Marriage of Walgrath

Gilbert (defendant) and Gladys (plaintiff) Walgrath were married in January 1992. Prior to marriage, Gilbert owned a home in Lucerne, California. In June 1992, Gilbert deeded the Lucerne property to himself and Gladys as joint tenants. At this time, the Lucerne property had an equity value of $146,000 and a remaining loan balance of $82,000. Gladys contributed $20,000 of her separate property to reduce the loan balance on the Lucerne property. In 1993, the Walgraths refinanced the Lucerne property and borrowed against the equity value in the home. The loan proceeds were used as follows: $60,000 was paid on the Lucerne property loan principal, $62,000 was used to pay off a mortgage on property in Nevada, $40,500 was used to acquire and improve upon property in Utah, and $16,000 was deposited in a joint bank account. The trial court ruled that Gilbert and Gladys were entitled to reimbursement on a proportionate basis from the equity value of the Lucerne property. The trial court concluded that § 2640 of the California Family Code did not provide Gilbert with a reimbursement claim for his contributions to the Nevada and Utah properties. Gilbert appealed the trial court’s ruling, and the court of appeals affirmed the trial court’s ruling. Gilbert petitioned the Supreme Court of California for review, asserting that he was entitled to reimbursement for his separate-property contributions to the Nevada and Utah properties.