GOETHALS, J.
NOT TO BE PUBLISHED
Appeal from postjudgment orders of the Superior Court of Orange County No. 12D003255, James L. Waltz, Judge. Affirmed.
Law Offices of Saylin & Swisher, Brian G. Saylin and Lindsay L. Swisher for Appellant.
Harty Family Law, Brian C. Harty; and Garrett C. Dailey for Respondent.
OPINION
GOETHALS, J.
When they divorced, Cinda and Barry Hoeven negotiated a global resolution dividing their substantial estate, and the family court entered a judgment based on their settlement. Barry died the following year.
We refer to the parties by their first name to avoid confusion; we mean no disrespect.
Three years later, Cinda filed a request for order (RFO) against Barry's estate, asserting Barry had failed to disclose certain postseparation investment opportunities made available to Barry and their family business during the divorce proceedings, and asking the family court to award her the gains yielded from those opportunities. She also filed motions to join third party investors in the proceedings and to compel discovery responses from Barry's estate. Barry's estate opposed Cinda's requests and submitted evidence that neither Barry nor the family business ever invested in, much less had an opportunity to invest in, the alleged business opportunities.
The family court denied Cinda's RFO in its entirety based on the parties' papers. It found, among other things, that Cinda had not made a prima facie showing that Barry failed to disclose postseparation investment opportunities. The court also found there was good cause to refuse Cinda's request for an evidentiary hearing, and it declined to rule on Cinda's pending joinder and discovery motions.
Cinda appeals those postjudgment orders. She asserts the family court erred in denying her RFO, in not permitting an evidentiary hearing, and in failing to rule on her joinder and discovery motions. For the reasons discussed below, we affirm the orders.
FACTS
1. Statutory Framework
Before turning to the proceedings below, we begin with a brief overview of the various statutory provisions at play. Spouses owe fiduciary duties to one another, and those duties continue even after separation. (Fam. Code, §§ 721, 1100, subd. (e), 2102.) Consistent with those obligations, during dissolution proceedings, each party must fully and accurately disclose all his or her assets and liabilities. (§ 2100, subd. (c).)
All further undesignated statutory references are to this code.
As part of those disclosures, each party is required to disclose, in writing, “any investment opportunity, business opportunity, or other income-producing opportunity that presents itself after the date of separation, but that results from any investment, significant business activity outside the ordinary course of business, or other income-producing opportunity of either spouse from the date of marriage to the date of separation, inclusive.” (§ 2102, subd. (a)(2).) Those disclosures “shall be made in sufficient time for the other spouse to make an informed decision as to whether the spouse desires to participate in the investment opportunity, business, or other potential income-producing opportunity, and for the court to resolve any dispute regarding the right of the other spouse to participate in the opportunity.” (Ibid.)
If a party fails to disclose such an investment opportunity, the other party may pursue, postjudgment, “the division of any gain resulting from that opportunity” by following the procedure outlined in section 2556. (§ 2102, subd. (a)(2).) Under section 2556, the family court “has continuing jurisdiction to award community estate assets... to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. In these cases, the court shall equally divide the omitted or unadjudicated community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability.” (§ 2556.) There is no statute of limitations for bringing such a motion, and the movant need not move to set aside the judgment before seeking relief under section 2556. (In re Marriage of Huntley (2017) 10 Cal.App.5th 1053, 1060-1061.)
2. The Dissolution Proceedings
Barry and Cinda got married in 1974. In 1985, they founded Westport Properties, Inc. (Westport), which is now a multimillion dollar business that acquires, develops, operates, and manages self-storage facilities throughout the United States. By the time of these proceedings, Barry and Cinda owned a 60 percent interest in Westport; the remaining 40 percent was gifted to their three adult children: Drew (who eventually became Westport's chairman and chief investment officer), Hilary, and Chase.
Barry and Cinda separated in March 2012, and Barry petitioned for dissolution the following month. The divorce proceedings lasted nearly three years. During those proceedings, Barry affirmed under penalty of perjury in his final declaration of disclosure that he was not “presented with any investment opportunity since the date of separation, other than those opportunities available to the general public.”
In February 2015, after seven full days of negotiation, the parties reached a global resolution on the distribution of their significant assets, which included multiple houses and other properties in Newport Beach, Corona del Mar, Hawaii, and elsewhere, a boat, multiple vehicles, and various family businesses, including Westport. The family court entered a 76-page judgment of dissolution on reserved issues in accordance with the parties' settlement. The judgment awarded the parties' 60 percent interest in Westport entirely to Barry.
As part of the judgment, Barry and Cinda expressly acknowledged their fiduciary duties to disclose to one another “any post-separation investment opportunity that arises out of the parties' community property assets or activities that presents itself during separation”; they both confirmed they had complied with their fiduciary duties. In paragraph 55 of the judgment, Barry and Cinda each expressly waived all “remedies at law or in equity related to breaches of fiduciary duties only in Family Court and [their right] to prosecute or assert in Family Court any and all claims related to breach of fiduciary duty claims against the other.”
Barry died in June 2016. In his will, he left his estate to the Barry L. Hoeven Family Trust (the trust) and nominated Bruce Birkeland to serve as executor.
3. Cinda's RFO and Other Motions
Cinda later began to suspect that Barry had concealed from her certain investment opportunities made available to him and Westport (their family business) in the months leading up to their February 2015 divorce settlement. Those opportunities included about two dozen Westport self-storage facilities that were formed after the judgment, between April 2015 and November 2016. They also included the Westside Gateway project (WGP), an unrelated condominium development in Costa Mesa spearheaded by the Hoevens' family friend, Brandon Johnson. Although Barry had testified at his deposition during the dissolution proceedings that he had no personal involvement with WGP, Cinda came to believe-based on an article she read in the Los Angeles Times, her discussions with her son Drew, and her personal observations about certain overlap between Westport's leadership and the individuals who promoted WGP-that Westport was in fact the developer and owner of WGP. According to Cinda, WGP eventually yielded a profit of over $15 million.
In late 2017, Cinda filed a petition in probate court against Barry's estate and his trust, alleging Barry had breached his fiduciary duties to her by failing to disclose those investment opportunities during the dissolution proceedings. The trustee of Barry's trust, Bruce Birkeland, and other joining defendants demurred to the petition. In ruling on their demurrer, the probate court determined Cinda's claims should instead be presented to the family court and ordered the probate proceedings stayed.
In early 2018, Cinda also filed a civil action for breach of fiduciary duty and fraud against Westport, her son Drew, and numerous others. The status of that matter is unclear from the record.
According to Cinda, the probate court found the judgment in her divorce case was procured by fraud and Cinda has a right to the unadjudicated community property. Cinda misstates the record. The probate court was merely summarizing Cinda's allegations when it ruled on the demurrer and stayed the probate proceedings; it made no findings of fraud.
Accordingly, in March 2019, Cinda filed an RFO against Barry and his estate's personal representative in family court, asserting Barry failed to disclose those postseparation investment opportunities during their dissolution proceedings. Citing sections 2102 and 2556, Cinda asked the court to value and divide the gain from those investments. She also filed a request for an evidentiary hearing on her RFO. (See § 217.)
Birkeland substituted in as Barry's successor in interest and filed an opposition to Cinda's RFO. Among other things, he asserted Cinda had expressly waived her claims for breach of fiduciary duty in the judgment, and the alleged “investment opportunities” described in her RFO were never available to Cinda or Barry.
In support of his opposition, Birkeland provided detailed declarations from the developer of WGP (Brandon Johnson) and from several officers of Westport (including Charles Byerly and Drew Hoeven), who uniformly attested that neither Barry nor Westport invested in the WGP deal, neither Barry nor Westport were offered an opportunity to invest in the WGP deal, and WGP leadership never would have afforded Cinda an opportunity to participate in the WGP deal in any capacity due to her litigious nature and her lack of relevant expertise. According to these declarations, Brandon Johnson (who had been a close personal friend to the Hoeven family since childhood) began work on WGP back in 2006 and spent over a decade obtaining approvals for the project. While Cinda and Barry's dissolution was pending, he asked Drew Hoeven (Cinda and Barry's son, and Westport's chairman and chief investment officer) and Charles Byerly (Westport's president and chief executive officer) to be involved in WGP in various capacities, and Westport also briefly served as a consultant for WGP on issues like accounting, entitlement oversight, and property management. Johnson insisted that neither Cinda nor Barry have any involvement in the deal, in large part because of the Hoeven “family drama” and because Cinda had historically proven to be “erratic, ” “unreasonable, ” “disruptive, ” “frivolously litigious, ” and “problematic to investors.”
While her RFO was pending, Cinda propounded document demands to Barry's estate, seeking various documents pertaining to Westport's acquisitions. Birkeland served responses attesting he was unable to comply with certain demands. Cinda moved to compel responses from Birkeland; he opposed her motion.
Cinda also filed a motion to join Westport, her son Drew, Byerly, various other Westport executives, Birkeland (as an individual), and several limited liability companies affiliated with WPG, asserting those claimants possessed the WGP profits to which she is entitled. Her proposed complaint for joinder included claims for fraudulent concealment, negligent and intentional misrepresentation, and breach of fiduciary duty. Both Birkeland and the proposed claimants, who specially appeared, opposed Cinda's joinder motion.
4. The Court's Rulings
After hearing oral argument, the family court denied Cinda's RFO in its entirety. First, the court concluded her RFO failed factually because (1) WGP “was never an investment opportunity or asset” of Barry or Westport; and (2) the remaining Westport projects listed in her RFO existed only after the judgment or were expressly adjudicated in the judgment. Second, the court concluded her RFO failed legally because (1) Cinda expressly acknowledged Barry's compliance with his fiduciary duties in the judgment and waived her right to assert any breach of fiduciary claims against him (see ¶ 55, Judgment on Reserved Issues); (2) to the extent an undisclosed marital asset existed, Cinda failed to file a timely motion to set aside the judgment (see § 2122); and (3) Cinda failed to bring her claims against Barry's estate within one year of Barry's death (see Code Civ. Proc., § 366.2). Given these defects, the court declined to rule on Cinda's motion to compel and motion for joinder.
In a subsequent order, after allowing supplemental briefing, the family court further found there was good cause to refuse Cinda's request for an evidentiary hearing under section 217, since she failed to make a prima facia showing of her right to bring the action.
Cinda appealed both orders. We consolidated her appeals.
DISCUSSION
1. The Denial of Cinda's RFO
Cinda first contends the family court erred in denying her RFO. She insists Barry failed to disclose the opportunity to invest in WGP, he “conspired” with WGP's investors to hide that opportunity from Cinda, and as a result, she is entitled to half the profits from WGP. We review the court's order denying her RFO for abuse of discretion (In re Marriage of Honer (2015) 236 Cal.App.4th 687, 699-700); we review issues of statutory interpretation de novo (Land Partners, LLC v. County of Orange (2018) 19 Cal.App.5th 741, 745).
Cinda's briefs do not meaningfully address her RFO's allegations that Barry failed to disclose postseparation investment opportunities in the two dozen or so Westport self-storage facilities that were later formed between April 2015 and November 2016; we therefore consider that issue abandoned.
Section 2102 obligated Barry to disclose to Cinda “any investment opportunity, business opportunity, or other income-producing opportunity that present[ed] itself after the date of separation.” (§ 2102, subd. (a)(2).) But as best we can tell, neither Barry nor Westport (the Hoeven family business) ever invested in WGP or had an opportunity to do so. Cinda alleged in general and conclusory terms that Barry had such an opportunity, but she did not support that claim with any evidence. Contrary to Cinda's assertions, the probate court did not find the divorce settlement was procured by fraud, or that Cinda has any right to the WGP profits. Both WGP's developer and several officers of Westport attested that neither Barry nor Westport invested in the WGP deal, neither Barry nor Westport were offered an opportunity to invest in the deal, and WGP's leadership never would have afforded Cinda an opportunity to participate in the deal due to her highly litigious nature and lack of relevant expertise. On this record, the family court acted within its discretion in concluding WGP was not an “investment opportunity” of Barry or Westport subject to disclosure under section 2102.
Our holding is supported by the statutory language. Section 2102 provides that if a party fails to disclose a postseparation investment opportunity, the other party may file an RFO under section 2556 to pursue “the division of any gain resulting from that opportunity.” (§ 2102, subd. (a)(2), italics added.) Section 2556, in turn, grants the family court “continuing jurisdiction to award community estate assets... not previously adjudicated by [the] judgment.” (§ 2556, italics added.)
As is evident from the italicized language above, for a party to bring a successful claim against a nondisclosing spouse based on an undisclosed postseparation investment opportunity, the nondisclosing spouse must have enjoyed some sort of divisible “gain” from the undisclosed opportunity so as to yield a putative “community estate asset.” (See Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1118 [courts should give meaning to every word of a statute if possible and avoid a construction making any word surplusage] see also §§ 2102, 2556.) Conversely, if the nondisclosing spouse gained nothing as a result of the alleged investment opportunity, there is no “asset” for the family court to divide, no “gain” to award to the moving party, and thus no basis for relief under sections 2102 and 2556.
In this case, there is no evidence that Barry or Westport invested in WGP, so the Hoeven community estate could not have attained any divisible “gain” from the alleged investment opportunity. We therefore agree with the family court that Cinda failed to establish she was entitled to relief under sections 2102 and 2556. As a result, we find no abuse of discretion in the court's order denying Cinda's RFO.
In denying Cinda's RFO, the family court also relied on paragraph 55 of the judgment, in which Barry and Cinda waived their rights to prosecute one another for breach of fiduciary duties. We have serious concerns about the enforceability of that waiver. Ultimately, however, we need not decide whether the judgment's waiver provision is enforceable, or whether the trial court erred in finding Cinda's RFO time-barred because, as explained above, Cinda's RFO failed for other reasons.
2. The Denial of Cinda's Request for an Evidentiary Hearing
Cinda next asserts the family court erred in not permitting an evidentiary hearing under section 217. Again, we disagree.
Section 217 requires a family court to receive live testimony at a hearing on any order to show cause or motion brought under the Family Code, unless the parties otherwise stipulate or the court finds good cause to refuse to receive live testimony. (§ 217, subd. (a); Cal. Rules of Court, rule 5.113(a).) The party seeking to present live testimony must file and serve a witness list briefly describing the anticipated testimony before the hearing. (§ 217, subd. (c); Cal. Rules of Court, rule 5.113(e).) If the court finds good cause to refuse live testimony, it must state its reasons on the record or in writing, identifying the factors on which good cause is based. (§ 217, subd. (b); Cal. Rules of Court, rule 5.113(c); see id. at rule 5.113(b) [identifying factors that court must consider]; In re Marriage of Binette (2018) 24 Cal.App.5th 1119, 1132 [court need not discuss all factors in its ruling; it must only identify the facts upon which its good cause finding is based].)
In this case, Cinda filed a request for an evidentiary hearing on her RFO, but she never filed the required witness list describing the anticipated testimony, nor did she make an offer of proof as to the substance, purpose, or relevance of her proffered testimony. As a result, Cinda forfeited any argument that the family court erred in refusing to permit live testimony. (Molinaro v. Molinaro (2019) 33 Cal.App.5th 824, 829, fn. 4 [husband who failed to file a witness list or make an offer of proof about the anticipated testimony forfeited argument that court erred in barring testimony]; see Evid. Code, § 354, subd. (a) [finding may not be set aside based on erroneous exclusion of evidence unless substance, purpose, and relevance of excluded evidence were made known to trial court]; Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2021) ¶¶ 5:494, 5:494.1, p. 5-257.)
Even if Cinda had not forfeited the issue, we would reject her challenges based on the lack of an evidentiary hearing. The family court found there was good cause to refuse live testimony because (1) Cinda's petition failed on multiple legal grounds, and (2) Cinda did not present any evidence in her moving papers, supplemental briefs, or at oral argument to make a prima facie showing that Barry was offered an investment opportunity that he failed to disclose. The court's written ruling to that effect comports with the requirements of section 217 and California Rules of Court, rule 5.113. We see no error.
3. The Failure to Rule on Cinda's Joinder and Discovery Motions
Finally, Cinda contends the family court abused its discretion in failing to rule on her motions for joinder and to compel discovery responses. We disagree. Cinda failed to show she was entitled to relief on her RFO, and the court's denial of her RFO mooted her joinder and discovery motions. (See also In re Marriage of Hixson (2003) 111 Cal.App.4th 1116, 1120-1121 [there is no absolute right to discovery in a § 2556 proceeding; the family court has discretion to limit discovery based on the nature of the proceeding and the issues in controversy].)
DISPOSITION
The orders are affirmed. Birkeland shall recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
WE CONCUR: BEDSWORTH, ACTING P. J., FYBEL, J.
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