Lesh v. Lesh

• Decision Date: 17 June 1970
• Citation: 87 Cal.Rptr. 632,8 Cal.App.3d 883
• Court: California Court of Appeals Court of Appeals
• Parties: Kathryn M. LESH, Plaintiff and Appellant, v. David Kirby LESH, Defendant and Respondent. Civ. 35432.

Page 632

87 Cal.Rptr. 632

8 Cal.App.3d 883

Kathryn M. LESH, Plaintiff and Appellant, v. David Kirby LESH, Defendant and Respondent.

Civ. 35432.

Court of Appeal, Second District, Division 1, California.

June 17, 1970.

Hearing Denied Aug. 12, 1970.

Young & Young and Walter H. Young, Los Angeles, for plaintiff-appellant.

Clark & Kunert and Stanley D. Clark, San Marino, for defendant-respondent.

LILLIE, Associate Justice.

In December of 1949 plaintiff secured an interlocutory decree of divorce from defendant which, among other provisions, approved a property settlement agreement between the parties entered into three months earlier; these provisions were made binding by the terms of the final judgment entered in January of 1951. More than seventeen years later (in July of 1968) plaintiff, by way of an order to show cause, applied for a writ of execution under section 685, Code of Civil Procedure, asserting that the sum of $37,431.09--$10,000.00 by way of principal, the rest being compound interest--was due her under paragraph 6 of the agreement; she also asked for attorneys' fees and costs. Following a hearing during which oral and documentary evidence was received, the court denied plaintiff's application for the writ, also her request for attorneys' fees and costs. She appeals from this order.

Paragraph 6 of the agreement was but one of several paragraphs in which provision is made for division of the community assets as well as for maintenance of plaintiff and the parties' two children, then aged twelve and six years. It reads as follows: 'That the husband shall pay to the wife, out of distributions received by him from the copartnership known as 'Better Gardens', and in the manner hereinafter stated, the sum of Ten Thousand Dollars ($10,000.00) as and for the wife's community interest in said partnership.

'That in event of the death of the husband, he or his estate will be entitled to receive from the surviving partners the amount provided to be paid under and according to the terms and provisions of said partnership agreement, and that from the first moneys thus becoming payable to the husband, or to his estate, the wife shall be paid and shall be entitled to receive for her own use, the said sum of Ten Thousand Dollars ($10,000.00), less such sum or sums as the husband shall have paid to the wife, on account thereof, during his lifetime.

'That the husband shall be entitled to receive salary which may from time to time be paid to him by said copartnership, but in event cash distributions shall be made from time to time by said copartnership such cash distributions, exclusive of salary, shall be divided equally between the husband and wife, and one-half thereof paid to the wife until the wife shall have received the aggregate total of Ten Thousand Dollars ($10,000.00) as and for her community interest in said partnership, as herein provided for.

'That in event said partnership shall be liquidated, or said business sold, the wife shall in like manner be entitled to receive out of the first moneys distributed to the husband, such sum or sums as shall be required to make up the aggregate total of Ten Thousand Dollars ($10,000.00), on account of the wife's community interest in said partnership herein agreed to be paid to her.'

Section 685, Supra, provides that after the lapse of ten years from its entry, the judgment may be enforced by the court in the manner here sought upon due notice to the judgment debtor, accompanied by an affidavit setting forth the reasons for failure to proceed in compliance with section 681, which latter statute authorizes the issuance of a writ of execution when applied for within ten years after entry of the judgment. As required by section 685, the following reasons were listed by plaintiff for failure to proceed under section 681: the partnership, known as 'Better Gardens,' was formed in July of 1946, consisting of three partners--Neal Campbell, S. C. Ambler and defendant; in September of 1965 the partnership business was taken over by, and became a part of, 'Better Gardens, Inc.' the capital stock of which corporation was then acquired by defendant; that the above transactions constituted a liquidation of the partnership and a distribution of its assets to the husband within the meaning of paragraph 6, and that no part of the sum of $10,000.00 due plaintiff thereunder has been paid. It was further alleged by plaintiff that defendant borrowed $925.00 from her in January of 1952 (which he repaid); that in September of 1953 he borrowed $3,550.00 from her and her sisters, giving his promissory note therefor and between July of 1954 and September of 1955 he repaid the sum of $2,100.00 on said note, the balance of which is still owing; 'That on numerous occasions defendant has informed plaintiff that she should consider the said sum of $10,000 as being invested in said business and that the said sum was earning interest'; that 'on innumerable occasions since the entry of the Interlocutory Judgment of Divorce' she was told by defendant that he intended paying all sums due her, but that he was unable to do so because there were no distributions from the partnership; 'that all he was getting out of the partnership was salary and he needed that to live on; that the partnership was not making money; that he wished he could pay her but that he could not as he was having all he could do to support himself and the children of the parties; that his other partners wanted to 'plough' everything back into the business in order to build the business and that unless this was done he would be unable to support the minor children of the parties and that the partnership would go broke.' Finally, it was alleged by plaintiff that the effect of the property settlement agreement, merged into the interlocutory judgment, was to make the defendant an express trustee of all distributions, other than salaries, received from the partnership; by virtue of said trust, and upon liquidation of the partnership as above alleged, she was entitled to the agreed principal sum ($10,000) plus interest compounded annually at 7% From December 2, 1948, and totalling $37,431.09.

At the hearing upon the order to show cause both parties testified and numerous exhibits were received in evidence. Therefrom it appears that in 1953 plaintiff consulted an attorney, Mr. Vincenti, who contacted the defendant and wrote him several letters; also contacted by letter was defendant's attorney, Mr. Rinehart. Plaintiff testified that at all times Vincenti acted with her approval and consent. On May 4, 1954, Vincenti's letter to defendant included the statement that there had been distributions pursuant to paragraph 6 of $4,660.00 from which his client was entitled to one-half ($2,330.00); acknowledging that 'you have paid the sum of $950.00,' the attorney stated that a balance of $1,380.00 thus remained due on distributions up to that date. In the same letter Vincenti requested that defendant provide security for plaintiff by a second mortgage on his home, hypothecation of his partnership interest, and a chattel mortgage on cymbidium orchids the defendant was raising. Defendant refused to give any of the requested security; he did, however, provide plaintiff with a document dated 'April 1954' and signed by his partners. Among other things, the document stated that the partners were to pay 'to my former wife, Kathryn M. Lesh, one-half of any and all such cash distributions to which I may be entitled, up to the aggregate sum of Ten Thousand Dollars ($10,000.00) * * *.' It concluded with the statement that 'This order is irrevocable and you will act in accordance therewith unless the same may be revoked or altered by joint act of myself and the said Kathryn M. Lesh, and evidenced by a written agreement lodged with you.' On September 15, 1954, Vincenti wrote defendant's partners, stating that 'Mr. Lesh has provided his former wife with a document upon which appears your two signatures, a copy of which document I enclose herewith.' Continuing, 'This letter is intended to notify each of you that Mrs. Kathryn M. Lesh has this document and relies thereon and shall except each of you to comply with the terms thereof and to be responsible that no distributions are made from the partnership between yourselves and Mr. Lesh, except in accordance with the terms thereof.' The same date (September 15) Vincenti sent plaintiff a copy of this last mentioned letter, concluding with this statement, 'If you wish me to again review this matter with Mr. Lesh approximately a year from this date I will expect you to request me to do so and will not automoatically (sic) take it up with Mr. Lesh as I have mentioned in my letter to him.'

After receipt of Vincenti's letter, plaintiff admittedly was advised by him in August of 1955 that he was leaving the practice of law to become president of a savings and loan association. She testified, however, that thereafter she did nothing except make verbal demands on defendant until consulting her present attorney in the middle of 1968, an interval of some thirteen years; to such verbal demands defendant replied that the profits of the partnership were being 'ploughed back' into the business, that he was without funds and that she could not get 'blood from a turnip.' At no time, plaintiff admitted, did she ever make an investigation of defendant's assets, although she knew that he owned certain real property and had seen him drive new cars on separate occasions....