordingly on July 16, 1997. The court reserved jurisdiction over all other issues.

In 1999, Carole requested a determination by the court on the reserved issues of spousal support, the division of marital assets, and attorney fees and costs. Following a two-day trial in March of that year, the court ruled in Carole's favor on all three of the issues. Bearl appeals from the orders regarding the first two.

The court found Bearl had, in fact, been able to pay spousal support during the entire seven-year period from July 1, 1992 (the month after his support obligation was suspended) through June 30, 1999 (the month in which, the court found, Bearl became disabled). Therefore, the court retroactively reinstated Bearl's support obligation and ordered him to pay Carole $64,000 in arrearages.²

In the course of dividing the community property, the court found that Bearl had "obviously committed a fraud upon [Carole]" in regard to the disposition of the proceeds from the sale of their home in 1991. Accordingly, the court awarded the entire amount, $82,000, to Carole. When combined with the court's other findings, the net effect of the property division was to require Bearl to make an equalizing payment to Carole in the amount of $28,902.91.

A judgment to this effect was entered on June 1, 2001, and notice of entry was filed three days later. Bearl filed a timely notice of appeal on July 27.

Bearl challenges the court's support order on four related grounds. He contends: (1) the court's 1992 order suspending support amounted to a res judicata determination he lacked the ability to pay at that time; (2) there has been no showing of any subsequent "changed circumstances" sufficient to justify a modification of support; (3) there is no evidence Bearl had the ability to pay the retroactive support; and (4) the court may not, in effect, compel someone over the age of 65 to go to work to pay support.

Bearl challenges the property division order on two grounds. He contends: (1) there is no clear and convincing evidence Bearl committed a fraud; and (2) there is no evidence connecting the fraud, if there were one, to the sale of the house.

In order to consider these claims in their proper context, we must first set out in greater detail the evidence of Bearl's financial circumstances. The following is our best attempt to reconstruct them from the sketchy record.

FACTUAL AND PROCEDURAL BACKGROUND

When Bearl and Carole married in 1972, Bearl was working for a company called Baker Hughes, which apparently was involved in the oil business. The record provides little more information about his work there except that the couple's community assets would later be found to include a Baker Hughes pension plan that paid Bearl $179 per month, and about $8,000 dollars in a Baker Hughes Thrift Plan.

Bearl suffered an industrial injury in 1973 that left him, by his account, totally disabled. He survived for the next several years on Social Security disability payments. (Carole was also working during that period as a cosmetologist.) Finally, in 1981 or so, Bearl went back to work as a commissioned salesperson for a company called Fishing Masters, which, notwithstanding its name, was an oil field supply company. He would eventually become the company's "working manager."

Fishing Masters was owned by Bill and Sam Malisos. In 1987, they asked their aunt, Genevieve Malisos, to come to work for the company. She did, and soon struck up a friendship with Bearl.

The House in Texas

In 1989, when both Bearl and Carole were in their late 50s, they decided to retire and move to Texas. They were living together then in a house they owned in Garden Grove, California. Carole went to Texas in January and arranged to buy a house in Fort Worth. The Murrays paid $20,000 down for the house and financed the balance.³ Carole finally left California and moved into the house in May or June of 1989. She took some or all of the household furniture with her, depending upon whose testimony can be believed. Bearl remained behind in California.

M & E Sales and Service

Also in 1989, sometime after Carole moved to Texas, Fishing Masters went into bankruptcy. Bill and Sam Malisos offered to sell Bearl the company's production tools so he could start his own similar business. Bearl accepted the Malisos's offer, and signed a $500,000 note for the equipment, but lacked the additional funds necessary to operate the business. So he turned to Genevieve Malisos. Over the next two years, beginning in September of 1989, she made some 20 business loans to Bearl, each evidenced by a promissory note, totalling approximately $287,000, plus interest. She also made several other loans to him during this period, totalling about $70,000, for his personal expenses (including the down payment on the Texas house). And, as we explain below, she supported him after the business failed.

Bearl renamed the business M & E Sales and Service, and relocated it to Hawaiian Gardens, in Southern California. He was sole owner of the company, notwithstanding Genevieve Malisos's sizeable investment in it.⁴ In fact, she continued to work there but never got paid. Her job included paying all the bills, both for the business and for Bearl personally (he had given her a power of attorney). Carole on the other hand, although she was living in Texas, received a "paycheck" from M & E every two weeks for an amount usually between $400 and $500, less payroll deductions. However, by her account, Carole was unaware of Bearl's interest in M & E until after he bought the company, she knew nothing of the Malisos loans, and she never gave Bearl her consent to borrow money from Malisos or from any of his many other creditors.

This arrangement, with Bearl in California and Carole in Texas, lasted for about two years before Bearl's mounting debts finally forced him to close M & E sometime late in 1991. Several other significant things also happened around this same time.

The Dissolution Petition

Most importantly, Bearl decided he did not want to join Carole in Texas, and so filed a dissolution petition in Kern County on June 11, 1991.⁵ Carole filed a response and a request for spousal support, in which she stated Bearl had stopped sending her money (i.e., the M & E "paychecks") the previous April. Bearl opposed the request for support, citing his physical disability, the collapse of his business, and the size of his debt. He claimed his income was then limited to a pension of $831 per month (presumably from Baker Hughes), along with the prospect of receiving about $750 per month in Social Security disability payments (which presumably had been discontinued when he went to work for Fishing Masters in 1981).

Temporary Spousal Support

Following a hearing in September of 1991, the court (Judge Wiseman) directed Bearl to pay Carole $800 per month in spousal support. In its written ruling issued in October, the court gave the following explanation:

"3. Although [Bearl] may have suffered health problems in the past (approximately 1973 to 1979), there is insufficient evidence to substantiate a finding that he is totally disabled....

"4. [Bearl] has not been truthful in disclosing his assets. First, this court is dissatisfied with the presentation of out-of-date financial information regarding M and E Sales and Services, Inc.... [f ] In addition, [Bearl] was extremely evasive in answering questions about the financial status of M and E....

"5. [Bearl's exhibit] K [a financial statement apparently submitted in support of a loan application] shows [he] had a net worth of close to one million dollars. [Bearl] explains this by stating that even though he signed the statement as being true and correct, he knew it was inaccurate and padded substantially ....

"6. [Bearl] seems to find money for the things that he wishes to do including the purchase of vehicles and for trips to Hawaii...."

The formal support order...