Opinion
1 CA-CV 22-0018 FC
10-25-2022
In re the Marriage of: CHERYL FRANCES COWAN, Petitioner/Appellee, v. JAMES W. STERKENBURG, Respondent/Appellant.
David Dick & Associates, Chandler By David A. Dick Counsel for Respondent/Appellant Riggs Ellsworth & Porter, PLC, Show Low By Michael R. Ellsworth Counsel for Petitioner/Appellee
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Navajo County No. S0900DO202100243 The Honorable Melinda K. Hardy, Judge
David Dick & Associates, Chandler
By David A. Dick
Counsel for Respondent/Appellant
Riggs Ellsworth & Porter, PLC, Show Low
By Michael R. Ellsworth
Counsel for Petitioner/Appellee
Judge James B. Morse Jr. delivered the decision of the Court, in which Presiding Judge Jennifer M. Perkins and Judge Michael J. Brown joined.
MEMORANDUM DECISION
MORSE, JUDGE
¶1 James Sterkenburg ("Husband") appeals from a marriage dissolution decree. We affirm in part and vacate in part.
FACTS AND PROCEDURAL BACKGROUND
¶2 Husband and Cheryl Cowan ("Wife") married in 2015. The couple married later in life, and both had accumulated substantial assets prior to the marriage. Wife petitioned for dissolution in July 2021. After a dissolution hearing in October, the superior court entered a dissolution decree, dissolving the parties' marriage and dividing their assets and liabilities. Husband timely appealed. We have jurisdiction under A.R.S. § 12-2101(A)(1).
The superior court granted Wife's request to be restored to her former name, we therefore amend the caption to reflect the name change.
DISCUSSION
¶3 Husband raises several issues on appeal challenging the superior court's characterization and division of property. We address each in turn, reviewing the court's division of property for an abuse of discretion but reviewing its characterization of the property de novo. Helland v. Helland, 236 Ariz. 197, 199, ¶ 8 (App. 2014).
I. Wife's Financial Accounts.
¶4 Husband challenges the division of Wife's financial accounts, asserting the superior court erred when it did not award him half "of the $60,000 increase in [Wife's] Wells Fargo bank accounts" and "half of the $140,000 increase in" Wife's STREFF retiresment accounts. But Husband does not point to record evidence supporting his argument and showing the court erred. Thus, we must affirm the court's findings.
¶5 First, Husband relies on non-evidentiary comments from his opening statement and closing argument to support his assertion that Wife's Wells Fargo account increased by $60,000 during the marriage because she deposited community funds into the account. Although Husband cites to one 70-page exhibit of Wells Fargo bank statements, he does not point to specific pages in the exhibit showing Wife deposited community funds in the account or that the account increased by $60,000 during the marriage. Instead, the exhibit reflects a decrease in the account's value.
¶6 Similarly, husband fails to point to evidence showing the court inequitably awarded the STREFF accounts to Wife. The court found that Wife established the retirement account during her employment prior to the marriage. Wife testified the account increased by $81,000 during the marriage but attributed the increase to "trades" and "rollover" from her 401k. Husband provides numerous cites to the trial transcript. None, however, show that the increase in the account's value was due to community efforts or the deposit of community funds. See Cockrill v. Cockrill, 124 Ariz. 50, 52 (1979) (explaining the increase in the value of separate property remains separate unless the increase is "a result of the work effort of the community").
¶7 We will affirm a family court's division of property if, viewing the record in the light most favorable to sustaining the court's finding, there is evidence that reasonably supports it. Kohler v. Kohler, 211 Ariz. 106, 107, ¶ 2 (App. 2005). "We are not required to assume the duties of an advocate and search voluminous records and exhibits to substantiate an appellant's claims." Adams v. Valley Nat'l Bank of Ariz., 139 Ariz. 340, 343 (1984). Husband does not cite any record evidence showing the court failed to account for community contributions to the accounts. Accordingly, we affirm the court's division of Wife's financial accounts.
II. $3,500 Lien.
¶8 Husband also disputes a $3,500 lien the court placed on Wife's home in Show Low. The court found that $7,000 in community funds were used to install a new air conditioner at Wife's home, and thus Wife owed Husband $3,500. Husband claims that the court erred and that Wife installed the air conditioner at a different house she sold in 2019. He asserts that he is entitled to a portion of the proceeds from the sale of that house because $7,000 in community funds were used to improve it and the sale proceeds were comingled with community funds.
¶9 Husband again points to no record evidence - other than non-evidentiary statements in his closing argument-to show the air conditioner was installed in the house that Wife sold in 2019. And even if he had presented such evidence, Husband cites no legal authority suggesting he would be entitled to more than the $3,500 lien he was already awarded. Cf. Valento v. Valento, 225 Ariz. 477, 479, ¶ 1 (App. 2010) (holding "community contributions to sole and separate property create equitable lien rights" against the property for the value of the contributions). Husband's argument thus fails.
III. $28,600 Check.
¶10 Husband contends that the court erred when it found that the $28,600 he gave Wife "was a gift to be used to pay the debts of the community and not a loan." Husband asserts that, during the dissolution hearing, Wife "admitted" the money he gave her was a loan. Wife counters that Husband "presented no evidence in the form of email, text, or other written document regarding the alleged loan and repayment of the loan." We conclude that the court erred.
¶11 To begin, the superior court found that "the statute of frauds applies" because Husband "did not provide[] any written loan documents showing the $28,600 check issued to [Wife] was an agreement for a loan." This was error. "Whether the statute of frauds applies is a question of law, which we review de novo." Turley v. Ethington, 213 Ariz. 640, 643, ¶ 6 (App. 2006) (citation omitted). The statute of frauds applies to certain unwritten agreements, including a "commitment to loan money" when the amount is "greater than two hundred and fifty thousand dollars and not made or extended primarily for personal, family or household purposes." A.R.S. § 44-101(9). Here, the alleged loan was for $28,600, which is less than the $250,000 requirement for the statute of frauds to apply, and it was extended "primarily for personal, family or household purposes." Id. The court erred when it found that the statute of frauds applies.
¶12 The court also erred when it found the money was a gift and not a loan because Wife's testimony at the dissolution hearing contradicts this finding. The court's dissolution decree states, the "court finds [Wife's] claim that the $28,600 check issued to her was a gift to be used to pay the debts of the community and not a loan." Wife, however, admitted the following on cross examination:
Q: Mrs. Sterkenburg, isn't it true that, even though you knew it was a loan, when James tried to settle the case with you, you refused to pay that loan back, didn't you? Yes or no.
A: Yes.
Wife's admission contradicts the court's finding that she "claim[ed] that the $28,600 check issued to her was a gift." On direct examination, she testified that the money was used for her medical costs and Husband's birthday party but did not testify the money was a gift. Similarly, on redirect, she testified about the absence of loan documents, a repayment plan, or any interest charges but never clarified or recanted her admission. Also, Wife does not dispute the admission in her answering brief. Instead, she relies on the lack of "loan documents" or "agreements" to insist the money was not a loan. But the absence of a written loan document is not dispositive when the statute of frauds does not apply. A.R.S. § 44-101. Because Wife admitted the money was a loan, the court erred in finding it was a gift. See Shoen v. Shoen, 167 Ariz. 58, 62 (App. 1990) (stating that a court abuses its discretion if it "clearly erred in finding the facts or applying them to the legal criteria"). We vacate and remand for the court to enter findings regarding the $28,600 consistent with this decision.
IV. Equitable Lien.
¶13 Husband next argues the court should have awarded him a lien of over $60,000 for Wife's use of his home during their six-year marriage. Husband contends Valento establishes that "the Community owes a lien to the owner of sole and separate property for the use of such property during the marriage." Husband misinterprets Valento. As discussed supra ¶ 5, Valento allows equitable lien rights based on "community contributions to sole and separate property." 225 Ariz. at 479, ¶ 1. Valento does not stand for the opposite proposition-i.e., the community must reimburse a spouse for the value of implied rent for the period during which both spouses lived together on separate property. 225 Ariz. at 479, ¶ 1; cf. Ferrill v. Ferrill, 73 Ariz. Case Dig. 25, __, ¶ 18 (App. Jun. 30, 2022) (noting that a rental offset may be appropriate when one spouse ousts another from the marital home). Husband fails to provide authority for the proposition that Wife should be required to pay for the time she lived at Husband's house during the marriage. Accordingly, we reject his argument.
CONCLUSION
¶14 We affirm the family court's findings regarding Wife's financial accounts, the $3,500 lien, and Husband's request for an equitable lien for use of his house during the marriage. But we vacate the court's finding that the $28,600 Husband gave Wife was a gift and not a loan. We remand the case for the family court to enter findings consistent with this decision.