Whitt v. Meza

545 P.3d 931

In re the Matter of: Katherine WHITT, Petitioner/Appellee,

v.Marco MEZA, Respondent/Appellant.

No. 1 CA-CV 23-0256 FC

Court of Appeals of Arizona, Division 1.

Filed February 27, 2024

Appeal from the Superior Court in Maricopa County, No. FC2021-003483, The Honorable Daniel G. Martin, Judge. AFFIRMED IN PART; VACATED AND REMANDED IN PART

Stanley David Murray, Attorney at Law, Scottsdale, By Stanley David Murray, Counsel for Petitioner/Appellee

State 48 Law Firm, Scottsdale, By Bryce Johnson, Robert Hendricks, & Stephen Vincent, Counsel for Respondent/Appellant

Presiding Judge Paul J. McMurdie delivered the Court’s opinion, in which Judge Cynthia J. Bailey and Judge Maria Elena Cruz joined.

OPINION

McMURDIE, Judge:

¶1 Marco Meza ("Father") appeals several rulings in the decree dissolving his marriage to Katherine Whitt ("Mother"). We vacate the characterization of the Chase bank account ("Chase account") that Father co-owned with his mother ("Grandmother") as community property because Grandmother’s non-marital property cannot be transmuted to the community. As a result, we also vacate the equalization judgment for the community bank accounts and offer instructions on the pre- and post-marital portion of the Chase account. We affirm the superior court’s calculation of the community’s equitable lien on Father’s separate real estate. But we vacate and remand the vehicle equalization judgment because the evidence does not support the amount of the community’s interest found by the court. We affirm the rest of the decree.¹

FACTS AND PROCEDURAL BACKGROUND

¶2 Mother and Father married in 2015 and have three children. Father opened the Chase account with Grandmother before the marriage and they deposited their earnings into the Chase account. After the marriage, Father and Grandmother continued to deposit their earnings into the Chase account. Mother and Father used the Chase account to pay for living expenses during the marriage, though they also had bank accounts in their names.² The Chase account had a balance of around $42,000 on the marriage date. It grew to around $98,500 on the date of service. The day after service, Grandmother withdrew the entire balance.

¶3 Father bought a home before the marriage but paid the mortgage with community funds during the marriage. Mother agreed the home is Father’s separate property but asserted the community had an equitable lien. The parties also owned five vehicles, two bought during the marriage. Father bought the other three vehicles before the marriage but made payments with community funds.³

¶4 As relevant to this appeal, the superior court awarded Mother $51,212 as an equalization judgment for her share of the "community depository accounts." The court awarded the home to Father and found Mother’s interest in the community’s equitable lien on the home was $14,469. The court found one vehicle (Rav4) was Father’s separate property, awarded one vehicle to Mother (2006 Acura), and awarded the three other vehicles to Father (Subaru, 2007 Acura, and Toyota Highlander) with an equalization judgment of $15,625 owed to Mother.

¶5 Father sought post-decree relief, which the superior court partially granted on an issue irrelevant to the appeal. After the court entered an appealable decree, Father appealed. We have jurisdiction under A.R.S. § 12-2101(A)(1) and (2) and Arizona Rule of Family Law Procedure ("Rule") 78(c).

DISCUSSION

A. The Superior Court Did Not Have to Make Written Findings of Fact and Conclusions of Law After It Directed the Parties to Submit Proposed Decrees.

[1] ¶6 Father argues that the superior court erred by failing to make written findings of fact and conclusions of law under Rule 82(a). Neither party requested findings under Rule 82(a). But Father argues on appeal that the court invoked Rule 82’s requirement for written findings and legal conclusions when it ordered the parties to submit proposed decrees. We disagree.

[2] ¶7 For Rule 82(a) to apply, a party must request findings. See Ariz. R. Fam. Law P. 82(a)(1) ("If requested before trial, the court must make separate findings of fact and conclusions of law.") (Emphasis added.). Rule 82(a) does not encompass the court’s authority to order parties to submit proposed forms of a decree. The court’s authority to request proposed judgments comes from its "inherent power to do those things which are necessary for the efficient exercise of its jurisdiction." Fenton v. Howard, 118 Ariz. 119, 121, 575 P.2d 318, 320 (1978). Thus, the court did not invoke Rule 82 when it ordered the parties to submit proposed decrees.

[3, 4] ¶8 Without the requirement that the superior court make written findings, our standard of review presumes the superior court found every fact necessary to support its decision. See Francine C. v. Dep’t of Child Safety, 249 Ariz. 289, 297, ¶ 19, 468 P.3d 1250, 1258 (App. 2020); Elliott v. Elliott, 165 Ariz. 128, 135, 796 P.2d 930, 937 (App. 1990). We will affirm the decree if it is supported by reasonable evidence and view the evidence in the light most favorable to upholding it. See Vincent v. Nelson, 238 Ariz. 150, 155, ¶ 17, 357 P.3d 834, 839 (App. 2015).

B. The Superior Court Erred by Finding the Entire Chase Account Was Community Property.

[5] ¶9 Father and Grandmother had a joint Chase account at the time of the marriage with a balance of around $42,000. Mother did not dispute the $42,000 amount and conceded that Grandmother continued to deposit unspecified amounts into the Chase account throughout the parties’ marriage. Mother also recognized that the parties used the Chase account for "community expenses" during the marriage. And the parties agreed that Father continued to deposit his earnings into the Chase account. While Father made withdrawals from the Chase account throughout the marriage, there was no evidence that he used these funds for separate expenses. Neither party offered evidence that Grandmother withdrew her funds from the account until she withdrew all funds after service.

¶10 After the trial, the court adopted Mother’s position that the entire Chase account was community property and ordered Father to pay an equalization judgment of $51,212 "for Mother’s share of the communi- ty depository accounts." The court reached the $51,212 amount as follows. The total amount in all accounts was $105,293. Half of that amount was $52,646. The court awarded Mother her named accounts, which totaled $1,434—subtracting $1,434 from $52,646 leaves $51,212—the amount of the equalization judgment.

¶11 Father argues that the entire account was not transmuted to a community account because it contained marital and non-marital property. Father also claims the approximately $42,000 in the account on the marriage date is undisputedly Grandmother’s non-marital and Father’s separate property, and it was error to award Mother any of those funds.

¶12 Grandmother has an undisputed but undetermined interest in the pre-marital funds in the Chase account and the funds she deposited into the account during the marriage, less anything she withdrew. Mother argues that because Father failed to trace his pre-marital separate property and Grandmother’s deposits and withdrawals, the entire account became commingled and is, therefore, community property. Not so.

¶13 Grandmother’s funds in the account are not marital property and can never become such because she was never married to Father or Mother. In a dissolution proceeding, the court has the authority to assign each spouse their sole and separate property and equitably divide the community property, but it lacks the authority to assign non-marital property. See A.R.S. § 25-318(A) (authorizing the court to divide property in a dissolution). As a result, Grandmother’s funds are not subject to transmutation simply because they were combined in an account containing the parties’ community property. See In re Marriage of Cupp, 152 Ariz. 161, 164, 730 P.2d 870, 873 (App. 1986) (The rule of "transmutation of separate property to community property occurs only when the identity of the property as separate or community is lost."). Because Grandmother was not a spouse in the dissolution, her property is neither "separate" nor "community." Grandmother’s funds are non-marital property and not subject to transmutation.

[6] ¶14 As between Mother and Father, the funds Father deposited after the marriage are presumably community property. See A.R.S. § 25-211(A) (All property acquired during the marriage by either spouse is community property unless an exception applies.). But that does not allow the superior court to order Father to pay Mother one-half of all funds in the account. Mother had no right to any share of the funds Grandmother deposited into the account. See A.R.S. § 14-6211(A) ("During the lifetime of all parties an account belongs to the parties in proportion to the net contribution of each to the sums on deposit unless there is clear and convincing evidence of a different intent.").

[7, 8] ¶15 Father also asserts that the $42,000 account balance on the marriage date is not subject to allocation because it was a combination of Grandmother’s and Father’s pre-marital funds. See A.R.S. § 25-213(A) (The property a spouse owned before marriage is that spouse’s separate property.). A spouse’s pre-marital property remains separate property unless transmuted by agreement or operation of law. Potthoff v. Potthoff, 128 Ariz. 557, 561, 627 P.2d 708, 712 (App. 1981). "The mere fact that the property was commingled does not cause it to lose its separate identity, as long as the separate property can still be identified." Cupp, 152 Ariz. at 164, 730 P.2d at 873; see also Cooper v. Cooper, 130 Ariz. 257, 259, 635 P.2d 850, 852 (1981) (same); Noble v. Noble, 26 Ariz. App. 89, 95, 546 P.2d 358 (1976) (Commingling does not cause transmutation "so long as the funds remain traceable."). Father has the burden of proving with clear and satisfactory evidence what portion...