IN RE: MARRIAGE OF Mary Lou HOPKINS AND Harry W. AXENE.

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Court of Appeal, Fourth District, Division 3, California.

 IN RE: MARRIAGE OF Mary Lou HOPKINS AND Harry W. AXENE. Mary Lou HOPKINS, Respondent, v. Harry W. AXENE, Appellant.

No. G004031.

Decided: November 17, 1987

 Leon E. Campbell, La Jolla, for appellant. Marjorie G. Fuller, Santa Ana, for respondent.

OPINION

Does Civil Code section 4800.2 govern in a dissolution proceeding filed before the statute's enactment?   On constitutional grounds, we hold it does not.

The facts in this case are undisputed.   In 1982, while married, Mary Lou Hopkins (Wife) and Harry Axene (Husband) purchased a Palm Desert  condominium.   Although the entire $198,000 purchase price was paid by Husband from his separate property, title was taken in both parties' names, as community property.

The parties separated in June 1983 and Wife petitioned for dissolution of marriage in June 1984.   The marriage was dissolved in December 1984 and trial on reserved issues was held in January 1986.   At trial, Husband requested reimbursement for his separate property contribution to the condominium.   He based his claim on Civil Code section 4800.2,1 which permits reimbursement of separate property contributions to community assets, absent a written waiver of reimbursement.   Although section 4800.2 was in effect when the dissolution petition was filed, the court refused to apply it because the acquisition preceded the effective date of the statute.   At the time of purchase the contrary rule of In re Marriage of Lucas (1980) 27 Cal.3d 808, 166 Cal.Rptr. 853, 614 P.2d 285 controlled.   Husband appeals.

In July 1983, the Legislature added sections 4800.1 and 4800.2, abolishing the long-standing rule that separate property contributions to community assets were presumed gifts to the community in the absence of a contrary agreement.  (See Stats.1983, ch. 342, §§ 1–4, pp. 1538–1539;  for former rule, see In re Marriage of Lucas, supra, 27 Cal.3d 808, 166 Cal.Rptr. 853, 614 P.2d 285.)  “As the law stood [before 1983], an agreement was necessary to preserve a separate property interest in funds contributed to the acquisition of a community asset․  Under the new law, no agreement is needed:  the tables are turned so that the separate property interest is now preserved unless the right to reimbursement is waived in writing.”  (In re Marriage of Fabian (1986) 41 Cal.3d 440, 450, 224 Cal.Rptr. 333, 715 P.2d 253.)

Section 4800.2 provides:  “In the division of community property under this part unless a party has made a written waiver of the right to reimbursement or signed a writing that has the effect of a waiver, the party shall be reimbursed for his or her contributions to the acquisition of the property to the extent the party traces the contributions to a separate property source․”  Sections 4800.1 and 4800.2 were applicable to all proceedings commenced on or after January 1, 1984.  (Stats.1983, ch. 342, § 4, p. 1539.)

In In re Marriage of Buol (1985) 39 Cal.3d 751, 218 Cal.Rptr. 31, 705 P.2d 354 our Supreme Court held unconstitutional the retroactive application of section 4800.1, which required, upon dissolution, written proof that property taken in joint tenancy during marriage was actually the separate property of one spouse.   Applying that section to property acquired before  the effective date of the statute impaired a vested property right without due process of law.

Shortly thereafter the Supreme Court reached a similar result with respect to section 4800.2.   In In re Marriage of Fabian, supra, 41 Cal.3d 440, 224 Cal.Rptr. 333, 715 P.2d 253 husband contributed separate property to a community property purchase.   The trial court found no agreement between the parties that husband should be reimbursed upon dissolution and therefore applied the Lucas presumption that husband intended a gift to the community.   While husband's appeal was pending, section 4800.2 was enacted.   Although the court found retroactive application of section 4800.2 would decrease wife's interest in the property, a right which vested upon acquisition, it also acknowledged that “[i]mpairment of a vested property interest, alone, does not invalidate retroactive application of a statutory measure.”  (Id., at p. 448, 224 Cal.Rptr. 333, 715 P.2d 253.)   Other considerations may justify such impairment:  “ ‘ “[T]he significance of the state interest served by the law, the importance of the retroactive application of the law to the effectuation of that interest, the extent of reliance upon the former law, the legitimacy of that reliance, the extent of actions taken on the basis of that reliance, and the extent to which the retroactive application of the new law would disrupt those actions.” ’  [Citation.]”  (Id., at p. 448, 224 Cal.Rptr. 333, 715 P.2d 253.)

With those factors in mind, the Fabian court concluded retroactive application of section 4800.2 was not “ ‘necessary to subserve a sufficiently important state interest,’ ” and therefore could not be constitutionally permitted.  (Ibid.)  “In Buol, we surveyed the legislative history of Assembly Bill No. 26 which contained both sections 4800.1 and 4800.2, and concluded that the significant state interest that compelled retroactivity ․ that of promoting ‘ “equitable dissolution of the marital relationship” ’ by curing a ‘ “rank injustice” ’ in the law, was lacking.”  (Ibid.)  The court found the state interest in compelling the retroactivity of section 4800.2 similarly lacking.

Also considered by the Fabian Court was the disruptive effect of applying the statute retroactively:  “It is difficult to imagine greater disruption than retroactive application of an about-face in the law, which directly alters substantial property rights, to parties who are completely incapable of complying with the dictates of the new law․  In a case such as this one ․ it is improbable that [the writing now required by section 4800.2] would have been executed prior to the dissolution action or that it could be obtained afterwards.   From the time the separate property funds were used to purchase an asset in the name of the community until after entry of the final judgment dissolving the marriage, no writing was required to preserve the community's interest in that asset.   The separate property contribution automatically became a gift to the marital community unless the parties  specifically agreed otherwise.   The spouse who contributed separate property to the community had no right to reimbursement and, logically, there was no requirement that any waiver of such a right be written.   By the time the Legislature created the new right to separate property reimbursement which could be waived only by a writing, the parties' marriage had been terminated by a final judgment of dissolution.   The spouse who asserted a separate property right adverse to the community could hardly be expected to then execute a writing waiving his right to the property he claimed.”  (Id., at p. 450, 224 Cal.Rptr. 333, 715 P.2d 253.)

The Fabian court expressly limited its holding to cases pending on January 1, 1984 (id., at p. 451, fn. 12, 224 Cal.Rptr. 333, 715 P.2d 253), leaving undecided the question of whether section 4800.2 is constitutional as applied to dissolution actions filed after the effective date of the statute, but involving property acquired before that time.   The Legislature expressed its views on that issue shortly after Fabian was decided.   In April 1986, urgency legislation was enacted providing that sections 4800.1 and 4800.2 now apply “to proceedings commenced on or after January 1, 1984, regardless of the date of acquisition of property subject to the proceedings or the date of any agreement affecting the property.”  (Stats.1986, ch. 49, § 1, p. 31;  see also In re Marriage of Griffis (1986) 187 Cal.App.3d 156, 164, 231 Cal.Rptr. 510.)

In re Marriage of Griffis, supra, 187 Cal.App.3d 156, 231 Cal.Rptr. 510 considered the application of the urgency legislation in light of the Supreme Court's holdings in Buol and Fabian.   Quoting “one of California's foremost family law commentators,” the court noted:  “ ‘Fabian leaves it unclear where in the procedural time line the retroactive application of [Civil Code section] 4800.2 becomes unconstitutional․  [¶] Applying the reasoning of Buol and Fabian to proceedings not yet pending on January 1, 1984, is no simple task, but the better view seems to be to utilize the date the property is  acquired during the marriage.   This is the date when, in the case of [Civil Code section] 4800.1, it becomes too late for the separatizer to get a writing rebutting the community-property presumption, and, in the case of [Civil Code section] 4800.2, it becomes too late for the community to get a written waiver of the automatic right to reimbursement.’  (Adams and Sevitch, Cal.Family Law Practice (1986) § D.11.5.3, subd. a., pp. D–12–D–13.)”  (In re Marriage of Griffis, supra, 187 Cal.App.3d 156, 165, 231 Cal.Rptr. 510.)

Bound by the Supreme Court's determination in Buol and Fabian that the legislative purpose underlying sections 4800.1 and 4800.2 was not sufficiently compelling to justify the impairment of a vested property right, the Griffis court held applying section 4800.2 to any property acquired before the effective date of the statute is unconstitutional, regardless of when the dissolution action was filed.  “[A]ll of the property under dispute was acquired at a time when the Lucas rule was still in effect.  ‘The status of property as community or separate is normally determined at the time of its acquisition.’  [Citations.]  Since there was no agreement to the contrary, that property became community property as soon as it was acquired pursuant to the Lucas presumption․  [¶] If a property right vests before the enactment of a statute, such a right may not be altered except in those rare instances when it is necessary to promote a significantly important state interest.”   (Ibid.)

We agree with the Griffis court's application of Fabian to property acquired before January 1, 1984.   Here, as in Griffis, Wife acquired a community property interest at a time when the only method of defeating or diminishing that right was by proof of an agreement to the contrary.   By the time section 4800.2 was enacted, Husband and Wife were already separated.   Wife, therefore, had little, if any, opportunity to obtain a written waiver of Husband's right to reimbursement for his separate property contribution.

The judgment is affirmed.   Wife is entitled to costs on appeal.

FOOTNOTES

1.   All statutory references are to the Civil Code unless otherwise specified.

WALLIN, Acting Presiding Justice.

CROSBY and TAYLOR (GARY) *, JJ., concur.

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