Marriage Of Frick

181 Cal. App.3d 997 (1986)

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Nature of the Case

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Facts

Careful what you talk about as much of this is not in certain casebooks. H and W met at the Mikado Hotel and Restaurant, owned and operated by H and his then-wife, Yoko. W was also married at the time. They began dating in 1967. After they had been seeing each other for about five or six months, H proposed to W. Yoko sued for divorce in 1968. As part of the dissolution proceedings, H acquired Yoko's interest in the Mikado. W filed for divorce in August 1968 and a settlement entered in May 1971. H and W were married on November 23, 1971. They separated on January 29, 1982. H filed for dissolution of marriage. The court decided the real property, buildings, hotel and restaurant located at 12600 Riverside Drive upon which the Mikado operations are located are the sole and separate property of H. There was no oral agreement to transmute to community property either the real property or the hotel and restaurant and liquor license. H devoted his full labor to the business. H commingled community and separate funds so no separate property funds could be found to be the source of the payments on the real estate after marriage. The real estate increased in value due to inflation while the business increased in value in large part due to H's labor. The court applied a Pereira calculation to the business and a Marsden calculation to the real property. The hotel and restaurant increased from $131,000 at the time of the marriage to $290,000 at the time of trial. H was entitled to a yield of 7.2 percent on his capital investment and as such, his investment should have earned him $99,850 without compounding interest. The community is entitled to the remaining increase in the business -- $ 59,150. Community living expenses must be subtracted from community income to determine the balance of the community property. Since the expenses exceeded the income, no community property remains. The business real property was worth $1,150,000 at the time of marriage and was worth $ 1,850,000 at the time of trial. The separate property interest in the real property is $1,118,720, and $613,120 is the fair market value of the community interest. H is awarded the community interest. The community property family home, valued at $405,000, is awarded to W. H must make an equalizing payment of $110,560. H must pay spousal support in the sum of $2,500 per month. This amount shall terminate after two years with the court retaining jurisdiction for another three years. Both parties appealed.