Marriage of Hixon CA4/2

California Court of Appeal

Marriage of Hixon CA4/2

California Court of Appeal·Decided March 5, 2025·No. E082253·Unpublished

Opinion

Filed 3/5/25 Marriage of Hixon CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO

In re the Marriage of ADAM and AMANDA HIXON.

ADAM HIXON, E082253

Respondent,

(Super.Ct.No. FLHE1800210)

v.

OPINION

AMANDA HIXON,

Appellant.

APPEAL from the Superior Court of Riverside County. Nicholas A. Firetag, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.

Masson & Fatini, Richard E. Masson, Susan M. Fatini-Masson, for Appellant.

No appearance for Respondent.

Adam Hixon (Husband) and Amanda Hixon (Wife) divorced. The family court found that, during the marriage, the marital home transmuted from Wife’s separate property into community property. The family court also found that, at the time of trial,

the marital home’s fair market value was $395,000, which was the value opined by Husband’s expert, Jeff Cane (Cane). Wife contends the family court erred by finding a transmutation, by finding Cane qualified as an expert, and by relying on Cane’s opinion. We affirm.

FACTS

In 2010, Wife purchased a house (the House) for $84,000. The House was held in Wife’s name, as a single woman, without a mortgage. In 2012, Wife obtained a five- year home equity line of credit (HELOC) of approximately $63,000 on the House. Wife made interest-only payments on the HELOC.

Husband and Wife married in May 2014. Upon marrying, Wife wanted a joint bank account with Husband. From their joint bank account, Husband and Wife continued the interest-only payments on the HELOC. In 2017, as the five-year deadline for the HELOC approached, Husband and Wife obtained an $85,000 mortgage to pay off the HELOC and purchase a car. It was Wife’s idea to apply for a mortgage because the HELOC “was a five-year term loan, and [the bank] did not want to renew or extend the loan.”

Wife’s father is a financial advisor, and he advised Husband and Wife throughout the process of obtaining a mortgage. According to Husband, Wife needed Husband’s income and credit score to qualify for the mortgage. According to Wife, she did not need Husband to qualify for the mortgage because she held sufficient equity in the House. Husband and Wife jointly applied for the mortgage.

As part of the mortgage process, Wife changed the deed for the House to reflect it was held by Husband and Wife, as community property. Husband and Wife jointly made the $675 a month payments on the mortgage, $283 of which was principal. Husband and Wife separated in June 2018. Husband moved out of the House in August 2018. At trial, in closing argument, Wife argued a theory of undue influence to support her assertion that there was not a transmutation.

The family court found the House was community property. The family court reasoned, “[Wife] signed a grant deed transferring the property from herself as a single person to both parties as husband and wife with a community property interest and that the parties obtained an $85,000 loan secured by the property to pay off the HELOC. Both parties are now on title and are subject to the new mortgage. Here, I find that this was a proper transmutation as there was a writing signed by [Wife] agreeing to transfer the home, they both agreed to be financially responsible for the loan, and there was no evidence of any undue influence by [Husband]. I find that [Husband] has overcome any presumption of undue influence as he agreed to take on . . . the debt that was [Wife’s] debt from the HELOC in exchange for having his name on title. While both parties may not have known exactly what all of the terms meant, they both knew that the home was going from [Wife’s] home where she was solely responsible for a loan to their home where both were responsible for the loan. Therefore, as of 5/4/17, I find the parties have a community property interest in the home.”

DISCUSSION

A. TRANSMUTATION Wife contends substantial evidence does not support the finding that Husband overcame the presumption of undue influence. We begin our analysis with whether the presumption applies in this case.

“[C]ourts have long held that when an interspousal transaction advantages one spouse, public policy considerations create a presumption that the transaction was the result of undue influence.” (In re Marriage of Starr (2010) 189 Cal.App.4th 277, 281.) “[T]he ‘advantage’ which raises a presumption of undue influence in a marital transaction . . . must necessarily be an unfair advantage.” (In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 730.) A lack of consideration from one spouse in the transaction is an example of an unfair advantage. (Ibid.) We apply the substantial evidence standard of review. (In re Marriage of Rossin (2009) 172 Cal.App.4th 725, 734.)

In 2017, as the five-year deadline for the HELOC approached, the bank declined to extend or renew the HELOC. Thus, Wife needed to obtain a loan. Wife decided to apply for a mortgage. Wife needed Husband’s income and credit score to qualify for the mortgage. In exchange for adding Husband to the deed for the House, Wife was given Husband’s liability on the mortgage as well as his joint payments on the mortgage. Moreover, for the period that the House was Wife’s separate property, the entirety of that separate property value remains with Wife. Husband did not receive half of Wife’s separate property. Rather, Husband will receive half of the value that the

House accrued from the time it became community property in May 2017. (Fam. Code, § 2640, subd. (b).)

Husband did not receive a windfall when the House became community property. Husband became liable for the mortgage and any issues with the House, while Wife retained the separate property value of the House. Because Husband did not receive an unfair advantage, the presumption of undue influence is inapplicable.

Wife asserts that Husband received an unfair advantage because, in 2017, when the mortgage was obtained, the House appraised for $235,000 with an $85,000 mortgage, creating $150,000 in equity. Wife contends Husband will receive half of that equity, e.g., $75,000, which is a windfall. Wife is mistaken.

The family court’s order reads, “For [Wife], she is entitled to a reimbursement for her separate property claim under [Family Code section] 2640. I find that at the time of the transfer, the [House] had a fair market value of $235,000. At the time the [House] was transmuted then, she would have a separate property claim of $235,000 less $63,856.16 for the HELOC, for a total of $171,143.84.” Thus, the family court awarded Wife all the equity in the House at the time of the transmutation. Husband will receive only half of the value the House accrued starting in May 2017.

Although the undue influence presumption does not apply, if we assume the presumption did apply, then Husband overcame the presumption. We continue to use the substantial evidence standard of review. (In re Marriage of Burkle, supra, 139 Cal.App.4th at p. 737.) Husband bore the burden of establishing, by a preponderance of the evidence, that Wife freely and voluntarily executed the deed adding Husband, and

did so “with a full knowledge of all the facts and with a complete understanding of the transfer.” (In re Marriage of Mathews (2005) 133 Cal.App.4th 624, 631.)

It was Wife’s idea to apply for a mortgage. Wife wanted to include Husband on the mortgage application for the purpose of using his income and credit score. This evidence reflects Wife understood the advantages of including Husband in the mortgage process.

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