Dole v. Hon. blair/dole

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

PHILLIP DOLE, Petitioner,

v.

THE HONORABLE MICHAEL BLAIR, Judge of the SUPERIOR COURT
OF THE STATE OF ARIZONA, in and for the County of MARICOPA,
Respondent Judge,

DALYNNE DOLE, Real Party in Interest.

No. 1 CA-SA 20-0001
FILED 4-14-2020

Petition for Special Action from the Superior Court in Maricopa County
No. FC2018-005549
The Honorable Michael Blair, Judge

JURISDICTION ACCEPTED; RELIEF GRANTED

COUNSEL

Berkshire Law Office, PLLC, Tempe
By Keith Berkshire, Kristi A. Reardon, Alexandra Sandlin
Counsel for Petitioner

Woodnick Law, PLLC, Phoenix
By Markus W. Risinger
Co-Counsel for Real Party in Interest

The Cavanagh Law Firm, P.A., Phoenix
By Helen R. Davis
Co-Counsel for Amicus Curiae American Academy of Matrimonial Lawyers
Arizona Chapter

Law Offices of Annette T. Burns, Phoenix
By Annette T. Burns
Co-Counsel for Amicus Curiae American Academy of Matrimonial Lawyers
Arizona Chapter

OPINION

Judge Maria Elena Cruz delivered the opinion of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge David B. Gass joined.

C R U Z, Judge:

¶1 Phillip Dole (“Father”) seeks special action relief from the
superior court’s decree of dissolution, which, citing the children’s best
interests, did not divide the community’s interest in two homes but instead
ordered the parties to own the homes as joint tenants with right of
survivorship for the next six years. For the reasons that follow, we accept
jurisdiction and grant relief.

FACTUAL AND PROCEDURAL HISTORY

¶2 Father and Dalynne Dole (“Mother”) were married for
twenty-four years when Mother filed for divorce in 2018. The parties have
six children together, three of whom are minors. Father is an engineer,
earning a base salary of $127,000 with an annual bonus. Mother stayed at
home with the children and did not work outside the home throughout the
entirety of the marriage. Other than their retirement accounts, the parties’
primary assets were the marital residence and a rental home.

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¶3 While the dissolution was pending, Mother remained in the
marital residence with the children and Father moved into the rental
property. Neither Mother nor Father had the properties appraised. At trial,
they agreed there was about $200,000 in equity in the marital residence and
about $100,000 in equity in the rental property. They owed about
$236,810.56 on the marital residence, and about $197,766.51 was owed on
the rental property.

¶4 Following trial, the superior court allocated parenting time
and legal decision-making authority, awarded Mother spousal
maintenance of $3,000 a month for six years and child support of $1,489 a
month. The court did not divide the community’s interest in the two
homes, but instead awarded them to Father and Mother as joint tenants
with right of survivorship. Mother was granted exclusive use of the marital
residence, with sole responsibility for all mortgage, HOA, utilities, and
other expenses related to the marital residence. Father was granted
exclusive use of the rental property, with sole responsibility for all
mortgage, HOA, utilities, and other expenses related to the rental property.
The court further ordered that, unless the parties agreed to sell the
properties sooner, Father and Mother were to sell them by October 31, 2025
(a few months after the youngest child graduates from high school). The
net proceeds of each sale would then be divided equally between the
parties.

¶5 Father promptly filed a Request to Alter/Amend Ruling,
which the superior court denied. Father then filed the instant special action
petition.

SPECIAL ACTION JURISDICTION

¶6 Special action review is generally appropriate when there is
no “equally plain, speedy, and adequate remedy by appeal.” Ariz. R.P.
Spec. Act. 1(a); see generally Sw. Gas Corp. v. Irwin ex rel. Cty. of Cochise, 229
Ariz. 198, 201, ¶¶ 5-7 (App. 2012). However, “jurisdiction is frequently
accepted when under no rule of law can a trial court’s actions be justified.”
King v. Superior Court (Bauer), 138 Ariz. 147, 149-50 (1983). “This court’s
decision to accept special action jurisdiction is discretionary, and the
exercise of jurisdiction is appropriate when the issue involved is one of law
and of statewide importance.” State ex rel. Montgomery v. Rogers, 237 Ariz.
419, 421, ¶ 5 (App. 2015); see Sw. Gas Corp., 229 Ariz. at 201, ¶ 7.

¶7 The superior court erred by requiring Father and Mother to
own the residences as joint tenants with right of survivorship for six years

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following the dissolution of their marriage. Under these circumstances, we
agree Father has no “equally plain, speedy, and adequate remedy by
appeal” and therefore accept jurisdiction.

DISCUSSION

¶8 Father argues that the superior court erred by declining to
divide the parties’ community property due to the “best interests of the
children.” The apportionment of community property in a dissolution rests
within the discretion of the superior court, and we will not disturb it absent
an abuse of discretion. Hatch v. Hatch, 113 Ariz. 130, 133 (1976); Kohler v.
Kohler, 211 Ariz. 106, 107, ¶ 2 (App. 2005). A court abuses its discretion
when it commits an error of law in exercising its discretion. Id. We review
issues of law de novo. In Re Marriage of Pownall, 197 Ariz. 577, 581, ¶ 15 (App.
2000).

¶9 At trial, Father asked the court to order both community
homes sold and the proceeds divided. Mother asked to be allowed to
remain in the marital residence until the youngest child graduated high
school, but she offered no evidence that she could refinance the home and
pay Father his share of the equity. The superior court described the result
as a “conundrum,” explaining that if it were to award the marital home to
Mother and the rental home to Father, Father “loses out on the equity in the
marital residence because she does not have sufficient funds to pay him his
share[,] an inequitable result.” On the other hand, the court observed, if it
were to order “both properties sold and the equity divided, then the
children are uprooted from their home and suffer even more in this
divorce[,] also an inequitable result.” The court concluded:

In the end, the court is tasked to act in the children’s best
interest. Arguably, this applies to division of property as well
as legal decision-making and parenting time. While selling
the properties now and dividing the equity in them may be
best for the parents, forcing the children to move is not what
is best for them.

¶10 Arizona Revised Statutes (“A.R.S.”) section 25-318 directs the
court to divide community and jointly held property equitably upon
dissolution of the marriage; a substantially equal division is not required if
“sound reason exists to divide the property otherwise.” Toth v. Toth, 190
Ariz. 218, 221 (1997). Our supreme court has held “equitable” is “a concept
of fairness dependent upon the facts of particular cases.” Id. In arriving at
an equitable distribution of property, A.R.S. § 25-318 requires the court to

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consider certain enumerated factors, including debts or obligations relating
to the property, excessive or abnormal expenditures, destruction,
concealment or fraudulent disposition. A.R.S. § 25-318(B)-(C).
Additionally, the court may consider non-enumerated factors, including
the source of funds and “other equitable factors as they may bear on the
outcome” of equitable allocation. Toth, 190 Ariz. at 222. Regardless, the
court must divide any community property at dissolution. A.R.S. § 25-
318(A).

¶11 Here, the superior court did not do so. Instead, the court
ordered the parties continue to jointly own the two properties for the next
six years with a right of survivorship. As Father points out, one effect of
the court’s ruling is that in the event one of the parties dies before the end
of the six-year period, the other will inherit the deceased’s interest in both
properties. Father also argues the court’s ruling deprives him of his right
to manage and control his separate property by, for example, requiring him
to accept the market risk of waiting six years to sell the properties and the
risk that, in the meantime, Mother might not properly maintain the marital
residence. He also argues he should be able to draw from his share of the
equity in the homes to pay expenses he incurred since Mother filed for
dissolution.

¶12 Father does not dispute Mother’s assertion that the three
minor children would prefer to remain in the marital residence.
Nevertheless, and although divorce can impose stressful changes on the
children of the marriage, A.R.S. § 25-318 is clear in its mandate that
community property must be divided on dissolution of the marriage.
Moreover, no statute allows the superior court to deprive either party of the
right to control and dispose of their separate property based on the best
interests of the children. The Arizona Supreme Court was clear when, in
Koelsch v. Koelsch, 148 Ariz. 176, 181 (1986), it reasoned that “[w]hen the
community property is divided at dissolution pursuant to the mandate of
A.R.S. § 25-318, each spouse receives an immediate, present, and vested
separate property interest in the property awarded to him or her by the trial
court.”

¶13 Mother relies on In re Marriage of Berger for the proposition
that the court may take into account the children’s interests when it divides
property in divorce. 140 Ariz. 156, 168 (App. 1983). However, in Berger,
this court held that any unequal award of household furnishings to the wife
was proper because “[s]he paid for the property with her separate funds
and the furniture and furnishings were necessary to maintain the house in
a suitable condition as a home for the children whose custody she was

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awarded.” Id. Additionally, the Berger court held the wife’s “separate
funds were the major source for the support of the family, including the
husband, during the marriage.” 140 Ariz. at 168.

¶14 While a court may consider the parties’ children in deciding
which party should be awarded a given piece of property, in doing so, the
court may not impinge on either party’s property interests. Pursuant to
A.R.S. § 25-318, the community property is divided at dissolution, each
party is awarded their separate property, and “a former spouse loses any
interest in and control over that separate property.” Koelsch, 148 Ariz. at
181. Here, the court ruled based on what the court believed to be the
children’s best interests, and in doing so, it deprived both parties of their
interests in their separate property for six years after the divorce was
finalized.

¶15 It was improper for the superior court to use the “best
interests of the children” as the deciding factor in the distribution of
Mother’s and Father’s property. Although a court has broad discretion in
allocating property following the dissolution of a marriage, it “has no
authority to compel either party to divest himself or herself of [t]itle to
separate property.” Proffit v. Proffit, 105 Ariz. 222, 224 (1969). The court
committed reversible error when it allowed the children’s interests to
trump Father’s property rights.

¶16 We recognize the superior court enjoys discretion to divide
property equitably, such as by ordering it be sold, even if the sale may occur
some reasonable time after the superior court issues the dissolution decree.
That situation often arises by necessity, since usually it is impossible to
complete the sale of real estate immediately after the signing of a divorce
decree. The flaw in the instant case is two-fold, however. The court’s
failure to divide the community property denies both parties control over
their sole and separate property after the dissolution, denying them their
statutory right to seek partition, and it does so for the next six years, unless
Mother agrees to sell the properties sooner. See A.R.S. § 12-1211. Also, by
ordering that the property be held jointly with a right of survivorship, the
superior court denied both parents control over the disposition of their sole
and separate property upon their death.

¶17 Father requests we reverse the superior court’s orders
requiring that the parties own the two homes as joint tenants with right of
survivorship, and that we order the sale of the homes and equal division of
the proceeds. Mother contends that such an order risks inequity because it
will disturb the complex machinery of the decree. However, in its ruling,

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the superior court found that “this case does not present a unique set of
facts or circumstances. Therefore, an equal division of community property
is appropriate to achieve equity.” The court also found that the “allocation
of the real and personal property, when considered with the division of
debt, is fair and equitable under the circumstances” bearing some
equalization adjustments where Father was ordered to pay Mother a total
of $13,675 in offsets and reimbursements. Based on these findings, and the
court’s effort to divide the property equally, the only legally permissible
outcome is that the properties be sold, and the proceeds divided equally
between the parties.

¶18 Accordingly, we grant relief by reversing the superior court’s
order requiring that the parties own the two homes as joint tenants with
right of survivorship. We remand to the superior court for further orders
requiring that the two homes be sold and the net proceeds be divided
equally. The court shall direct that the parties hold title as tenants in
common until the properties can be sold.

CONCLUSION

¶19 We accept jurisdiction and grant relief. Father requests his
reasonable attorneys’ fees pursuant to A.R.S. § 25-324, and costs on appeal.
He argues Mother took an unreasonable position at trial and that her
appellate arguments were not made in good faith. Having considered the
financial positions of the parties and given Mother’s unsupported position
on the law regarding disposition of community property, in the exercise of
our discretion and under A.R.S. § 25-324(B)(2), we grant Father a partial
award of his reasonable attorneys’ fees. As the prevailing party, Father is
entitled to recover his costs on appeal upon compliance with ARCAP 21.

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

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