## Facts

- Eight months before marrying David Moore, Lydie Moore bought a house for $56,640.57.
- Lydie paid a $16,640.57 down payment from her separate funds, took title in her name alone, and financed the balance with a loan secured by a deed of trust.
- Before marriage, Lydie made payments that reduced the loan principal (reported as $245.18 in the record summarized in secondary sources).
- The parties were married for nearly 11 years and lived in the house during the marriage until separation.
- During marriage, community funds were used to make loan payments that reduced principal by $5,986.20.
- After separation, Lydie stayed in the home and made payments from her separate funds that reduced principal by $581.07 up to trial.
- At the time of dissolution, an outstanding loan balance remained in Lydie’s name; the trial court valued the residence and calculated the parties’ equity interests.
- The trial court ruled the residence was Lydie’s separate property, but that the community acquired an interest because community funds reduced the loan principal.
- In calculating the community share, the trial court used a ratio based on principal reduction and did not include amounts paid during marriage for mortgage interest, property taxes, or insurance.
- The trial court also found David deliberately misappropriated community personal property by disposing of items without valuable consideration and without Lydie’s consent to obtain money for alcoholic beverages, and it awarded compensation to Lydie under former Civil Code § 4800(b)(2).
- David appealed, challenging (1) the residence apportionment method for excluding interest, taxes, and insurance, and (2) the misappropriation finding and compensatory award.

## Issues

1. When community funds are used to make payments on a residence acquired by one spouse before marriage, must the community’s contribution (and resulting share of equity) include amounts paid for interest, taxes, and insurance, or is it limited to principal reduction?
2. Was the trial court’s finding that the husband deliberately misappropriated community personal property, and its compensatory award under former Civil Code § 4800(b)(2), supported by the evidence?

## Decision

- The court held the community’s interest in the separately acquired residence is measured by the extent to which community funds reduced the loan principal, together with a proportional share of the property’s appreciation attributable to that principal reduction.
- The court rejected the husband’s argument that community payments for interest, taxes, and insurance must be included in the apportionment because those payments do not add to the owner’s equity in the property.
- The court identified an error in the trial court’s computation of the parties’ respective interests in the residence, but concluded the error favored the husband; because he showed no prejudice and the wife did not appeal, the court did not alter the allocation made below.
- The court upheld the trial court’s finding that the husband deliberately misappropriated community personal property and affirmed the compensatory award under former Civil Code § 4800(b)(2).
- Disposition: reversed only to the extent the judgment determined the parties’ rights in the residence and otherwise affirmed, with no change to the allocation because the appellant was not harmed by the computational error.

## Legal Principles

- When a spouse acquires real property before marriage on credit and community funds later reduce the loan principal, the community obtains a pro tanto interest measured by the ratio of community-funded principal reduction to the total principal reduction used in determining equity.
- The community’s share is not limited to reimbursement of principal paid; it includes a proportional share of appreciation tied to the community’s principal payments.
- Payments for mortgage interest, property taxes, and insurance are not counted in calculating the community’s ownership share because they do not create or add to equity.
- Appellate relief generally requires a showing of prejudice; a party is not entitled to reversal to correct an error that benefits that party when the opposing party has not appealed.
- A deliberate misappropriation finding under former Civil Code § 4800(b)(2) may be sustained where a spouse disposes of community personal property without valuable consideration and without the other spouse’s consent, supporting a compensatory award.

## Conclusion

In *Marriage of Moore*, the California Supreme Court approved an apportionment method that bases the community’s interest in a premarital, separately titled residence on community-funded reductions of loan principal (with a proportional share of appreciation), excluding amounts paid for interest, taxes, and insurance, and it upheld the trial court’s compensatory award for the husband’s deliberate misappropriation of community personal property while declining to modify a computational error that did not prejudice the appellant.


Marriage of Moore, 618 P.2d 208 (1980)