Campbell v. Campbell

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

KYSHOWN DANOSHKY CAMPBELL, Petitioner/Appellant,

v.

RACHEL DHANI CAMPBELL, Respondent/Appellee.

No. 1 CA-CV 22-0687 FC
FILED 9-26-2023

Appeal from the Superior Court in Maricopa County
No. FN2021-070799
The Honorable Susanna C. Pineda, Judge

AFFIRMED IN PART, VACATED IN PART, AND REMANDED

COUNSEL

Becker Zarling & Smith Law, Avondale
By Sara Smith, Carlie Michelle Owsley, Gina M. Becker-Zarling
Counsel for Petitioner/Appellant

Rachel Dhani Campbell, Elgin AFB, Florida
Respondent/Appellee
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MEMORANDUM DECISION

Judge Michael S. Catlett delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge Maria Elena Cruz joined.

C A T L E T T, Judge:

¶1 Kyshown Danoshky Campbell (“Husband”) appeals the
superior court’s denial of his motion to set aside a dissolution decree that
included a division of property with Rachel Dhani Campbell (“Wife”).
Although the superior court properly distributed a solar tax credit and
reimbursed Wife for paying community debt from the date of service, the
court mischaracterized a Florida residence as community property and
provided inconsistent reimbursement starting dates. We affirm in part,
vacate in part, and remand.

FACTS AND PROCEDURAL HISTORY

¶2 Husband and Wife married on August 21, 2017. Husband
petitioned for dissolution of marriage and served Wife on October 26, 2021.
The disputed property included two residences, one in Florida and one in
Arizona.

¶3 Before marriage, Husband purchased a residence in Florida
which he refinanced in 2021, after marriage. Following the refinancing, the
loan was listed in Husband and Wife’s name. Wife testified she was
“advised” an updated deed was signed, but she did “not have any
supporting documents.” She believed she was entitled to half of the value
of the Florida residence because she helped improve the property and paid
some bills. Husband testified Wife was never added to the deed.

¶4 During marriage, Husband and Wife jointly purchased a
residence in Arizona and obtained a loan to fund the addition of solar
panels. Wife paid the mortgage and homeowners’ association fees on the
Arizona residence. Husband paid the electric and internet bills and made
the loan payment on the solar panels.

¶5 Husband and Wife filed their tax returns jointly in 2020 and
separately in 2021. Husband tried to claim a solar tax credit on his 2021 tax
return. But the IRS rejected his return because of an issue with a claimed
dependent.

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¶6 The superior court found the Florida residence changed from
separate to community property when Husband refinanced the mortgage.
The court determined Husband did not rebut the presumption of
community property because he did not provide a deed to demonstrate he
remained the sole owner of the residence. The court also relied on a text
exchange between Husband and Wife.

¶7 Although noting the parties “physically separated” in July
2021, the court awarded Wife reimbursement for half of the mortgage and
homeowners association payments on the Arizona residence to begin “after
service,” which occurred October 26, 2021. But later in the decree, the court
ordered the same reimbursement “from July 1, 2021 through the time of
sale.” Finally, the court found Husband claimed the solar tax credit on his
2021 taxes and awarded Wife half of the credit.

¶8 Husband filed a motion to set aside the decree, which the
court denied. Husband timely appealed. We have jurisdiction. See A.R.S.
§ 12-2101(A)(2).

¶9 Wife did not file an answering brief, but we exercise
discretion to address the merits of the case based on the record and
Husband’s brief. See Gonzales v. Gonzales, 134 Ariz. 437, 437 (App. 1982)
(“Although we may regard this failure to respond as a confession of
reversible error, we are not required to do so.”).

DISCUSSION

¶10 Husband argues the superior court erred by finding (1) the
Florida residence changed to community property after refinancing, (2)
Wife was entitled to an equitable distribution of the solar tax credit, and (3)
Wife was entitled to reimbursement from July 1, 2021. We review the
superior court’s denial of a motion to set aside and the division of property
for an abuse of discretion. Duckstein v. Wolf, 230 Ariz. 227, 231 ¶ 8 (App.
2012); Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, 523 ¶ 4 (App. 2007). But
we review de novo whether property is correctly characterized as
community or separate. Bell-Kilbourn, 216 Ariz. at 523 ¶ 4. An abuse of
discretion occurs when a court “rules without competent evidence or
commits a legal error in making a discretionary decision.” Meister v.
Meister, 252 Ariz. 391, 396 ¶ 12 (App. 2021). We review the evidence in the
light most favorable to sustaining the court’s findings and affirm unless
there is no reasonable evidence to support a finding. Kohler v. Kohler, 211
Ariz. 106, 107 ¶ 2 (App. 2005).

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I. Florida Residence

¶11 Husband argues the Florida residence remained his separate
property, even after refinancing, and Wife did not rebut the presumption.
We agree. The Florida residence was presumed to be Husband’s separate
property because he purchased it prior to marriage. A.R.S. § 25-213(A)
(“[P]roperty that is owned by that spouse before marriage . . . is the separate
property of that spouse.”). Wife had the burden to rebut the presumption.
Hefner v. Hefner, 248 Ariz. 54, 58 ¶ 9 (App. 2019) (“The spouse seeking to
overcome a presumption of asset characterization has the burden of
establishing the character of the property by clear and convincing
evidence.”). The court, however, placed the burden on Husband, instead
of Wife, to produce evidence that the Florida residence remained separate
property.

¶12 A spouse who refinances property does not change its
characterization without taking some other action, typically evidenced by
signing a deed, with the intent to gift the property to the other spouse. See
In re Marriage of Flower, 223 Ariz. 531, 535 ¶ 15 (App. 2010) (“When real
property is held as separate property by one spouse but title is subsequently
taken in the name of both spouses, a presumption exists that the
contributing spouses intended to make a gift[.]”). Wife did not rebut the
presumption that the Florida residence was separate property because she
did not provide any supporting documentation; instead, she testified to
“being advised” that she signed a deed. See In re Sims Est., 13 Ariz. App.
215, 217 (1970) (requiring evidence of a conveyance and contemporaneous
conduct to gift property). Wife did not clarify who advised her, or why she
otherwise believed she signed a deed. Instead, she testified that she
believed she was entitled to an interest in the property because she helped
improve the residence and pay bills. While Wife’s testimony might justify
imposing a community lien, it is insufficient to change the property’s
character as separate. Bell-Kilbourn, 216 Ariz. at 524 ¶ 12 (“[A]ny
community funds expended to pay the mortgage or enhance the value of
the house entitled the community to a share of any equity attributable to
those efforts.”).

¶13 The superior court also relied on text messages between
Husband and Wife. But those exchanges, overall, were conflicting as to
ownership and thus insufficient to change the property’s characterization.
In one exchange, wife stated “[w]e are on both houses. Can you take one
and I take one?,” and Husband responded, “I prefer to sell[.]” The court
interpreted Husband’s response as inferring that he did not contest
ownership. Not only is that not the only way to interpret Husband’s

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response, but there were other exchanges muddying the picture. One
message from Wife stated, “[b]ut, to clarify.. [sic] we are not on both loans.
We are [on] both deeds.” Wife also texted, “I don’t want your FL property,”
which could be interpreted as Wife conceding the Florida residence was
Husband’s separate property. Ultimately, Wife did not provide sufficient
evidence overcoming the presumption of separate property. See Ray v.
Mangum, 163 Ariz. 329, 333 (1989) (“Where conflicting testimony exists and
the parties’ unspoken assumptions and intentions conflict, one party’s
belief cannot provide clear and convincing evidence of the parties
agreement.”). The Florida residence should be reflected in the decree as
Husband’s separate property.

¶14 While we “recognize[] the nature of the separate property as
separate,” Wife might still be entitled to “a fair and equitable
reimbursement to the community” based on her testimony about
improving and contributing to the residence. See Saba v. Khoury, 253 Ariz.
587, 592 ¶ 15 (2022). On remand, the court should calculate an appropriate
community lien, if any, based on the evidence Wife provided. See id. ¶¶ 14–
16.

II. Arizona Residence

A. Solar Tax Credit

¶15 Husband argues the court abused its discretion by
distributing half of a solar tax credit to Wife. The solar panels are affixed to
the Arizona residence and both were purchased during the marriage.
Additionally, Husband testified the tax credit was carried over from
Husband and Wife’s joint 2020 tax return, during the marriage, to the 2021
tax return. Property acquired during marriage is community property.
A.R.S. § 25-211(A).

¶16 Husband attempts to overcome the presumption of
community property by arguing the solar tax credit was based on “future
events.” Husband argues he was not able to successfully file his income tax
return and, thus, had yet to receive the credit. Husband cites Moore v. Bolin
for the proposition that “[t]he allegations merely show an intent to do
certain things in the future all of which are dependent upon future events
and contingencies within control of the appellant.” 70 Ariz. 354, 358 (1950).
But, here, it was not speculative to distribute the tax credit because
Husband included the credit on his 2021 tax return. See Johnson v. Johnson, 131 Ariz. 38, 43 n.11 (1981) (If “the tax consequences could be immediately
and specifically determined . . . . the court should consider the effects”).

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¶17 Although Husband testified that his 2021 return was rejected,
he explained it was for a reason (claiming a dependent) that did not
implicate the solar tax credit, and stated he still expects to receive the credit.
Accordingly, the tax credit was not speculative and the court did not abuse
its discretion in distributing the credit as community property. A.R.S. § 25-
318; see In re Marriage of Berger, 140 Ariz. 156, 168 (App. 1983) (“The
[superior] court has wide discretion in the apportionment of community
property under § 25-318 and all reasonable inferences are taken in favor of
sustaining the [superior] court’s judgment.”).

B. Reimbursement to Wife

¶18 Husband argues the court listed an incorrect date for
calculating the reimbursement to Wife for continuing to pay mortgage and
homeowners’ association bills on the Arizona residence. Husband argues
the court used July 1, 2021 rather than the date he served Wife—October 26,
2021. Husband is partially correct; the decree included conflicting
reimbursement dates. The decree initially stated Wife was entitled to
reimbursement “after service” but later ordered reimbursement “from July
1, 2021 through the time of sale.” The court initially provided the correct
standard in the decree by pegging reimbursement to the date of service,
which is the end of the marital presumption of community property. See
A.R.S. § 25-211(A)(2); Bobrow v. Bobrow, 241 Ariz. 592, 596 ¶ 15 (App. 2017).
Yet the second instruction listing the reimbursement date as July 1, 2021
was incorrect. On remand, the court should amend the decree to correct
the inconsistency and accurately reflect the beginning date for
reimbursement as October 26, 2021.

¶19 Husband also argues that reimbursement was improper
because “both parties paid community obligations voluntarily” and the
court should have considered his solar, electric, and internet payments.
Arguments not raised in the superior court are waived on appeal, and
Husband did not raise these reimbursement arguments in the superior
court. BMO Harris Bank N.A. v. Espiau, 251 Ariz. 588, 594 ¶ 25 (App. 2021).

CONCLUSION

¶20 We vacate the decree in part and remand for the superior
court to list the Florida residence as Husband’s separate property, calculate
a community lien, if any, on the Florida residence, and amend the decree’s
language to consistently reflect that Wife’s reimbursement runs from the
date of service, October 26, 2021. We otherwise affirm Wife’s
reimbursement and the solar tax credit distribution. We decline to award

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Husband attorney’s fees, but as the successful party on appeal, we grant
Husband’s costs subject to compliance with Arizona Rule of Appellate
Procedure 21.

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

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