## Facts

- Husband and wife dissolved their marriage by interlocutory judgment in the superior court.
- The principal community asset was the family residence, which the court awarded to the wife.
- The court awarded the wife about 79% of the community property and attempted to equalize by ordering her to execute a promissory note to the husband for $19,820.80 at 7% simple interest.
- The note was secured by a second deed of trust on the residence.
- Payment of principal and accrued interest was deferred until the earliest of: 10 years, the wife’s remarriage, sale of the residence, voluntary refinancing, the wife no longer using the home as a family residence, or the wife’s death.
- The husband appealed, contending the property division was not equal and disputing how pendente lite support obligations should be charged between community and separate property.

## Issues

1. Whether the property distribution, including a long-deferred note secured by a second deed of trust, achieved the substantially equal division of community property required by Civil Code § 4800.
2. Whether the promissory note had a present value materially less than its face amount as a matter of law, rendering the division unequal.
3. How pendente lite spousal and child support obligations incurred before versus on/after January 1, 1975 should be allocated between community property and the husband’s separate property under Civil Code § 4805.

## Decision

- The court reversed the interlocutory judgment insofar as it divided the community property and remanded for further proceedings.
- The court held the note’s value was substantially less than its face value as a matter of law because of its subordinate security, deferred and contingent payment terms, inflation risk over time, and ownership risk.
- The court held that support obligations incurred before January 1, 1975 were chargeable to community property under the prior version of Civil Code § 4805.
- The court held that support obligations incurred on or after January 1, 1975 were chargeable to the husband’s separate earnings, income, or accumulations under the amended Civil Code § 4805.

## Legal Principles

- Civil Code § 4800 requires an equal (at least substantially equal) division of community property upon dissolution; formal arithmetic equality is inadequate if asset values are overstated.
- To effect equal division, the trial court must determine the nature and value of the community assets and use realistic valuation in the distribution.
- When awarding a major asset to one spouse under Civil Code § 4800(b)(1) and offsetting with an equalizing obligation, the offset must be valued at its true present economic worth; a deferred, contingent, subordinated note cannot be treated as cash at face value.
- Under Civil Code § 4805, the charge for support obligations depends on when the obligation was incurred: pre–January 1, 1975 obligations may be charged to community property, while obligations on/after that date are charged to the obligor spouse’s separate earnings while living separate and apart.

## Conclusion

The court required a substantially equal division based on realistic present valuation and held that a long-deferred, second-lien equalizing note must be discounted rather than treated at face value; it also applied Civil Code § 4805 temporally, charging pre-1975 support obligations to community property and post-1975 obligations to the paying spouse’s separate property.


In re Marriage of Tammen, 63 Cal. App. 3d 927 (Cal. Ct. App. 1976)