Defrancesco v. Defrancesco

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

In re the Matter of:

ANTHONY DEFRANCESCO,
Petitioner/Appellee,

v.

ADRIENE DEFRANCESCO,
Respondent/Appellant.

No. 1 CA-CV 19-0055 FC
FILED 12-5-2019

Appeal from the Superior Court in Maricopa County
No. FC2011-091013
FN2017-092333
The Honorable Katherine M. Cooper, Judge

AFFIRMED

COUNSEL

The Murray Law Offices, PC, Scottsdale
By Stanley D. Murray
Counsel for Petitioner/Appellee

Dickinson, Wright, PLLC, Phoenix
By Steven D. Wolfson, Michael R. Scheurich
Counsel for Respondent/Appellant
 DeFRANCESCO v. DeFRANCESCO
Opinion of the Court

OPINION

Judge Diane M. Johnsen delivered the opinion of the court, in which
Presiding Judge Kenton D. Jones and Judge James B. Morse Jr. joined.

J O H N S E N, Judge:

¶1 The manager of a professional minor-league baseball team
served a petition for dissolution on his wife in June 2017, midway through
the baseball season. We hold that a bonus he received after his
organization's major-league team won the World Series that year is his
separate property.

FACTS AND PROCEDURAL BACKGROUND

¶2 Anthony DeFrancesco ("Husband") and Adriene DeFrancesco
("Wife") married in 1988 and legally separated in 2012. Husband served a
petition for dissolution on June 23, 2017. Notwithstanding their legal
separation, both parties acknowledged they shared community property
that would need to be divided in the dissolution.

¶3 Husband was a long-time employee of the Houston Astros
baseball organization. From the outset of the 2017 baseball season, he
managed the Astros' AAA minor league affiliate team. After the Astros
won the World Series in October 2017, the team paid Husband a bonus of
$28,151.26. The superior court rejected Wife's argument that the bonus
belonged to the community and ruled it was Husband's separate property.
After the court entered its decree of dissolution, Wife timely appealed the
ruling. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona
Constitution, and Arizona Revised Statutes ("A.R.S.") sections 12-120(A)(1)
(2019) and -2101(A)(1) (2019).1

DISCUSSION

¶4 Whether property belongs to the community or is the separate
property of a spouse is a matter of law that we review de novo. In re Marriage
of Pownall, 197 Ariz. 577, 581, ¶ 15 (App. 2000). The general rule is that
"[p]roperty that is acquired by a spouse after service of a petition for

1 Absent material revision after the relevant date, we cite the current
version of a statute or rule.

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 DeFRANCESCO v. DeFRANCESCO
Opinion of the Court

dissolution" that results in a dissolution is that spouse's separate property.
A.R.S. § 25-213(B) (2019). Because Wife argues the bonus Husband received
after service of the petition was an exception to that rule, she had the burden
to establish any facts required to support her contention. See generally In re
Marriage of Foster, 240 Ariz. 99, 101, ¶ 6 (App. 2016) (parallel community-
property statute, A.R.S. § 25-211(A) (2019), creates "legal presumption" that
must be overcome by spouse claiming an exception).

¶5 Wife correctly argues that, notwithstanding § 25-213(B), not
every item of value a spouse receives after service of a dissolution petition
is that spouse's separate property. For example, a pension earned during a
marriage belongs to the community even though it may not be paid out
until after dissolution. In Van Loan v. Van Loan, 116 Ariz. 272 (1977), a
spouse argued that as long as he had not yet retired, his pension was a
"mere 'expectancy'" rather than a property right subject to equitable
division in his dissolution. 116 Ariz. at 273. Our supreme court ruled the
pension was community property because it was a contractual right earned
during the marriage, "not an expectancy." Id. at 274. The court cited the
California Supreme Court for the proposition that "the defining
characteristic of an expectancy is that its holder has no enforceable right to
its beneficence." Id. at 274 (quoting In re Marriage of Brown, 544 P.2d 561,
565 (Cal. 1976)).

¶6 Similarly, a contingent fee a lawyer earns during the marriage
but receives after dissolution is a community asset because it is an
enforceable contractual right that arose during the marriage. Garrett v.
Garrett, 140 Ariz. 564, 567-68 (App. 1983) (because contingent fee was not a
"mere expectancy," it was community property to the extent "community
labor contributed to" its acquisition).

¶7 Courts in other community-property states have applied a
similar analysis in considering whether a payment received after the
marriage could belong to the community as compensation for services
rendered during the marriage. For example, in In re Marriage of Nelson, 222
Cal. Rptr. 790 (App. 1986), the court ruled that a year-end bonus a spouse
received after the parties separated in anticipation of divorce was that
spouse's separate property. 222 Cal. Rptr. at 794. The other spouse asserted
the bonus "was paid either in consideration for or in recognition of services
rendered during marriage," id., but the court concluded that although the
employer often awarded bonuses at the end of the year, employees had
"only an expectancy of a year-end bonus rather than a right to one
contingent solely upon continued employment." Id. at 795.

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Opinion of the Court

¶8 The court in Pelafigue v. Sudduth, 820 So. 2d 583 (La. App.
2002), came to the same conclusion with respect to a year-end bonus a
spouse received after she filed for dissolution. 820 So. 2d at 595-96. The
spouse was salaried and did not know she would receive a bonus, and there
was no evidence the "bonus represented compensation for services
performed before termination of the community." Id. The court explained,
"[the spouse] had already been paid for the work that she performed during
the existence of the community. Without other evidence, we can only
conclude that her bonus was earned when it was paid." Id. at 596.

¶9 Of course, when a payment is received before service of a
dissolution petition, the presumption is that it belongs to the community.
A.R.S. § 25-211(A); see Foster, 240 Ariz. at 101, ¶ 6. But the presumption may
be overcome, and in analyzing this question, Arizona courts have
considered, as in Van Loan and Garrett, whether the payment relates to
services rendered during the marriage. For example, in considering
whether an employer's transfer of stock to a spouse is a gift (and therefore
separate property) or earnings belonging to the community, courts have
considered whether the spouse was otherwise sufficiently compensated for
his or her services and whether the employer regularly made such transfers.
See Davis v. Davis, 149 Ariz. 100, 102-03 (App. 1985); see also Brebaugh v.
Deane, 211 Ariz. 95, 98-99, ¶¶ 8, 15 (App. 2005) (status of stock options that
had not vested before the dissolution petition was served depended
primarily on whether the employer gave them as "compensation for work
performed" or as an incentive to encourage the spouse to remain with the
company); Holby v. Holby, 131 Ariz. 113, 114 (App. 1981) (notwithstanding
employer's cover letters describing stock it gave employee every Christmas
as a gift, stock "was clearly a remuneratory gift. . . . in consideration of
services rendered").

¶10 In Davis, we endorsed an approach that distinguishes
between an ordinary gift and a "remuneratory gift," meaning a payment to
which the spouse has no enforceable right but which nevertheless belongs
to the community because it is "the equivalent of any other property earned
through labor and industry" and made in consideration of services
performed during the marriage. 149 Ariz. at 102-03 (quoting William Q. De
Funiak & Michael J. Vaughn, Principles of Community Property § 70, at 159-
60 (2d ed. 1971)). Under this reasoning, a gift "inspired by charity, affection,
liberality or the like" is the spouse's separate property even if it is given "in
recognition or appreciation of some individual merit." Id. And what
otherwise might be a "remuneratory gift" belonging to the community
becomes separate property if it "is so in excess of the value of the services

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Opinion of the Court

as to indicate that it is inspired by liberality rather than to remunerate the
actual value of the services." Id.

¶11 Applying those principles here, Husband was a salaried
employee of the Astros during the majority of 2017. Although the record
does not make clear what the Astros paid him during that year, the team
paid him about $108,000 in 2016. The occasion for the bonus (and the source
of the monies from which the bonus was paid) was the Astros' success in
the 2017 playoffs, culminating in a World Series victory. Wife offered no
evidence for the proposition that, as a manager in the Astros' farm system,
Husband had any legal entitlement to a share of the monies awarded to the
team from the playoff pool; nor did she offer evidence that the salary the
Astros paid him did not adequately compensate him for his labor during
the season.

¶12 In sum, there is no suggestion in the record that the Astros'
decision to share their playoff proceeds with Husband was anything but "a
gift which, although in recognition or appreciation of some individual
merit, is actually in the nature of a simple gift inspired by charity, affection,
liberality or the like." Id. The superior court therefore did not err by
concluding it was his separate property. See A.R.S. § 25-213.

CONCLUSION

¶13 For the reasons set forth above and in our separate
memorandum decision, see Ariz. R. Civ. App. P. 28(c); Ariz. R. Sup. Ct.
111(b), we affirm the decree.

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

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