Filed 8/18/26 Tatum Family Investments v. Kaplan CA2/4 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION FOUR
TATUM FAMILY INVESTMENTS, B341017 LLC, (Los Angeles County
Plaintiff and Appellant, Super. Ct. No. 20STCV08112)
v.
JEFFREY A. KAPLAN,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County, Christopher Lui, Judge. Affirmed.
Liner Freedman Taitelman + Cooley, Bryan J. Freedman and Sean M.
Hardy; Benedon & Serlin, Wendy S. Albers and Kelly R. Horwitz for Plaintiff and Appellant.
Lang, Hanigan & Carvalho, Arthur Carvalho, Jr.; Greines, Martin, Stein & Richland, Robert A. Olson, Edward L. Xanders and Laura G. Lim for Defendant and Respondent.
INTRODUCTION
Here, we conclude that a wife agreed to be bound by the terms of a “buy-sell” agreement when the couple distributed their community property following dissolution of marriage. We therefore affirm the trial court.
Thomas T. Tatum and Jeffrey A. Kaplan are business partners who own and manage mobile home parks. In 1983, the two partners agreed to a buy-sell agreement. The agreement provided that in the event of one partner’s death the other partner would buy the deceased partner’s shares on certain terms.
Thomas Tatum was married to Claudia D. Tatum. Thomas’s1 partnership interests were community property when the buy-sell agreement was entered into in 1983. In 1998, Thomas and Jeffrey Kaplan signed an updated version of the partners’ buy-sell agreement.
Thomas and Claudia dissolved their marriage in 1996. But they did not distribute their community property at that time. In 2003, Thomas and Claudia entered into a stipulated judgment distributing their community property. Half of the community partnership interests were awarded to Claudia, but Thomas managed Claudia’s interests in the ongoing partnership as her trustee. The stipulated judgment references the buy-sell agreement.
Claudia died in 2011. Appellant Tatum Family Investments, LLC (TFI) now holds her interests. TFI would like to hold its partnership interests free of the buy-sell agreement. Thus, in this declaratory relief action, TFI sought to answer the following question: Is TFI subject to the 1998 buy-sell agreement? Following a bench trial, the superior court held that the answer is yes. TFI appealed.
1 We use first names for clarity.
3
We affirm. In our view, the 2003 stipulated judgment memorialized the couple’s binding and enforceable agreement to be bound by the buy-sell agreement. Thus, TFI, as Claudia’s successor-in-interest, is also bound by it. Since that resolves this appeal, we need not address the parties’ other arguments.
FACTUAL AND PROCEDURAL BACKGROUND A. Partnership and Buy-sell Agreement2 Thomas and Jeffrey Kaplan are real estate investors. In 1981 they formed a partnership to purchase and manage mobile home parks. At the time, Thomas was married to Claudia and Jeffrey was married to Donna Kaplan. The parties to this appeal agree that the partnership entities formed during the Tatums’ marriage were community property.
In 1983, Thomas and Jeffrey entered into the buy-sell agreement providing that in the event of one partner’s death, the other partner had the right to buy the deceased partner’s shares. Thomas and Jeffrey executed updated and amended buy-sell agreements in 1987, 1988, 1990, 1992, and 1998. The 1998 version is the current version of the buy-sell agreement.
Section 3 of the 1998 buy-sell agreement states, “Upon the death of the Partner first to die, the surviving Partner shall purchase, and the estate or other successor in interest of the deceased Partner shall sell to the surviving Partner, all of the deceased Partner’s right, title and interest in the Entities … for the price and upon the terms and conditions specified in this
2 The underlying facts are largely undisputed and are summarized from the pleadings, filings, and testimony from the bench trial below. To the extent that there is any dispute as to the facts, this Court, following a bench trial, reviews the trial court’s factual findings under the substantial evidence standard, construing the evidence in the light most favorable to the judgment. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.)
4
Agreement.” The earlier versions of the buy-sell agreement included the same basic terms. The early versions of the agreement listed a buy-out purchase price. The 1998 agreement stated that the purchase price was the “Fair Market Value” with a methodology for determining the price. It further stated that after the value had been determined, it “shall be reduced by 20% to reflect the transfer of a non-controlling and non-marketable minority interest.” The buy-sell agreements state that each partner would maintain a life insurance policy on the other, so the proceeds could cover the purchase price or assist with purchasing the other partner’s share.
Each version of the buy-sell agreement stated that the purpose of the agreement was “to protect the management and control” of the partnership entities “against intrusion by persons not active in the business of the [partnership entities] or not acceptable to the Partners as a co-manager and co-owner” of the partnership entities. Each buy-sell agreement also stated that it was binding on the parties’ heirs, successors, and assignees. B. Thomas and Claudia’s Divorce In 1994, Thomas and Claudia separated. In 1996, their divorce was finalized through a “status only” dissolution—in other words, they dissolved the marriage, but reserved division of the community assets. In 2003, Thomas and Claudia agreed to, and the court entered, a stipulated further judgment on reserved issues dividing their community assets. Thus, the 1998 buy-sell agreement post-dated the 1996 dissolution but preceded the Tatums’ 2003 agreement on the division of their community property.3
3 The Kaplans divorced in 1990 and their community property was divided in a 1999 judgment similar to the 2003 judgment at issue here. The 1998 version of the buy-sell agreement acknowledged that a portion of Jeffrey Kaplan’s interests were held in trust for Donna Kaplan. The 1998 buy-sell agreement did not reference the Tatums’ divorce.
5
In the 2003 stipulated judgment, the Tatums agreed that their interests in the partnership entities would be “equally divided in kind between [Thomas] and [Claudia],” subject to additional provisions. The 2003 judgment provided that Thomas would retain title to the partnership entities. It stated that Thomas “shall hold [Claudia’s] interests in all such assets as a trustee in trust.” It further stated that subject to his fiduciary obligations, Thomas “shall have the unilateral right to manage and control” the partnership entities, including “the sole right to make all day-to-day and all other management decisions,” and “the unilateral and sole right to make all decisions relating to any sale or financing” regarding the partnership entities.
The 2003 judgment contained an entire section devoted to the buy-sell agreement. Section 19 of the 2003 judgment was titled “Rights Concerning Cross-Purchase Agreement.” It stated in part that the “parties acknowledge the existence of a Cross-Purchase Agreement”—the buy-sell agreement4— “between [Thomas] and his partner, Jeffrey A. Kaplan,” which “provides that upon [Thomas’s] death, [Thomas’s and Claudia’s] interest in many of the [partnership entities] must be sold to Kaplan. Similarly, upon Kaplan’s death, Kaplan’s interest in certain divided assets must be sold to [Thomas].”
Section 19.1 contained provisions entitling Claudia to pay for one-half of the insurance premium for the $5 million insurance policy maintained on Kaplan’s life. So long as Claudia paid that premium, Claudia would have “the right to purchase one-half of Kaplan’s interest” in the partnership entities “at the time of Kaplan’s death.” Sections 19.3 and 19.4 discussed how life insurance would be used in the event the terms of the agreement were
4 Although TFI argued below that the 2003 judgment did not clearly reference the 1998 buy-sell agreement, on appeal it does not dispute this. Moreover, Thomas testified at trial that the “cross-purchase agreement” was the 1998 buy-sell agreement.
6
triggered (e.g., what would happen if the life insurance amount was insufficient to pay for the fair market value of the interests upon Kaplan’s death). In section 19.6, the parties noted that “[Claudia] desires to pay her share of the current premium for the $5 million life insurance policy on Mr. Kaplan’s life.”
Section 22.7 of the 2003 judgment stated that it was “intended to be a full, complete and final adjustment of all property rights of the parties hereto,” and that it “was made and entered into by [the parties’] own volition and with full knowledge of its legal effect.” Section 28 stated that the judgment was binding on “the parties and their heirs, personal representatives, assigns, and any other successors in interest.”
At trial, Thomas testified that between the 1996 dissolution and the 2003 judgment, he acted on behalf of the community with respect to the partnerships. He testified that the 2003 judgment divided partnership entities that had been acquired after the 1996 dissolution. However, Thomas also testified that he did not “intend to bind” Claudia to the terms of the 1998 buy-sell agreement when he signed it.
In 2005, Claudia transferred her interests in the partnership entities to a trust. Claudia died in 2011, and her interests in the partnership entities were divided into six sub-trusts for the Tatums’ three children. TFI was formed thereafter, and each of the sub-trusts transferred its interests to TFI. Michael Tatum, Thomas and Claudia’s son and the manager of TFI, testified that TFI is “an entity that takes distributions from the [partnership’s] mobile home parks and distributes them to the six trusts” for the children.
7
C. This Proceeding In February 2020, TFI filed a complaint against Jeffrey for declaratory relief.5 TFI alleged there was a controversy as to whether TFI was bound by the 1998 buy-sell agreement. TFI argued that Claudia was not a party to the 1998 buy-sell agreement, so neither she nor her heirs should be bound by it. TFI sought “a judicial declaration that (a) it is not bound by the terms of the June 1998 Buy/Sell Agreement; (b) should [Thomas] pass before [Jeffrey], TFI shall have no obligation to sell, and [the Kaplans] shall have no right to buy, all or any of TFI’s interest in the Partnership Entities; and (c) should [Jeffrey] pass before [Thomas], TFI shall have no obligation to buy all or any of [the Kaplans’] interest in the Partnership Entities.”
The parties presented their respective positions at a bench trial in October and November 2023 (which included the testimony noted above). In briefing before and after trial, TFI argued that the “obligation” Thomas created by entering into the 1998 buy-sell agreement after the 1996 dissolution constituted Thomas’s separate “debt” that did not impact Claudia or the community. TFI relied on Family Code section 902, which defines “debt” as “an obligation incurred by a married person before or during marriage, whether based on contract, tort, or otherwise,” and section 916, subdivision (a)(2), which states that the “separate property owned by a married person at the time of the division and the property received by the person in the division is not liable for a debt incurred by the person’s spouse before or during marriage.” TFI further argued that the 2003 judgment did not cause Claudia to assume Thomas’s obligations under the 1998 buy-sell agreement.
5 The proceedings below included additional parties and allegations not relevant to this appeal.
8
Jeffrey argued in his briefing that the 2003 judgment “establishes unequivocally that Claudia was aware of the terms of the 1998 Buy/Sell Agreement and that she assumed the obligations thereunder.” He further asserted that because all partnership interests were bound by the buy-sell agreements, the half awarded to Claudia in the 2003 judgment were necessarily bound by the buy-sell agreements.
In a written statement of decision, the trial court held that TFI was bound by the 1998 buy-sell agreement. The court acknowledged that Claudia was not a party to the 1998 buy-sell agreement. However, the court held that Thomas had the authority to act on behalf of the community under Family Code section 1100, subdivision (d), which provides that “a spouse who is operating or managing a business or an interest in a business that is all or substantially all community personal property” may “act alone in all transactions.”
The court discussed the parties’ disagreement as to whether the 1998 buy-sell agreement had been “sufficiently incorporated” into the 2003 judgment, which referenced a “cross-purchase agreement.” The court rejected TFI’s contention that the 2003 judgment “does not sufficiently identify the 1998 [buy-sell] Agreement to incorporate it by reference.” The court held that “[t]here is no alternative reading” of the 2003 judgment that would give effect to section 19, and no extrinsic evidence suggested that the partnership was subject to “any other cross-purchase agreement” in 2003.
The court concluded, “In light of the foregoing, the Court finds that [Thomas] had the authority to enter into the 1998 [buy-sell] Agreement, and that the acknowledgement of a ‘Cross-Purchase Agreement’ in the [2003 judgment] refers to the 1998 [buy-sell] Agreement. Accordingly, whatever portion of the partnership interests [Thomas] conveyed to Claudia … via the
9
[2003 judgment] were necessarily subject to the provisions of the” 1998 buy- sell agreement. The court further held that TFI was bound by the same terms, because “if there were conditions attached to those rights when Claudia … acquired them, the conditions did not cease with her passing.”
The court entered judgment in favor of Jeffrey. TFI timely appealed.
DISCUSSION
TFI contends the trial court erred in finding that TFI is bound by the 1998 buy-sell agreement. TFI acknowledges that as Claudia’s legal successor, its rights are limited to Claudia’s rights. TFI argues that because the 1998 buy-sell agreement post-dated the 1996 dissolution, the agreement represents Thomas’s separate “debt” under the Family Code, which did not bind Claudia. Jeffrey responds that TFI’s contention is essentially an untimely challenge to the 2003 judgment, which explicitly acknowledged that all partnership interests were bound by the 1998 buy-sell agreement.
Interpretation of the 2003 stipulated judgment is central to this appeal.
“We construe a marital settlement agreement that is incorporated into a stipulated judgment under the general rules governing the interpretation of contracts.” (In re Marriage of Schu (2014) 231 Cal.App.4th 394, 399.) “The basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting.” (In re Marriage of McConnell & Jahnke (2026) 120 Cal.App.5th 1274, 1279.) “If a contract’s ‘language is clear and explicit, and does not involve an absurdity,’ the unambiguous meaning governs.” (Id. at p. 1280.) “Where no extrinsic evidence is introduced, or the extrinsic evidence is not in conflict, we independently construe the agreement. [Citation.] Where competent extrinsic evidence is in conflict, we uphold any reasonable construction by the lower court.” (In re Marriage of Schu, supra, 231 Cal.App.4th at p. 399.) To the extent we consider the
10
application of law to undisputed facts, our review is de novo. (Reich v. Reich (2024) 105 Cal.App.5th 1282, 1288.)
Here, section 19 of the 2003 stipulated judgment explicitly acknowledges that the partnership entities are subject to the buy-sell agreement. It describes the terms of the buy-sell agreement, at length. It contains specific and clear instructions about how the buy-sell agreement applies to Claudia’s interests upon the death of Jeffrey Kaplan. It describes Claudia’s intent to pay for life insurance to obtain benefits for her share of the partnership interests under the buy-sell agreement upon the death of Jeffrey Kaplan. The only reasonable conclusion we can draw is that Thomas and Claudia understood and agreed in 2003 that Claudia’s half of the partnership interests would be subject to the 1998 buy-sell agreement. Nothing in the 2003 judgment suggests otherwise.
TFI argues that although the 2003 judgment “arguably called the Buy/Sell Agreement to Claudia’s attention, there is no evidence that she consented to its terms.” It asserts that the 2003 judgment is “far too vague” to put Claudia on notice that “all of her interests” in the partnership entities would be subject to the 1998 buy-sell agreement.
We disagree. There is no ambiguity in the 2003 stipulated judgment.
Again, the parties’ stipulated judgment provides that Thomas and Claudia “acknowledge the existence” of the “cross-purchase agreement.” It describes the terms of that agreement. And, perhaps most critically of all, it describes the precise steps Claudia must take to gain the benefit of the buy-sell agreement upon the death of Jeffrey Kaplan. The only reasonable conclusion is that Claudia understood that her partnership interests were subject to the buy-sell agreement. An “unambiguous meaning governs.” (In re Marriage of McConnell & Jahnke, supra, 120 Cal.App.5th at p. 1280.)
11
TFI points to no extrinsic evidence that might create an ambiguity as to these facially unambiguous terms. And, to the extent any extrinsic evidence of ambiguity existed, we would have to resolve the ambiguity in favor of Claudia’s agreement to be bound by the terms of the buy-sell agreement, given that the trial court (after a trial on the merits) so interpreted the 2003 stipulated judgment. Moreover, TFI’s argument that Claudia did not “consent[]” to have the buy-sell agreement apply to her partnership interests is belied by the record, since Claudia’s “consent” is evident in her stipulation to the 2003 judgment.
TFI also argues that the trial court erred by relying on the 2003 judgment, because in doing so it “failed to appreciate the extent to which Claudia’s interests in the partnerships are governed by community property law.” TFI contends the 1998 buy-sell agreement bound only Thomas—not Claudia—because it post-dated their 1996 dissolution. TFI characterizes the 1998 buy-sell agreement as individual “debt” that Thomas incurred. It relies on Family Code section 902, which defines “debt” as an “obligation incurred by a married person before or during marriage, whether based on contract, tort, or otherwise,” and section 903, subdivision (a), which states that a debt is incurred at the time a contract is made. TFI argues that based on these statutes, the 1998 buy-sell agreement was Thomas’s debt alone. It argues Claudia “did not ratify [Thomas’s] debt.”
We are not convinced that the 1998 buy-sell agreement—an update to an existing business agreement that had governed the community asset since 1983—constitutes Thomas’s individual “debt” under the Family Code.6
6 The Family Code anticipates that a community business might be managed by a single spouse before final distribution. Family Code section 2102, subdivision (a)(3), for example, states that from “the date of separation to the date of the distribution of the community … asset or liability,” a spouse
12
However, we need not resolve this issue. Even assuming for the sake of argument that the 1998 buy-sell agreement could be characterized in the manner TFI contends, the 2003 judgment is clear. The parties, including Claudia, (a) understood the buy-sell agreement and (b) intended that the terms of the buy-sell agreement would apply to Claudia and her successors.
Parties to a marital dissolution, of course, are generally free to agree to divide their community assets as they see fit. “Marital property settlement agreements are favored under California law.” (Safarian v. Govgassian (2020) 47 Cal.App.5th 1053, 1063; see also Mejia v. Reed (2003) 31 Cal.4th 657, 669 [“the law respects the finality of a [marital] property settlement agreement”].) Indeed, “‘parties in a marital dissolution action can agree on a lopsided division of community property,’” and if “‘such an agreement is entered into, the court must accept the parties’ written agreement … regarding the disposition of their property.’” (In re Marriage of Woolsey (2013) 220 Cal.App.4th 881, 897.) Even assuming (although we are skeptical) that TFI is correct that the 1998 buy-sell agreement constituted Thomas’s “debt” under Family Code section 902, TFI offers no authority suggesting that Claudia could not agree in 2003 to have her partnership interests governed by that same buy-sell agreement. Claudia unambiguously did so. We are aware of nothing in law that made her agreement invalid.
The parties assert additional arguments for their respective positions, but we need not address them. As noted above, “[t]he basic goal of contract
owes a fiduciary duty in “[t]he operation or management of a business or an interest in a business in which the community may have an interest.” Notably, this duty extends to the time of distribution—not dissolution. (See, e.g., Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1151 [“The fiduciary relationship … continue[s] postseparation until the marital property is divided”].)
13
interpretation is to give effect to the parties’ mutual intent at the time of contracting.” (In re Marriage of McConnell & Jahnke, supra, 120 Cal.App.5th at p. 1279.) The plain language of the 2003 judgment is sufficient to answer the declaratory relief question TFI presented in this case: Is TFI bound by the terms of the 1998 buy-sell agreement as Claudia’s successor-in-interest? The answer is yes.
DISPOSITION
The judgment is affirmed. Jeffrey Kaplan is entitled to recover his costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
DAUM, J.
We concur:
MORI, Acting P. J.
TAMZARIAN, J.