Robbins v. Townsend

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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 Marriage of:

NECIA ROBBINS, Petitioner/Appellee,

v.

ROBERT TOWNSEND, Respondent/Appellant.

No. 1 CA-CV 16-0417 FC
FILD 2-27-2018

Appeal from the Superior Court in Mohave County
No. L8015DO201407138
The Honorable Derek C. Carlisle, Judge

AFFIRMED

COUNSEL

Steven Clark, P.C., Phoenix
By Steven G. Clark
Co-Counsel for Petitioner/Appellee

The Murray Law Offices, P.C., Scottsdale
By Stanley D. Murray
Co-Counsel for Petitioner/Appellee

Law Office of John C. Churchill, Parker
By John C. Churchill
Counsel for Respondent/Appellant

ROBBINS v. TOWNSEND
Decision of the Court

MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which
Presiding Judge Michael J. Brown and Chief Judge Samuel A. Thumma
joined.

C R U Z, Judge:

¶1 Robert Townsend (“Husband”) appeals the superior court’s
Decree of Dissolution (“Decree”).

FACTUAL AND PROCEDURAL HISTORY

¶2 Husband and Necia Robbins (“Wife”) married in 2004. In
2008, with the advice of attorney Steve Beihn, Husband and Wife created a
marital trust. Wife filed her petition for divorce in 2014. Wife and Husband
disputed three main issues: (1) whether a Kiowa commercial property was
community property; (2) whether Wife’s Boeing Retirement Account (the
“Boeing Account”) was community property; and (3) the value of a shared
Montana home.

¶3 After a two-day trial, the superior court entered the Decree in
February 2016. The court found the Kiowa property was conveyed to the
parties as community property. The court found that, regardless of
Husband placing the Kiowa property in the marital trust, the evidence
demonstrated that the intent was for the Kiowa property to be community
property, and that Husband did not prove by clear and convincing
evidence that it was to remain his sole and separate property. The court
found that the Boeing Account was Wife’s sole and separate property.
Husband and Wife agreed that Wife would receive the Montana home and
that Husband would receive the Lake Havasu City home. Wife presented
an appraisal valuing the Montana home at $240,000. Husband estimated
the value was closer to $310,000 to $340,000, and Husband’s friend, Gordon
Brown, testified that he had bought a smaller, but newer, home for $275,000.
Given the competing evidence and testimony, the court found Wife’s
appraisal to be the most credible, and found the Montana home was worth
$240,000.

¶4 Husband unsuccessfully moved for a new trial and for
reconsideration and then timely appealed the denial of those motions.

2

ROBBINS v. TOWNSEND
Decision of the Court

After discovering the Montana home had suffered water damage at the
time of the court’s decree, Husband moved for relief from judgment, and
appealed the denial of said motion. We have jurisdiction pursuant to
Arizona Revised Statutes (“A.R.S.”) section 12-2101(A).

DISCUSSION

I. The Kiowa Property

¶5 Husband argues the Kiowa property should have been
awarded to him as his sole and separate property.

¶6 We review the denial of a motion for new trial for an abuse of
discretion. Pullen v. Pullen, 223 Ariz. 293, 296, ¶ 10 (App. 2009). However,
the superior court’s characterization of property as community or separate
is a conclusion of law we review de novo. In re Marriage of Pownall, 197 Ariz.
577, 581, ¶ 15 (App. 2000); see also Pullen, 223 Ariz. at 295-96, ¶ 9. We view
the evidence and all reasonable inferences in the light most favorable to
sustaining the superior court’s ruling regarding whether property is
community or separate. Valladee v. Valladee, 149 Ariz. 304, 307 (App. 1986).

¶7 Property acquired before marriage is characterized as
separate property, and the court must assign each spouse their sole and
separate property. A.R.S. §§ 25-213(A), -318(A). Property acquired during
marriage is presumed to be community property. A.R.S. § 25-211(A);
Somerfield v. Somerfield, 121 Ariz. 575, 578 (1979). This presumption may be
rebutted by clear and convincing evidence. Armer v. Armer, 105 Ariz. 284,
287 (1970). If the property acquired during marriage was acquired by gift,
devise, or descent, then the property is characterized as separate. A.R.S.
§ 25-213(A).

¶8 In 1995, Husband’s parents created the Townsend Trust,
named Husband and his brother, Wayne Townsend, as beneficiaries and
thereafter placed real property in the trust, including the Kiowa property.
In 2007, Wayne, as trustee, executed a deed conveying to Husband and
Wife, in exchange for just consideration, an undivided 50% interest in the
Kiowa property “as community property with right of survivorship.”
Husband and Wife accepted that conveyance in writing, signed by both
Husband and Wife, stating “it is their intention to accept [the] conveyance
as community property with right of survivorship.” Husband and Wife
later signed a lease extension to the Kiowa property, stating their
ownership rights were held jointly.

3

ROBBINS v. TOWNSEND
Decision of the Court

¶9 The superior court found the evidence established that
Husband and Wife acquired the property during the marriage as
community property; not that Husband had acquired the property as his
sole and separate property, and that any potential transmutation occurred
as a result of the property being placed into a marital trust Husband and
Wife created.1 The court denied Husband’s post-decree motions for new
trial and reconsideration on the same basis.

¶10 Husband argues the Kiowa property interest was not
acquired during the marriage; he claims the community deed merely
changed his status from “beneficial” owner to “record” owner. See City of
Phoenix v. State ex rel. Harless, 60 Ariz. 369, 377 (1943) (stating that vendee
under contract for sale of real property was to be regarded as the owner
within the meaning of tax exemption statute); see also Junker v. Union High
School Dist., 73 Ariz. 20, 22 (1951) (applying State ex rel. Harless to grant
vendee, as property owner, right to vote on bond issues or special
assessments in bond elections).

¶11 Generally, the creation of a trust involves the present transfer
of equitable property interests in the trust to the beneficiaries. In re Matter
of Estate and Trust of Pilafas, 172 Ariz. 207, 210 (App. 1992). These interests
cannot be taken from the beneficiaries except in accordance with the
provisions of the trust or by their own acts. Id.

¶12 The Townsend Trust was created in 1995. The Townsend
Trust obtained title to the Kiowa property in 2003. Husband’s beneficial
interest was as a beneficiary to the Townsend Trust, subject to distribution
to Husband and Wayne upon their parents’ deaths. While the property
remained in the trust, the property was to be “held, administered and
distributed by the trustee” in accordance with the trust provisions. The
trustee was further granted the power to convey trust property and acquire
or dispose of assets, including real estate. Wayne, as trustee and at
Husband’s request, conveyed the Kiowa property to Husband and Wife in
2007, at which point Husband and Wife acquired legal title. Husband
presented no controverting evidence that his future beneficial interest in
receiving a portion of the property held by the Townsend Trust upon the
death of his parents actually passed by devise, descent, or gift, instead of

1 For this reason, the court did not apply the presumption that a gift
was made to the Wife through the creation of the trust. See Toth v. Toth, 190
Ariz. 218, 220 (1997) (stating that when a spouse places separate real
property into a joint tenancy, there is a presumption that the spouse has
made a gift of a one-half property interest to the other spouse).

4

ROBBINS v. TOWNSEND
Decision of the Court

conveyance, and Husband did not challenge the validity of the transfer of
the property to him and Wife. Thus, as the Kiowa property was acquired
and held by Husband and Wife during the marriage, it was subject to
equitable division. A.R.S. § 25-211(A).

¶13 Husband next argues that the property was intended to be
transferred solely to him, and only mistakenly conveyed to him and Wife
as community property.

¶14 The intent of the parties to a deed is generally held to be the
deed language itself, in the absence of clear and convincing evidence to the
contrary. Yano v. Yano, 144 Ariz. 382, 384 (App. 1985). However, the court
may reform the terms of an instrument to conform with the instrument’s
intention. See Nationwide Res. Corp. v. Massabni, 143 Ariz. 460, 465 (App.
1984) (“The fact that the promissory note was made out to . . . husband and
wife does not preclude the trial court from determining the true status of
the note.”). Thus, the fact that the deed transferred the property to both
Husband and Wife does not necessarily preclude the court from
determining the property was Husband’s sole and separate property.

¶15 On appeal, we will not reweigh the evidence, and it is
peculiarly within the province of the superior court to draw a distinction
between evidence that is clear and convincing and evidence that is not.
Yano, 144 Ariz. at 384.

¶16 Both Wayne and Husband testified they never intended to
give Wife an interest in the Kiowa property. Both testified that Husband
had dyslexia, which prevented him from understanding certain documents.
However, both also testified Husband was the party that requested the
transfer, and Husband testified he believed the deed transferring the
interest in the Kiowa property from the Townsend Trust to Husband and
Wife was drafted in conformance with his request to transfer the property.
Neither Wayne nor Husband recalled who prepared the deed and neither
remembered reading it before signing it; in addition, Husband testified that
he was drunk when he signed it. Husband’s testimony contained
contradictions, and Wayne’s testimony indicated he merely signed what he
was given. Wayne testified he never considered placing title solely in
Husband’s name. Biehn, Husband and Wife’s trust attorney, testified he
did not prepare the deed.

¶17 Wife testified she had no dealings with the Townsend Trust,
neither was she aware that Husband was set to receive income based on an
interest in the Kiowa property. Wife stated Husband expressed his

5

ROBBINS v. TOWNSEND
Decision of the Court

intention that she acquire an interest in the Kiowa property and that
Husband requested Wife sign the deed. Wife denied instructing Wayne to
draft the deed, and had no knowledge of the manner in which the property
was conveyed.

¶18 In the Decree, the court found Husband “failed to prove by
clear and convincing evidence that the parties intended the Kiowa property
to remain separate.” The record fully supports this finding. The deed
conveyed the property as community property, was signed by Wayne, as
trustee, and received by Husband and Wife. While Wayne and Husband
testified they never intended to grant Wife an interest in the property, Wife
testified to the opposite. All parties agreed the deed was prepared at
Husband’s request, and Husband believed it comported with his wishes.
We agree that Husband failed to present clear and convincing evidence
negating the express language of the deed that the property be Husband’s
and Wife’s community property.

¶19 Husband cites Porter v. Porter, 67 Ariz. 273, 284-85 (1948), and
further argues the superior court’s decision ignored trust law as it applies
to a resulting/constructive trust; however, as discussed above, the
presumptions of gift do not apply, as they did in Porter, because the
property was conveyed for consideration from the parents’ trust to
Husband and Wife as community property.

¶20 Imposition of a constructive trust is an equitable remedy that
prevents one party from being unjustly enriched at the expense of another.
Turley v. Ethington, 213 Ariz. 640, 643, ¶ 8 (App. 2006). A court may impose
a constructive trust when it finds that title has been wrongfully obtained
through fraud, misrepresentation, undue influence, duress, or other means,
which would render it unconscionable for the holder of legal title to
continue to retain its beneficial interest. Id. at ¶ 9.

¶21 No imposition of a constructive trust is required here. The
court found the Decree’s allocation of the real and personal property was
fair and equitable, and particularly as it applied to the Kiowa property,
found the division equitable as “consistent with an allocation of community
property and debts – [Wife] to get the Montana house and a beneficial
interest in the Kiowa property, [Husband] to get the Kiowa property and
the motorhome debt.” Further, Husband presented no evidence suggesting
Wife wrongfully obtained title to Husband’s interest in the Kiowa

6

ROBBINS v. TOWNSEND
Decision of the Court

property.2 Husband’s testimony indicates that he requested the property
be transferred, requested documentation be drafted comporting with his
wishes, and that any mistake was that of his own making, either through
ignorance or intoxication.

¶22 For the foregoing reasons, we hold the court did not err when
it characterized the interest in the Kiowa property as community property
and apportioned it accordingly.

II. The Boeing Account

¶23 Husband argues the court erred when it excluded statements
from Wife’s deposition that the Boeing Account was to be included in the
marital trust. This error, he claims, means that the award to Wife of the
Boeing Account should be vacated.

¶24 We review the superior court’s admission of evidence for an
abuse of discretion, and will affirm its ruling in the absence of an abuse or
error and resultant prejudice. Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493,
506 (1996).

¶25 During cross-examination, Husband asked Wife whether she
understood the language of the trust to be inclusive, and whether it
therefore included her Boeing Account. Wife agreed the language was
inclusive, but did not know whether it included the Boeing Account.
Husband sought to impeach Wife with previous statements she made
during her deposition, in which according to Husband, Wife admitted the
marital trust language included the Boeing Account. Husband argues the
court incorrectly limited his questioning by sustaining an objection to
further questioning on the basis that the question had been asked and
answered. However, the record reveals, and Husband’s counsel conceded
at oral argument on appeal, that Wife did, in fact, answer the relevant
questions.

¶26 Additionally, Husband was never precluded from arguing
that the trust clearly, plainly, and simply included the Boeing Account. We

2 Husband does argue that he requested the Kiowa property from his
brother in order to include it in the trust on the condition that Wife said she
would include her Boeing Account. However, the evidence does not
establish that Wife acted to convey an interest to the Kiowa property to
herself, and Wife testified that she never agreed to place her Boeing
Account into the trust, and that it was never a consideration.

7

ROBBINS v. TOWNSEND
Decision of the Court

hold the court did not err at trial or abuse its discretion when it denied
Husband’s motions for new trial and reconsideration.

III. Jointly Held Montana Property

¶27 Husband first argues the court wrongly excluded a market
study of the Montana property on the grounds it lacked foundation.

¶28 Husband argues the court erred because it in part ignored the
less stringent admissibility rules of Arizona Rule of Family Law Procedure
(“Rule”) 2(B). Rule 2(B) replaces, if no notice is filed, certain evidence rules,
with a general rule stating, “relevant evidence is admissible, provided,
however, that the court must exclude evidence if its probative value is
outweighed by a danger of . . . [a] lack of reliability or failure to adequately
and timely disclose the same.” Ariz. R. Fam. Law P. 2(B)(2). While relaxed,
these rules do not eliminate the requirement that some indication of
reliability be provided. “We will not disturb a trial court’s ruling on the
admissibility of evidence absent a clear abuse of discretion and resulting
prejudice.” Jimenez v. Wal-Mart Stores, Inc., 206 Ariz. 424, 427, ¶ 10 (App.
2003).

¶29 Husband had a realtor prepare a market study for valuation
of the Montana property. Husband’s pretrial statement included the realtor
as a witness, to testify that she completed the market analysis and valued
the property between $325,000 and $340,000. Roughly one week prior to
trial, Husband disclosed to Wife that the realtor was not going to testify.
Wife then objected to use of the market study. The court granted Wife’s
objection to the use of the market study, and advised Husband that “unless
the proper foundation can be laid for that exhibit, that exhibit will be
precluded from the trial.” Husband chose to forgo laying foundation to
introduce the market study.

¶30 Even considering the more relaxed rules of admissibility of
Rule 2, we hold the court did not abuse its discretion when it excluded the
market study for lack of foundation. Even under that standard, evidence
must be “relevant” before it is admissible. On this record, the superior court
could properly conclude that, absent some foundation, the exhibit was not
relevant and, therefore, was inadmissible.

¶31 Husband next argues the court erred when it denied his
motion for relief from judgment, claiming Wife fraudulently failed to
disclose water damage to the jointly held Montana Property.

8

ROBBINS v. TOWNSEND
Decision of the Court

¶32 We review the denial of a Rule 85 motion under an abuse of
discretion standard. See Norwest Bank (Minnesota), N.A. v. Symington, 197
Ariz. 181, 184, ¶ 11 (App. 2000) (applying Civil Rule of Procedure 60, the
civil equivalent to Rule 85). It is an abuse of discretion for the superior court
to act arbitrarily or make a decision unsupported by fact or law. Id.

¶33 In May 2016, after the Decree issued in February 2016, Wife
notified Husband that the Montana home suffered water damage and there
was an insurance claim. In August 2016, Husband sought relief from
judgment, pursuant to Rule 85(C)(1)(f) (for “any other reason justifying
relief from the operation of the judgment.”).

¶34 Husband subsequently sought to inspect the residence for
purpose of evaluating the insurance claim, as well as have an appraisal
completed, and claimed that Wife committed fraud by hiding the existence
of damage. The court granted Husband’s request to inspect the property.
Husband and Wife set an inspection date in November, but a dispute arose
and the inspection could not be completed. A new inspection date was set,
however, neither Husband, a contractor of his choice, nor the appraiser
appeared on the date the court ordered. Husband asked to reset the
inspection date.

¶35 At an evidentiary hearing in February 2017, the court denied
Husband’s request to set a new inspection date. At the outset of the
hearing, the court noted that the issues were whether there was water
damage in respect to Husband’s knowledge if he were to sign an insurance
check, and whether Wife committed fraud or a misrepresentation in failing
to disclose the water damage and subsequent restoration.

¶36 Husband argued Wife’s concealment of water damage
precluded Husband from presenting evidence regarding the damage,
repairs and restoration, and the potential increase in value of the Montana
home after the Decree was entered. Husband testified that the insurance
agency was advised of water damage, at an estimated cost between
$32,493.37 and $47,000, in October 2015, but that Husband was not advised
of the damage until after the Decree was entered. Husband then presented
evidence that Wife was charged post-Decree repairs costing roughly
$50,000, reduced by $17,000 for preexisting damage, and another $15,000
was for simple dry-out services, which would not have affected home
value. The insurance company notified Wife and Husband of the damage
and lack of claim for loss in April 2016.

9

ROBBINS v. TOWNSEND
Decision of the Court

¶37 In regard to post-Decree repairs, Husband declined to sign
the insurance check because he believed Wife misrepresented whether the
damage repaired was due to the most current water damage, or had been
preexisting, because the house had suffered other damage previously. On
cross-examination, Husband admitted: he had not been in the home since
2013; he was not aware what condition the home was in before the Decree;
that said repairs did not occur until after the Decree; and that he truly and
bluntly wanted to revalue the house and have a new appraisal completed.

¶38 Wife testified she believed Husband knew of the water
damage. Wife testified she was away from the home for the winter when
the water damage occurred, and that her sister discovered it and claimed it
was limited to the laundry room. Wife acknowledged there was some
major damage, but did not believe it would alter the value of the home.
Wife testified that she did nothing to misrepresent the value of the home,
and that she was not present when the appraiser was there. Wife testified
Husband exaggerated the previous damage, but did state that Husband
had done some previous repairs. Wife further testified the insurance claim
did not involve some previously known damage, and that she never
attempted to include any preexisting conditions in her claim. Wife
eventually had the insurance claim check sent to just her, thereby holding
Husband harmless from any allegation he participated in the disputed
claim. Wife testified the restoration entailed repairs, not improvements,
and the only increase would be due to new linoleum.

¶39 After receiving exhibits and testimony, the court found there
was no fraud or misrepresentation on behalf of Wife, and any potential
omission by Wife did not negatively affect Husband. The appraiser who
conducted the appraisal pre-Decree did not inspect the inside of the home,
and no definitive evidence was provided showing the value would have
appreciated with expected restorative work, or have been depreciated at
the time of the Decree based on knowledge of the damage at the time. The
court found nothing that indicated the damage to the house negatively
affected the appraisal and nothing that would say the damage at the time
of trial would have increased the value of the house.3 Husband has shown
no error in these findings.

3 The court also noted that neither damage depreciating the value nor
restorative work increasing the value would have affected Husband’s
proposed market study that was not admitted, because the market study
looked only at comparable houses in the area, not the inside of the Montana
property.

10

ROBBINS v. TOWNSEND
Decision of the Court

¶40 The court did not abuse its discretion in denying Husband’s
motion for relief from judgment. The evidence does not indicate that the
damage negatively impacted the value of the home, nor does it show that
Wife fraudulently concealed this information. Besides attempting to secure
a new valuation, Husband’s concern regarding insurance fraud was
dispelled when Wife had the check signed over to just her, relieving
Husband of potential liability for a claim based on preexisting damage.

CONCLUSION

¶41 For the foregoing reasons, we affirm the court’s Decree and
denial of Husband’s motion for relief from judgment.

¶42 Husband and Wife both requested costs and reasonable
attorneys’ fees pursuant to A.R.S. § 25-324. Husband’s request for costs and
attorneys’ fees is denied. In the exercise of our discretion, we award Wife
her costs and reasonable attorneys’ fees on appeal subject to compliance
with Arizona Rule of Civil Appellate Procedure 21.

AMY M. WOOD • Clerk of the Court
FILED: AA

11