## Facts

- Sarane and Harold Fonstein married in 1954, separated in 1972, and had three children.
- Sarane filed for dissolution in 1973; after trial, the court entered an interlocutory judgment dissolving the marriage, dividing community property, allocating debts, and ordering child and spousal support.
- The property division awarded Sarane community assets valued at about $73,997 (including the family residence and stock) and awarded Harold about $123,848 (including his interest in a law partnership), with an equalizing payment mechanism.
- Harold became a partner in his law firm during the marriage; the parties agreed his partnership interest, if it had value, was community property.
- The partnership agreement provided payment terms upon events such as withdrawal, retirement, disability, or death; the trial court valued Harold’s partnership interest using the agreement’s withdrawal-payment formula.
- The trial court reduced the partnership-interest valuation to reflect potential income-tax consequences if Harold later converted the interest to cash, even though no withdrawal or sale was ordered and no tax liability had been incurred.
- Sarane appealed the community property valuation of the partnership interest; Harold cross-appealed and sought dismissal, arguing Sarane’s acceptance of benefits (occupying the residence, receiving support/fees, accepting stock) barred her appeal.

## Issues

1. Whether Sarane’s acceptance of certain benefits under the interlocutory judgment barred her appeal under the acceptance-of-benefits doctrine.
2. Whether Harold’s law partnership interest acquired during marriage was a divisible community asset with present value rather than a mere expectancy.
3. Whether the trial court could reduce the present value of the partnership interest based on speculative future tax consequences where no withdrawal or sale was required and no tax liability had been incurred.

## Decision

- The court declined to dismiss Sarane’s appeal; her conduct did not show clear and unmistakable acquiescence in the challenged property-division determination, and the accepted benefits were severable and/or would not be negated by reversal.
- The court held Harold’s partnership interest was community property with present value; valuation based on enforceable contractual payment rights did not convert the interest into a mere expectancy.
- The court held the trial court erred by discounting valuation for hypothetical future tax consequences because no withdrawal or sale was ordered, no tax liability arose during marriage, and any later tax would depend on Harold’s future voluntary actions.
- The court reversed the portion of the judgment addressing valuation of the partnership interest and remanded for revaluation without speculative tax reductions; the remainder was affirmed.

## Legal Principles

- Acceptance of a judgment’s benefits bars appeal only upon a showing of clear and unmistakable acquiescence; acceptance does not bar appeal when the benefits are severable from the challenged portion or would be retained even after reversal.
- A professional partnership interest acquired during marriage is community property and may be valued as a present asset where the spouse holds enforceable contractual rights to payment upon specified events.
- In dividing community property, a court should not reduce a present valuation based on speculative future tax consequences when no sale, liquidation, or withdrawal is required by the dissolution judgment and no tax liability was incurred during marriage.

## Conclusion

The court permitted the wife’s appeal, confirmed that a spouse’s law-partnership interest acquired during marriage is a community asset with present value, and ruled that valuation cannot be reduced for hypothetical future tax consequences absent a transaction or event that makes tax liability current or certain.


In re Marriage of Fonstein, 17 Cal. 3d 738, 552 P.2d 1169 (Cal. 1976)