Todd v. Todd

• Decision Date: 12 May 1969
• Citation: 272 Cal.App.2d 786,78 Cal.Rptr. 131
• Court: California Court of Appeals
• Parties: Alyce C. TODD, Plaintiff and Appellant, v. Leo J. TODD, Defendant and Respondent. Civ. 11900.

Page 131

78 Cal.Rptr. 131

272 Cal.App.2d 786

Alyce C. TODD, Plaintiff and Appellant, v. Leo J. TODD, Defendant and Respondent.

Civ. 11900.

Court of Appeal, Third District, California.

May 12, 1969.

Hearing Denied July 9, 1969.

[272 Cal.App.2d 788] F. L. Sinclair, Roseville, for plaintiff-appellant.

D. R. Robinson, Auburn, for defendant-respondent.

BRAY, Associate Justice (assigned).

Plaintiff appeals from portions of an interlocutory decree of divorce granting her a divorce, dividing the community property, and awarding her alimony, child support and attorneys' fees. ¹

Plaintiff also appeals from a minute order dated February 1, 1967, denying attorneys' fees and costs on appeal. ²

QUESTIONS PRESENTED

A. Appeal from the decree:

1. Was plaintiff entitled to an award based upon the value of the husband's education?

2. In dividing the community property, did the court improperly value the husband's law practice?

3. Value of the Christmas tree farm.

4. Alimony and child support.

B. Appeal from an order denying attorneys' fees and costs.

C. Effect of the failure to appeal from a second order denying attorneys' fees, costs on appeal and increase in support and alimony.

RECORD

Plaintiff and defendant were married January 25, 1947. They separated December 26, 1964. Plaintiff had a son by a prior marriage, subsequently adopted by defendant. He is now of age and not involved in this action. The parties have two children, Laura Jean, born June 12, 1953, and Gary Lee, born June 30, 1955. Plaintiff filed a complaint for separate maintenance. Defendant filed a cross-complaint for divorce, alleging extreme cruelty which he later dismissed. Later plaintiff filed an amended complaint consisting of two causes of action, one for divorce and the other for return to the community of the law practice sold to Brian Bishop, who was joined as a party defendant. Apparently, the second cause of action was dismissed.

After a trial an interlocutory decree of divorce was granted plaintiff, awarding her a divorce and custody of the children. The other terms of the decree will be hereinafter discussed. Plaintiff's motion for new trial was denied. She then appealed from the decree.

1. Husband's Education

Three months before the marriage, defendant, a high school graduate and having spent one semester at Sacramento Junior College before service in the armed forces, reenrolled at that college under the educational benefits of the Cal-Vet and G.I. programs. Without finishing his college course he was admitted to the University of San Francisco Law School, graduating therefrom with an LLB degree in June 1951, and was admitted to the State Bar. He started to practice law in Grass Valley. His assets at that time, other than his license to practice law, were practically nil. By March 1, 1965, the community had accumulated net assets in excess of $200,000, and his law practice was bringing in approximately $23,412 net per year.

Plaintiff was working prior to the marriage; she continued working the entire time defendant was in school and for several years after he started practicing law. ³ Her earnings were treated as community income and were used to supplement defendant's veteran's benefits to keep defendant in college and law school, and thereafter for general community purposes. The court at the time of dividing the community property valued the law practice at $9,866.47 and awarded plaintiff no portion thereof. The value was based upon accounts receivable, moneys in various banks, and goodwill valued at $1,000.

Plaintiff contended and now contends that defendant's education, partially paid for by community funds, is a community asset and that in terms of its existing economic potential it has a substantial worth which must be taken into account in evaluating the community estate for divorce purposes. The court made a finding, 'EDUCATION OF DEFENDANT: * * * the value of this claimed asset is nothing $--0--.'

Testimony was admitted on the value of an education, and on the value of defendant's education. A witness for the plaintiff, Philip Eden, testified that he had examined statements of defendant's earnings as an attorney since being admitted to practice and pointed out that defendant was in good health and could reasonably be expected to work until retirement age of 65; that his life expectancy was beyond that; that his average annual earnings from the law practice were $23,412, excluding business investments, stock dividends, interest, etc.; and that defendant, until he reached the age of 65, could be expected to earn $519,746. This figure did not include allowance for retirement, fringe benefits or future increases in prices and earnings. Even then testified to factors which would cause greatly increased earnings which would make the total earnings greater than the above estimate. He then placed the value of defendant's education and law degree at $308,000.

The parties had entered into a stipulation that plaintiff could offer into evidence without the necessity of foundation certain material but subject to objection as to materiality, relevancy or competency. This material consisted of federal and state records, surveys and statistics dealing with incomes and earnings of people with various educational backgrounds and of various occupations and professions, including lawyers. Plaintiff offered these in evidence together with a bulletin 'An Advantage for a Lifetime' by an officer of the United States Bureau of Census. The court sustained objections to their admission on the ground that they were 'irrelevant, incompetent and immaterial because it is hearsay' and cumulative. The court did not err in refusing to admit the material.

If a spouse's education preparing him for the practice of the law can be said to be 'community property,' a proposition which is extremely doubtful even though the education is acquired with community moneys, it manifestly is of such a character that a monetary value for division with the other spouse cannot be placed upon it.

In Franklin v. Franklin (1945) 67 Cal.App.2d 717, 155 P.2d 637, which held that a husband's cause of action for personal injuries is not considered 'property' for community division in a divorce action, the court stated (at p. 725, 155 P.2d at p. 641), 'the word 'property,' as used in the code sections relating to community property, does not encompass every property right acquired by either husband or wife during marriage * * *. The right to practice medicine and similar professions, for instance, is a property right but it is not one which could be classed as community property.'

At best, education is an intangible property right, the value of which, because of its character, cannot have a monetary value placed upon it for division between spouses.

Plaintiff has cited no case law holding that the education of a spouse acquired in whole or in part with community moneys is tangible property, the value of which may be divided with the other spouse.

It should be pointed out that the assets of the community were the results of defendant's legal education and that in a sense plaintiff realized the value therefrom in the award to her of a value of $111,500.97 in those assets. (The court awarded defendant $89,116.35 in assets.)

2. The Law Practice.

While the right to practice law is a property right which cannot be classed as community property, the value of the practice at the time of dissolution of the community is community property. (Franklin v. Franklin, supra, p. 725, 155 P.2d 637.)

In Brawman v. Brawman (1962) 199 Cal.App.2d 876, 19 Cal.Rptr. 106, the defendant appealed from a decree denying her alimony. The plaintiff was a lawyer who had commenced his law practice one year before the marriage and whose income from it was $26,000 net at the time of the divorce action. The court said that on divorce and dissolution of the community 'a professional practice goes automatically to the spouse licensed to practice it. * * * Effectually, it is the case of a silent partner withdrawing from a going business. And, if such partner is to receive fair compensation for her share, on her enforced retirement, it should be so evaluated.' The court stated further that where a lucrative law business had been built by the husband during the marriage, 'the business is community property and it has a substantial value.' (P. 882, 19 Cal.Rptr. p. 109.) The court then pointed out that the appeal was not from the community property division but from denial of alimony.

'* * * Therefore, discussion of the value of the law business has application only to respondent's contention that denial of alimony is to be justified on the basis of the court's generosity in the award of property to the wife. Considering the value of the law practice for this limited purpose, it becomes clear that the wife here received not more, but less, in value of the community property than did the husband.' (Brawman v. Brawman, supra, p. 882, 19 Cal.Rptr. p. 110.)

'On divorce and dissolution of the community a professional practice perforce remains in the hands of the spouse licensed to practice it. Nevertheless, in terms of its existing economic potential, it may have a substantial worth which must be taken into account in evaluating the community estate for divorce purposes.' (Fritschi v. Teed (1963) 213 Cal.App.2d 718, 726, 29 Cal.Rptr. 114, 119.)

In Fritschi v. Teed, supra, at pages 726--727, 29 Cal.Rptr. 114, the court pointed out that the practice of the medical doctor husband had netted more than $40,000 per year for several years preceding the divorce, and that during the period subsequent to the interlocutory decree his net professional annual income was almost $47,000. 'Thus, at the time the divorce court was formulating the property division, the expectation of future professional income was a valuable asset of the marital community.' The controversy was over the interpretation of the interlocutory...