A A A 
Loading
Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

FAMILY LAW

Denise M Skinner and Aaron C Skinner

Case No: 1156994
Hearing Date: Tue May 13, 2014 10:30

Nature of Proceedings: Req. for Order: Est. Purchase Price of Residence & Reimbursements

This case has seen a lot of Courtroom time; we are now in the 5th volume of Court’s records; it was last in Court on January 8, 2014, and the Court made decisions as to whether Respondent was in contempt of Court (he was); on April 18, 2014, Respondent filed an RFO seeking orders to (1) establish a purchase price of the family residence, and (2) establish Petitioner’s right to reimbursements.

 

RFO

 

The RFO is supported by an 8-page brief and the declarations of Bruce Glesby and Respondent (8 pages); supported by Exhibits A through M.

 

As for the value of the property issue: Respondent contends the property has an appraised value of $625,000 in reasonably good condition albeit it has an “as is” appraised value of $565,000; that Petitioner’s failure to keep the property in good condition and repair and her repeated refusal to allow him to inspect the home to make extraordinary repairs drove the value down in violation of her fiduciary duty to him and he thus contends the higher appraised value should be $625,000; reports that to date (meaning April 18, 2014) Petitioner had not accepted the appraisal.

 

As for the HELOC issue: Respondent contends he owes $51,013, not the $55,000 Petitioner contends is owed; he points to the Stipulation and Order from November 2008 saying he owed $56,000 and based on the interest rate of 2.5%, he reduced his principal to $51,013.

 

As for the educational expenses issue: He contributed his share of Aaron’s share and his share of Troy’s expenses until Troy started high school; he could no longer afford to pay and he gave notice to Petitioner “as required” under the MSA; that her attorney agreed with his assessment that he met the requirements of the MSA (Exhibit B) and she is estopped from now claiming otherwise. In any event, his share of the educational expenses is $19,668, not the amount she claims; provides a chart.

 

RESPONSE

 

On April 30 Petitioner filed her response:

 

On the option to purchase issue: She contends she has accepted Respondent’s appraisal of $565,000 “subject to certain settlement conditions” and has used this value as a basis in calculating several written settlement offers; otherwise she “has not accepted the appraisal.” Contends the MSA requirement she must keep the property in good repair and condition is “contingent upon the cooperation, consent and contribution of Respondent;” agrees she is responsible for ordinary maintenance and repair but that Respondent has refused to consistently contribute to his share of extraordinary maintenance and repairs (defined in the MSA as any single item the cost of which exceeds $500); that she ceased making requests to him because she could not afford making him comply with Court Orders; that the multiple maintenance problems he lists in his RFO are either normal wear and tear or structural or cosmetic improvements (MSA provides neither party shall make such changes without written consent of the other); she ceased making request to him for his consent for these types of problems as well.

 

On the HELOC debt issue:  She agrees the HELOC debt exists but denies the parties amended their repayment agreement to only pay his or her respective share of the interest and contends she cannot be estopped from claiming a right to reimbursement of $460/mo according to the MSA and disagrees with Respondent’s calculation of his portion of the remaining principal balance; contends she borrowed $45,000 from HELOC and has made every interest payment since 2006 until it converted to principal and interest in December 2013; she currently owes about $44,000 (total balance on HELOC is $98,420) Respondent has a remaining principal balance of $54,420.

 

On the Private School Education Costs issue: She agrees that the MSA obligates Respondent to pay 50% but disagrees with his contentions that his obligation to pay 50% was cancelable upon a 60-day unilateral declaration by him to her where he “claimed an inability to pay;” contends the MSA language creates a clear condition precedent to Respondent being able to avoid the “additions to child support” obligation of 50% of the educational expenses based upon her contention that the MSA requires an “actual objective inability to afford payment” rather than merely a professed “subjective inability to pay;” (ignores her attorney’s email that seems to agree with Respondent’s argument); he therefore owes in excess of $45,710 in educational expenses “according to proof” and that she is entitled to 10% interest on all unpaid amounts.

 

Contends the Court should find that Respondent owes her reimbursement of $45,710 for educational expenses; should set the purchase price at $565,000 (apparently she now accepts the “as is” appraisal value of $565,000 for the property); the mortgage is $247,230 leaving an equity of $317,770 to be divided $158,885 to each (subject to HELOC).

 

Contends that to buy out his share she is allowed to deduct (a) the remaining principal amount due on the HELOC for which Husband received 100% of the proceeds and (b) any right to reimbursement(s) due.

 

 

 

Her arithmetic:     $158,885

                   Less       54,420 HELOC

                   Less       45,710 outstanding educational costs

                   Less         1,000 deposit she paid to exercise the option

                               $57,754 as the “Purchase Price” for Respondent’s interest

 

REPLY

 

The Reply was filed on May 7; contains a 6-page brief and a declaration from Respondent that the brief is true and correct.

 

As to the HELOC issue: Respondent contends the parties are only $3,000 apart on their arithmetic; that they had agreed Respondent’s balance was $56,000 as of August 2008 (Exhibit G); that over the years Petitioner received HELOC payments from Respondent which she kept and did not apply to his portion of the loan and if the Court adopts her method of determining his share, she would receive a $3,408 windfall; submits a very extensive and exhaustive “accounting” that folds out to some 5 pages; contends the only competent evidence is Exhibit H and the Court should find his portion of the outstanding HELOC loan is $51,013 [compared to Petitioner’s calculation of $54,420].

 

As to the education costs issue: He contends he paid $6,615 to Bishop prior to the 2009/10 year and if the Court finds he had a duty to contribute to these expenses under the MSA, his portion of the tuition reimbursement is $17,295 not the $25,155 Petitioner claimed in her contempt citation and not the $45,710 she alleges in her response declaration. As to extracurricular expenses, he contends the amount of reimbursement should be $2,373 (Exhibit F) and not the $15,788 Petitioner claims in her contempt citation and which she includes as part of her $45,710 reimbursement claim. 

 

As to the keeping the home in proper repair issue: He contends that in 2010, after living in the house 6 years, she had it inspected and the inspector found water damage and mold; she demanded Respondent pay ½ the tens of thousands it would cost to repair the home; she would not allow Respondent onto the property to inspect these problems and did not present him with “a legitimate repair bid” and no repairs were done; that she failed to do routine repairs and so the house is reputed to be $60,000 less than its value would have been had she done the ordinary wear and tear repairs.

 

As to the purchase option issue: He points out he agreed to defer the sale of the home and agreed to give her the first option to purchase it; she offers now to purchase his interest at $57,754 (based on a value of $565,000) and subtracting her calculation of HELOC and her unreimbursed education expenses; he disagrees with her calculations and submits what he believes is correct; supported by Exhibits A and B.

 

He assumes 2 different scenarios:

 

His Scenario #1 assumes (for the sake of argument) that the house value is $565,000 and the mortgage is $247,500 [not the $247,230 that Petitioner uses] and thus they each are entitled to $158,750:

 

His Scenario #1 arithmetic:   $158,750

                                      Less    51, 013 HELOC

                                      Less    19,668 outstanding educational costs

                                      Less      1,000 deposit she paid to exercise the option

                                                $87,069 as the “Purchase Price” for his interest             

 

His Scenario #2 assumes (for the sake of argument) that the house value is $625,000 and the mortgage is $247,500 [not the $247,230 that Petitioner uses] and they each are entitled to $188,750:

 

His Scenario #2 arithmetic:    $188,750  

                                       Less     51,013 HELOC

                                       Less     19,668 (zero or $19,668) educational costs

                                       Less       1,000 deposit she paid to exercise the option

                                               $117,069 as the “Purchase Price” for his interest

 

RULINGS:

 

1. The house value for purposes of a buy-out is $565,000 or the “as is” value. There is no preponderating evidence that permits a fact finder to distinguish what is ordinary wear and tear and what is extraordinary (above $500) costs; but reviewing Rick White & Associates’ May 2010 report and Mr. McIvers’ appraisal of October 2013 (particularly page 4 of 15 “some issues remain”), a fact finder could only conclude the $565,000 appraisal should be used. The fact that Petitioner would not allow Respondent to inspect is not meaningful because he could have sought Court intervention on that issue and he has had years to do so; he elected not to. The contention that Petitioner and her husband have significant income and could have or should have repaired the property is argument, not fact. Moreover, Mr. McIvers’ appraisal appears thorough and persuasive.  

 

2. The HELOC number to be used is $51,013; Respondent’s evidence is preponderating.

 

3. The educational costs reimbursements are $19,668; the issue is not free from some doubt; Petitioner’s attorney seems to have accepted Respondent’s claim of inability to pay; thus Respondent arguably is entitled to a good faith belief that he had no legal obligation to provide for Troy’s private school education based upon that communication and no efforts made over the years to do much about it. On the other hand, the MSA does not help him; it states “should either Party no longer afford to contribute to the payment for the boys to be enrolled.” That language surely means something more than a subjective assessment and an email to the Petitioner’s attorney; although lulled into a belief that he did not have to anything more, this Court cannot conclude that such a sense of comfort on such an expensive, emotional and important issue was reasonable; more was required; either a Court Order or a Stipulation would have been obvious. At the same time Petitioner’s accounting claiming $45,710 was not persuasive; Respondent’s evidence on the issue was persuasive.

 

4. The purchase price for Petitioner is as follows:

    

     The Court’s arithmetic:      $158,750

                                      Less       51, 013 HELOC

                                      Less       19,668 outstanding educational costs

                                      Less         1,000 deposit she paid to exercise the option

                                                 $ 87,069 as the “Purchase Price” for Petitioner        

                                                   ROUNDED TO $87,000             

 

5. The $87,000 “Purchase Price” for Petitioner must be accepted and paid within a reasonable time; the foregoing figure is applicable and available only until August 12, 2014. Said sum draws no interest if paid within that time frame.