California Family Law Report

Case of the Month Archive

Cars are not articles of a personal nature under Fam C §852(c) . . .

In reversal, Fourth District holds that trial court erred by characterizing Porsche bought during marriage with wife’s separate property funds (but treated by husband as gift to him) as husband’s separate property

Tatia Buie married Walter Neighbors in 1999. Sometime thereafter, Walter paid $60,000 for a 2001 Porsche 996, using funds from Tatia’s separate property checking account. He considered the Porsche to be a gift from her, apparently because he bought it right before his birthday.

The couple later divorced. After a trial on the reserved issues, the trial court found that the Porsche had been transmuted to Walter’s separate property under Fam C §852(c), which provides that a written transmutation is not necessary for gifts of “ ‘tangible articles of a personal nature’ that are ‘not substantial in value’ ” relative to the marital circumstances.

Tatia appealed and the Fourth District reversed and remanded.

Can’t wear a Porsche . . .
Tatia contended that the trial court erred by finding that the Porsche had been transmuted to Walter’s separate property. The justices reasoned that, per Fam C §760, the car was presumed to be community property because it was purchased during marriage. Therefore, they continued, it should be characterized as community property unless Fam C §852(c) applied. The specific language of that statute, the panel found, creates an exception to Fam C §852(a) [transmutation of real or personal property must be in writing] for gifts between spouses “ ‘of clothing, wearing apparel, jewelry, or other tangible article of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage.’ ” Here, everyone agreed that Tatia had not made a written transmutation; the key question, the panel said, was whether the Porsche was the kind of personal property that could be transmuted without one.

In the olden days . . .
The justices noted that the lower court based its ruling on a finding that the car’s value was not substantial in relation to the parties’ circumstances during their marriage; it hadn’t determined whether the Porsche qualified as a “ ‘tangible article of a personal nature.’ ” In their view, however, that part of §852(c) was ambiguous. Accordingly, the panel looked for guidance from the statutory history, focusing specifically on the California Law Commission’s comment to a proposed predecessor statute, former CC §5110.640(b) [gift presumptions]. There, the panel found, the commission stated that in general, gifts between spouses were presumed to be either community or separate property, depending on what the gift was, but that the gift of an automobile would not create a presumption that it was the recipient’s separate property because “ ‘an automobile is not an article of a personal nature within the meaning of the statute.’ ” (emphasis added in opinion). This legislative history was enough to convince these justices that the Porsche should not be characterized as a tangible article of a personal nature under §852(c). And, given that Tatia had not executed a written transmutation of the car, the trial court erred when it concluded that the Porsche had been transmuted to Walter’s separate property.

Tatia gets her money back . . .
Tatia also argued that if the Porsche was found to be community property, she was entitled to reimbursement under Fam C §2640(b) [authorizes reimbursement of spouse’s separate property contribution to acquisition of community property absent written waiver]. The justices agreed. They pointed out that Walter bought the Porsche with funds that were unquestionably Tatia’s separate property and that she hadn’t executed a written waiver of reimbursement. Therefore, the panel concluded, Tatia was entitled to reimbursement of her separate property contribution to the acquisition of the Porsche under §2640(b).