Silva v. Silva ( 2020 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In re the Matter of:
JOSE FERNANDO SILVA,
Petitioner/Appellant,
v.
BEATRIZ SILVA,
Respondent/Appellee.
No. 1 CA-CV 19-0684 FC
FILED 9-8-2020
Appeal from the Superior Court in Maricopa County
No. FN2018-003122
The Honorable Margaret LaBianca, Judge
AFFIRMED IN PART; VACATED IN PART; REMANDED
COUNSEL
Jorden Hiser & Joy, PLC, Phoenix
By Trevor Joseph Louis Burggraff
Co-Counsel for Petitioner/Appellant
Burggraff Tash Levy, PLC, Scottsdale
By Michael J. Dinn, Jr.
Co-Counsel for Petitioner/Appellant
Tessenderlo Kerley, Inc., Phoenix
By Randy A. McCaskill
Counsel for Respondent/Appellee
MEMORANDUM DECISION
Judge James B. Morse Jr. delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge Jennifer M. Perkins joined.
M O R S E, Judge:
¶1 Jose Fernando Silva ("Husband") appeals from the superior
court's decree of dissolution of his marriage to Beatriz Silva ("Wife"),
challenging the superior court's division of real property, the valuation of
the community car, and the division of community debts. For the following
reasons, we affirm in part, vacate in part, and remand for further
proceedings.
FACTS AND PROCEDURAL BACKGROUND
¶2 Husband and Wife married in September 2006. During the
marriage they purchased a house in Buckeye as the marital residence (the
"House"). Husband testified he placed $500 down and the seller put down
"around $2100" on Husband's behalf. Title to the House was in Husband's
name only and Husband produced a notarized disclaimer deed signed by
Wife. The disclaimer deed declared, in relevant part, that the House (a) had
been purchased with Husband's sole and separate property, (b) Wife had
no interest, claim, or lien in or against the property, and (c) Wife was
executing the document "not for the purpose of making a gift" to Husband.
Separate title notwithstanding, the down payment and all payments on the
loan were made with community funds. Wife left the House in October
2018.
¶3 In November 2018, Husband filed a dissolution petition. In
August 2019, the superior court held a dissolution trial. Husband and Wife
both testified and represented themselves pro per.
¶4 The court found that the House was a community asset,
ordered it sold, and awarded one-half of the equity in the House to each
party. The court also awarded the community car, a 2009 Dodge Caliber,
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to Husband and ordered him to pay Wife half of its $5,000 value. Finally,
the court divided the community debts.
¶5 Husband timely appealed and we have jurisdiction under
A.R.S. § 12-2101(A)(1). In January 2020, this case was placed in this Court's
Pro Bono Representation Program, and pro bono counsel was appointed to
represent the parties in the appeal.
DISCUSSION
I. Marital House.
¶6 Husband argues that the superior court erred by classifying
the House as community property. We review de novo the legal question
of whether property should be classified as community or separate. Bell-
Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, 523, ¶ 4 (App. 2007). We consider
the evidence in the light most favorable to upholding the decree, deferring
to the superior court's assessment of witness credibility. Id. at 522 n.1;
Gutierrez v. Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998).
¶7 Property acquired during marriage is presumed to be
community property. A.R.S. § 25-211(A); Brebaugh v. Deane, 211 Ariz. 95,
97-98, ¶ 6 (App. 2005). The presumption may be rebutted by clear and
convincing evidence that the property is separate. Brebaugh, 211 Ariz. at 98,
¶ 6. A signed disclaimer deed rebuts the presumption of community
property and the burden then shifts to the other party to prove by clear and
convincing evidence that the deed is unenforceable on grounds of fraud or
mistake. Femiano v. Maust, 248 Ariz. 613, 616, ¶ 10 (App. 2020); see also Bell-
Kilbourn, 216 Ariz. at 523, ¶ 7 ("[T]he disclaimer deed constitute[s] a binding
contract that must be enforced in the absence of fraud or mistake.").
¶8 As an initial matter, both parties allege the other waived their
arguments on appeal regarding the disclaimer deed. But neither party
disclosed their legal theories in their pretrial pleadings and the record
indicates that neither party disclosed their exhibits prior to trial. The only
pretrial reference to the disclaimer deed was one mention in Husband's
resolution management statement.
¶9 At trial, Husband asserted his belief that the money he earned
during the marriage was his separate property. Husband explained he
secured the disclaimer deed "[b]ecause I wanted to buy a house . . . not
knowing exactly where my relationship with her was headed to. I wanted
to protect myself." When the superior court asked Wife about the
disclaimer deed, she replied "[h]e's lying about that, because I never signed
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any documents. I never gave up . . . my right, . . . because all the property,
you know, I worked hard with him." On this record we find no waiver.
¶10 The superior court concluded the House was community
property and found:
Husband produced a Disclaimer Deed that includes the
statement that the property is Husband's sole and separate
property "having been purchased with the separate funds of
the [Husband]." Husband testified at Trial, however, that the
down payment and mortgage payments for the house were
all paid from money earned during the community, and
produced no evidence of an agreement or other facts to
support a finding that earnings during the community would
be deemed Husband's sole and separate property; for these
reasons, the Court finds the marital residence is community
property.
¶11 When a deed recites "the proper exercise of the powers
granted, in the manner required by the law, it is held to be prima facie valid.
It is not necessary that it be sufficient to withstand all evidence brought
against it." Silver Queen Min. Co. v. Crocker, 8 Ariz. 397, 401 (1904). Thus, by
presenting the disclaimer deed, Husband rebutted the community-
property presumption, Bell-Kilbourn, 216 Ariz. at 524, ¶ 11, and the burden
shifted to Wife to present clear and convincing evidence that the deed was
the result of fraud or mistake, Femiano, 248 Ariz. at 616, ¶ 10. Rather than
requiring Wife to prove fraud or mistake, the superior court refocused the
burden on Husband, finding that he "produced no evidence of an
agreement or other facts" to show that community "earnings" could be used
to acquire Husband's separate property. But, of course, that is precisely
what the disclaimer deed purports to do. See Kadiyala v. Vemulapalli, 1 CA-
CV 17-0111 FC, 2019 WL 311713, at *3, ¶¶ 10, 13 (Ariz. App. Jan. 24, 2019)
(mem. decision) (noting that incorrect statement on disclaimer deed that
down payment was made with separate property "does not invalidate or
defeat the transfer of title effected by the disclaimer deed"). Without
examining whether the disclaimer deed resulted from fraud or mistake, the
court erred in finding that the House is community property. See Femiano,
248 Ariz. at 615-16, ¶¶ 3, 15 (affirming determination of separate property
even though "down payment and all payments on the loan were made with
community funds").
¶12 On appeal, Wife argues that she proved fraud or mistake in
the superior court, but the superior court never decided that question and
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this Court is not in the best position to answer that fact question in the first
instance.
¶13 Wife also argues that any error is harmless because Husband
conceded that the superior court's equal distribution of the House's equity
was proper and thus the status of the House as community or separate
property is a dispute of form over substance. That is inaccurate because the
distribution of equity is a separate inquiry from whether the house is
community property or separate property. Bell-Kilbourn, 216 Ariz. at 524, ¶
12.
¶14 Accordingly, we vacate the superior court's ruling that the
House was community property and remand for the court to decide
whether the disclaimer deed was induced by fraud or mistake. If the deed
is valid, the court may "calculate the value of the community's expenditures
on the house at the time of dissolution and then make a property
distribution award that is fair and equitable under the circumstances." Id.
II. Valuation of the 2009 Dodge Caliber.
¶15 Husband also argues the superior court abused its discretion
by valuing the 2009 Dodge Caliber at $5,000. "The valuation of assets is a
factual determination that must be based on the facts and circumstances of
each case." Kelsey v. Kelsey, 186 Ariz. 49, 51 (App. 1996). "We review a trial
court's findings of fact for abuse of discretion and reverse only when clearly
erroneous." In re Marriage of Gibbs, 227 Ariz. 403, 406, ¶ 6 (App. 2011).
¶16 Both parties presented testimony valuing the car. Wife
estimated the car's value at "$6,000 or $5,000." Husband argued the car was
worth about $2,200-$2,400. Neither party presented documentary
evidence. The superior court valued the car at $5,000, awarded it to
Husband, and ordered that Husband owes Wife $2,500. The court's
valuation is reasonable—between the parties' estimates. See State Tax
Comm'n v. United Verde Extension Mining Co., 39 Ariz. 136, 140 (1931)
(holding that when valuing property "a result anywhere between the
highest and the lowest estimates . . . which is reasonable will be sustained
by an appellate court"). We will not reweigh the evidence of the car's value
on appeal. See Gutierrez, 193 Ariz. at 347, ¶ 13 ("We will defer to the [family]
court's determination of witnesses' credibility and the weight to give
conflicting evidence.").
¶17 Husband filed a "Motion to Amend the Decree of Dissolution"
requesting, among other things, that the court adjust the value of the car.
He attached to the motion a car valuation from Kelly Blue Book ("KBB").
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The court denied the motion. Husband argues on appeal that the KBB
print-out supports his argument that the court's valuation was erroneous.
We decline to address arguments made to the superior court for the first
time in a post-trial motion. See Medlin v. Medlin, 194 Ariz. 306, 308, ¶ 6 (App.
1999).
III. Division of Community Debts.
¶18 As a part of the property division, the superior court ordered
Husband to pay 80% of certain community debts, including a Walmart
credit card, a Capital One credit card, and a personal loan from Bank of
America. The court explained "that Husband has continued to use the
credit cards listed in the debts, which is why the Court orders Wife pay 20%
and Husband pay 80% of those debts." On appeal, Husband argues that the
decision is inequitable and unsupported by the record.
¶19 The superior court has broad discretion in apportioning
community property and debt between parties at dissolution, and we will
not disturb its allocation absent an abuse discretion. Boncoskey v. Boncoskey,
216 Ariz. 448, 451, ¶ 13 (App. 2007). In reviewing the superior court's
division of property, we consider the evidence in the light most favorable
to upholding the court's ruling and will sustain the ruling if it is reasonably
supported by the evidence. Boyle v. Boyle, 231 Ariz. 63, 65, ¶ 8 (App. 2012).
¶20 We presume that debts incurred during marriage are
community obligations unless the party seeking to overcome this
presumption provides clear and convincing evidence to the contrary. In re
Marriage of Flower, 223 Ariz. 531, 537, ¶ 24 (App. 2010). Under A.R.S. § 25-
318, community property is to be divided "equitably" absent a sound reason
otherwise appearing in the record. See Toth v. Toth, 190 Ariz. 218, 221 (1997);
see also A.R.S. § 25-318(C) (family court may consider excessive or abnormal
expenditures, destruction, concealment or fraudulent disposition of
community property when dividing such property at dissolution).
"Equitable" "is a concept of fairness dependent upon the facts of particular
cases." Toth, 190 Ariz. at 221.
¶21 Husband's discrete challenge to the allocation of particular
debts ignores the court's overall distribution of assets. An equitable
distribution of property need not be exactly equal "but must result in
substantial equality." Miller v. Miller, 140 Ariz. 520, 522 (App. 1984); see
Flower, 223 Ariz. at 537, ¶ 24 ("Division of property upon dissolution should
. . . take into consideration the overall marital estate."); see also Neal v. Neal,
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116 Ariz. 590, 594 (1977) (approving consideration of "future earning
ability" in the apportionment of community obligations).
¶22 Husband asserts that the superior court's stated reason for its
division of the debt is factually incorrect, and thus clearly erroneous. But
the record supports the court's finding. For 10 months after Wife left the
House, Husband kept all of the community cash, controlled all of the
couple's credit, and used the community's credit cards. Further, Husband
admitted that in November 2018, after Wife left the House, he removed her
name from their joint bank account.
¶23 Husband also argues that most of the debt accumulated prior
to the separation and thus is community debt. Husband did not provide
evidence to prove this point; he offered no credit card or bank statements
from either the time of separation or service of the petition. Regardless, this
argument is misplaced because the court found the challenged debts were
community debts, but after the parties separated, Husband used the
community credit cards for his own benefit. Dividing community debt to
account for such expenditures is within the court's discretion. See Martin v.
Martin, 156 Ariz. 452, 458 (1988) ("[W]hen the court finds that one spouse
has intentionally dissipated marital property, the value of the dissipated
property is added to the other existing marital property, and the total
divided equitably.").
¶24 Finally, we decline to address Husband's argument that the
superior court's order lacks substantial reasoning justifying the division.
Because Husband failed to request findings of fact and conclusions of law,
he waived the argument on appeal. See Nia v. Nia, 242 Ariz. 419, 425, ¶ 26
(App. 2017).
¶25 Given the totality of the circumstances, the superior court's
division of debts is reasonable and not an abuse of discretion.
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CONCLUSION
¶26 We vacate the superior court's determination of the House as
community property, affirm in all other respects, and remand for
proceedings consistent with this decision.
AMY M. WOOD • Clerk of the Court
FILED: AA
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