Benetich v. Benetich, III

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

GINA BENETICH, Petitioner/Appellee,

v.

GEORGE PETER BENETICH, III, Respondent/Appellant.

No. 1 CA-CV 22-0701 FC
FILED 12-05-2023

Appeal from the Superior Court in Maricopa County
No. FC2021-070181
The Honorable Stasy D. Avelar, Judge

AFFIRMED

COUNSEL

Modern Law, Peoria
By B. Kathleen Gilbertson
Counsel for Petitioner/Appellee

The Hogle Firm, Mesa
By Nathan J. Hogle
Counsel for Respondent/Appellant
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MEMORANDUM DECISION

Judge Anni Hill Foster delivered the decision of the Court, in which
Presiding Judge Jennifer B. Campbell and Judge Kent E. Cattani joined.

F O S T E R, Judge:

¶1 In this dissolution proceeding, Appellant George Peter
Benetich, III, (“Husband”) argues that the superior court miscalculated the
marital community’s equitable lien against an Arizona home owned by
Gina Benetich (“Wife”) as her separate property. Husband argues
specifically that the court erred by finding that Wife’s separate property
funds were used to make the downpayment on the Arizona home. For
reasons that follow, the superior court’s order is affirmed.

FACTS AND PROCEDURAL HISTORY

¶2 Before marriage, Wife owned a home in Indiana. Wife also
had a savings account and checking account held solely in her name.
During the marriage, Wife deposited her paychecks, paid the mortgage on
the Indiana home, and made other withdrawals from her separate checking
account. She also deposited unidentified funds into her separate savings
account and transferred funds between the two accounts. In 2015, Wife sold
the Indiana home and deposited the sale proceeds of $88,788.71 into her
savings account.

¶3 After relocating to Wisconsin, Wife transferred the funds in
both separate accounts to one account in her name only. Wife regularly
wrote checks and made other withdrawals from this account. When Wife
and Husband moved to Arizona, Wife purchased a home with a down
payment of $52,100 from her separate account. Husband signed a
disclaimer deed.

¶4 In February 2021, Wife filed for divorce. The parties resolved
all issues in their dissolution by agreement except the amount of the
community’s equitable lien on Wife’s separate property — the Arizona
home. Husband argued the down payment on the Arizona home came from
community funds because (1) the community had an interest in the
proceeds from the earlier sale of the Indiana home and (2) Wife commingled
the Indiana home sale proceeds with other community funds, rendering her

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separate bank account, from which the down payment came, community
property. Stating that it was “not required to dissect every real estate
transaction that occurred during the marriage,” the superior court ruled it
need not determine whether the community had an equitable lien in the
sale proceeds from the Indiana home, sold two years prior to the dissolution
action. It found the $88,788.71 Indiana sale proceeds were Wife’s separate
property and that, although Wife’s bank accounts contained commingled
funds, the Indiana home sale proceeds remained traceable. As a result, the
court rejected Husband’s claim that the $52,100 down payment on the
Arizona home came from community funds.

¶5 Relying on the formula set forth in Drahos v. Rens, 149 Ariz.
248 (App. 1985), the superior court determined the community had an
equitable lien of $32,076.97 and awarded Husband $16,038.40. After an
unsuccessful motion to alter or amend the decree, Husband timely
appealed. This Court has jurisdiction under A.R.S. § 12-2101(A)(1) and (2).

DISCUSSION

¶6 Husband does not dispute the classification of the Arizona
home as Wife’s separate property and the superior court’s use of the Drahos
formula. His sole argument is that the court erred by mischaracterizing the
funds used for the down payment as Wife’s separate property.

¶7 This Court reviews de novo, as a question of law, whether
property is separate or community. In re Marriage of Pownall, 197 Ariz. 577,
581, ¶ 15 (App. 2000). “[A] marital community is entitled to reimbursement
for its contributions to a spouse’s separate property” by way of “an
equitable lien against the separate property.” Saba v. Khoury, 253 Ariz. 587,
590, ¶ 8 (2022). “The determination of the amount of the community interest
in separate property resulting from an equitable lien is a mixed question of
fact and law, . . . so [this Court] defer[s] to the trial court’s factual findings
but review[s] legal conclusions de novo[.]” Id. (citations omitted). To
determine the amount of the community’s equitable lien in the Arizona
home, a court must determine how much of the down payment came from
community funds and how much from separate property funds. See id. at
592, ¶ 15 (courts consider community contributions to reducing the
principal or loan balance and any improvements).

I. A.R.S. § 25-318(A) DOES NOT APPLY TO THE SALE PROCEEDS
FROM THE INDIANA HOME.

¶8 Husband first argues the superior court erred by not applying
A.R.S. § 25-318(A) to the Indiana home sale proceeds. He claims the

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proceeds were partly community property because the community had an
equitable lien on the Indiana home. Under that statute, “property acquired
outside this state shall be deemed to be community property if the property
would have been community property if acquired in this state.” A.R.S. § 25-
318(A). According to Husband, the community’s equitable lien arose
because Wife used her salary, acquired during the marriage, to pay the
mortgage on the Indiana home and that he made improvements to the
home.

¶9 Reading the statute in context, Husband’s argument fails. See
Stambaugh v. Killian, 242 Ariz. 508, 509, ¶ 7 (2017) (“In construing a specific
provision, [this Court] look[s] to the statute as a whole[.]”). The cited
provision reads: “For the purposes of this section only, property acquired by
either spouse outside this state shall be deemed to be community property
if the property would have been community property if acquired in this
state.” A.R.S. § 25-318(A) (emphasis added). Section 25-318 addresses the
division of community property and assigning separate property at the time
of dissolution. In other words, this section affects only property owned by
one or both parties at the time of dissolution. It does not address property
sold years before the proceeding began and property no longer in either
party’s possession.

II. THE DOWN PAYMENT FOR THE ARIZONA HOME IS
TRACEABLE TO THE INDIANA HOME SALE PROCEEDS.

¶10 Husband argues alternatively that the down payment came
from a comingled bank account and was untraceable as Wife’s separate
property. Separate property may be transmuted into community property
when it is commingled to the degree that “the identity of the property as
separate or community is lost.” Potthoff v. Potthoff, 128 Ariz. 557, 562 (App.
1981). Merely commingling does not transmute the entire account to
community property if the separate property funds can be clearly traced or
identified. Cooper v. Cooper, 130 Ariz. 257, 259-60 (1981). The party asserting
that funds are separate property must identify the separate funds by clear
and satisfactory evidence. Id. This Court will affirm the superior court’s
ruling on tracing if sufficient evidence supports it. See In re Marriage of Cupp,
152 Ariz. 161, 164 (App. 1986).

¶11 According to Husband, the proceeds from the sale of the
Indiana home were commingled with community funds Wife deposited
into her separate account for about 18 months. He contends her bank
account became commingled and the proceeds became untraceable
rendering the entire amount in the account community property. But he

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does not dispute that he disclaimed any interest in the property as of the
date Wife purchased the property.

¶12 Moreover, the record shows the Indiana home proceeds were
deposited into Wife’s individual savings account, which was later
transferred to another separate account, used for the down payment for the
Arizona home. Husband testified $25,000 left the Wife’s account between
the time Wife opened the account and the date Wife withdrew the down
payment. Indeed, Wife regularly wrote checks and made other withdrawals
from this account. Husband argues that it is impossible to determine
whether those withdrawals came from community or separate funds, so the
account was hopelessly commingled. Not so. Even if this Court presumes
all the $25,000 withdrawn came from Wife’s separate Indiana home sale
proceeds, the remaining separate proceeds in her account exceeded $60,000.
The remaining separate funds were sufficient to cover the $52,100 down
payment. “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.” See Cupp, 152 Ariz. at 164. “Furthermore, there is a presumption
that where separate and community funds are comingled in one account,
payments out of that account for charges against separate property or for
separate uses are deemed to be paid out of the separate funds.” Blaine v.
Blaine, 63 Ariz. 100, 113 (1945); accord Noble v. Noble, 26 Ariz. App. 89, 96
(1976). Husband’s argument fails.

III. THE DISCLAIMER DEED DOES NOT DESTROY HUSBAND’S
INTEREST IN THE COMMUNITY LIEN ON THE HOME.

¶13 Wife argues the disclaimer deed’s broad language waived
any interest Husband may have had in the Arizona home. However, in
superior court, Wife conceded there was a community lien on the Arizona
home. Wife cannot now assert an inconsistent position on appeal. See In re
Marriage of Thorn, 235 Ariz. 216, 223-24, ¶ 34 (App. 2014). To the extent Wife
challenges the community lien on the Arizona home, this Court will not
consider such an argument because she did not file a cross-appeal. Ariz. R.
Civ. App. P. 13(b)(2) (appellate court may not reduce an appellant’s rights
without a cross-appeal).

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CONCLUSION

¶14 For the foregoing reasons, the superior court’s judgment is
affirmed. Wife’s request for attorneys’ fees on appeal is denied. See A.R.S.
§ 25-324.

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

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