Court Finds Forced Sale of House Unenforceable

In this quiet title action, the Second District affirmed a Los Angeles County trial court that held that a trust deed a husband signed but wife did not was unenforceable. It said that “the trust deed here did not state the last date for payment under the promissory note, under section 882.020, subdivision (a)(2) Appellants would have 60 years to exercise the power of sale in the trust deed. However, the power of sale is not enforceable for another reason. The Residence presumptively is community property. Appellants did not rebut that presumption at trial. Because Dinah did not execute the trust deed, she has the power to void it.”

Family Code section 760 provides that, “[e]xcept as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” This provision establishes a presumption affecting the burden of proof, which may be rebutted by a preponderance of the evidence. (In re Marriage of Benson (2005) 36 Cal.4th 1096, 1103; In re Marriage of Valli (2014) 58 Cal.4th 1396, 1400 (Valli).)

In In re Brace (2020) 9 Cal.5th 903 (Brace), our Supreme Court recently held that, for properties acquired after 1975, the presumption established by Family Code section 760: (1) applies to claims by third parties outside the context of marital dissolution proceedings; and (2) prevails over another, more general, statutory presumption that “[t]he owner of the legal title to property is presumed to be the owner of the full beneficial title.” (Evid. Code, § 662.) The court further held that, for properties acquired after 1985, the “titling of a deed” as a joint tenancy is not sufficient to show that the spouses intended that writing to convert community property into separate property. (Brace, at pp. 937–938.)

In framing its holding by including the assumption that property was acquired with community funds, the court in Brace focused on the specific question that it decided. The court held that the form of title does not itself rebut the community property presumption in Family Code section 760, while avoiding any diversion into the separate question whether the presumption might be rebutted through the alternative means of tracing the source of the funds. The court did not hold that tracing was required before the presumption could be applied. We therefore conclude that Appellants failed to rebut the statutory presumption that the Trenks held the Residence as community property. Because Dinah did not execute the Trust Deed, that deed was voidable and the trial court properly canceled it.

View the court's full opinion here.

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