In re Marriage of Grinius - 166 Cal. App. 3d 1179, 212 Cal. Rptr. 803 (1985)

Rule:

Loan proceeds acquired during marriage are presumptively community property; however, this presumption may be overcome by showing the lender intended to rely solely upon a spouse's separate property and did in fact do so. Without satisfactory evidence of the lender's intent, the general presumption prevails.

Facts:

Victor Grinius and Joyce Grinius signed an antenuptial agreement distinguishing the separate property of the parties. After the marriage, they opened a restaurant. Later, the parties separated. Before trial, Victor stipulated that the restaurant business was community property and the business was sold. The trial court found all of the contested assets, except the restaurant real property, to be community property. The restaurant property was determined to be Victor’s separate property. Joyce sought review of the judgment of dissolution contending that there was insubstantial evidence to rebut the presumption that property acquired during marriage had a community nature. Victor relied on the antenuptial agreement to support his separate property claim.

Issue:

Did the trial court err in determining that the restaurant was Victor’s separate property?

Answer:

Yes.

Conclusion:

The Court of Appeal held that the restaurant was community property. The Court determined that the antenuptial agreement could not support Victor’s claims because it lapsed six years after the date of marriage and reinvested the spouses with all communal rights retroactive to the date of marriage. The Court effected the property division, with directions to determine whether Victor should be reimbursed for separate property contributions and affirmed the trial court's denial of Joyce’s request for attorney's fees. The court held that the SBA loan was extended on both the ability of the community to repay the note and to manage the restaurant, and, in absence of any evidence to the contrary, was a community asset. The failure of Victor to present evidence to rebut the community presumption on the second purchase money loan also required a finding that the loan was an asset of the community. The court held that Victor’s taking of the title in his name, believing he was entitled to do so under the antenuptial agreement, did not affect the presumption of community property, since his authority expired under the terms of the agreement before the dissolution action and retroactively reinstated the community presumption. Civ. Code, § 4800.2, relating to reimbursement of a party for separate property contributions to the acquisition of community property, applied to the action and required reversal as to the entire property division to reflect a just resolution through the taking of additional evidence upon remand. The trial court did not abuse its discretion in denying Joyce attorney fees, in light of evidence that Joyce and her attorney received $ 5,000 from the community proceeds of the restaurant's sale, that Joyce was working at this time as a part-time clerk, and was receiving $ 695 a month in rent from a community residence which she was later awarded.