Marriage of McNeill, In re

• Decision Date: 28 September 1984
• Citation: 206 Cal.Rptr. 641,160 Cal.App.3d 548
• Court: California Court of Appeals Court of Appeals
• Parties: In re the Marriage of Jo B. and Samuel Blair McNEILL. Jo B. McNEILL, Appellant, v. Samuel Blair McNEILL, III, Respondent. Samuel Blair McNEILL, III, Respondent, v. Jo B. McNEILL, Appellant. G000124. Civ. 30317.

Page 641

206 Cal.Rptr. 641

160 Cal.App.3d 548

In re the Marriage of Jo B. and Samuel Blair McNEILL.

Jo B. McNEILL, Appellant, v. Samuel Blair McNEILL, III, Respondent.

Samuel Blair McNEILL, III, Respondent, v. Jo B. McNEILL, Appellant.

G000124.

Civ. 30317.

Court of Appeal, Fourth District, Division 3, California.

Sept. 28, 1984.

Hearing Denied Dec. 19, 1984.

[160 Cal.App.3d 554] James E. Sutherland, Long Beach, for appellant.

Gayle R. Posner, Los Alamitos, and Carter, Monkman & Cooper, Los Angeles, for respondent.

OPINION

SONENSHINE, Associate Justice.

Wife appeals from judgments in a consolidated civil action and a proceeding for dissolution of marriage.

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[160 Cal.App.3d 555] Wife represented many material facts to husband during their six-year marriage. She told him she was an attorney, had a master's degree in accounting, and was suffering from cancer. Further she led him to believe there was an outstanding premarital judgment against her which she said could affect their assets. All were lies.

Husband owned a residence before the marriage. Shortly thereafter, title was changed by grant deed from his name alone to "Samuel Blair McNeill III, and Jo B. McNeill, Husband and Wife." Two years later, husband, upon wife's urging and believing she needed complete rest and quiet because of alleged chemotherapy treatments, moved out of the home. The next year wife told husband she had only 90 days to live and encouraged him to execute documents she had prepared transferring their assets to a trust. Husband, relying on wife's legal and tax expertise and allegations of her imminent death, signed all of the documents. In fact, wife had presented husband with a marital settlement agreement transferring almost all of his assets to her and a grant deed to the residence transferring title to her alone.

Husband did not learn the house had been put into wife's name until a year later. He filed suit claiming the house was his separate property but did not immediately serve her. Wife, still very much alive, filed a petition for dissolution, alleging all property, including the residence, had been divided by the property settlement agreement. Husband's response in the dissolution action pleaded the agreement was void and the residence was his separate property. He also amended his civil complaint to include four causes of action. In the first, he asked for cancellation of the deed and to quiet title to the residence. The second cause of action alleged fraud and sought a declaration that the deed and settlement agreement were void. He further requested compensatory and exemplary damages. Husband's third cause of action alleged constructive fraud resulting from wife's breach of her fiduciary duty and again sought cancellation of the deed and marital agreement, plus compensatory and exemplary damages. Husband pleaded rescission of the deed and marital settlement agreement in the fourth cause of action.

The parties stipulated only the second deed and marital settlement agreement were at issue; husband conceded the first transfer was valid. Husband's motion to consolidate his action and the dissolution was granted. ¹ The parties also stipulated to an advisory jury which heard the issue of [160 Cal.App.3d 556] fraud. ² The court took further evidence on the remaining issues, adopted the jury's findings of damage and fraud, cancelled the marital settlement agreement and deed, and quieted title to the residence in the names of the parties as community property. Husband was awarded $96,000 in compensatory and consequential damages, $32,000 in exemplary damages, and costs. The judgment on reserved issues in the dissolution action included an order to sell the family residence and divide the proceeds. Further, wife was ordered to return designated items of husband's separate property to him, and if not, to reimburse husband for them.

THE CONSOLIDATION OF THE DISSOLUTION AND CIVIL SUIT

Relying on California Rules of Court, rule 1212 and California public policy motivating the 1970 Family Law Act, wife argues the court erred in consolidating the civil and dissolution actions.

Rule 1212 provides, "Neither party to the proceeding may assert against the other party or any other person any cause of action or claim for relief other than for the relief provided in these rules or the Family Law Act." The rules are sui generis and control both statutory and decisional law. (In re Marriage of Dover

(1971) 15 Cal.App.3d 675, 93 Cal.Rptr. 384.) Husband's civil action, insofar as it claimed damages, could not have been joined with the dissolution action nor could those causes of action have been pleaded as part of the dissolution. Consolidation of the actions was not prohibited, however. "When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay." (Code Civ.Proc., § 1048.)

Wife argues the no-fault concept of dissolution proceedings, the cornerstone of the 1970 Family Law Act, precludes consolidation and the procedural order in which the cases were heard. There can be no disagreement with this general proposition; the strong public policy of this state is to eliminate fault as a ground for dissolution of marriage and as a consideration in the division of property. This, however, does not prohibit husband and wife from pursuing appropriate civil remedies against one another.

[160 Cal.App.3d 557] Here husband sought to void the deed and the agreement, asked for damages resulting from wife's fraud, and sought exemplary damages. Neither the existence of the marital relationship nor the fact wife was contemporaneously seeking a dissolution prohibited husband from his requested relief. Husband could have tested the validity of the deed and agreement in the dissolution or by an independent action. (In re Marriage of Testa (1983) 149 Cal.App.3d 319, 196 Cal.Rptr. 780.) But damages could not have been pleaded in the dissolution action; to be compensated for fraud, husband had to file a separate civil action.

Courts have encouraged consolidation since the enactment of both the Family Law Act and the Family Law Rules of Court. This allows issues which could not be raised in the dissolution action nevertheless to be heard concurrently. In Porter v. Superior Court (1977) 73 Cal.App.3d 793, 141 Cal.Rptr. 59, wife filed for dissolution and husband then filed an independent action to set aside a deed transferring property from his name alone to himself and his wife as joint tenants. He could not "prevent the court from proceeding with the dissolution action insofar as it involves the status of the parties and the wife's claim that the property is community property." (Id., at p. 805, 141 Cal.Rptr. 59, emphasis added.) The Porter court, in discussing possibilities as to how the matter could proceed, stated "the actions could be ordered consolidated...." (Id., at p. 805, 141 Cal.Rptr. 59) And in Beehler v. Beehler (1979) 100 Cal.App.3d 376, 161 Cal.Rptr. 30, wife filed a civil complaint against husband and his business partners. The lower court improperly dismissed her suit after sustaining defendants' demurrers. As in Porter, the reviewing court suggested consolidation with her dissolution action as an efficient and proper procedure: "[the trial court] could have ordered the actions consolidated thereby providing for resolution of the entire matter in one proceeding." (Id., at p. 384, 161 Cal.Rptr. 30; In re Marriage of Buford (1984) 155 Cal.App.3d 74, 79, 202 Cal.Rptr. 20.) ³

This distinction was also accepted in the case of In re Marriage of Utigard (1981) 126 Cal.App.3d 133, 178 Cal.Rptr. 546, where the children sought to be joined in the parties' dissolution action. The court found rule 1212 prohibited their joinder, but allowed their complaint to be consolidated for trial. In re Marriage of Johnson (1983) 143 Cal.App.3d 57, 191 Cal.Rptr. 545

is similar. There, a spouse was precluded from joining a Marvin claim with the dissolution action, ⁴ but was encouraged to make the claim in an [160 Cal.App.3d 558] independent action to be consolidated with the dissolution. And in Watkins v. Watkins (1983) 143 Cal.App.3d 651, 192 Cal.Rptr. 54, the court consolidated husband's petition for dissolution with wife's separate action for declaratory relief, constructive trust, breach of contract, and fraud

Wife in this instance alternatively contends the court erred in not staying or dismissing the civil action after the marital settlement agreement was set aside. Were rescission the only relief requested, this claim would have merit. However, the further request for damages, and punitive damages in particular, had to be determined in the civil action as discussed above. We find no error in the order the matters were heard or in their consolidation.

THE CIVIL SUIT

The court, finding wife perpetrated a fraud upon husband, cancelled and rescinded the second deed and the property settlement agreement, quieted title in husband and wife as community property, and awarded the following damages: ⁵

1. Damages based on fraud in the amount of $10,000 for loss of use of the residence and $30,000 for emotional distress;

2. Attorney's fees of $56,000, plus costs;

3. Exemplary damages in the amount of $32,000. We consider each separately.

Loss of Use Damages

Wife contends the court erred in awarding husband damages for loss of use of the residence. The contention is meritless. The complaint prayed for rescission and damages and alleged wife had fraudulently prevailed upon him to move out of his home and caused the property to be placed in her name alone. Loss of use during the time wife was in exclusive possession is a proper recovery. (Millar v. James (1967) 254 Cal.App.2d 530, 62 Cal.Rptr. 335....