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Filed 81809 Marriage of Nelipovich CA41 NOT TO BE PUBLISHED IN

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									Filed 8/18/09 Marriage of Nelipovich CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA

In re the Marriage of ANTHONY P. and JILL NELIPOVICH. D053907 ANTHONY P. NELIPOVICH, Respondent, v. JILL NELIPOVICH, Appellant. (Super. Ct. No. ED64935)

APPEAL from an order of the Superior Court of San Diego County, Alan B. Clements, Commissioner. Appeal dismissed.

In this family law case, Jill Nelipovich appeals from the trial court's ruling characterizing the house in which she lived during her marriage to Anthony P. Nelipovich as Anthony's separate property, and determining that Anthony did not breach any

fiduciary duty to Jill with respect to the house.1 As we will explain, we conclude that the ruling from which Jill appeals is a nonappealable interlocutory order, and we accordingly dismiss the appeal because we lack jurisdiction over it. I FACTUAL AND PROCEDURAL BACKGROUND Anthony and Jill were married on January 25, 1997, and separated on August 1, 2004. Anthony filed a petition for dissolution on July 1, 2005. At issue in this appeal is whether a house (the Property) that Anthony purchased for $155,296 on December 26, 1996 — approximately one month prior to the marriage — was Anthony's separate property. The purchase of the Property was financed through a loan that did not require Anthony to provide a down payment. Anthony took title in his name, and Anthony and Jill began residing in the Property immediately after the purchase and continued to reside there throughout their marriage. Anthony refinanced the Property three times. He first refinanced the Property in May 1999, to take advantage of a lower interest rate. Anthony did not make an out-ofpocket down payment when he refinanced the Property in 1999 because the lender relied instead on Anthony's equity in the Property. Jill was not a cosignor on any of the loan documents for the 1999 refinance, but the lender required that Jill sign a quitclaim deed regarding the Property, quitclaiming the Property to Anthony "as his sole and separate

1 As is customary in family law cases, we refer to the parties by their first names for the sake of clarity and mean no disrespect by doing so. 2

property." Jill was not present when Anthony executed the loan documents, so the notary left the quitclaim deed with Anthony so that Jill could sign it and have it notarized. After the 1999 refinance, Anthony continued to hold title to the Property in his name. Anthony refinanced the Property for a second time in August 2002 to obtain a lower interest rate and to generate funds to pay off the financing on a community vehicle that Jill was using. According to Anthony, he received approximately $30,000 to $40,000 in funds from the second refinance, and he used approximately $25,000 to $30,0000 of that amount to pay off the financing on Jill's vehicle.2 Jill was not a cosignor on any of the loan documents for the 2002 refinance, and the lender did not require her to sign a quitclaim deed. Record title to the Property remained in Anthony's name after the second refinance, and the deed of trust indicated that Anthony held the Property as his sole and separate property. Anthony refinanced the Property for a final time in February 2003 to take advantage of lower interest rates and to generate additional funds. Anthony applied the funds he received from this third refinancing to pay off another vehicle purchased during the marriage.3 Once again, Jill did not cosign any of the loan documents for the third

2 We note that the figures that Anthony recalled regarding the amount of equity taken from the Property on the second refinance may not be accurate. According to a report by a special master who assisted the parties in attempting to resolve their dispute over the Property (the special master's report), the equity in the Property was reduced by $59,400 as a result of the second refinancing. 3 Anthony's testimony does not state the precise amount of funds generated from the third refinancing, but the special master's report states that the equity in the Property was reduced by $31,180 as a result of the third refinancing. 3

refinance, and the lender did not require a quitclaim deed. Anthony continued to hold title to the Property in his name after the third refinance. In July 2006, while the petition for dissolution was pending, Anthony sold the Property for $475,000, and received net sale proceeds of $204,623. Shortly before escrow closed, Anthony and Jill entered into a stipulation regarding the proceeds from the sale of the Property.4 The stipulation recited Anthony's contention that the Property "is his separate property, subject to a community property interest in an amount yet to be determined," and Jill's contention that the Property "constitutes community property in its entirety." The stipulation provided for the proceeds from the sale of the Property to be distributed between Jill and Anthony, subject to "reallocation and adjustment" "[i]n the event it is ultimately determined . . . that [Jill] has less than a fifty (50) per cent [sic] interest in the net proceeds of [the Property]." Jill and Anthony stipulated that in such an event, "any adjustment required to accomplish the equal division of all community property shall be made in the division of the other and additional community property assets over which [the] Court has jurisdiction." The parties were in agreement on several of the pertinent issues in the dissolution proceeding, which they indicated they would eventually set forth in a marital settlement agreement, but they could not come to an agreement on the disposition of the proceeds from the sale of the Property, child support, spousal support or attorney fees.

4 The parties did not file the stipulation with the trial court at the time they entered into it, but submitted it later as a trial exhibit. 4

Accordingly, the trial court held a short cause dissolution trial on July 14, 2008, to address those issues. During trial, the primary issue was whether the Property was community property, as Jill contended, or Anthony's separate property, subject to a community property interest, as Anthony contended. After taking the issue under submission, the trial court ruled on July 21, 2008, that the Property was Anthony's separate property and there was no community property interest due to Jill. On October 10, 2008, the trial court entered a judgment of dissolution, which terminated marital status effective July 14, 2008, and addressed the issues covered in the July 14 trial, namely, (1) child support; (2) spousal support; (3) attorney fees; and (4) the characterization of the Property as separate or community property. With respect to the Property, the judgment of dissolution stated: "1. The Court finds that the [Property] was the separate property of [Anthony], and that there was no resulting community property interest in the residence sale proceeds subject to division and due to [Jill] pursuant to the appropriate application of the formula as set forth within the cases of [In re Marriage of Moore (1980) 28 Cal.3d 366 and In re Marriage of Marsden (1982) 130 Cal.App.3d 426]. "2. The Court further finds that, in dealings between [Anthony] and [Jill] regarding the purchase and refinance of [the Property] that [Anthony] did not breach his fiduciary duty to [Jill], as set forth within . . . Family Code section 721[, subdivision] (b)." The judgment of dissolution indicated that "[j]urisdiction is reserved over all other issues . . . ." The record contains no evidence that the parties finalized a marital settlement agreement as to other pending issues, such as the division of remaining community assets and any required equalization payments or adjustments arising from the fact that Jill obtained half of the proceeds from the sale of the Property. Anthony's 5

appellate brief, filed June 4, 2009, states that the parties had not formalized their tentative agreement as to those pending issues. Notice of entry of judgment was mailed on October 10, 2008, and Jill filed a notice of appeal on that date, stating that she was appealing from a "judgment after court trial" entered on July 21, 2008. In her appellate briefing, however, Jill contends that she is appealing from the judgment of dissolution entered October 10, 2008. Jill's appellate brief challenges only the trial court's ruling that the proceeds from the Property are Anthony's separate property and that Anthony did not breach a fiduciary duty to Jill with respect to the Property. II DISCUSSION As a dispositive threshold issue, we address Anthony's contention that the ruling from which Jill appeals is not a final judgment and thus not appealable. Anthony explains that "[t]here are multiple additional community assets which have yet to be divided," and "the division of the remaining community assets remains subject to the jurisdiction of the [t]rial [c]ourt." He argues that, accordingly, the judgment of dissolution may "not be considered to be a final judgment for purposes of appeal."5

5 Anthony adds, however, that he "has no objection to the Court proceeding with the appeal if deemed appropriate based on the facts set forth herein." 6

"The existence of an appealable judgment is a jurisdictional prerequisite to an appeal. Thus, this court is obligated to review the question of appealability." (Doran v. Magan (1999) 76 Cal.App.4th 1287, 1292 (Doran).) To decide the question of appealability, we first focus on the nature of the trial court ruling from which Jill appeals. As we have discussed, although Jill is unclear about whether she purports to appeal from (1) the trial court's ruling of July 21, 2008, characterizing the Property as Anthony's separate property, or (2) the October 10, 2008 judgment of dissolution, which incorporated that ruling, it is undisputed that the sole focus of Jill's appeal is the trial court's decision characterizing the Property as Anthony's separate property and the related issue of whether Anthony breached a fiduciary duty to her with respect to the Property. The trial court's decision with respect to the Property is preliminary to an ultimate division of the community assets, which has not yet occurred. Indeed, as the parties' stipulation makes clear, as a result of the trial court's decision that Jill has less than a 50 percent interest in the proceeds from the sale of the Property, "any adjustment required to accomplish the equal division of all community property shall be made in the division of the other and additional community property assets over which [the trial court] has jurisdiction." Thus, the trial court's ruling "is merely preliminary to a final order characterizing, valuing, and dividing all the marital assets." (In re Marriage of Lafkas (2007) 153 Cal.App.4th 1429, 1433 (Lafkas).) As relevant here, Code of Civil Procedure section 904.1 provides that an appeal may be taken from a final, rather than interlocutory, judgment (id., subd. (a)(1)), and also allows for appeals "[f]rom an order made appealable by the provisions of . . . the Family 7

Code" (id., subd. (a)(10)). Here, as we will explain, the ruling from which Jill appeals is an interlocutory order, rather than a final judgment, and Jill did not comply with the provisions of the Family Code under which she could have sought leave to appeal from that interlocutory order. Accordingly, we lack jurisdiction over the appeal. In deciding that the trial court's ruling was an interlocutory order, we rely on the principle that an order which is merely " 'preliminary to later proceedings' " is not final for purposes of appeal, but is instead a nonappealable interlocutory order. (In re Marriage of Levine (1994) 28 Cal.App.4th 585, 589 (Levine).) "If no issues in the action remain for further consideration, the decree is final and appealable. But if further judicial action is required for a final determination of the rights of the parties, the decree is interlocutory," and "[t]he decree will not be appealable 'unless it comes within the statutory classes of appealable interlocutory judgments.' " (Doran, supra, 76 Cal.App.4th at p. 1293.) Here, because issues still remain to be adjudicated concerning the division of the community assets, the trial court's ruling characterizing the Property as Anthony's separate property is interlocutory and thus is not an appealable final judgment. Case law discussing analogous situations supports our conclusion. In Lafkas, supra, 153 Cal.App.4th 1429, 1432, the trial court held a bifurcated trial on one specific issue concerning the division of community property, ruling that the husband's interest in a business entity was community property. Lafkas concluded that the trial court's order on that issue was not an appealable order because it was "merely preliminary to a final order characterizing, valuing, and dividing all the marital assets." (Id. at p. 1433.)

8

In re Marriage of Ellis (2002) 101 Cal.App.4th 400 (Ellis) presented a similar situation. In Ellis, the trial court entered a judgment of dissolution but reserved jurisdiction over whether the community had an interest in the husband's health insurance subsidy. (Id. at p. 402.) The trial court ruled that there was a community property interest in the subsidy, but set a later hearing on the issue of valuation, which had not yet occurred when the husband filed an appeal. (Id. at pp. 402-403.) Ellis concluded that the husband prematurely appealed from the order determining that the community had an interest in the subsidy because that order was "interlocutory in nature, merely preliminary to an anticipated final order evaluating and dividing the asset." (Id. at p. 403.) Finally, In re Marriage of Doherty (2002) 103 Cal.App.4th 895 (Doherty) is also on point. In Doherty, preliminary to an eventual division of the community assets, the trial court entered an order characterizing the wife's mortgage subsidy from her employer as a community asset. (Id. at p. 898.) Doherty concluded that the order characterizing the asset was not appealable because it was "an interlocutory order that characterizes but does not divide the mortgage subsidy," and would be "reviewable upon appeal from a final judgment that divides the mortgage subsidy, among other assets of the marriage." (Ibid.)6

6 Several additional cases illustrate the concept of nonappealable interlocutory orders in a family law context. (See, e.g., In re Marriage of Nicholson and Sparks (2002) 104 Cal.App.4th 289, 291, fn. 1 [partial judgments which "resolved some of the issues relating to the division of property" were not final judgments because "other issues concerning the same subject matter were still pending"]; In re Marriage of Griffin (1993) 15 Cal.App.4th 685, 689 [when "spousal support and other property issues remain[ed] to be tried," an appeal of a ruling on a motion to correct a minute order stating the value of 9

In all three of these cases, although an order characterizing an asset as community or separate property was at issue in the appeal, further rulings were necessary to resolve the division of community assets, and thus the order was interlocutory rather than an appealable final judgment. Here, further proceedings are required with respect to the Property and the division of the community assets. Specifically, the trial court has not yet entered an order accomplishing the equal division of all community property, which pursuant to the parties' stipulation, must take into account the fact that Jill received half of the proceeds from the sale of the Property. Further, the trial court's order concerning the Property does not become appealable merely because it is contained in a judgment of dissolution. Although the portion of a judgment of dissolution terminating marital status is an immediately appealable final judgment (In re Marriage of Fink (1976) 54 Cal.App.3d 357, 360), "if the court elects to reserve jurisdiction to decide a severable, collateral matter, such as the division of the community property, at a time subsequent to the entry of the interlocutory judgment dissolving the marriage, no appeal may be taken from any interim or preliminary ruling or decision the court may make as to that collateral matter even though the ruling or decision is embodied in the interlocutory judgment of dissolution of marriage." (Van

marital property was a nonappealable interlocutory order]; Levine, supra, 28 Cal.App.4th at p. 589 [order in response to order to show cause to resolve dispute over postdissolution sale of assets was merely " 'preliminary to later proceedings' " that would resolve the dispute, and thus was a nonappealable interlocutory order]; In re Marriage of Van Sickle (1977) 68 Cal.App.3d 728, 737 (Van Sickle) [appeal from "the part of the interlocutory judgment . . . purporting to delineate the community property assets of the parties, without dividing them," was a "premature" appeal of "an interim decision"].) 10

Sickle, supra, 68 Cal.App.3d at p. 737, italics added.) Put simply, "[t]he fact that part of a judgment is appealable does not confer appellate jurisdiction over interlocutory rulings which happen to accompany it." (Kinoshita v. Horio (1986) 186 Cal.App.3d 959, 966, fn. 3.) Indeed, "to hold that interim and preliminary rulings or decisions affecting severable and collateral matters arising in connection with the dissolution of a marriage are appealable as well, merely because they are embodied in the interlocutory judgment dissolving the marriage, would pave the way to a piecemeal disposition of such severable and collateral issues in contradiction of the very rationale upon which the 'one final judgment' rule is predicated." (Van Sickle, at p. 737.) We note that the Family Code provides a procedure by which a party may obtain appellate review of interlocutory orders, but Jill did not make use of it. In family law matters, a trial court may bifurcate issues to be tried separately before other issues are decided. (Cal. Rules of Court, rule 5.175(a).)7 As relevant here, the trial court bifurcated the issue of whether the Property was separate or community property and the related issue of whether Anthony breached a fiduciary duty to Jill with respect to the Property. Family Code section 2025 provides that "if the court has ordered an issue or issues bifurcated for separate trial or hearing in advance of the disposition of the entire case, a court of appeal may order an issue or issues transferred to it for hearing and decision when the court that heard the issue or issues certifies that the appeal is appropriate." Family Code section 2025 is implemented by rule 5.180, which sets forth procedures 7

All further rule references are to the California Rules of Court. 11

under which "a party may notice a motion asking the court to certify that there is probable cause for immediate appellate review of the order" on a bifurcated issue (rule 5.180(b)(2)), and "[i]f the certificate is granted, a party may," within a specific time period, "serve and file in the Court of Appeal a motion to appeal the decision on the bifurcated issue" (rule 5.180(d)(1)). The court of appeal may either grant or deny the motion. (Rule 5.180(e).) Because Jill did not follow this procedure, she "has not complied with the rules necessary to invoke appellate jurisdiction over an interlocutory order." (Lafkas, supra, 153 Cal.App.4th at p. 1434.) Based on the above, we conclude that the trial court's ruling with respect to the Property was a nonappealable interlocutory order and that Jill's appeal is not properly before us. Accordingly, we dismiss the appeal.8 (Lafkas, supra, 153 Cal.App.4th at p. 1435 [dismissing improper appeal of interlocutory order].)

8 The parties have not asked us to exercise our discretion to treat Jill's appeal as a petition for a writ of mandate. (Cf. Doherty, supra, 103 Cal.App.4th at p. 898 [both parties asked the appellate court to consider the merits of an interlocutory appeal]; Ellis, supra, 101 Cal.App.4th at pp. 403-405 [both parties asked that a premature appeal be treated as a writ petition to permit a review of the merits].) But, even if they had made such a request, we would decline to exercise our discretion in that regard. "Although an appellate court has discretion to treat an imperfect appeal as a petition for writ of mandate, the power should be exercised only in unusual circumstances." (Lafkas, supra, 153 Cal.App.4th at p. 1434.) "Routine granting of requests to treat improper appeals as writs where there are no exigent reasons for doing so would only encourage parties to burden appellate courts with reviews of intermediate orders." (Estate of Weber (1991) 229 Cal.App.3d 22, 25.) "Strong policy reasons underpin the one final judgment rule, and the guidelines for 'saving' appeals from nonappealable orders. The interests of clients, counsel, and the courts are best served by maintaining, to the extent possible, bright-line rules which distinguish between appealable and nonappealable orders. To treat the instant appeal as a writ application would obliterate that bright line and encourage parties to knowingly appeal from nonappealable orders, safe in the knowledge 12

DISPOSITION The appeal is dismissed.

IRION, J. WE CONCUR:

MCINTYRE, Acting P. J.

O'ROURKE, J.

that their appeal will be 'saved by the appellate courts.' We cannot condone or encourage such practice." (Mid-Wilshire Associates v. O'Leary (1992) 7 Cal.App.4th 1450, 14551456, fn. omitted.) We perceive "no exigent reasons why review of the interlocutory order should not await the rendition of a final judgment." (Lafkas, at p. 1434.) 13


								
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