Sharon v. Rico

Opinion

KING, Acting P. J.— I

Introduction

In this case we hold when, prior to marriage, spouses each contributed separate property funds to purchase real property, with title taken in both names as tenants in common, and payments after marriage are made with community funds, the correct method to calculate the separate and community interests of the parties upon dissolution is the same method as when the property is the separate property of only one spouse and payments after marriage are made with community property funds, that method generally known as the Moore-Marsden rule.

[709]II

Background

Sharon and Ron Rico married in 1980 and separated in 1988. They had lived together for a year before the marriage. In 1979, they bought a house for $150,334, taking title as tenants in common. Ron made a deposit of $3,109 toward the purchase of the residence and paid into escrow a balance due of $33,714. Sharon paid Ron $1,500 toward the purchase. Ron subsequently contributed additional sums for improvements on the property before marriage.

In July 1986, the parties refinanced the residence and converted title to joint tenancy. The fair market value of the property at the time of conversion was $270,000.

After a trial on bifurcated property issues, the court rendered a statement of decision which disposed of the residence by determining “the respective separate property equities of the parties as of July of 1986.” The court found that Sharon had contributed $1,500 toward the purchase of the residence, and Ron had contributed $36,823 toward the purchase and $8,965 toward improvements. Sharon’s separate property equity consisted of (1) her $1,500 contribution, which was 1 percent of the purchase price, and (2) an additional sum of $1,196, to account for appreciation in the property’s value as of July 1986, which was 1 percent of the appreciation. Ron’s separate property equity consisted of (1) the $36,823 and $8,965 the court found he had contributed toward purchase and improvements, which was 30 percent of the purchase price and (2) an additional sum of $35,899, to account for appreciation as of July 1986, which was 30 percent of the appreciation. The court ordered that these amounts (totaling $2,696 for Sharon and $81,687 for Ron) were to be reimbursed to the respective parties upon sale of the residence, and the remaining balance was to be divided equally after adjustment for offsets and credits between the parties.