In re Marriage of Lucas

In In re Marriage of Lucas (1980) 27 Cal.3d 808, a husband and wife purchased a home during marriage for $23,300. Wife used $6,351.57 of her separate property for the down payment and spent $2,962 of her separate property for improvements. They took title as "'Gerald E. Lucas and Brenda G. Lucas, Husband and Wife as Joint Tenants.'" (Id. at p. 811.) At the time of dissolution, the net equity in the home was approximately $41,650. (Id. at pp. 811-812.) During marriage, the couple also traded in a community property vehicle toward the purchase of a motor home. Wife used her separate property to pay the majority of the purchase price. The parties' intent was to use the motor home for their family, and husband did not object to putting title in wife's name alone. (Id. at p. 817.) The Lucas court noted that "where there is no written indication of ownership interests as between the spouses, the general presumption of community property may be overcome simply by tracing the source of the funds used to acquire the property to separate property. " (Lucas, supra, 27 Cal.3d at p. 815.) Before the law was modified by statute in 1965, spouses could agree to alter the character of their property by specifying a form of title, which raised a rebuttable presumption that the parties' ownership interests were as stated in the title. (Id. at p. 813; see, e.g., Socol v. King (1950) 36 Cal.2d 342, 345-346 223 P.2d 627; Tomaier v. Tomaier (1944) 23 Cal.2d 754, 757-759 146 P.2d 905.) The form of title presumption could be rebutted by evidence of a contrary agreement, but not simply by tracing the source of the property. (Lucas, supra, at p. 813.) When spouses owned a residence in joint tenancy, it was presumed to be separate property in which each spouse held one-half interest. (Lucas, supra, 27 Cal.3d at p. 813.) In dissolution proceedings, the court could not award the residence to one spouse as a family home unless the title presumption was rebutted by evidence of an agreement. (Id. at pp. 813-814.) But spouses took title in joint tenancy primarily because real estate professionals presented them with deeds in joint tenancy form, without understanding the difference between joint tenancy and community property. (Id. at p. 814.) In 1965, the Legislature added a provision to Civil Code former section 164 to solve these problems in dissolution proceedings. (Lucas, supra, 27 Cal.3d at p. 814.) As amended, Civil Code former section 164 provided that a single-family residence acquired by a husband and wife during marriage as joint tenants was presumed to be community property for the purposes of division of property at divorce. (27 Cal.3d at p. 814.) Civil Code former section 164 was replaced in 1969 with a nearly identical provision in Civil Code former section 5110. (27 Cal.3d at p. 814, fn. 2.) The Lucas court held, based on the form of title and Civil Code former section 164, that the house belonged entirely to the community, unless on remand the trial court found the parties had an agreement or understanding that wife would retain a separate property interest. (Lucas, supra, 27 Cal.3d at pp. 815-816.) The court reasoned, "To allow a lesser showing could result in unfairness to the spouse who has not made the separate property contribution. Unless the latter knows that the spouse contributing the separate property expects to be reimbursed or to acquire a separate property interest, he or she has no opportunity to attempt to preserve the joint ownership of the property by making other financing arrangements. The act of taking title in a joint and equal ownership form is inconsistent with an intention to preserve a separate property interest. Accordingly, the expectations of parties who take title jointly are best protected by presuming that the specified ownership interest is intended in the absence of an agreement or understanding to the contrary." (Id. at p. 815.) The Lucas court noted that on remand, if the trial court found the house belonged entirely to the community, wife would not be entitled to reimbursement of her separate property contribution to the property unless the parties had agreed to reimbursement. (Lucas, supra, 27 Cal.3d at p. 816.) It was well established that a spouse who used separate property for community purposes was deemed to be making a gift to the community unless there was an agreement otherwise. (Ibid.) The Lucas court similarly concluded there was substantial evidence to support the trial court's finding that husband made a gift of his community property interest in the motor home to wife, because title to the motor home was taken in wife's name alone, husband was aware of it, and he did not object. (Id. at p. 818.)