Court Finds that Husband Wrongly Withheld Proceeds of Home Sale

In this case, the Second District affirmed a Los Angeles County trial court’s judgment on property issues. First, the court affirmed the trial court’s rejection of Husband’s witnesses’ testimony regarding whether Wife still owed the balance on the former family residence, holding that “(a) court is entitled, of course, to reject testimony from witnesses who tell a contradictory story.” Second, it affirmed a sanctions order against Husband imposed for the “improper concealment” of a house in his PDD and FDD, holding that “(c)ouples dissolving their bonds thus must grasp the importance of candor. They, and their attorneys, must understand concealment will be costly and counterproductive.”

Third, it affirmed the trial court’s order imposing interest on Husband for Wife’s share of the proceeds of sale of a property during the dissolution after the court ordered him to sell it. “The court in 2008 ordered Father to sell this property and to split the proceeds with Mother. Instead, Father kept all the money for himself until the time of trial in 2015.” Husband contended that the order requiring him to sell the property did not have any timeline for him to do so; “(t)herefore, Father claims, it was an abuse of discretion for the trial court to have made up timing deadlines and to have created a ‘phantom provision’ requiring prompt action.”

Disagreeing, the panel said that:

“It was reasonable for the trial court to use the context of the proceedings to interpret the 2008 order. Mother had custody of the children and was struggling financially. The couple had an illiquid asset that could be sold and divided to help alleviate the pressing situation.

Father’s proposed interpretation of the order, by contrast, is unreasonable: that the 2008 order envisioned him selling the Havasupai property in secret, keeping proceeds entirely for himself until Mother discovered what he had done, and then paying Mother her share only upon a further order of the court.

Parties to a marital dissolution must act in good faith. If there is legitimate uncertainty about a court order, the proper response is to seek the court’s clarification, not to ‘interpret’ the order in a self-serving and unreasonable way and then cover your tracks. There was no legitimate uncertainty here. The family court’s interpretation of the 2008 order was entirely logical.”

The panel affirmed Husband’s other miscellaneous complaints about the trial court’s finding on substantial evidence.

Read the rest of the court’s opinion.