Sowards v. Sowards

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

BARBARA SOWARDS, Petitioner/Appellant,

v.

TOMMY SOWARDS, Respondent/Appellee.

No. 1 CA-CV 25-0781 FC
FILED 08-05-2026

Appeal from the Superior Court in Maricopa County
No. FN2019-093369
The Honorable Keith A. Miller, Judge

REVERSED IN PART; AFFIRMED IN PART; REMANDED

COUNSEL

Stanley David Murray, Attorney at Law, Scottsdale
By Stanley D. Murray
Counsel for Petitioner/Appellant

SOWARDS v. SOWARDS
Decision of the Court

MEMORANDUM DECISION

Presiding Judge Andrew M. Jacobs delivered the decision of the Court, in
which Judge Brian Y. Furuya joined, and in which Judge James B. Morse Jr.
joined in part. Judge James B. Morse also delivered a separate special
concurrence.

J A C O B S, Judge:

¶1 Barbara Sowards (“Wife”) appeals the superior court’s order
dividing community property, denying her request for spousal
maintenance, and awarding her attorneys’ fees. For the following reasons,
we reverse the court’s community property ruling and remand for a new
division of property and calculation of prejudgment interest, affirm its
denial of spousal maintenance, and remand for reconsideration of its
attorneys’ fees ruling in light of this decision.

FACTS AND PROCEDURAL HISTORY

¶2 Wife and Tommy Sowards (“Husband”) divorced in 2020.
During their marriage, they sued a pacemaker manufacturer. The jury in
that case awarded compensatory damages of $2,323,673 to Husband and
$60,000 to Wife. It also awarded $65 million in punitive damages against
the pacemaker manufacturer, which the superior court reduced to $25
million in the judgment.

¶3 Thereafter, Husband and Wife entered a written settlement
agreement (the “Agreement”) with the pacemaker manufacturer. They
agreed to vacate the trial court’s judgment and dismiss all claims with
prejudice in exchange for a $12 million settlement. The Agreement
provided that the pacemaker manufacturer would deposit $6.6 million into
the trust account maintained by Husband’s and Wife’s attorney and stated
that $2,383,673 of that amount was attributable to Husband’s and Wife’s
alleged personal physical damages. The remaining $5.4 million of the $12
million settlement amount would fund a series of payments to Husband
per a detailed schedule (the “Annuity Payments”).

¶4 When Husband and Wife divorced, Wife sought one-half of
the Annuity Payments or, in the alternative, spousal maintenance. The
superior court ruled that it would enforce the terms of the Agreement,
which made the Annuity Payments Husband’s sole and separate property

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during his lifetime. It also denied Wife’s request for spousal maintenance,
finding she had agreed in her pleadings that she would not receive spousal
maintenance.

¶5 Wife appealed. This Court affirmed the separate property
ruling but reversed the spousal maintenance decision and directed the
superior court to determine whether Wife was entitled to spousal
maintenance based on the evidence and reconsider its denial of Wife’s
request for attorneys’ fees. Sowards v. Sowards, 1 CA-CV 21-0098 FC, 2022
WL 678530, at *2-3 ¶¶ 10, 13-14 (Ariz. App. Mar. 8, 2022) (mem. decision).

¶6 On appeal from that ruling, the Arizona Supreme Court held
the Agreement was not a binding property settlement or post-nuptial
agreement. Sowards v. Sowards, 255 Ariz. 527, 529 ¶ 1 (2023). It remanded
for the superior court to determine if any portion of the Annuity Payments
was Husband’s sole and separate property and, if not, to divide them as
community property. Id. at 532 ¶ 22.

¶7 After the Supreme Court’s decision, Wife concluded the
Agreement did not accurately reflect the settlement she and Husband had
reached with the pacemaker manufacturer. She based this conclusion on a
disbursement statement from the attorney who represented Husband and
Wife in the pacemaker litigation, which listed $12 million in settlement
proceeds, attorneys’ fees and costs of $5,141,000, and “settlement proceeds
to clients” of $6,859,348.31. Confusingly, the document appeared to show
that $5,400,000 was deducted from the $6,859,348.31 for the annuity
payments, with the remaining $1,459,348.31 paid to Husband
($1,399,348.31) and Wife ($60,000).

¶8 In the superior court, Wife moved to join the companies and
individual involved in drafting the Agreement and administering the
Annuity Payments, and filed a complaint to reform the Agreement. She
alleged that the Agreement needed to be reformed to correctly state that
$6.8 million was to be paid to Husband and Wife, with $1,459,348.31
payable to them for their compensatory damages, and the remaining $5.4
million used to purchase the annuity for periodic payments owned by their
community estate.

¶9 Wife and Husband agreed that, as a temporary order pending
trial, Husband would pay to Wife one-half of the Annuity Payments he
received each month beginning November 2023. Then, before trial, Wife
settled her claims against the Agreement’s drafter, and agreed with
Husband and the companies administering the annuity that one-half of the

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Annuity Payments would be sent directly to her going forward. The trial,
therefore, was limited to what portion of the Annuity Payments Wife was
entitled to receive from January 2019 to November 2023, Wife’s spousal
maintenance claim, and Wife’s claim for attorneys’ fees from the dissolution
trial and post-remand proceedings.

¶10 The superior court ruled that the Agreement preserved
$2,323,673 as Husband’s sole and separate property, he received
$1,399,348.31 of that money at settlement, and the remaining amount
($924,324.69) was applied toward the $5.4 million annuity purchase price.
As a result, it found that 17.12% of the Annuity Payments belonged to
Husband as his sole and separate property, and 82.88% of the payments
belonged to the community. It calculated Wife’s portion of the Annuity
Payments between January 2019 and November 2023 as $528,069.92. The
court initially characterized this amount as spousal maintenance, but after
Wife moved to alter or amend the judgment, changed it to a marital
property division.

¶11 Because Husband conceded at trial he owed Wife at least
$371,897.50, the superior court awarded Wife interest on that amount at
9.5% for the 559 days between November 1, 2023 and the date of its ruling.
The court also awarded Wife $15,000 in attorneys’ fees for the dissolution
proceeding and, later, $30,000 in attorneys’ fees for the post-remand
proceedings.

¶12 Wife timely appealed. We have jurisdiction. Ariz. Const. art.
6, § 9; A.R.S. § 12-2101(A)(2).

ISSUES

¶13 Wife asserts the court erred by: (1) not characterizing the
entirety of the Annuity Payments as community property; (2) incorrectly
calculating prejudgment interest; (3) determining Wife was not entitled to
an award of spousal maintenance; and (4) awarding only a portion of Wife’s
requested attorneys’ fees for the post-remand proceedings.

DISCUSSION

I. Husband’s Failure to File an Answering Brief Is an Implied
Confession of Reversible Error.

¶14 Husband filed no answering brief. “Where debatable issues
are raised, the failure of an appellee to file an answering brief constitutes a
confession of reversible error.” Bugh v. Bugh, 125 Ariz. 190, 191 (App. 1980).

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However, the confession of reversible error doctrine is discretionary. See
Gibbons v. Indus. Comm’n, 197 Ariz. 108, 111 ¶ 8 (App. 1999); Nydam v.
Crawford, 181 Ariz. 101, 101 (App. 1994). As we explain below, the issues
Wife raises are not merely debatable, they are meritorious. Rather than
simply relying upon waiver, and to assist the superior court upon remand,
we exercise our discretion to explain our analysis of the issues we resolve
in favor of Wife.

II. The Superior Court Erred by Determining That Husband Should
Retain 17.12% of the Annuity Payments as His Separate Property.

¶15 After the Arizona Supreme Court’s remand, Husband had the
burden to prove that any or all of the Annuity Payments were his sole and
separate property. Cockrill v. Cockrill, 124 Ariz. 50, 52 (1979) (“Property
acquired by either spouse during marriage is presumed to be community
property, and the spouse seeking to overcome the presumption has the
burden of establishing the separate character of the property by clear and
convincing evidence.”); Jurek v. Jurek, 124 Ariz. 596, 598 (1980) (amounts
awarded for personal physical injuries are separate, not community
property). Wife argues the superior court erred by apportioning a
percentage of the Annuity Payments to Husband as his sole and separate
property and by denying her motion to alter or amend the judgment. We
review de novo the superior court’s characterization of property and
interpretation of contracts. In re Marriage of Pownall, 197 Ariz. 577, 581 ¶ 15
(App. 2000); Andrews v. Blake, 205 Ariz. 236, 240 ¶ 12 (2003).

¶16 The superior court rejected Wife’s argument that she and
Husband accepted a reduced amount of personal physical damages in the
pacemaker settlement and found that the Agreement preserved $2,383,673
as damages based on personal physical injury (divided $2,323,673 to
Husband and $60,000 to Wife). It reasoned that because Husband received
a check for $1,399,348.31 at settlement, the amount of his remaining
personal injury damages ($2,323,673 - $1,399,348.31 = $924,324.69) was to be
paid via the Annuity Payments. Thus, it apportioned the Annuity
Payments as 82.88% community property and 17.12% Husband’s sole and
separate property.

¶17 The superior court’s apportionment is not supported by the
record. Under the Agreement, the pacemaker manufacturer funded the $12
million settlement through two components: a $6.6 million cash payment
and $5.4 million allocated to fund the Annuity Payments. The evidence
does not support any suggestion that Wife and Husband purchased the
annuity themselves with settlement proceeds. The pacemaker

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manufacturer was obligated to make the Annuity Payments separate from
the $6.6 million cash payment — and paid a third party to assume that
obligation when the Agreement was signed. The disbursement statement
from Husband and Wife’s attorney in the pacemaker litigation states that
the $5.4 million was paid directly to the assignee of that obligation.

¶18 Crucially, the Agreement provides that $2,383,673 of the $6.6
million cash payment is attributable to personal physical injuries. When
Husband and Wife received the $6.6 million cash payment, it contained all
$2,383,673 in personal physical damages they were owed under the
Agreement. The reason why Husband did not receive a check for the full
amount of personal physical damages allocated to him ($2,323,673) is
because Husband and Wife used the $6.6 million cash payment to pay their
attorneys’ fees and other costs. But Husband still received the full amount
of physical damages allocated to him — he simply allowed his lawyers to
keep the remaining $924,324.69 paid to him for his personal physical
damages. After those expenses, only $1,458,248.31 of the $6.6 million cash
payment remained and was divided between Husband ($1,399,348.31) and
Wife ($60,000).

¶19 Because no amount of the Annuity Payments was allocated to
personal physical injuries, Husband did not satisfy his burden on remand
to establish that any portion of those payments is his sole and separate
property. Cockrill, 124 Ariz. at 52. Accordingly, the superior court erred in
determining that Husband should retain 17.12% of the Annuity Payments
as his sole and separate property. We thus remand for the superior court
to divide the Annuity Payments as community property.

III. The Superior Court Erred in its Award of Prejudgment Interest to
Wife.

¶20 The superior court awarded Wife prejudgment interest on a
portion of the Annuity Payments it awarded her ($371,897.50 of the
$528,069.92 award) at 9.5% for the 559 days between November 1, 2023 and
the date of its ruling. Wife argues she is entitled to interest — at the
statutory rate — on her share of each annuity payment that Husband
received but did not distribute to her, calculated from the date each
payment was made. We review the superior court’s ruling on entitlement
to prejudgment interest de novo. John C. Lincoln Hosp. & Health Corp. v.
Maricopa Cnty., 208 Ariz. 532, 544 ¶ 39 (App. 2004).

¶21 Prejudgment interest is awarded as a matter of right when a
claim is liquidated — that is, there is a precise basis for calculating the

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amount owed. Id. The mere fact that liability is uncertain doesn’t make a
claim unliquidated. Id. at ¶ 40. “All that is necessary is that the evidence
furnish data which, if believed, makes it possible to compute the amount
with exactness.” Id.

¶22 Here, the exact amount of the Annuity Payments Wife was
owed from January 2019 to November 2023 can be calculated. Her claim is
therefore liquidated and she is entitled to prejudgment interest on each
annuity payment that Husband received but did not share with her from
January 2019 to November 2023.

¶23 The superior court erred by limiting Wife’s prejudgment
interest to only a part of the Annuity Payments owed to her and by
calculating that interest from November 2023 forward. On remand, we
direct the court to award Wife prejudgment interest on the entire amount
of Annuity Payments it determines Wife was entitled to and did not receive
from January 2019 to November 2023. The prejudgment interest must be
calculated at the statutory rate applicable on the date of each annuity
payment withheld from Wife during that period.

III. The Superior Court Did Not Err By Denying Wife’s Request for
Spousal Maintenance.

¶24 Wife argues the superior court abused its discretion by
denying her request for spousal maintenance. We review that decision for
abuse of discretion. Boyle v. Boyle, 231 Ariz. 63, 65 ¶ 8 (App. 2012).

¶25 Wife initially sought spousal maintenance in the event the
court declined to award her one-half of the Annuity Payments. After the
Arizona Supreme Court remanded for the court to determine whether any
part of the Annuity Payments was Husband’s sole and separate property,
Wife argued she was entitled to spousal maintenance from January 2019 to
November 2023, when she began receiving one-half of the Annuity
Payments. She stated in the Joint Pretrial Statement, however, that she
would waive her spousal maintenance claim if the court found she was
entitled to a retroactive award of the Annuity Payments Husband received
from January 2019 to November 2023. The court granted Wife a retroactive
award of the Annuity Payments and did not award her spousal
maintenance. We see no error.

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IV. Given Our Reversal of the Superior Court’s Treatment of the
Annuity Payments, We Remand to Allow the Superior Court to
Reconsider its Ruling on Wife’s Request for Attorneys’ Fees.

¶26 The superior court awarded Wife $30,000 of the $99,309.62 in
attorneys’ fees she requested for the post-remand proceedings, finding that
she had been “somewhat unreasonable” in her positions. Wife challenges
the fee award, arguing the court erred by not awarding the full amount of
her fees because her positions in the proceedings were not unreasonable.
We review an award of attorneys’ fees under A.R.S. § 25-324 for abuse of
discretion. Myrick v. Maloney, 235 Ariz. 491, 494 ¶ 6 (App. 2014).

¶27 Because the superior court’s fee award relied in part on its
finding that Wife was “somewhat unreasonable” — a finding bound up
with its erroneous conclusion that a portion of the Annuity Payments
constituted Husband’s separate property — we remand for the court to
reconsider fees after properly characterizing the Annuity Payments as
community property.

CONCLUSION

¶28 For the foregoing reasons, we reverse the court’s division of
property and remand for a new division of the Annuity Payments, a
recalculation of prejudgment interest, and reconsideration of the attorneys’
fees ruling. We affirm the court’s denial of spousal maintenance.

¶29 In the exercise of our discretion, we deny Wife’s request
under A.R.S. § 25-324 for an award of attorneys’ fees on appeal.

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M O R S E, Judge, specially concurring:

¶30 For the reasons stated in my special concurrence in Mayberry
v. Stambaugh, No. 1 CA-CV 23-0289 FC, 2024 WL 1282653 at *1-5, ¶¶ 5-20
(App. 2024) (mem. decision), I’m not convinced that we have the discretion
to ignore an implied confession of error when an appellant raises debatable
issues and a child’s best interests are not at issue. That said, I fully join in
the majority’s discussion of the merits to demonstrate that Wife raises
debatable issues and to provide guidance to the superior court on remand.

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

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