Schmitzer v. Schmitzer ( 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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
DOROTHY S. SCHMITZER, Petitioner/Appellee,
v.
MICHAEL A. SCHMITZER, Respondent/Appellant.
No. 1 CA-CV 19-0793 FC
FILED 9-17-2020
Appeal from the Superior Court in Maricopa County
No. FN 2018-052077
The Honorable Adam D. Driggs, Judge
AFFIRMED IN PART; VACATED IN PART; REMANDED
APPEARANCES
Michael A. Schmitzer, Phoenix
Respondent/Appellant
Scott L. Patterson PLLC, Tempe
By Scott L. Patterson
Counsel for Petitioner/Appellee
SCHMITZER v. SCHMITZER
Decision of the Court
MEMORANDUM DECISION
Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge Jennifer M. Perkins and Judge David B. Gass joined.
B R O W N, Judge:
¶1 Michael Schmitzer (“Husband”) appeals the superior court’s
decree dissolving his marriage to Dorothy Schmitzer (“Wife”). In 2018,
Wife petitioned to dissolve her 30-year marriage to Husband. After a half-
day trial, the court entered a decree dissolving the parties’ marriage and
dividing their assets and liabilities. Husband timely appealed.
¶2 We review the superior court’s division of property and debts
for an abuse of discretion. Hefner v. Hefner, 248 Ariz. 54, 54, ¶ 6 (App. 2019).
An abuse of discretion occurs if the court commits an error of law or the
record fails to provide substantial evidence supporting its ruling. Schickner
v. Schickner, 237 Ariz. 194, 197, ¶ 13 (App. 2015). We defer to the court’s
factual findings unless clearly erroneous. Id. 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).
¶3 Husband argues insufficient evidence supports various
provisions of the decree allocating assets, including retirement funds, bank
accounts, and funds obtained from the sale of a limited liability company.
But Husband failed to provide a transcript of the trial for our review. See
ARCAP 11(c)(1)(A) (imposing duty on appellant to ensure record contains
all documents deemed necessary for proper consideration of issues on
appeal). We must therefore presume the missing transcript supports the
court’s findings and conclusions relating to the allocation of such assets. See
Baker v. Baker, 183 Ariz. 70, 73 (App. 1995).
¶4 Husband contends the superior court erred as a matter of law
by awarding Wife a one-half interest in two developed real estate parcels,
referred to as the “Surprise” and “Bungalow” properties. When the parties
acquired each property, in 2009 and 2010, respectively, Wife signed
disclaimer deeds, stating in part Husband solely owned the properties and
she “has no present or future right, title, or interest claim or lien of any kind
or nature whatsoever in, to, or against the [properties].”
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SCHMITZER v. SCHMITZER
Decision of the Court
¶5 Property acquired during a marriage is presumed to be
community property. A.R.S. § 25-211(A). But a disclaimer deed, as a
binding contract between the parties, rebuts that presumption. Bell–
Kilbourn, 216 Ariz. at 523–24, ¶¶ 7, 11. The burden then shifts to the party
who signed the disclaimer deed to prove by clear and convincing evidence
the deed is unenforceable on grounds of fraud or mistake. Femiano v. Maust,
248 Ariz. 613, 616, ¶ 10 (App. 2020).
¶6 Because the disclaimer deeds were admitted as evidence at
trial, Husband rebutted the community-property presumption. Wife then
bore the burden to present clear and convincing evidence the deed was the
result of fraud or mistake. But the superior court did not decide whether
Wife met her burden. Instead, it ruled as follows:
Wife asks the Court to set aside the Disclaimer Deeds or in the
alternative, find that Husband holds Wife’s 50% interest in the
properties in a Constructive Trust. Wife cites Murillo v.
Hernandez, 79 Ariz. 1 (1955) for the proposition that when a
confidential relationship exists between two parties and one
party deeds property to the other, coupled with a promise to
reconvey the property back to the grantor, even though no
active fraud by the grantee in procuring the conveyance is
shown, a constructive trust exists. The Court agrees.
The court then determined Wife would receive a 50% interest in the Sunrise
and Bungalow properties.
¶7 In Murillo, our supreme court recognized that when a
confidential relationship, such as marriage, exists “between two parties,
even though no active fraud by the grantee in the procuring of a conveyance
be shown, the mere existence of such confidential relation, when coupled
with a promise to reconvey, creates a constructive trust.” Murillo, 79 Ariz.
at 6–7.
¶8 Unlike her position in the superior court, Wife does not
defend the court’s decision to impose a constructive trust, an
understandable posture given that our research does not reveal any
appellate decision that has imposed a constructive trust under Murillo in
the face of an otherwise valid disclaimer deed. And as Husband notes,
Murillo is distinguishable because Wife never deeded either of the two
properties to Husband before she signed the disclaimer deeds, meaning
there could not have been a promise to “reconvey” the properties to Wife.
Thus, the superior court erred by imposing a constructive trust and by
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SCHMITZER v. SCHMITZER
Decision of the Court
failing to address whether Wife proved by clear and convincing evidence
the disclaimer deeds were unenforceable due to fraud or mistake.
¶9 Wife contends nonetheless the superior court made an
implicit finding of fraud. We are unwilling to infer such a finding because
there is no indication the court applied the well-established principle that a
disclaimer deed rebuts the community property presumption. See Bell–
Kilbourn, 216 Ariz. at 523, ¶ 7. Wife also argues that even if the court did
not make an implicit finding of fraud, “the community would have 100%
liens” on the properties, entitling her to “50% interest as ordered.” Her
argument fails because distribution of equity is a separate inquiry from
whether the community owns the two properties. See id. at 524, ¶ 12.
Accordingly, we vacate the superior court’s decision to impose constructive
trusts on the Surprise and Bungalow properties and remand for the court
to decide whether clear and convincing evidence establishes the disclaimer
deed was induced by fraud or mistake. If the court determines the deeds
are valid, it must then consider Wife’s claims for equitable liens based on
community expenditures. See Femiano, 248 Ariz. at 617, ¶ 17 (“Arizona has
long recognized . . . that capital contributions made with community funds
create a community interest in the separate asset that may be vindicated
through an equitable lien.”).
¶10 Husband also argues the superior court erred in failing to
explicitly rule on his May 2018 request for attorneys’ fees related to an
emergency motion concerning the parties’ cellular phone service. Simply
because the court failed to specifically address Husband’s request does not
mean it erred. State v. Hill, 174 Ariz. 313, 323 (1993) (noting that a “motion
not ruled on is deemed denied by operation of law”). Moreover, in
addressing attorneys’ fees as part of the decree, the court considered each
party’s arguments concerning the reasonableness of the other’s conduct
during the proceedings, ultimately finding Husband acted unreasonably
during discovery and his misconduct warranted a partial award of
attorneys’ fees to Wife. Husband does not contest that finding.
¶11 Finally, Husband argues the superior court erred in accepting
Wife’s pretrial statement two and a half days late. Arizona Rule of Family
Law Procedure 65(b)(1) authorizes the court to impose sanctions against a
party who fails to comply with discovery rules, which may include
“striking pleadings in whole or in part” or “prohibiting the disobedient
party from supporting or opposing designated arguments, or from
introducing designated matters in evidence.” We review the court’s
decision to impose or deny such sanctions for an abuse of discretion. See
Johnson v. Provoyeur, 245 Ariz. 239, 241–42, ¶ 8 (App. 2018).
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SCHMITZER v. SCHMITZER
Decision of the Court
¶12 Husband did not allege in the superior court he was harmed
by Wife’s delay in filing her pretrial statement. On appeal, he argues for
the first time that Wife’s untimely filing reduced his trial preparation time
in half and severely prejudiced his case. Even assuming the argument is
not waived, Husband does not offer any specifics to support his assertion
of prejudice, nor does he identify what additional evidence or argument he
would have presented if he had received Wife’s pretrial statement two days
earlier. The court acted within its discretion in allowing Wife’s late filing.
See Ariz. R. Fam. Law P. 86 (“At every stage of the proceeding, the court
must disregard all errors and defects that do not affect any party’s
substantial rights.”).
¶13 Wife requests an award of attorneys’ fees and costs incurred
on appeal under A.R.S. § 25–324, which allows a court to award a
reasonable amount of attorneys’ fees “after considering the financial
resources of both parties and the reasonableness of the positions each party
has taken throughout the proceedings.” In our discretion, we deny her
request. As the successful party on appeal, Wife is awarded taxable costs
upon compliance with ARCAP 21.
¶14 We vacate the portion of the superior court’s decree of
dissolution awarding Wife a 50% interest in the Surprise and Bungalow
properties, affirm the remainder of the decree, and remand for further
proceedings consistent with this decision.
AMY M. WOOD • Clerk of the Court
FILED: AA
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