February 2014 California Bar Exam Essay #2: (CP)

This is the second of six posts in which I will analyze the essay questions from the February 2014 California Bar exam and will provide sample answers.  (I apologize for lagging behind in these answers.  I am going to try to pick up pace with the rest.)  Below is the essay question from the California Bar website (here).  As you can see, it was a community property question.  I have bolded the facts that I thought were especially relevant.  My general thoughts and sample answer are after the jump.

Essay Question

Hank and Wendy are residents of California.  Hank is a teacher and Wendy is an accountant. 

In 2008, Hank and Wendy married.  After their wedding, Wendy’s mother deeded them a house as joint tenants.  They moved into the house and used their earnings to furnish it in a lavish style, including an antique mirror in the entryway.  One day, Hank gave the mirror to a friend who had admired it on a visit to the house. 

In 2012, Wendy purchased a small office building where she established her own accounting practice.  She paid for the building with funds saved from her earnings during her marriage and took title in her name alone. 

In 2013, Hank and Wendy separated.  Hank told Wendy that the house was henceforth her separate property and she said, “O.K.” 

After the separation, Wendy’s income from the accounting practice tripled and she remodeled the office building with her increased earnings. Without Hank’s knowledge, she then sold the building to Bob, who did not know that she was married. 

In 2014, Wendy initiated dissolution proceedings. 

1.  What are Wendy’s rights, if any, as to the antique mirror? Discuss.
2.  What are Hank’s and Wendy’s rights, if any, as to the following:

                a) The house? Discuss.

                b) The accounting practice? Discuss.

                c) The office building? Discuss. 

Answer according to California law.