Hill v. Hill

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

ANGADREME HILL, Petitioner/Appellee,

v.

DAVID K. HILL, Respondent/Appellant.

No. 1 CA-CV 19-0456 FC
FILED 4-21-2020

Appeal from the Superior Court in Maricopa County
No. FC2018-053653
The Honorable Roy C. Whitehead, Judge

REVERSED AND REMANDED

COUNSEL

Wees Law Firm, L.L.C., Phoenix
By James F. Wees
Counsel for Petitioner/Appellee

Collins & Collins, LLP, Phoenix
By C. Robert Collins
Counsel for Respondent/Appellant
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Decision of the Court

MEMORANDUM DECISION

Judge D. Steven Williams delivered the decision of the Court, in which
Presiding Judge Michael J. Brown and Judge Kenton D. Jones joined.

W I L L I A M S, Judge:

¶1 David K. Hill (“Husband”) appeals from the superior court’s
decree dissolving his marriage to Angadreme Hill (“Wife”), arguing the
court erred in designating the marital residence as community property
and ordering its sale and equitable division. For the following reasons, we
reverse that portion of the decree and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

¶2 Husband and Wife married on May 2, 1998. On February 21,
1998 —approximately three months before the marriage—Husband
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purchased a home located on Oraibi Drive in Phoenix (“the Home”) in his
own name, using his own separate funds to pay the down payment.
Husband and Wife both resided at the Home throughout the marriage and
used community funds 2 to make mortgage payments. Wife filed for
dissolution on June 20, 2018. Husband and Wife resolved several issues out
of court but proceeded to trial in regard to day care reimbursement and
property issues. At trial, Husband testified he had purchased the Home in
his own name and made all mortgage payments before and during the
marriage, while Wife testified the Home was intended to be marital
property, but she was not included on the title because of her poor credit.
In its dissolution decree, the court designated the Home as community
property, and ordered it to be sold with the proceeds divided equally.

1 Husband testified that he purchased the Home on February 21, 1998,

which is the date reflected on the purchase contract, but with a closing date
listed as March 27, 1998. Thus, the record is unclear as to the exact date the
property was purchased. It is, however, undisputed that the Home was
purchased before the marriage.

2 Although the parties apparently maintained separate bank accounts and

Husband’s earnings were the primary source of marital income, the
mortgage was paid with money earned during the marriage, which is
community property. See A.R.S. § 25-211(A).

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Decision of the Court

Husband filed a Rule 85 motion to set aside the part of the judgment
regarding property distribution, which was denied. Husband timely
appealed, and we have jurisdiction pursuant to A.R.S. § 12-2101(A)(1).

DISCUSSION

¶3 Husband argues the court erred in designating the Home as
community property. Husband contends that because he purchased the
Home before the marriage and used his separate property to make the
down payment, it is, as a matter of law, Husband’s separate property
subject to an equitable community lien. Wife contends there was an implied
agreement to transmute the Home to community property.3 The court’s
property characterization is a question of law we review de novo. Schickner
v. Schickner, 237 Ariz. 194, 199, ¶ 22 (App. 2015).

¶4 Property is divided in accordance with its character, which is
determined at its acquisition. Porter v. Porter, 67 Ariz. 273, 281 (1948).
Property acquired by either spouse before marriage is characterized as
separate property. A.R.S. § 25-213(A). The court must assign each spouse’s
separate property to that spouse. A.R.S. § 25-318(A). When property is
characterized as separate, it remains separate unless and until its
characterization is “changed by agreement of the parties or by operation of
law.” Sommerfield v. Sommerfield, 121 Ariz. 575, 578 (1979). Although “a
residence which is separate property does not change its character because
it is used as a family home and mortgage payments are made from
community funds,” such a situation may entitle the community to an
equitable lien on the property. Drahos v. Rens, 149 Ariz. 248, 249-50 (App.
1985).

¶5 Wife argues the court correctly characterized the Home
because it “was intended to be community property.” Property’s initial
characterization is not dependent upon the parties’ subjective intent; rather,
we look to the property’s acquisition to determine its characterization. See
Porter, 67 Ariz. at 281. Here, the court found the Home was acquired by
Husband before the marriage. Wife does not dispute that fact. In the
dissolution decree, the court accurately cited the law, but erred in its
characterization of the property. Because property is characterized at

3 Wife also contends for the first time on appeal that Husband’s failure to

file a pretrial disclosure with the trial court violated Arizona Rule of Family
Procedure 49. We generally do not consider issues raised for the first time
on appeal, and the argument is therefore waived. See Englert v. Carondelet
Health Network, 199 Ariz. 21, 26, ¶ 13 (App. 2000).

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Decision of the Court

acquisition, the Home was, as a matter of law, Husband’s separate property
as of the purchase date. See A.R.S. § 25-213(A); see also Nace v. Nace, 104 Ariz.
20, 22 (1968) (“The well settled law in this State is that the separate or
community character of property is determined by its status at the time of
the marriage. Once property has been identified as separate or community,
it remains such as long as it can continue to be segregated.”) (citations
omitted).

¶6 Wife further contends the court’s property characterization is
justified because Husband and Wife either expressly or implicitly agreed to
transmute the property from separate to community. Although Wife
correctly asserts that a property’s characterization may be altered by the
parties’ agreement, see Sommerfield, 121 Ariz. at 578, she fails to identify
evidence of any agreement, express or implied, sufficient to transmute the
Home to community property. Further, Wife fails to establish that the
Home transmuted to community property as a matter of law. See id.
Therefore, the Home remained Husband’s separate property throughout
the marriage.

¶7 Because the court mischaracterized the Home as a community
asset, it erred in ordering its sale. See A.R.S. § 25-318(A) (“[T]he court shall
assign each spouse’s sole and separate property to such spouse.”); see also
Weaver v. Weaver, 131 Ariz. 586, 587 (1982) (holding that the superior court’s
jurisdiction over separate property in a dissolution proceeding is limited by
statute to “assigning to each spouse his or her separate property . . . and
impressing a lien”). However, because the court found community funds
were used for mortgage payments, the community is entitled to a partial
interest in the property, subjecting it to an equitable community lien. See
Drahos, 149 Ariz. at 249-50 (holding that the husband’s separate property
was subject to an equitable community lien when community funds were
used for mortgage payments and repairs); see also A.R.S. § 25-318(E) (“The
court may impress a lien on the separate property of either party . . . in order
to secure the payment of . . . [a]ny interest or equity the other party has in
or to the property.”). Because the record contains insufficient evidence to
accurately calculate the community’s interest in the Home, we remand for
calculations pursuant to the formula prescribed in Drahos, 149 Ariz. at 250.

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Decision of the Court

CONCLUSION

¶8 For the foregoing reasons, we reverse that portion of the
decree designating the Home as community property. We also remand for
further proceedings to calculate the amount of the community lien on
Husband’s separate property and to issue orders in accordance therewith.
Both Husband and Wife request attorney’s fees. Having considered the
parties’ financial resources and the reasonableness of the positions asserted
on appeal, pursuant to A.R.S. § 25-324, we deny both requests.

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

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