Burger v. Waldren

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

CHRISTINA MARIE BURGER, Petitioner/Appellant,

v.

TY WALDREN, Respondent/Appellee.

No. 1 CA-CV 22-0764 FC
No. 1 CA-CV 23-0210 FC
(Consolidated)
FILED 11-30-2023

Appeal from the Superior Court in Maricopa County
No. FC2021-094839
The Honorable Charlene D. Jackson, Judge

REVERSED IN PART AND REMANDED

COUNSEL

Law Offices of Vescio & Seifert, P.C., Glendale
By Theresa L. Seifert
Counsel for Petitioner/Appellant

Stanley David Murray, Attorney at Law, Scottsdale
By Stanley David Murray
Counsel for Respondent/Appellee
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Decision of the Court

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 Christina Marie Burger appeals the superior court’s
dissolution decree ordering the sale of real property and an equal
distribution of the proceeds. She also challenges the denial of her motion to
alter or amend the decree and the court’s reduced attorneys’ fee award. For
the following reasons, the superior court’s ruling ordering the distribution
of real property sale proceeds is reversed and the case is remanded for
proceedings consistent with this decision.

FACTS AND PROCEDURAL HISTORY

¶2 Burger purchased real property in 2010 before the parties
married. Ty Waldren, her soon to be husband, contributed $3,000 towards
the down payment. Waldren did not sign the purchase contract, was not
listed on the warranty deed, and did not sign any of the documentation
provided by the title agency. Only Burger’s name appeared on the deed,
which identified her as “a single woman.”

¶3 The parties married on October 12, 2011. They lived together
in the property as their marital residence. Waldren made the mortgage
payments.

¶4 Burger petitioned for dissolution in October 2021. In the joint
pre-trial statement, Burger requested the superior court award her the
marital residence as her sole and separate property because she purchased
it before marriage and the property was titled in her name only. Burger
acknowledged that Waldren was entitled to an equitable lien of $39,512.55,
using the formula in Drahos v. Rens, 149 Ariz. 248 (App. 1985) and Barnett v.
Jedynak, 219 Ariz. 550 (App. 2009), plus reimbursement for his $3,000 down
payment contribution. Waldren conceded the property was “technically”
Burger’s sole and separate property but asked for a 50% equitable lien not
calculated using the Drahos/Barnett formula. Waldren asserted that, at the
time of the property purchase, he believed the parties were taking title in
both names, intended to purchase the home and upgrade it with money

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Decision of the Court

borrowed from his parents, sell it to buy a bigger home, and then repay his
parents once the house was sold. He also asserted that he paid the $3,000
down payment with his sole and separate funds and paid all the mortgage
payments before and during the marriage. In addition to the 50% equitable
lien on the home, Waldren also asked that his parents be paid the
approximately $50,0001 they “lent the community to improve the home.”
Burger denied any knowledge of a loan or agreement to repay Waldren’s
parents for improvements to the property.

¶5 After trial, the superior court ruled that the real property was
community property. Despite noting that the home was titled only in
Burger’s name, the court found the parties “purchased the home together
and intended to own the home together.” The court also found that
Waldren “never disclaimed the deed” and that he “presented clear and
convincing evidence that the parties intended to own the property together
and equally.” In the Decree of Dissolution, the court ordered the property
be sold and the equity be divided equally.2 The court also found that Burger
was unaware of a contract between Waldren and his parents for
reimbursement of the approximately $50,000 for home improvements and
was not a party to that contract; thus, Burger was not responsible for
repayment of that debt.3

¶6 Additionally, the superior court found that Waldren acted
unreasonably during the litigation and awarded Burger $7,500 of the
$25,067.50 she requested in attorneys’ fees. The court awarded this reduced
amount after determining that Burger’s position on the marital home had
been unreasonable. Burger moved to alter or amend the decree, which the
superior court denied.

¶7 This Court has jurisdiction over Burger’s timely appeal under
A.R.S. § 12-2101(A)(1).

DISCUSSION

1 In the joint pre-trial statement, Waldren advised the court his parents

spent $54,425.87, but his mother testified the actual costs were $50,631. The
record shows additional charges of $3,794.87 for interest.

2 At the time of the trial, the property was under contract for $300,000.

3 Waldren does not cross-appeal this ruling.

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I. The superior court erred by holding that the real property was a
community property asset.

¶8 Burger argues the superior court erred in finding Waldren
was entitled to half the sale proceeds of her sole and separate real property.
A court’s characterization of property as community or separate is
reviewed de novo. In re Marriage of Pownall, 197 Ariz. 577, 581, ¶ 15 (App.
2000). A court’s order distributing property is reviewed for an abuse of
discretion. Saba v. Khoury, 253 Ariz. 587, 590, ¶ 7 (2022). “A trial court abuses
its discretion when it misapplies the law or predicates its decision on
incorrect legal principles.” State v. Jackson, 208 Ariz. 56, 59, ¶ 12 (App. 2004).

¶9 The status of property is established at the time of acquisition.
Bender v. Bender, 123 Ariz. 90, 92 (App. 1979). Property status does not
change “except by agreement or operation of law.” Id. Spouses may convey
their separate or community property interests to one another, but the
conveyance must be by a written instrument and have contemporaneous
supporting conduct. Id. at 93. Property acquired during marriage may be
acquired as, or converted to, sole and separate property by way of a
disclaimer deed in which one spouse states he or she has no interest in the
property acquired by the other spouse. See, e.g., id. at 93-94; Bell-Kilbourn v.
Bell-Kilbourn, 216 Ariz. 521, 524, ¶¶ 10-11 (App. 2007).

¶10 Waldren concedes the superior court erred in finding the
martial residence was community property and that whether Waldren
signed a disclaimer deed was irrelevant. He argues, however, that the court
reached the right result because the parties owned the property as tenants
in common at the time of purchase and each party owned a 50% interest as
sole and separate property. He argues that dividing the property held as
tenants in common would have resulted in the same equal distribution that
the court used. Waldren waived this tenancy-in-common argument by
failing to raise it before the superior court. See Odom v. Farmers Ins. Co. of
Ariz., 216 Ariz. 530, 535, ¶ 18 (App. 2007) (stating that “[g]enerally,
arguments raised for the first time on appeal are untimely and deemed
waived.”). Regardless, Waldren does not dispute that the deed was solely
in Burger’s name, and the parties were not married at the time of purchase.
“Moreover, a joint tenancy is not created in Arizona unless it clearly
appears that the grantees have agreed to accept the conveyance as joint
tenants. Bostwick v. Jasin, 170 Ariz. 15, 17 (App. 1991) (citation omitted). No
evidence supports an argument that the parties jointly purchased the home
at the time of the acquisition. A.R.S. § 33-431. The record clearly establishes
that the property was Burger’s separate property.

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¶11 When a spouse owns real property before the parties’
marriage, that real property and any increase in value is the separate
property of the acquiring spouse. See A.R.S. § 25-213(A). Even if community
funds are expended on separate property, the community does not acquire
an interest in the title of the property, but instead has only a potential claim
for reimbursement for any expenditure of community funds. Bourne v.
Lorde, 19 Ariz. App. 228, 231 (1973); see also Drahos, 149 Ariz. at 249-50
(recognizing the community’s right to an equitable lien against separate
property when community funds are used to pay the mortgage on the
separate property).

¶12 Applying the formula from Drahos, the court must apportion
to the community the increase in a spouse’s separate property value
attributable to the community’s mortgage payments. 149 Ariz. at 250. “The
community property equitable lien interest is determined by adding the
principal balance paid by the community to the product of the community
property principal payments divided by the purchase price times the
appreciation in value.” Id. The formula from Drahos was adjusted in Barnett
to account only for post-marriage appreciation and uses the appraised
value of the separate property as of the date of marriage rather than the
purchase price. 219 Ariz. at 555, ¶ 21. Here, it is undisputed that the
purchase price and the value as of the date of marriage are the same. In
Saba, the Arizona Supreme Court held that courts must use the
Drahos/Barnett formula as a starting point to achieve substantial justice in
calculating a marital community’s equitable lien on a spouse’s separate
property. 253 Ariz. at 592, ¶ 14.

¶13 Waldren concedes that Burger’s calculations using the
Drahos/Barnett formula were correct. But, because the court improperly
concluded the marital residence was community property, it did not use
the formula to calculate the marital community’s equitable lien on Burger’s
separate real property.

¶14 Waldren argues the marital community contributed money
and labor to Burger’s separate property with the improvements made by
his parents. In such cases, the community “is entitled to share in the
enhanced value of that property.” Saba, 253 Ariz. at 592, ¶ 15 (quoting
Honnas v. Honnas, 133 Ariz. 39, 40 (1982)). But, the spouse claiming he or
she increased the value of the other spouse’s separate property through
community labor and funds has the burden of showing the increased value.
Hefner v. Hefner, 248 Ariz. 54, 60, ¶ 17 (App. 2019); Walker v. Walker, No. 1
CA-CV 23-0036 FC, 2023 WL 6397297, at *5, ¶ 29 (Ariz. App. Oct. 3, 2023).

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¶15 Here, the record shows that Waldren’s father volunteered to,
and performed, labor to improve the home, not Waldren himself. And
Waldren did not offer any evidence at trial about how much of the funds
used to make improvements to the house contributed to the increased value
of the home. In the decree, the superior court noted that “substantial
upgrades” to the home were made but there were no factual findings about
whether those improvements increased the value of the property. And
although an appraisal in evidence shows that the interior of the home
“appear[ed] to have been updated,” the parties did not direct the superior
court’s attention to any evidence from which it could determine the
difference in increased value attributable to market forces compared to
home improvements or a combination thereof. Waldren did not meet his
burden on this issue.

¶16 Given the parties’ acknowledgment that the property is
Burger’s separate property and that her Drahos/Barnett calculation is
accurate this case is remanded, directing the superior court to order a
$39,512.55 distribution to Waldren as his share of the community’s
equitable lien, plus $3,000 to reimburse him for his contribution to the down
payment, for a total of $42,512.55.

II. The superior court’s order to sell the marital property is moot.

¶17 As to the sale of the marital residence, Burger argues the
superior court could not order the sale of her separate real property.
Because the marital residence has now been sold, this issue is moot. Vinson
v. Marton & Assocs., 159 Ariz. 1, 4 (App. 1988) (noting that a court’s decision
is moot for appellate purposes when appellate action would have no effect
on the parties due to a change in circumstances before the appellate
decision).

III. The award of attorneys’ fees must be recalculated.

¶18 Burger challenges the attorneys’ fee award, arguing that the
superior court reduced her requested fee amount based on its erroneous
finding that her position regarding the marital residence was unreasonable.
This Court agrees.

¶19 An award of attorneys’ fees is reviewed for an abuse of
discretion. Hefner, 248 Ariz. at 57, ¶ 6. Under A.R.S. § 25-324, the superior
court may award attorneys’ fees to one party based on unreasonable
positions taken by the other party. Magee v. Magee, 206 Ariz. 589, 591 n.1
(App. 2004); Clark v. Clark, 239 Ariz. 281, 283, ¶¶ 10-12 (App. 2016). The

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superior court has discretion regarding the amount ultimately awarded.
Hunt Inv. Co. v. Eliot, 154 Ariz. 357, 362 (App. 1987).

¶20 Here, in analyzing Burger’s application for fees, the superior
court found Waldren acted unreasonably and that Burger’s position on the
marital home was unreasonable. But as discussed above, Burger’s position
on the marital home was not unreasonable, and her calculation of the
community’s equitable lien was accurate.

¶21 It is unclear from the court’s ruling to what extent it reduced
Burger’s attorneys’ fee award based on her position regarding the marital
home. Accordingly, this issue is remanded for the superior court to
reconsider the attorneys’ fee award.

CONCLUSION

¶22 For the foregoing reasons, the superior court’s ruling ordering
an equal division of the sale proceeds is reversed. On remand, the superior
court shall enter an order awarding Waldren $39,512.55 for his share of the
community’s equitable lien and $3,000 for reimbursement of his down
payment contribution. The superior court should also reconsider the
amount of Burger’s attorneys’ fee award.

¶23 After considering the parties’ relative financial resources and
their positions on appeal pursuant to A.R.S. § 25-324, Burger’s request for
costs and reasonable attorneys’ fees is granted upon compliance with
Arizona Rule of Civil Appellate Procedure 21.

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

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