Marriage of Buol, In re

• Decision Date: 16 September 1985
• Docket Number: S.F. 24823
• Citation: 705 P.2d 354,218 Cal.Rptr. 31,39 Cal.3d 751
• Court: California Supreme Court
• Parties: , 705 P.2d 354 In re the MARRIAGE OF Esther and Robert BUOL. Robert BUOL, Appellant, v. Esther BUOL, Respondent.

Page 31

218 Cal.Rptr. 31

39 Cal.3d 751, 705 P.2d 354

In re the MARRIAGE OF Esther and Robert BUOL Robert BUOL, Appellant, v. Esther BUOL, Respondent.

S.F. 24823.

Supreme Court of California In Bank.

Sept. 16, 1985.

T.G. Fitzgerald, San Rafael, for appellant.

Mary Catherine Farley, Sausalito, for respondent.

REYNOSO, Justice.

May legislation requiring a writing to prove, upon dissolution of marriage, that property taken in joint tenancy form is the separate property of one spouse constitutionally be applied to cases pending before its effective date? We conclude that it may not. Applied retroactively, the statute impairs vested property rights without due process of law.

Esther and Robert Buol married in 1943 and separated in 1977. The Buols had three children together and Esther had one child from a previous marriage.

Robert worked as a laborer until 1970 when he was fired, at least in part, due to alcoholism. He began receiving Social Security total disability payments in 1973. Esther began working in 1954 as a housekeeper, a babysitter and an attendant to elderly women. Since 1959 she has been employed as a nursing attendant at a local hospital.

With Robert's knowledge and consent, Esther put her earnings in a separate bank account. ¹ Esther used the money to support the family, and in 1963, purchased a home in San Rafael. Although title was taken in joint tenancy on the advice of the realtor handling the sale, Esther made all mortgage, tax, insurance and maintenance payments out of her separate account. Robert contributed nothing. The original purchase price was $17,500. The home is now valued at approximately $167,500.

The sole issue at trial was the status of the home as separate or community property. Esther testified that she purchased the home with her earnings which Robert had emphasized numerous times were hers to do with what she pleased. She also testified that she never would have gone to work without such an agreement because "that would be more money for him to put into gambling and drinking." In addition, she testified that he had always maintained that the house was hers and that he wanted no responsibility for it, until after he moved out and started demanding that she sell it so that he could have a share of the proceeds.

Esther's testimony was corroborated by two of the Buols' children, Roy and Judith, Judith's husband, and Esther's brother-in-law. Each remembered many conversations with Robert, alone or in family gatherings, in which he confirmed that the house was Esther's. Robert offered conflicting testimony, but conceded that he considered Esther's earnings to be hers alone, that he borrowed from her occasionally and that she made all the house payments out of her separate account.

Finding that the parties had an enforceable oral agreement (In re Marriage of Lucas (1980) 27 Cal.3d 808, 166 Cal.Rptr. 853, 614 P.2d 285) that the earnings and the home were Esther's separate property, the court entered judgment awarding the home to Esther. Robert appealed, contending that there was insufficient evidence to support the finding of an oral agreement.

While the appeal was pending, Civil Code section 4800.1 ² was enacted. ³ Under that section the only means of rebutting the presumption that property acquired during marriage in joint tenancy is community property is by providing evidence of a written agreement that the property is separate property. ⁴ No writing exists in the instant case.

I

We must determine whether section 4800.1 may be given retroactive effect without offending the state Constitution. It appears that the Legislature intended section 4800.1 to apply retroactively to cases such as the one at bench. Section 4 of Assembly Bill No. 26 states, "This act applies to the following preceedings: [p] (a) Proceedings commenced on or after January 1, 1984. [p] (b) Proceedings commenced before January 1, 1984, to the extent proceedings as to the division of property are not yet final on January 1, 1984." (Stats.1983, ch. 342, § 4.) As the trial court's judgment awarding the $167,500 residence to Esther as her separate property was on appeal as of section 4800.1's January 1, 1984, effective date, the division of property was not yet final. (Code Civ.Proc., § 1049. See In re Marriage of Brown (1976) 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561.) Presumably, therefore, section 4800.1 would operate to defeat Esther's separate property interest to the extent it is unprotected by section 4800.2's formula for reimbursing separate property contributions to community assets. ⁵ Under section 4800.2, only $17,500 would be credited as Esther's separate property; the remaining $150,000 would be attributed to the community.

Legislative intent, however, is only one prerequisite to retroactive application of a statute. Having identified such intent, it remains for us to determine whether retroactivity is barred by constitutional constraints. We have long held that the retrospective application of a statute may be unconstitutional if it is an ex post facto law, if it deprives a person of a vested right without due process of law, or if it impairs the obligation of a contract. (Rosefield Packing Co. v. Superior Court (1935) 4 Cal.2d 120, 122, 47 P.2d 716; San Bernadino County v. Indus. Acc. Com. (1933) 217 Cal. 618, 628, 20 P.2d 673. See In re Marriage of Bouquet (1976) 16 Cal.3d 583, 592, 128 Cal.Rptr. 427, 546 P.2d 1371; Robertson v. Willis (1978) 77 Cal.App.3d 358, 365, 143 Cal.Rptr. 523.)

Retroactive application of section 4800.1 would operate to deprive Esther of a vested ⁶ property right without due process of law. (Cal. Const., art. I, § 7.) At the time of trial, Esther had a vested property interest in the residence as her separate property. (Cf. Bouquet, supra, 16 Cal.3d at p. 591, 128 Cal.Rptr. 427, 546 P.2d 1371; Addison v. Addison (1965) 62 Cal.2d 558, 566, 43 Cal.Rptr. 97, 399 P.2d 897.) The law had long recognized that "separate property ... [might] be converted into community property or vice versa at any time by oral agreement between the spouses. [Citations.]" (Woods v. Security-First National Bank (1956) 46 Cal.2d 697, 701, 299 P.2d 657. See also Beam v. Bank of America (1971) 6 Cal.3d 12, 25, 98 Cal.Rptr. 137, 490 P.2d 257.)

The Buols had such an agreement as to Esther's earnings and the home she purchased and maintained with those earnings. ⁷ "The status of property as community or separate is normally determined at the time of its acquisition." (Bouquet, supra, 16 Cal.3d at p. 591, 128 Cal.Rptr. 427, 546 P.2d 1371; Trimble v. Trimble (1933) 219 Cal. 340, 343, 26 P.2d 477.) Such status is not dependent on the form in which title is taken. (Machado v. Machado (1962) 58 Cal.2d 501, 506, 25 Cal.Rptr. 87, 375 P.2d 55.)

At all relevant times--when Esther purchased the home, during trial and when the trial court entered judgment for Esther--proof of an oral agreement was all that was required to protect Esther's vested separate property interest. (See Lucas, supra, 27 Cal.3d 808, 166 Cal.Rptr. 853, 614 P.2d 285; Machado, supra, 58 Cal.2d 501, 25 Cal.Rptr. 87, 375 P.2d 55.) Section 4800.1's requirement of a writing evidencing the parties' intent to maintain the joint tenancy asset as separate property operates to substantially impair that interest.

Two Courts of Appeal have summarily rejected the contention that section 4800.1 directly impairs vested property rights, finding instead that the measure "merely alters the evidentiary burden of proof when a husband and wife take property by a joint tenancy deed." (In re Marriage of Martinez (1984) 156 Cal.App.3d 20, 30, 202 Cal.Rptr. 646; See also In re Marriage of Taylor (1984) 160 Cal.App.3d 471, 474, 206 Cal.Rptr. 557; In re Marriage of Benart (1984) 160 Cal.App.3d 183, 188, fn. 2, 206 Cal.Rptr. 495.) ⁸ This literal reading of the statute without due consideration for its practical application to proceedings initiated prior to its effective date, unnecessarily exalts form over substance, substantially impairing vested property rights along the way.

While the Legislature generally is free to apply changes in rules of evidence or procedure retroactively when no vested rights are involved, it is not so unrestrained when these changes directly affect such rights. (See e.g., Augustus v. Bean (1961) 56 Cal.2d 270, 14 Cal.Rptr. 641, 363 P.2d 873 [no vested right in remedy in place prior to contribution by joint tortfeasors]; Owens v. Superior Court (1959) 52 Cal.2d 822, 345 P.2d 921 [no vested right in more limited scope of pre-amendment long arm statute]; San Bernadino County v. Indus. Acc. Com., supra, 217 Cal. 618, 20 P.2d 673 [amendment designed to prevent injured employee from realizing double recovery impairs no substantive right]; Los Angeles v. Oliver (1929) 102 Cal.App. 299, 283 P. 298 [vested right to just compensation in condemnation proceeding not affected by change in method of computing amount due].)

The answer to the question whether a particular statute is "merely evidentiary" or "purely procedural" is not always to be found in the statutory language. " 'Alteration of a substantial right ... is not merely procedural, even if the statute takes a seemingly procedural form.' " (People v. Smith (1983) 34 Cal.3d 251, 260, 193 Cal.Rptr. 692, 667 P.2d 149, quoting Weaver v. Graham (1981) 450 U.S. 24, 29, fn. 12, 101 S.Ct. 960, 964, fn. 12, 67 L.Ed.2d 17.) "Destroying enforcement of a vested right is, ... tantamount to destroying the right itself." (Baldwin v. City of San Diego (1961) 195 Cal.App.2d 236, 240, 15 Cal.Rptr. 576.) We must, therefore, extend our analysis beyond the Legislature's chosen evidentiary language--"this presumption is a presumption affecting the burden of proof"--and focus upon the realities of retroactive application of the statute.

Applied retroactively, section 4800.1 unquestionably is substantive. A statute is substantive in effect when it "imposes a new or additional liability...