Alys Ann ESPY, Plaintiff and Respondent, v. Glenn Douglas ESPY et al., Defendants and Appellants.
Today we decide a former wife, after a lapse of 12 years, cannot by an action for partition obtain a division of the husband's vested pension benefits which had been omitted from a final unmodifiable property settlement agreement. Glenn Douglas Espy (Glenn or appellant) appeals from a judgment awarding his former wife Alys Ann Espy (Alys or respondent) an interest in his IBM retirement benefits. We reverse that judgment.
The parties were married in 1958 and separated in 1969. Throughout the marriage Glenn was employed by IBM. During the dissolution proceedings Alys was represented by counsel, but Glenn represented himself. On January 6, 1969, Alys' attorney drafted a letter agreement setting forth the parties' proposed property settlement, which was duly executed by the parties; Glenn's pension was not vested at that time and the agreement made no mention of it. However, in August 1969 at Alys' request the parties executed a new agreement, because Alys had changed her mind and wanted to receive the family home instead of the stock. In the meantime, in May 1969 IBM had changed the provisions of its retirement plan, so that at the time of this August agreement Glenn's pension had, in fact, vested. The August agreement, just as the January one, however, made no mention of Glenn's pension.1
An interlocutory decree of dissolution incorporating the parties' property settlement agreement was entered on December 30, 1969.
In 1981 Alys retained her present attorney to represent her in connection with a child support problem. He suggested that she might have an interest in Glenn's retirement plan because it was not mentioned in the dissolution documents. On November 20, 1981, approximately 12 years after the parties' dissolution, Alys filed the present action for partition and declaratory relief.
The trial court determined that Glenn's pension was an omitted community asset subject to partition, and that Alys has a one-half interest as a tenant in common with Glenn in the community share of the pension, which interest she can at her election receive either when Glenn is first eligible to retire or when he actually does retire. The court also awarded Alys an interest in any death benefit payable by the plan.
Glenn contends that this suit is barred by the limited retroactivity of In re Marriage of Brown (1976) 15 Cal.3d 838, 126 Cal.Rptr. 633, 544 P.2d 561 or, in the alternative, by laches. He argues additionally that Alys' recovery, if any, should be limited to the cash buy-out value of her interest in the pension at the time of the parties' dissolution, plus interest, but that if she is entitled to a share of the matured pension, the trial court erred in failing to provide for different means of calculating her share, depending on whether she elects to receive payment when the pension first matures or when Glenn actually retires. Finally, Glenn asserts that the court erred in awarding Alys any interest in the pension plan's death benefits.
I. The Rights of the Parties are Controlled by the Terms of Their Agreement
It is well settled that the division of the community property is trusted primarily to the parties and that the courts assume this task only if the spouses failed to make the necessary arrangement between themselves. Civil Code 2 section 4800 provides in relevant part that “(a) Except upon the written agreement of the parties, or an oral stipulation of the parties in open court, the court shall, either in its judgment of dissolution of the marriage, in its judgment decreeing the legal separation of the parties, or at a later time if it expressly reserves jurisdiction to make such a property division, divide the community property and the quasi-community property of the parties equally.” (Emphasis added.) 3
In interpreting the above cited code sections (or former sections of the Civil Code regulating the same subject), the case law underlines that private settlements dividing marital property are favored as a matter of public policy (In re Marriage of Moore (1980) 113 Cal.App.3d 22, 27, 169 Cal.Rptr. 619); and that in the absence of fraud or mistake the intention of parties expressed in the property settlement agreement is controlling (Esserman v. Esserman (1982) 136 Cal.App.3d 572, 578, 186 Cal.Rptr. 329; Henley v. Henley (1960) 183 Cal.App.2d 519, 522, 6 Cal.Rptr. 733). As stated in Adams v. Adams (1947) 29 Cal.2d 621, 624, 177 P.2d 265: “Property settlement agreements occupy a favored position in the law of this state and are sanctioned by the Civil Code. [Citations.] Such agreements are usually made with the advice of counsel after careful negotiations, and the courts, in accord with legislative sanction, prefer agreement rather than litigation. [Citation.] When the parties have finally agreed upon the division of their property, the courts are loath to disturb their agreement except for equitable considerations. A property settlement agreement, therefore, that is not tainted by fraud or compulsion or is not in violation of the confidential relationship of the parties is valid and binding on the court.” (Accord In re Marriage of Vomacka (1984) 36 Cal.3d 459, 464, 204 Cal.Rptr. 568, 683 P.2d 248; In re Marriage of Moore, supra, 113 Cal.App.3d at p. 27, 169 Cal.Rptr. 619.)
This follows from the sanctity and constitutional protection of contracts. The United States Constitution, article I, section 10, provides that no state shall pass any law impairing the obligation of contracts. The California Constitution likewise provides that no law impairing the obligation of contracts may be passed. (art. I, § 9.) The cases construing the contract clauses explain that the prohibition against impairment of contractual obligations is almost absolute and that unless there are overriding considerations of public policy, the courts cannot lawfully disregard the provisions of valid contracts or deny to either party his or her rights thereunder. (Bradley v. Superior Court (1957) 48 Cal.2d 509, 519, 310 P.2d 634; Bodle v. Bodle (1978) 76 Cal.App.3d 758, 767, 143 Cal.Rptr. 115; Rabwin v. Chotiner (1967) 249 Cal.App.2d 675, 680, 57 Cal.Rptr. 721; see also Allied Structural Street Co. v. Spannaus (1978) 438 U.S. 234, 240, 98 S.Ct. 2716, 2720, 57 L.Ed.2d 727; In re Marriage of Potter (1986) 179 Cal.App.3d 73, 82, 224 Cal.Rptr. 312.)
In the case at bench respondent and appellant entered into a valid and enforceable contract whereby they intended to, and did in fact, reach a final and complete settlement of their property rights. The settlement agreement (which was drafted by respondent's attorney and survived its incorporation in the interlocutory decree, see discussion, infra ) provided in clear and unambiguous terms that it was to include all the respective property rights of the parties; that the husband and wife accepted their share under the agreement in full satisfaction and in lieu of their rights in the marital property regardless of their community or separate nature; and that in consideration of the shares received the parties released each other forever from all liabilities in law or equity arising out of their marital relationship.4
These contractual provisions make it clear that the parties to the agreement disposed of all their property rights (known or unknown) and that as a consequence no property rights have remained unadjudicated. It is, of course, elementary that where, as here, the language of the contract is clear and explicit, the trial court must give effect to the mutual intention of the parties expressed in their agreement and may not undertake to rewrite the contract under the guise of judicial interpretation. It follows that the purported modification of the property settlement agreement on the basis of unadjudicated vested pension rights amounts to an unveiled disregard of the parties' contractual intent and clearly violates the constitutional prohibition against impairment of contracts.
Respondent's contention that the property settlement agreement at bench was assailable because it was the result of mutual mistake of the parties or fraud on the part of the husband, may be briefly answered. While it is conceded that a contract may be set aside for extrinsic or intrinsic fraud, coercion, mutual mistake and the like, respondent here did not seek such contractual remedies. Rather, she brought an action for partition some 12 years later in which she intended to keep all the benefits under the agreement and to repudiate only the disadvantageous portions thereof. This she cannot do. It is well settled that where, as here, the marital settlement agreement is entire or “integrated,” the court must approve or disapprove the entire agreement and cannot embark on a partial modification. (In re Marriage of Nicolaides (1974) 39 Cal.App.3d 192, 198, 114 Cal.Rptr. 56; Wright v. Wright (1957) 148 Cal.App.2d 257, 270, 306 P.2d 536.)
II. The Agreement Relative to Division of Marital Property is not Modifiable Despite its Incorporation in the Interlocutory Decree
Even though the 1969 property settlement agreement was incorporated in the interlocutory decree of dissolution of marriage, such incorporation did not render the division of community property modifiable.
The cases and legal authorities unanimously hold that while the support provisions of a property settlement incorporated in the decree are modifiable under certain circumstances (§ 4811, subd. (b); In re Marriage of Vomacka, supra, 36 Cal.3d 459, 204 Cal.Rptr. 568, 683 P.2d 248), the provisions dividing the marital property are not without the consent of the parties.
Thus, in Leupe v. Leupe (1942) 21 Cal.2d 145, 130 P.2d 697, the leading case, the interlocutory decree awarded certain personal property to the husband and support payments to the wife which was secured by lien upon the husband's property. Later on the husband moved to terminate the lien upon his property which was granted by the trial court. The wife contended on appeal that the court was not authorized to terminate the lien or change other portions of the interlocutory decree relating to property after it had become final and the time for appeal or for relief under Code of Civil Procedure section 473 had expired. The appellate court agreed by holding that “the trial court is without jurisdiction to modify an unqualified disposition of property rights made in an interlocutory decree of divorce except in accordance with the methods applicable to judgments generally.” (Id., at p. 148, 130 P.2d 697.) Leupe was followed by numerous cases all repeating that where the settlement agreement was approved by the court in the interlocutory decree of divorce and each of the parties ordered to abide by all the provisions thereof, the unqualified disposition of the property rights thereby effected constitute conclusive adjudication and res judicata with reference to the division of marital property. (Adams v. Adams, supra, 29 Cal.2d 621, 624, 177 P.2d 265; Puckett v. Puckett (1943) 21 Cal.2d 833, 840, 136 P.2d 1; In re Marriage of Potter, supra, 179 Cal.App.3d 73, 79, 224 Cal.Rptr. 312; Bodle v. Bodle, supra, 76 Cal.App.3d 758, 767, 143 Cal.Rptr. 115; Darter v. Magnussen (1959) 172 Cal.App.2d 714, 717, 342 P.2d 528; Robinson v. Robinson (1949) 94 Cal.App.2d 802, 805–806, 211 P.2d 587.)
The very same issue has been recently addressed and decided in Esserman v. Esserman, supra, 136 Cal.App.3d 572, 186 Cal.Rptr. 329. In Esserman, the parties entered into a property settlement agreement in 1959. The agreement included, inter alia, child and spousal support, division of marital property and the disposition of the husband's estate upon his death. The property settlement agreement was incorporated in the interlocutory decree of divorce in December 1959. In 1979 the husband brought an action to modify the property agreement to delete the requirement that he leave 75 percent of his estate to his children. The trial court denied the request. Relying on an unbroken line of cases, the appellate court upheld the trial court's ruling by pointing out that the court may not alter the terms of private settlements dividing property even when they are incorporated into an interlocutory decree. (Id. at p. 578, 186 Cal.Rptr. 329.) The same premise was reiterated in In re Marriage of Brown, supra, 15 Cal.3d 838, 851, 126 Cal.Rptr. 633, 544 P.2d 561 where our Supreme Court emphasized that an interlocutory decree which renders a present division of property becomes a final and conclusive adjudication of the parties' property rights if not challenged on appeal; the premise is summarized in the recent edition of California Jurisprudence as follows: “[W]here a property settlement agreement has been made and incorporated in the judgment, a court has no power to change provisions that relate to the division of property, especially where the agreement as a whole recites the desire of the parties to effect a complete settlement of their property rights. The court's lack of power to modify provisions of the latter category is predicated on the desirability of finality in the settlement of property rights.” (33 Cal.Jur.3d, Family Law, § 526, p. 102, fns. omitted, emphasis added.) The case at bench falls squarely within these principles and renders the attempted modification of the interlocutory decree improper.
Furthermore, the property settlement contract herein explicitly provided that it would survive its merger or incorporation in the divorce decree 5 and that it would be modifiable only upon the written consent of the parties.6 Since appellant did not consent to the modification, the decree was nonmodifiable on this additional ground as well.
The cases relied upon by respondent are clearly distinguishable from the facts of the present situation. In Giovannoni v. Giovannoni (1981) 122 Cal.App.3d 666, 176 Cal.Rptr. 154, the division of marital property was effected by a judicial decree based upon the stipulation of the parties, not upon a separate property settlement agreement. The situation was similar in Miller v. Miller (1981) 117 Cal.App.3d 366, 172 Cal.Rptr. 745, which was also decided in the absence of a written and binding property settlement contract. Finally, Henn v. Henn (1980) 26 Cal.3d 323, 161 Cal.Rptr. 502, 605 P.2d 10 is distinguishable on the ground that the property settlement agreement incorporated in the decree of divorce did not contain specific provisions that the terms of the agreement were not modifiable except by written consent of the parties; that the spouses relieved each other from all further obligations and liabilities. Moreover, Henn must be read together and harmonized with the existing case precedents as well as with the constitutional premise which accords sanctity to the contracts of the parties freely and voluntarily entered into, and proscribes unqualifiedly any attempt to interfere with, or impair, the obligation of contracts. Any other interpretation would raise serious doubts about the constitutional soundness of Henn —a result which ought to be avoided.
III. The Validity of the Judgment may be Attacked for the First Time on Appeal
Respondent's position that the contract defense is not available to the appellant because he failed to raise that issue in the court below, is likewise without foundation.
In the second place, the cases cited supra emphasize that the trial court is without jurisdiction to modify the unqualified disposition of property rights incorporated in the interlocutory decree of divorce. (Leupe v. Leupe, supra, 21 Cal.2d 145, 148, 130 P.2d 697; In re Marriage of Potter, supra, 179 Cal.App.3d 73, 79, 224 Cal.Rptr. 312; Cochran v. Cochran (1970) 13 Cal.App.3d 339, 343, 91 Cal.Rptr. 630; Darter v. Magnussen, supra, 172 Cal.App.2d 714, 717, 342 P.2d 528.) As explained in Vasquez v. Vasquez (1952) 109 Cal.App.2d 280, 283, 240 P.2d 319: “A judgment, though entered in a case over which the court had jurisdiction over the parties and the subject matter, may be void in whole or in part because it granted some relief which the court had no power to grant․ ‘ “Lack of jurisdiction” ․ may be applied to a case where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no “jurisdiction” (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.’ ” (Accord Jones v. World Life Research Institute (1976) 60 Cal.App.3d 836, 847, 131 Cal.Rptr. 674.)
It is blackletter law that where, as in the instant case, the court had no jurisdiction to modify its earlier judgment, any such modification is void and can be attacked at any time, including for the first time on appeal. (In re Marriage of Lackey (1983) 143 Cal.App.3d 698, 701, 191 Cal.Rptr. 309; Costa v. Banta (1950) 98 Cal.App.2d 181, 182, 219 Cal.Rptr. 478; Robinson v. Robinson, supra, 94 Cal.App.2d 802, 807, 211 P.2d 587.)
IV. Appellant's Suit for Partition was Barred by Laches
We are equally persuaded that the judgment at bench should be reversed on the additional ground that Alys' claim was barred by the doctrine of laches—an affirmative defense which was raised below by Glenn.
The action for partition sought by Alys is an action in equity, therefore, subject to equitable defenses, including laches. (Henn v. Henn, supra, 26 Cal.3d at p. 330, 161 Cal.Rptr. 502, 605 P.2d 10; see also Hill v. Hattrem (1981) 117 Cal.App.3d 569, 574–576, 172 Cal.Rptr. 806; In re Marriage of Ankenman (1983) 142 Cal.App.3d 833, 838, 191 Cal.Rptr. 292.) Laches is an unreasonable delay in asserting a right which causes prejudice to the other party. (Marshall v. Marshall (1965) 232 Cal.App.2d 232, 252, 42 Cal.Rptr. 686; McCullough v. Jones (1970) 11 Cal.App.3d 270, 275, 89 Cal.Rptr. 646.)
In the case at bench both the unreasonable delay on the part of Alys and the prejudice caused to Glenn by the delay are established as a matter of law.
In determining the reasonableness of the delay, we are guided by the applicable statute of limitations (Vai v. Bank of America (1961) 56 Cal.2d 329, 349, 15 Cal.Rptr. 71, 364 P.2d 247; Protopappas v. Protopappas (1963) 213 Cal.App.2d 659, 665, 28 Cal.Rptr. 884) which in the case at bench is three years if the action is deemed to be for fraud or mistake (Code Civ.Proc., § 338, subd. (4)), or four years if it is for equitable relief against judgment obtained by extrinsic fraud or mistake (Code Civ.Proc., § 343; Zastrow v. Zastrow (1976) 61 Cal.App.3d 710, 714, 132 Cal.Rptr. 536.)
Here it is undisputed that while the interlocutory decree incorporating the property settlement agreement was entered on December 30, 1969, Alys did not bring her action for partition until November 20, 1981, i.e., some 12 years later. Moreover, the record is clear that Glenn relied on the finality of the 1969 property settlement agreement and that in reliance thereon, he changed his position or refrained therefrom to his detriment. Thus, it was shown that following his remarriage in 1970 Glenn decided not to purchase additional life insurance because he could rely on the IBM plan benefits to protect both himself and his new family. He rejected otherwise lucrative employment offers because the latter did not include the same retirement benefits as the IBM plan. Glenn's investment strategy was also greatly influenced by the IBM retirement plan. He made only short term investments because he believed that the IBM retirement plan provided sufficient future security for himself and his new family. Lastly, the evidence demonstrated that due to the belatedness of the claim, the value of Alys' community share in the pension dramatically increased by virtue of Glenn's salary raises and the intervening favorable changes in the IBM retirement program itself, and that as a consequence Glenn could now (at the time of the commencement of the present action) only buy her out for a sum much higher than that in 1969 when his right in the pension originally vested.
Respondent's position that her delay was reasonable because she did not personally know about her community interest in Glenn's pension until 1981 and that the defense of laches was thus unavailable to Glenn is untenable. While the statute provides that in case of fraud or mistake the cause of action is not deemed to have accrued until the aggrieved party discovers facts constituting fraud or mistake (Code Civ.Proc., § 338, subd. (4)), it is well settled that once the plaintiff becomes aware of facts which would make a reasonably prudent person suspicious, the duty to investigate arises and he or she then may be charged with knowledge of facts which would have been discovered or revealed by such investigation. (Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 875, 191 Cal.Rptr. 619, 663 P.2d 177; Hobbs v. Bateman Eichler, Hill Richards, Inc. (1985) 164 Cal.App.3d 174, 202, 210 Cal.Rptr. 387; 3 Witkin, Cal.Procedure (3d ed. 1985) Actions, § 456, p. 487.) Moreover, it is blackletter law that the general rule of agency that notice to, or knowledge possessed by, an agent is imputable to the principal, applies in the relationship of an attorney and client as well. This rule rests on the premise that the agent has acquired knowledge which he or she had a duty to communicate to his or her principal, and that a conclusive presumption arises that the agent has performed that duty. (Freeman v. Superior Court (1955) 44 Cal.2d 533, 537, 282 P.2d 857; Diaz v. United California Bank (1977) 71 Cal.App.3d 161, 169, 139 Cal.Rptr. 314.) Consistent therewith, it has been held that the attorney's knowledge is imputable to his client and that the client is chargeable with the knowledge of his or her attorney. (§ 2332; Lazzarevich v. Lazzarevich (1952) 39 Cal.2d 48, 50, 244 P.2d 1; Estate of Cantor (1974) 39 Cal.App.3d 544, 549, 114 Cal.Rptr. 160.) While the client is charged with the neglect of his or her attorney, the client is not without redress because in case of such wrongdoing the law provides the client remedy against the attorney. (Daley v. County of Butte (1964) 227 Cal.App.2d 380, 391, 38 Cal.Rptr. 693; Hummel v. Hummel (1958) 161 Cal.App.2d 272, 277, 326 P.2d 542.)
In the case at bench the record unerringly shows that Mr. Van Voorhis, Alys' attorney in the dissolution proceedings, knew about Glenn's IBM pension as early as 1968. When at the end of that year he met Glenn in order to discuss the property settlement agreement with him, Glenn, upon the attorney's request, provided an IBM benefits booklet for him. Van Voorhis reviewed the booklet and determined that there was no community interest in the pension because there was a 15–year vesting period and Glenn had been working for IBM only for about 12 years. Although it is thus clear that Van Voorhis acquired actual knowledge that Glenn's pension right would vest within three years (i.e., in 1972), he failed to advise his client about this important matter both in 1969 when the property settlement agreement was signed and in 1974 when he represented Alys in an action for modification of the divorce decree. Since Van Voorhis' knowledge that Glenn's pension right had vested in 1972 was imputable to Alys, the statute of limitation to bring either a legal or equitable action for fraud, mistake, compulsion or partition, etc. began to run in 1972 (but no later than in 1974 when Van Voorhis, representing Alys in the modification proceeding, had both the opportunity and duty to communicate his knowledge to his client). It follows that the tardy commencement of the present action, some seven to nine years later, was unreasonable; when coupled with the obvious prejudice resulting from the delay it constituted laches as a matter of law.
We finally note that Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564, 232 Cal.Rptr. 722, a case recently decided by Division Two of this court, is clearly distinguishable with respect to both the contract and laches issues.
In Huddleson, the court did not hold that the parties are not free to settle their marital property dispute by an agreement, much less that such agreement is not controlling between themselves. Rather, Huddleson was decided on the narrow issue that the contractual waiver there was limited to property acquired after the effective date of the agreement and that the portended waiver did not affect the wife's pension right because her right in the pension had vested earlier. As the court observed: “In light of our finding that the community property interest in the pension arose incrementally during the marriage as husband rendered services to his employer, we cannot say that the pension benefits were ‘acquired’ by husband after the property settlement agreement was signed. Therefore, as a matter of law, the property settlement agreement, making after-acquired property separate property, did not constitute a waiver of wife's interest in the pension.” (Huddleson v. Huddleson, supra, 187 Cal.App.3d at pp. 1571–1572, 232 Cal.Rptr. 722.) By contrast, in the case at bench the contractual waiver between the parties was unconditional and all-embracing which extended to all property whenever acquired and regardless of its separate and community character. Moreover, the agreement specifically stressed that it would be controlling between the spouses irrespective of its incorporation in the interlocutory or final decree of divorce. (See fns. 4, 5 at pp. 185–187.)
The issue of laches in Huddleson likewise rests on the restricted grounds that the wife became aware of her interest in the pension only one year prior to the commencement of the action and that the husband failed to show prejudice stemming from the delay. (Huddleson, supra, 187 Cal.App.3d at pp. 1573–1574, 232 Cal.Rptr. 722.) In contradistinction, in the case at bench, we concluded that Alys had at least imputed knowledge of her pension right since 1974 and that the evidence introduced by Glenn abundantly established the detriment suffered by him as a result of the tardiness of the action. (See discussion, supra.)
The analysis set out above palpably demonstrates that the judgment appealed from is not only erroneous inasmuch as it violates long established legal authority and well recognized constitutional principles, but it also is void for lack of jurisdiction. Moreover, the evidence conclusively demonstrates that respondent was precluded from instituting the present action for partition by laches. Under these circumstances this court has no choice but to reverse the judgment to avoid a manifest miscarriage of justice.
The judgment is reversed. Appellant to recover costs on appeal.
I dissent. I believe the majority is profoundly in error on many grounds and the resulting decision works a grave injustice.
CONTEXT OF THE DECISION.
As it came to us, this case was relatively simple. In 1969 Alys and Glenn agreed on a division of their property in the course of a divorce proceeding. Unbeknownst to Alys, Glenn had acquired a vested right to a pension due to a change in the pension plan which took place during the dissolution proceedings. Because it had vested before entry of the divorce decree, the pension right was a community asset. (In re Marriage of Ward (1975) 50 Cal.App.3d 150, 153, 123 Cal.Rptr. 234, disapproved on another point in In re Marriage of Brown (1976) 15 Cal.3d 838, 851, fn. 14, 126 Cal.Rptr. 633, 544 P.2d 561; see In re Marriage of Brown, supra, at p. 847, 126 Cal.Rptr. 633, 544 P.2d 561; Civ.Code, § 5110.) Alys was therefore a part owner of that right. (Phillipson v. Board of Administration (1970) 3 Cal.3d 32, 44, 89 Cal.Rptr. 61, 473 P.2d 765, disapproved on another point in In re Marriage of Brown, supra, 15 Cal.3d at p. 851, fn. 14, 126 Cal.Rptr. 633, 544 P.2d 561.) To be precise, she was a tenant in common of the community's share in the pension. (Henn v. Henn (1980) 26 Cal.3d 323, 330, 161 Cal.Rptr. 502, 605 P.2d 10; Biggi v. Biggi (1893) 98 Cal. 35, 38, 32 P. 803.) She brought this action as a tenant in common to partition that portion of the benefits.
The only real defenses presented by Glenn were equitable ones based on Alys's delay in asserting her rights and on the supposed harm which Glenn suffered from that delay. After hearing the evidence, the trial court rejected these defenses and entered a judgment in Alys's favor.
In reversing this judgment the majority opinion takes a long and tortuous excursion far outside our domain as a court of appeal. It trespasses on the prerogatives of the parties by completely restructuring the case and erecting affirmative defenses which were neither pleaded nor tried below. It invades the trial judge's province as factfinder and chancellor, overturning his findings and ignoring the presumptions which shield his actions from arbitrary review.
The majority opinion also strays far from the controlling substantive principles. Contrary to its central premise, the property settlement agreement was not a defense because, by statute, it could not bar unknown claims. (See section II, post.) The divorce decree could not bar this action, and any defense based on it was waived long ago. (Section III.) The analysis of laches rests on a misconstruction of plaintiff's claims and is wholly unsupported by the record. (Section IV.)
The magnitude of these errors is no doubt related to the considerable height of the obstacles which had to be overcome to reverse this judgment. To avoid Glenn's waiver of the defenses relied on here, the majority finds “jurisdictional” issues where none exist. To justify its arrogation of the trial court's fact-finding role, the majority finds various facts established “as a matter of law” even though they contradict the assumptions of the parties, the findings of the trial court, and the evidence of record.
Unfortunately, Alys's claims may not survive these unexpected attacks. Even if it is erroneous, the majority opinion will now presumably be the law of the case, raising serious, perhaps insurmountable hurdles. (See 9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 737, pp. 705–706.) I find this result appalling not only because of the grievous flaws in the analysis but because of the unprecedented extent to which the court has remade this lawsuit in an image of its own choosing.
Our power to engage in sua sponte analysis (see In re Marriage of Ankenman (1983) 142 Cal.App.3d 833, 837, fn. 2, 191 Cal.Rptr. 292) cannot extend to the complete usurpation of the issue-framing role of the parties. If the parties to an appeal may not raise new theories resting on mixed questions of law and fact (Harriman v. Tetik (1961) 56 Cal.2d 805, 810, 17 Cal.Rptr. 134, 366 P.2d 486), surely we are rarely if ever justified in raising such theories on our own motion and then holding them meritorious as a matter of law.
Years ago Justice Frankfurter chided his colleagues for a much less disturbing departure from the principles of appellate restraint (Terminiello v. Chicago (1949) 337 U.S. 1, 11, 69 S.Ct. 894, 899, 93 L.Ed. 1131 (dis. opn.)): “This is a court of review, not a tribunal unbounded by rules. We do not sit like a kadi under a tree dispensing justice according to considerations of individual expediency.”
Glenn has had excellent legal representation, and the decision not to raise the issues involved here must be deemed a deliberate one. We cannot know how this action might have developed if these theories had been developed through pleadings, discovery, and trial. Certainly their injection would have produced a more complex and expensive lawsuit; as it was the case was tried in less than a day. Moreover, their presence might well have harmed Glenn's case. To give a speculative example—for nothing else is possible in our appellate cloister—the record does not reveal when Glenn learned that the benefits had undergone a change in status placing an ownership share in Alys. For all we know, the answer to that question was unfavorable to Glenn and his attorneys chose not to press issues which were likely to emphasize the subject. Evidence that he had pertinent knowledge, understood its significance, and failed to disclose it would have obliterated his equitable arguments. As we recently acknowledged, a showing of extrinsic fraud would overcome even the highest of the hurdles here placed before Alys. (Resnik v. Superior Court (1986) 185 Cal.App.3d 634, 637, 230 Cal.Rptr. 1.) The record supports educated speculation to the effect that Glenn's attorneys concentrated their efforts on the issue of relief precisely because they recognized that Glenn had little chance of proving a complete defense. In their supplemental brief, they acknowledge with commendable candor the frailty of the defenses relied on in the majority opinion.
The majority's Herculean efforts have yielded nothing more than an injustice to these parties and an object lesson in appellate restraint.
THE MARITAL PROPERTY AGREEMENT.A. The Trial Court's Findings.
The central premise of the majority's opinion is that the parties' agreement applied to the retirement benefits. This premise contradicts the trial court's express finding that “[n]either Mrs. Espy nor any of her attorneys ever made any agreement with Mr. Espy concerning the IBM retirement plan.” The entire analysis thus violates fundamental limitations on our powers as a court of review. “A judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.” (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 268, p. 276.) “Where the evidence is in conflict, the appellate court will not disturb ․ the findings of the trial court. The presumption being in favor of the judgment ․, the court must consider the evidence in the light most favorable to the prevailing party, giving him the benefit of every reasonable inference, and resolving conflicts in favor of the judgment․ ‘[I]n examining the sufficiency of the evidence to support a questioned finding, an appellate court must accept as true all evidence tending to establish the correctness of the finding as made, taking into account, as well, all inferences which might reasonably have been thought by the trial court to lead to the same conclusion ․’ ” (Id., § 278, p. 289, quoting Bancroft-Whitney Co. v. McHugh (1913) 166 Cal. 140, 142, 134 P. 1157, italics omitted.)
Under these principles reversal cannot be justified on the grounds noted by the majority. Whether Alys and Glenn had an agreement or understanding governing retirement benefits was an issue expressly acknowledged and tried below. Glenn's counsel said that it involved a “serious factual dispute” and raised “material factual issues.” At trial he offered extrinsic evidence of the parties' intentions in an unsuccessful attempt to prove that the parties intended the benefits to go to Glenn. True, he did not try to prove that the property settlement disposed of the pension benefits. Instead he contended that they were covered by some arrangement or understanding outside of the agreement. However this implied concession that the benefits were excluded from the agreement can hardly operate to keep that issue alive; it must have the opposite effect.
In any event all of the evidence supported the conclusion that the agreement did not extend to the benefits. Alys testified that she had no knowledge of the terms of the pension and no intentions as to their distribution. Glenn testified that “the issue was closed” after Alys's attorney examined the pension booklet and concluded (correctly, at the time) that the benefits were not a community asset. No one told Glenn that the benefits would go to him; rather, it simply “was not an issue” to him. The only reasonable inference is that neither party intended to dispose of the retirement benefits in the property settlement or otherwise.
The majority ignores this evidence, relying instead entirely on the language of the agreement. Apparently the majority finds the agreement so unambiguous that its true meaning can be determined on its face. Yet the contract was ambiguous as to the assets covered. It contained an itemization of property which the parties agreed they were “now possessed of”; in the clause quoted by the majority, the parties accepted the rights created by the agreement in lieu of any other right to “the property of the parties.” (Ante at p. 185, fn. 4.) A factfinder could have found (had the issue been raised) that the latter phrase was intended to refer only to the itemized assets. The trial court's finding is binding and dispositive.
B. Waiver by Failure to Plead.
Insofar as it is relied upon by the majority the agreement is a general release. “A release is defined as ‘The relinquishment, concession, or giving up of a right, claim, or privilege, by the person in whom it exists or to whom it accrues, to the person against whom it might have been demanded or enforced.’ ” (Commercial Ins. Co. v. Copeland (1967) 248 Cal.App.2d 561, 565, 56 Cal.Rptr. 794.) So understood, the property settlement cannot be construed to bar Alys's claims. The defense of release was waived and the contract was inadmissible as a release because Glenn did not plead it. (Johnson v. Workmen's Comp. App. Bd. (1970) 2 Cal.3d 964, 975, 88 Cal.Rptr. 202, 471 P.2d 1002; Baker v. Ferrel (1947) 78 Cal.App.2d 578, 579–580, 177 P.2d 973.) The same is true if the argument is viewed as one of waiver (Williams v. Marshall (1951) 37 Cal.2d 445, 456, 235 P.2d 372; Calabrese v. Rexall Drug & Chemical Co. (1963) 218 Cal.App.2d 774, 785, 32 Cal.Rptr. 665) or accord and satisfaction (Southern Cal. Disinfecting Co. v. Lomkin (1960) 183 Cal.App.2d 431, 444, 7 Cal.Rptr. 43).
The majority has predicated reversal not merely on a legal issue which Glenn failed to urge on appeal, but on a substantive, fact-based defense which was forfeited in the earliest days of the action. No known principle can justify this court's ipse dixit vivification of a dead affirmative defense.
C. Application of Agreement to Unknown Claims.
The trial court expressly found that Alys did not know of any claim to the pension benefits when she signed the property settlement. That finding was supported by substantial evidence. It precludes the result reached by the majority because under a statute enacted 114 years ago, “[a] general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” (Civ.Code, § 1542.) In short, the agreement could not prevent Alys from asserting claims of which she was unaware when she signed it.1
True, a party may waive the protection of section 1542 by signing a release with the intent to relinquish unknown claims. However the majority infers such an intent solely from the fact that the parties thought they were effecting a final settlement. Such an inference renders section 1542 meaningless, since the statute presupposes that the parties may well believe they are disposing of all issues between them. The law is, in fact, very reluctant to infer an intent to dispose of unknown claims. The cases which raise the issue seem to involve contracts expressly declaring (unlike this one) that they apply to unknown claims. Even those agreements do not ipso facto effect a waiver; their construction presents a question of fact for the finder of fact. (Casey v. Proctor (1963) 59 Cal.2d 97, 109–110, 28 Cal.Rptr. 307, 378 P.2d 579; Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 411, 163 Cal.Rptr. 711; Grebe v. McDaniel (1968) 265 Cal.App.2d 901, 903, 71 Cal.Rptr. 662.)
Here there is no hint that Alys intended to waive unknown claims. The agreement contains no such recital. No one testified that such an intent was formed. The trial court presumptively and impliedly found that the agreement did not extend to such claims. That finding was supported by all of the evidence. Indeed, Glenn's attorneys conceded at the hearing on their demurrer that the contract did not apply to unknown claims.2
The majority's discourse on the enforcement and impairment of contracts begs the question. Before a contractual obligation can be enforced or impaired, it must exist. Furthermore, in raising the specter of the contract clause the majority overlooks 159 years of constitutional jurisprudence. Every contract “incorporates in its terms the positive law of the time and place where it is made.” (Tribe, American Const. Law (1978) p. 467–468; see Ogden v. Saunders (1827) 25 U.S. (12 Wheat.) 212, 259, 6 L.Ed. 606 (sep. opn. of Washington, J.).) “The obligations of a contract long have been regarded as including not only the express terms but also the contemporaneous state law pertaining to interpretation and enforcement.” (United States Trust Co. v. New Jersey (1977) 431 U.S. 1, 19–20 fn. 17, 97 S.Ct. 1505, 1516–1517 fn. 17, 52 L.Ed.2d 92.) Therefore a pre-existing law may make a contract wholly unenforceable without running afoul of the constitution. (E.g. Reding v. Texaco, Inc. (9th Cir.1979) 598 F.2d 513, 519–520 [indemnity agreement unenforceable under Wyoming law].) In this case the law merely limits the effect of the contract, so that unknown claims are preserved unless an actual intent to forfeit them is affirmatively demonstrated. This is neither a refusal to enforce nor an impairment of the contract, but a determination of its meaning and effect under the very laws on which it depends for its life.
D. Failure to Seek Rescission.
The majority also suggests that Alys fatally tripped on a procedural obstacle by not seeking rescission of the property settlement. This is astonishing, given that the agreement was never erected as a legal bar to the action. The majority suggests that such a defense was raised “imperfectly” in support of Glenn's demurrer (ante at pp. 187–188, fns. 7, 8, but the quoted excerpts cannot be so understood in context. The passage from the points and authorities was simply a quotation and paraphrase of the contract with no articulation of a legal defense. The point urged in oral argument (and at trial) was that Glenn detrimentally relied on the apparent finality of the agreement such that his equitable defenses should be sustained—an implied concession contrary to the whole tenor of the majority opinion. (See footnote 2, ante.)
Nor has Alys ever recognized the agreement as an obstacle to her claims. Contrary to the majority's suggestion, she has never contended that the agreement “was the result of mutual mistake of the parties.” (Ante at pp. 185–186.) The majority supposes otherwise because it views the case as if the parties had mistakenly awarded the pension benefits to Glenn. Whatever happened, this did not. Rather, as the trial court found, the parties made no disposition of the benefits. Therefore a rescission of the contract would have had no effect at all. For Glenn to seek some sort of relief from the agreement—such as reformation so that it did make some disposition of the benefits—would at least have been logical (although such an attempt would have probably failed). But there is no basis for casting such a burden on Alys.
THE DIVORCE DECREE.
The majority perceives a non-waivable “jurisdictional” defect in the supposed fact that the court below impermissibly “modified” the parties' divorce decree.
This argument stands or falls with the interpretation of the parties' contract. The majority apparently agrees with me that the decree could only dispose of the benefits if the agreement did so. Since the contract did not dispose of the benefits, neither did the decree.3
But the most glaring flaw in the “jurisdictional” argument is that, as Glenn's own counsel observed in the brief requested by this court, “the present judgment does not actually modify the prior judgment.” (Emphasis added.) Therefore even if the decree adjudicated the rights here in issue, the rule relied upon would be wholly inapplicable.
The cases cited by the majority involve the preclusive effect of a judgment when a party seeks to reopen the action and change the terms of the judgment. The general rule in such cases is that entry of a final judgment deprives the trial court of the unrestricted power to change it. (7 Witkin, op. cit. supra, Judgment, § 66, p. 500.) This follows because a final judgment terminates the action in which it is entered, and the trial court can only act in the context of a pending case. Thus once a judgment becomes final, “the cause is no longer pending and the court has no further jurisdiction of the subject matter.” (2 Witkin, op. cit. supra, Jurisdiction, § 261, pp. 657–658.)
The rule against modification of final judgments has no application to a new and separate action in which a party seeks to relitigate matters already embraced by a prior judgment.4 The first judgment has no “jurisdictional” significance and if its preclusive effect is not asserted the second judgment becomes controlling. “Rights acquired by virtue of a judgment or decree are liable to be terminated in the same manner. Consequently though a matter has once been litigated to a final judgment if it is subsequently relitigated and adjudicated, the last judgment controls and determines the rights of the parties.” (California Bank v. Traeger (1932) 215 Cal. 346, 351, 10 P.2d 51; see Maloney v. Mass. Bonding & Ins. Co. (1942) 20 Cal.2d 1, 6, 123 P.2d 449; Rest.2d Judgments, § 15; 7 Witkin op. cit. supra, Judgment, § 215, p. 653.)
Here the conclusiveness of the decree is governed by the doctrines commonly lumped together under the rubric of “res judicata.” (See Henn v. Henn, supra, 26 Cal.3d 323, 332 [4, 5, 6], 161 Cal.Rptr. 502, 605 P.2d 10.) They are “ordinary defense[s],” not “jurisdictional” ones. (Woodford v. Municipal Court (1974) 37 Cal.App.3d 874, 878 fn. 2, 112 Cal.Rptr. 773; see Donovan v. Superior Court (1952) 39 Cal.2d 848, 851, 250 P.2d 246; Pathe v. City of Bakersfield (1967) 255 Cal.App.2d 409, 418, 63 Cal.Rptr. 220; Baird v. Superior Court (1928) 204 Cal. 408, 412, 268 P. 640; 2 Witkin, op. cit. supra, Jurisdiction, §§ 78–79, pp. 447–449.) Like other affirmative defenses they are waived by failure to assert them. (Donovan v. Superior Court, supra, 39 Cal.2d 848, 851, 250 P.2d 246; 7 Witkin, op. cit. supra, Judgment, § 198, p. 636–637.) Their underlying policy considerations “are not so strong as to require that the court apply them of its own motion when the party himself has failed to claim such benefits as may flow from them.” (Rest.2d Judgments, § 15, com. b.)
Glenn raised no defense based on the decree. If he had it would have failed. A decree of marital dissolution does not bar a separate action to partition a community asset which was omitted from the decree. (Henn v. Henn, supra, 26 Cal.3d 323, 330, 161 Cal.Rptr. 502, 605 P.2d 10; In re Marriage of Elkins (1972) 28 Cal.App.3d 899, 903, 105 Cal.Rptr. 59.) The majority never mentions this settled rule but attempts to distinguish the leading cases on completely irrelevant grounds. (See footnote 3, ante.) Nonetheless those cases apply, and defeat any defense based on the supposed conclusiveness of the divorce decree.
LACHES.A. The Majority's Theory.
As I understand it, the majority's analysis of laches rests on the following assertions: (1) The action is one for fraud or mistake, or for equitable relief against a judgment; therefore, the “applicable” statute of limitations is three or four years. (2) Alys had imputed knowledge sufficient to require her to take action in 1972, when she (or her attorney) thought the pension vested, or in 1974, when litigation on other matters took place. (3) Therefore Alys's delay of twelve years 5 was unreasonable as a matter of law. (4) During this time Glenn made various decisions on the assumption that the benefits were his; also, the value of Alys's share of the pension increased considerably. (5) Therefore the prejudice to Glenn caused by Alys's delay was also established as a matter of law.
B. The Limitations Period.
The notion that this is an action for fraud or mistake or for relief from the divorce decree rests on obvious fallacies already discussed above. The statutes of limitations governing such actions are wholly irrelevant here. In fact, since this is a cotenant's action for partition, there is no limitation period. (3 Witkin, op. cit. supra (3d ed. 1985) Actions, § 350, p. 380; Adams v. Hopkins (1904) 144 Cal. 19, 27, 77 P. 712.) It is probably for this reason that Glenn's main defense was not laches, but estoppel. In any event, the laches analysis cannot stand because it rests upon this misdescription of Alys's claim and the resulting false premise that the analogous limitations period was exceeded.
C. The Conduct of Alys's Attorney.
I assume that the conduct of Alys's attorney can be imputed to her for purposes of the present analysis. However I am bewildered by the majority's determination that his conduct was unreasonable. When he became aware of the pension, he investigated its terms and Glenn's credits. He saw that the plan required 15 years for vesting, that Glenn had only 12, and that Glenn's benefits were therefore unvested. He correctly concluded that under the law then in effect the pension was not a community asset subject to division. He therefore took no steps to include it in the agreement. I see nothing more he should or could have done.
The majority apparently reasons that the attorney should have discovered the change in the vesting rules because he had a duty to re-investigate in 1972 or 1974. Yet I am unable to discover in the record or in the majority opinion any fact giving rise to that duty. Certainly nothing occurred which should have made him suspect that a change had transpired. According to all the facts known to him, the pension was not a community asset and would never be one. His expectation that it would vest in 1972 was irrelevant because the parties' property rights were fixed when the decree of dissolution was entered in 1969. (In re Marriage of Ward, supra, 50 Cal.App.3d 150, 123 Cal.Rptr. 234.) The further litigation between the parties in 1974 had nothing to do with the pension. Nor was he required to take action in 1976, when the Supreme Court made unvested pension benefits divisible. (In re Marriage of Brown, supra, 15 Cal.3d 838, 847, 126 Cal.Rptr. 633, 544 P.2d 561.) Under the limited retroactivity given that holding (id. at p. 851, 126 Cal.Rptr. 633, 544 P.2d 561), he would not have believed that it allowed the belated adjudication of the benefits involved here. And his failure to tell Alys about the terms of the pension, even if negligent, had no discernible effect and therefore cannot support the decision.
Had the trial court found that Mr. Van Voorhis's conduct was unreasonable, I do not believe the finding could be sustained on this record. Therefore I take strenuous exception to the majority's assertion that he committed malpractice. He has no forum in which to clear himself of this groundless charge.
“Laches is not mere delay, but delay that works a disadvantage to another.” (Lubin v. Lubin (1956) 144 Cal.App.2d 781, 794, 302 P.2d 49, quoting Carlson v. Lindauer (1953) 119 Cal.App.2d 292, 309, 259 P.2d 925.) Again, the record cannot even support the requisite finding —let alone a conclusion as a matter of law.
Glenn testified that he made various decisions on the assumption that the benefits were all his. Accepted at face value, this testimony shows nothing but reliance without detriment. One may act on erroneous assumptions without suffering any harm as a result. I may purchase stock in the expectation of a merger, but whether I am harmed by this decision depends not on the accuracy of my belief but on numerous other factors, most notably the extent of my return relative to what I would have earned had I not made the decision. Here, Glenn never testified about any loss, relative or absolute, caused by his deciding to remain at IBM, to make short-term investments, and to forego additional life insurance. All we can infer from his testimony is that he saved some insurance premiums and stayed with a stable employer in an unstable sector of the economy instead of accepting a job with some smaller company. As for his investment choices we can only guess whether his short-term investments paid off or went bust. If the former, of course, his erroneous assumptions resulted in a handsome benefit. The trial court's presumptive finding that Glenn was not harmed by Alys's delay is supported by his very failure to present any firm evidence of harm when such evidence, if it existed, was exclusively within his control. (Evid.Code, § 412.)
Nor is the increase in the value of Alys's share a legal detriment. Glenn's share has increased at the same rate and by the same proportion; it is not as though Alys's gains came at his expense. Furthermore the increase in value cannot be attributed to the supposed delay unless it is assumed that Glenn would otherwise have become the sole owner of the pension rights. Had Alys elected in 1969 to maintain her interest in the benefits until Glenn retired or became eligible for retirement, he would be exactly where he is now. The majority's assumption that Alys would have accepted or been forced to accept a “cash buyout” appears completely unwarranted.
I see no inherent injustice in Alys partaking in the appreciation of an asset which unquestionably belongs, in part, to her. And even if this were a proper consideration it would at most affect the fashioning of relief. Laches is not designed to punish a plaintiff, but will only be invoked where a refusal to do so would permit an “unwarranted injustice.” (Lubin v. Lubin, supra, 144 Cal.App.2d 781, 794, 302 P.2d 49, quoting Berniker v. Berniker (1947) 30 Cal.2d 439, 449, 182 P.2d 557.) Here, if there were an “unwarranted injustice” in the appreciation of Alys's share it could be cured by limiting her recovery. Instead the majority has mandated the absolute forfeiture of her property.
It was Glenn's burden to demonstrate that inequitable conduct by Alys barred her claims. The majority overturns the trial judge's finding that this burden was not met. Yet the balance of equities as between the parties seems to compel the result reached by the court below. At all relevant times, it was Glenn who was in the best position to avert the prejudice of which he now complains. He had superior knowledge of, or at least superior access to, information about the terms of the plan. He knew that Alys's attorney had based his decision on the terms of the plan as it existed before the revisions. Glenn had every reason to suspect, and every opportunity to confirm, that the vesting of the benefits brought them within the community and made them partly Alys's property. Thus the majority places wholly upon Alys the consequences of what was at most a mutual lack of vigilance.
HUDDLESON v. HUDDLESON
Having granted a rehearing to consider the effect of Huddleson v. Huddleson (1986) 187 Cal.App.3d 1564, 232 Cal.Rptr. 722, the majority declares that case “clearly distinguishable.” (Ante at p. 190.) In my view the persuasive force of that case is not diminished, let alone dispelled, by the majority's partial and extremely narrow reading. Rather that case presents striking similarities to this one and illustrates the analysis which should have been followed here.
Huddleson was an action to partition a pension which the parties had left out of their property settlement agreement “on the assumption that the plan did not represent a community property asset which could be divided.” (187 Cal.App.3d at p. 1572, 232 Cal.Rptr. 722.) The husband pleaded release and laches based on the agreement.6 The trial court found against him. Division Two of this court affirmed.
To be sure, the legal issues addressed in Huddleson were not identical to those dealt with here. But this has less to do with factual or legal differences between the two cases than with the exotic nature of the points raised sua sponte by the majority.7 And despite differences in the precise issues analyzed, Huddleson confirms my belief that the outcome achieved today is only made possible by disregarding several unassailable legal principles. The Huddleson court plainly recognized, as the majority does not, that (1) an agreement relinquishing rights, whether characterized as a waiver or a release, generally works only against rights known to exist when the agreement is executed (see 187 Cal.App.3d at pp. 1572–1573, 232 Cal.Rptr. 722); (2) an action to divide an omitted marital asset is not an attempt to modify or reopen a final judgment (187 Cal.App.3d at p. 1573, 232 Cal.Rptr. 722); and (3) cases involving other remedies and legal theories do not govern the question whether a delay in seeking to partition an omitted marital asset is reasonable (187 Cal.App.3d at pp. 1573–1574, 232 Cal.Rptr. 722). More broadly, the Huddleson court recognized and enforced a “policy choice” in this state's marital property law favoring “the equitable division of marital property over the competing concern for preserving the finality and stability of judgments.” (Id. at p. 1574, 232 Cal.Rptr. 722, citing Casas v. Thompson (1986) 42 Cal.3d 131, 141, 228 Cal.Rptr. 33, 720 P.2d 921.) Today this court has stretched very far indeed to avoid giving effect to that policy.
The judgment here, like that in Huddleson, is free of error, and should be affirmed.
1. Prior to reaching the January agreement Glen had given his IBM benefit booklet to Alys' attorney; after reviewing it, Alys' attorney advised Glen there was no community interest in the benefits.
FN2. Unless otherwise indicated, all statutory references are to the Civil Code.. FN2. Unless otherwise indicated, all statutory references are to the Civil Code.
3. See also section 5103 which sets forth that “Either husband or wife may enter into any transaction with the other, or with any other person, respecting property, which either might if unmarried; subject, in transactions between themselves, to the general rules which control the actions of persons occupying confidential relations with each other, as defined by Title 8 (commencing with Section 2215) of Part 4 of Division 3”; and section 4802 providing that “[e]xcept as provided in Section 4811 or subdivision (b) of Section 4801, a husband and wife cannot, by any contract with each other, alter their legal relations, except as to property, and except that they may agree, in writing, to an immediate separation, and may make provision for the support of either of them and of their children during such separation or upon the dissolution of their marriage. The mutual consent of the parties is a sufficient consideration for such an agreement.” (Emphasis added.)
4. The pertinent parts of the agreement read as follows: “WHEREAS, the parties entered into a letter of agreement prepared by wife's attorney dated January 6, 1969 and it is the desire of the parties to cancel and rescind said agreement and by this agreement make an integrated agreement to effect a final and complete settlement of their rights with reference to each other, which shall be unmodifiable and shall include all our respective property rights, ․ [¶] 11. Except as herein provided, each party is released and absolved from any and all obligations and liabilities of each on behalf of the other, and neither will obligate or charge the credit of the other in any manner whatsoever; each party hereby forever releases and discharges the other from all liabilities in law or equity arising out of the marital relation or otherwise, ․ [¶] 14. Husband and Wife hereby accept these provisions and the property herein granted, conveyed, and set over to each of them, in full satisfaction and in lieu of his or her right to any shares of the property, community, separate, or regardless of the character of the same, which was the property of the parties hereto.” (Emphasis added.)
5. The settlement contract set out that the parties intended “to make an agreement that shall survive its incorporation and merger into an Interlocutory or Final Judgment of Divorce, and shall not be dependent and conditional upon approval of the Court in its merger in any such judgment resulting from an action for divorce.” (Emphasis added.)
6. The instrument also provided that “this Agreement can only be modified, annulled, or cancelled by an Agreement in writing executed by the parties hereto, and the provisions of this Agreement shall be binding upon and inure to the benefit of the heirs, assigns, legal representatives of the parties hereto, ․” (Emphasis added.)
7. The illustrative parts of the record read as follows: “[T]he parties in this case clearly intended the property settlement agreement to be a dispositive, complete and final adjudication of all property rights of the marriage. The property settlement agreement is replete with references to the finality it was intended to create․ For example, at page 1 of the Agreement: ‘[I]t is the desire of the parties ․ by this agreement [to] make an integrated agreement to effect a final and complete settlement of their rights with reference to each other, which shall be unmodified and shall include all our respective property rights․’ [¶] At page 6, ‘[E]ach party hereby forever releases and discharges the other from all liabilities in law or equity arising out of the marital relation or otherwise, and each party hereby waives, relinquishes, surrenders, and quitclaims all claims against or rights against the other․ and waive all right to share in the estate or property of the other upon the death or incompetency of the other․’ [¶] At page 7, ‘14. Husband and Wife hereby accept these provisions and the property herein granted, conveyed and set over to each of them, in full satisfaction and in lieu of his or her right to any shares of the property, community, spearate, or regardless of the character of the same, which was the property of the parties hereto.’ [¶] (Note that, at page 8, Plaintiff's attorney drew up the agreement and that the husband declined to be represented by independent counsel of his own choosing.) [¶] This property settlement agreement and Interlocutory Judgment could not be more clear in its purpose and effect: It is a final, dispositive, complete adjudication of the parties' property rights. As indicated previously in the body of this Points and Authorities, ‘An interlocutory decree which does not expressly reserve jurisdiction to divide property at a later date ․, but instead renders a present division of property, if not challenged by appeal becomes a final and conclusive adjudication of the property rights of the parties.’ In Re Marriage of Brown, 15 Cal.3d at 851 [126 Cal.Rptr. 633, 544 P.2d 561]. [¶] Based on her previous intent and her agreement with Defendant, the Plaintiff cannot at this point be allowed to resurrect a claim for a questionable contingent pension interest when a final adjudication between the parties has already been effected.” (Original emphasis.)
8. “MR. LANGFORD [appellant's attorney]: (Reading) “․ that she accepted the property which was conveyed in full satisfaction and in lieu of her right to any shares of property, community or separate, regardless of the character which was the parties hereto․ [¶] MR. LANGFORD: Now, you know from the agreement in reading it that the intent of the parties was to complete a full and final adjudication and resolution of all of their respective property rights․ [¶] Any case they cite to you, the Henn case, the Brown case, any of those cases, which we cite also, as buttressing our position, are distinguishable on those facts alone because none of those cases contain an agreement like this one in which she said ‘I am never going to come back and ask about any pension rights or property of any sort whatsoever.’ [¶] The agreement is clear. My client relied on that agreement. [¶] He didn't cash her out. He could have done it six years ago when the Brown decision came out. [¶] If she would have brought her claim in a timely manner and in a manner which would have not prejudiced him, then he wouldn't even be here today.”
1. Similar rules govern a defense of waiver, which requires clear and convincing evidence of the intentional relinquishment of a known right or privilege with knowledge of the facts—particularly where the right alleged to have been waived is one favored in law. (City of Ukiah v. Fones (1966) 64 Cal.2d 104, 107, 48 Cal.Rptr. 865, 410 P.2d 369; In re Marriage of Moore (1980) 113 Cal.App.3d 22, 27, 169 Cal.Rptr. 619 [marital property rights “favored in law” within this rule].)
2. “MR. LANGFORD: Now, you know from the agreement in reading it that the intent of the parties was to complete a full and final adjudication and resolution of all of their respective property rights. [¶] THE COURT: No, only those that are known. [¶] MR. LANGFORD: That is correct, but she made the promise there that all the property which was the property of the parties, regardless of whether—of course, there is an issue as to whether it was specifically talked about, but if you look just directly at the Complaint itself, I think you can come to the resolution that she has made a promise which we have relied on to our detriment․ You see, what we have here is an estoppel.”
3. I see no point in the majority's inquiry into whether the contract “survived” its incorporation in the decree. Neither its preclusive scope nor that of the decree could be increased by such survival. Nor is Glenn's waiver of contractual defenses affected. Similarly I fail to see how “survival” distinguishes cases concerned with the defense of res judicata. (See discussion following.)
4. Outright attacks on the judgment are governed by another body of rules. (See 8 Witkin, op. cit. supra, Attack on Judgment in Trial Court, §§ 1, 6, pp. 403–405, 410–411.) Thus, if Glenn had raised the decree as a defense, Alys would have been entitled not only to question its preclusive scope but to attack its validity. (Ibid.) Since he did not raise it, however, she had neither the occasion nor the duty to launch such an attack.
5. This figure is perplexing. The majority's reasoning does not establish an unreasonable delay embracing all twelve years from 1969 to 1981. If, as the majority says, the cause of action may not have accrued until 1974 and the limitations period may have been four years, the delay only became presumptively unreasonable after 1978.
6. The agreement in Huddleson contained precatory boilerplate of the same kind as is found here (though in lesser quantity). Thus it recited that “the parties hereto desire and by this agreement it is their intent to fully and finally settle and dispose of all community property, rights, and claims between them.” (Exhibit 1 in No. A031811, Clerk's Transcript at p. 80; see Reporter's Transcript at 17.) It also contained a general release from “any and all liabilities, debts or obligations of every kind or character ․ it being understood that this agreement is intended to settle the rights of the parties hereto in all respects.” (Ibid.)
7. The contentions of the husband in Huddleson were similar to those presented by Glenn here, except that Mr. Huddleson had actually pleaded contractual defenses and was therefore in a position to press them on appeal. (See Answer to Complaint in No. A031811, Clerk's Transcript at pp. 8–10.)
ANDERSON, Presiding Justice.
SABRAW, J., concurs.