Smith v. Harter

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

CYNTHIA LYNNE SMITH, Petitioner/Appellee/Cross-Appellant,

v.

JILL MAUREEN HARTER, Respondent/Appellant/Cross-Appellee.

No. 1 CA-CV 25-0021 FC
FILED 10-27-2025

Appeal from the Superior Court in Maricopa County
No. FN2023-001927
The Honorable Amy Michelle Kalman, Judge

AFFIRMED IN PART, REVERSED IN PART

COUNSEL

Berkshire Law Office, PLLC, Tempe
By Keith Berkshire, Alexandra Sandlin
Counsel for Petitioner/Appellee/Cross-Appellant

Modern Law, PLLC, Mesa
By Kylie Bigelow
Counsel for Respondent/Appellant/Cross-Appellee

SMITH v. HARTER
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Angela K. Paton delivered the decision of the Court, in
which Judge Daniel J. Kiley and Judge Brian Y. Furuya joined.

P A T O N, Judge:

¶1 Jill Maureen Harter appeals from certain provisions of the
decree dissolving her marriage to Cynthia Lynne Smith. Smith cross-
appeals. We affirm in part and reverse in part.

FACTS AND PROCEDURAL HISTORY

¶2 Harter and Smith married in 2016. Harter owned a bank
account (“the account”) before marriage. After their marriage, the parties
paid community expenses using the account’s funds and replenished the
account with funds from a joint account.

¶3 Harter also owned a house (“the house”) before marriage.
She paid the down payment and financed the remainder of the purchase
price. In 2009, Smith moved into the house with Harter. In 2021, the parties
created a joint trust and transferred the house into it.

¶4 Smith petitioned for dissolution in 2023. A few months later,
she obtained an order of protection against Harter, alleging domestic
violence. The order, which granted Smith exclusive use and possession of
the house, was affirmed after a contested hearing.

¶5 At trial, Harter claimed the account was her separate
property. She testified that the account held nearly $200,000 of her separate
funds when she married Smith, and that she deposited separate funds
gifted to her into the account after marriage. The parties withdrew funds
from the account to pay community expenses and deposited community
funds into the account, but Harter insisted that her separate funds were
traceable.

¶6 The superior court held that the separate and community
funds had become sufficiently commingled such that the account should be
treated as community property. It divided the proceeds equally.

¶7 In addition to the account, Harter argued the house was her
separate property and Smith claimed it was community property. Harter

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relied on the document establishing the parties’ joint trust, which stated
that separate property put into the trust would remain separate. Smith
countered that the deed transferring the house to the trust specified it was
“to be held as community property.”

¶8 The superior court determined that the deed gifted the house
to the community. It divided the house’s value equally between the parties
but ordered Smith to reimburse Harter for her down payment and pre-
marriage mortgage payments.

¶9 Harter further claimed she was ousted from the house by the
order of protection and sought reimbursement of half of the house’s rental
value for the time she could not live in the house. The superior court denied
her request, finding she was not ousted because her own actions caused her
removal from the house.

¶10 Harter and Smith each sought attorneys’ fees, claiming the
other acted unreasonably throughout the proceedings. The court found
that both parties had acted unreasonably and that no financial disparity
existed. It denied both requests.

¶11 Smith moved to amend the decree, claiming the superior
court erred by ordering her to reimburse Harter’s pre-marriage mortgage
payments because Harter presented insufficient evidence of the amounts.
The superior court agreed and amended the decree. Harter moved for
reconsideration, arguing the court failed to consider all the evidence. The
court denied her motion.

¶12 Harter appealed, and Smith cross-appealed. We have
jurisdiction under Arizona Revised Statutes (“A.R.S.”) Section 12-
2101(A)(1)-(2).

DISCUSSION

I. The superior court properly characterized the account and house
as community property.

¶13 Harter asserts that the court erred in determining that the
house and the account were community property. “We review de novo the
[superior] court’s characterization of property as separate or community.”
Kim v. Pak, 258 Ariz. 594, 596, ¶ 7 (App. 2024). But we do not disturb its
factual findings absent clear error. Id.

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a. The account’s proceeds were transmuted to community
property.

¶14 Property owned by a spouse before marriage is that spouse’s
separate property. A.R.S. § 25-213(A). But “[s]eparate property may be
transmuted into community property when it is commingled so much that
its identity . . . as separate or community is lost.” Kim, 258 Ariz. at 597, ¶ 9
(citation omitted). When commingling occurs, the entire account becomes
community property “unless the separate property can be explicitly
traced.” Cooper v. Cooper, 130 Ariz. 257, 259 (1981) (citation omitted). The
party claiming commingled funds are their separate property bears the
burden to prove that fact and the separate amount by clear and satisfactory
evidence. Id. at 259-60.

¶15 Harter insists that the account is her separate property
because her separate funds are “fully traceable[,]” apparently based on her
submitted exhibit #B-24 and testimony. But evidence showed the account
funds were used to pay community expenses, including for a home
improvement loan, and were replenished with community funds from a
joint account. The court also found Harter’s demonstrative exhibit
unpersuasive because it failed to explain how or why she classified
expenses as community or separate. Therefore, the court found that Harter
had not met her burden of proving any or all of the funds in the account
were separate. The evidence supported this determination, and thus the
court did not err in characterizing the account as community property.

b. The court properly determined that the house was gifted to the
community.

¶16 Property acquired before marriage may also become
community property when gifted to the community. See In re Marriage of
Flower, 223 Ariz. 531, 535, ¶ 15 (App. 2010). Separate real property, title to
which is later transferred into the name of both spouses, is presumed to be
a gift to the community absent clear and convincing evidence showing lack
of donative intent. Bobrow v. Bobrow, 241 Ariz. 592, 594-95, ¶ 8 (App. 2017).
Whether a gift was made is a factual determination that we uphold unless
clearly erroneous. Id. at 595, ¶ 11.

¶17 Harter argues the house remained her separate property even
though it was transferred into the parties’ joint trust “to be held as
community property” because the trust document provided that separate
property put into it would remain separate. Although the trust document
stated that the parties’ “separate property may be identified as the separate

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property of either of us on the attached schedules[,]” the parties did not list
the house or any other separate property in the attached schedules. And
the parties’ warranty deed transferring the house into their joint trust
provided that the house was “to be held as community property.” The
court found the deed expressly providing that the house was community
property more convincing evidence of the parties’ intent than the trust
document and that Harter failed to credibly explain at trial why the “clear
language on the deed” did not transmute it to community property. We do
not reweigh the evidence on appeal. Kim, 258 Ariz. at 596, ¶ 7. Sufficient
evidence supported the court’s conclusion that Harter gifted the house to
the community.

II. The superior court failed to equitably divide the house’s proceeds.

¶18 Both parties challenge the superior court’s division of the
proceeds from the sale of the house. We review the division of community
property for an abuse of discretion. Id. The superior court abuses its
discretion when the record is “devoid of competent evidence to support”
its decision. Little v. Little, 193 Ariz. 518, 520, ¶ 5 (1999) (citation omitted).
Community property must be divided equitably. A.R.S. § 25-318(A); In re
Marriage of Inboden, 223 Ariz. 542, 544, ¶ 6 (App. 2010). Equal division is
presumed to be equitable “unless there exists a sound reason to divide the
property otherwise.” Inboden, 223 Ariz. at 544, ¶ 6.

¶19 Harter argues the superior court erred by (1) not ordering
Smith to reimburse her pre-marriage mortgage payments, (2) not allocating
the pre-marriage appreciation in the house’s value to her, and (3) not
ordering Smith to reimburse her for half of the house’s fair rental value
while she was ousted. Smith argues the superior court erred by ordering
her to reimburse Harter’s pre-marriage down payment made on the house
because the court’s findings did not support unequal division.

a. Harter is not entitled to reimbursement for mortgage payments
she made before marriage.

¶20 Harter claims the superior court erred by amending its order
to no longer require Smith to reimburse Harter’s pre-marriage mortgage
payments. But Harter only cursorily mentions this claim and fails to
develop any argument on this issue in her opening brief. She has therefore
waived this issue on appeal. See ARCAP 13(a); Waltz Healing Ctr., Inc. v.
Ariz. Dep’t of Health Servs., 245 Ariz. 610, 616, n.4 (App. 2018) (failure to
develop argument or present supporting authority on appeal waives issue).

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b. Harter is not entitled to pre-marriage house appreciation.

¶21 Harter next contends the superior court abused its discretion
by failing to allocate the house’s pre-marriage appreciation to her. But she
cites no authority holding that the court must do so. Instead, she cites cases
holding the community is entitled to an equitable lien against the separate
property of one spouse when the community contributes to the increase in
the property’s value. See Kim, 258 Ariz. at 597, ¶¶ 8, 10; Brucklier v. Brucklier, 253 Ariz. 579, 584, ¶ 22 (App. 2022). These cases are inapposite. And as
discussed above, the superior court properly determined the house is not
Harter’s separate property. Therefore, the value of the entire property was
gifted to the community. See Inboden, 223 Ariz. at 545, ¶¶ 10-11.

c. The superior court properly denied Harter’s request for
reimbursement of the house’s fair market rental value.

¶22 Harter next argues she is entitled to reimbursement for the
fair market rental value of the house because she was ousted by the order
of protection against her. But she asks us to recognize affirmative ouster as
the basis for her claim, which no Arizona court has recognized. We need
not reach this issue because Harter has not proven she was ousted.

¶23 Whether a spouse has been ousted is a factual finding that we
will not reverse unless clearly erroneous. Ferrill v. Ferrill, 253 Ariz. 393, 398,
¶ 17 (App. 2022); Walsh v. Walsh, 230 Ariz. 486, 490, ¶ 9 (App. 2012). Ouster
occurs when a co-tenant notoriously and unequivocally acts to deprive
another of the right to the common and equal possession and enjoyment of
the property. Morga v. Friedlander, 140 Ariz. 206, 208 (App. 1984). But
Harter was not ousted by Smith. As the superior court correctly noted, her
own acts of violence and harassment led to the issuance of an order of
protection against her, which was later affirmed. And the record showed
that despite multiple efforts, Smith was only able to stop Harter from
harassing her through an order of protection. The court did not abuse its
discretion in determining Harter was not ousted from the community home
and therefore not entitled to reimbursement.

d. The superior court erred by ordering Smith to reimburse
Harter’s down payment.

¶24 In her cross-appeal, Smith contends the superior court abused
its discretion by ordering Smith to reimburse Harter’s down payment.
Specifically, Smith argues that “despite finding that none of the Inboden
factors that might weigh in favor of an unequal division of property were
present in this case, the [] court concluded that an unequal division of the

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marital residence was necessary in order to reimburse [Harter] for her
downpayment on the marital residence.”

¶25 Under Section 25-318(A), the superior court must divide
community property “equitably.” Generally, “an equitable division of
jointly held property should be substantially equal absent facts to support
a contrary result.” Inboden, 223 Ariz. at 546, ¶ 14.

¶26 When property purchased with a spouse’s separate funds is
gifted to the community, the gift “encompasses any monies spent in the
past by [the spouse] in order to acquire it.” Valladee v. Valladee, 149 Ariz.
304, 310 (App. 1986). Therefore, the court may not order unequal division
solely to reimburse a spouse for separate funds used to acquire the
property. Inboden, 223 Ariz. at 545, ¶ 11. Instead, the court must consider
other relevant factors to determine whether unequal division is necessary
to achieve equitable division. See id. at 546-47, ¶¶ 17-18. These factors
include the length of the marriage, the contributions of each spouse to the
community, financial or otherwise, the source of funds used to acquire the
property to be divided, and the allocation of debt. Id. at 547, ¶ 18. But if a
spouse contributes to the marriage as a whole or improves the value of the
property in question, “an unequal property division would not be justified
so long as these contributions were not completely negligible.” Id. at ¶ 17.

¶27 Here, the court found Smith contributed both to the
community and improving the house. The court specifically noted that
Smith provided Harter with health insurance and contributed to a major
remodel of the house. Her contributions were “not completely negligible,”
so an unequal property division is not justified. See id.

¶28 In fact, the court expressly distinguished this case from
Flower, 223 Ariz. at 531-39. There, we upheld unequal division because (1)
the parties were married for only thirteen months, (2) Wife made no
contributions to the community nor the value of the house, but (3) instead
caused Husband’s equity in the house to decrease by taking out a loan
against it to improve her own house. Id. at 534, 537-39, ¶¶ 9, 23, 30, 37. But
here, the court found that (1) Harter and Smith’s marriage lasted far longer,
(2) both parties contributed to the house, and (3) Smith did nothing to
decrease the equity in the house.

¶29 Beyond these facts, all of which support equal division, the
court made no other findings to support its decision to order unequal
division. And our review of the record revealed no facts that could support

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it. Accordingly, the court erred in ordering unequal division of the house.
We therefore reverse that portion of the superior court’s order.

III. The superior court did not abuse its discretion by denying both
parties’ attorneys’ fees.

¶30 Both parties contend that the superior court erred by denying
their request for attorneys’ fees. We review attorneys’ fees decisions for
abuse of discretion and will not disturb the superior court’s order “if there
is any reasonable basis for it.” Orfaly v. Tucson Symphony Soc’y, 209 Ariz.
260, 265, ¶ 18 (App. 2004) (citation omitted). Under Section 25-324(A), a
court may award attorneys’ fees after considering the reasonableness of a
party’s positions and the financial resources of both parties.

¶31 Here, the superior court found both parties acted
unreasonably by withdrawing funds from joint accounts in violation of the
court’s preliminary injunction. Harter also refused to return the entire
amount she improperly withdrew, requested Smith pay over $1,000 a
month for mortgage even after the mortgage had already been paid off,
refused to disclose mortgage statements, and harassed Smith, forcing her to
obtain an order of protection. The court further found there was no
substantial disparity of financial resources between the parties. We discern
no abuse of discretion.

¶32 Both parties request their attorneys’ fees under Section 25-324.
In the exercise of our discretion, we decline both requests. As the prevailing
party, Smith is entitled to her reasonable costs upon compliance with
Arizona Rule of Civil Appellate Procedure 21.

CONCLUSION

¶33 We reverse the portion of the decree ordering Smith to
reimburse Harter’s down payment and affirm in all other respects.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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