Safarian v. GovgassianAnnotate this Case
A transmutation that does not meet the requirements of Family Code section 852 is voidable, rather than void. After a married couple filed a fraud action against multiple defendants, husband filed for divorce and entered into a written marital property agreement with wife, characterizing any recovery in the fraud action as the separate property of each spouse. The judgment was entered against defendants in the fraud action, but husband filed for bankruptcy prior to enforcement of the judgment. The fraud defendants entered into a settlement with the bankruptcy trustee, and moved to stay collection proceedings brought by wife in the fraud action. The trial court granted the protective order.
The Court of Appeal held that defendants were not parties to the marital property agreement, and thus they cannot rely on section 852 to invalidate the agreement. Accordingly, the court reversed and remanded for further proceedings to determine the effect of the marital property agreement under ordinary rules of contract interpretation.