Court Reverses Order Miscalculating Community Property Value

In this case, the Fourth District reversed and remanded a Riverside County trial judge’s determination that the community’s interest in Husband’s separate property house was fixed as of the date of separation and that the fixed percentage CP interest continued to increase after separation “just as if community funds had been used to pay the mortgage during that time.” In reversing, the panel said that:

“[T]he Moore/Marsden rule applies only insofar as community funds are used to build equity in an asset, a situation which often terminates, as it did here, upon separation. If the husband obtained a benefit from the community through living in the house beyond the parties’ separation date, the trial court may account for this through so-called Watts charges, a different legal concept than the Moore/Marsden rule. Watts charges equitably compensate the community for one spouse’s use of a community-owned home. We hold, as a matter of first impression, that Watts charges may be levied against a spouse for his or her post-separation occupation of a property where the property is not entirely community property, but rather is treated as partially community property due to the Moore/Marsden rule.”

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Want to read the full court opinion? Read it here.