Opinion
No. 1 CA-CV 13-0763
02-26-2015
In re the Matter of: KEVIN T. AHERN, Petitioner/Appellee, v. LINDA K. LEVITT, Respondent/Appellant.
COUNSEL Cavanagh Law Firm, Phoenix By Christina S. Hamilton Counsel for Petitioner/Appellee Jack Levine, PC, Phoenix By Jack Levine Counsel for Respondent/Appellant
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. FC2012-007484
The Honorable Susan M. Brnovich, Judge
AFFIRMED
COUNSEL Cavanagh Law Firm, Phoenix
By Christina S. Hamilton
Counsel for Petitioner/Appellee
Jack Levine, PC, Phoenix
By Jack Levine
Counsel for Respondent/Appellant
MEMORANDUM DECISION
Judge Maurice Portley delivered the decision of the Court, in which Presiding Judge Andrew W. Gould and Judge Jon W. Thompson joined. PORTLEY, Judge:
¶1 Linda K. Levitt ("Wife") appeals from a decree of dissolution awarding certain real property to Kevin T. Ahern ("Husband") as his separate property after concluding that the disclaimer deed Wife signed was not obtained as a result of fraud or mistake. Wife also appeals from the amount of attorneys' fees awarded in the decree. For the reasons stated below, we affirm the decree and fee award.
BACKGROUND
¶2 Husband and Wife each owned a house prior to their marriage in 1994. After the marriage, Wife sold her house, and the parties subsequently moved from Husband's house into the "6618 Property." The parties took title to the 6618 Property as community property with right of survivorship.
Husband filed his petition to dissolve the marriage in September 2012.
¶3 In 2001, Husband wanted to take out a line of credit on the 6618 Property and use the cash for investments, but Wife refused. Wife testified Husband later presented her with a disclaimer deed as a way for him to obtain a line of credit against the 6618 Property without obligating Wife on the loan. She testified that she signed the disclaimer deed without understanding it and thought it had to do with a lot on Coronado Island. Husband, however, testified that Wife signed the deed at his office after having agreed that his proposal to buy out her interest in the 6618 Property was a fair compromise.
¶4 Six months later, Husband presented Wife with a check for approximately $119,000 to buy out her interest in the 6618 Property. Wife testified that she refused the check, but Husband forced her to endorse the check with threats of divorce and a custody battle over their then young child. Husband testified that the parties discussed a fair price for Wife's interest and that the $119,000 included Wife's initial $75,000 investment plus 5.5% interest and one-sixth of the appreciation in property value. Husband also testified Wife deposited the check into her separate account which subsequently appreciated to $238,000 by 2012.
¶5 After Wife signed the disclaimer deed in 2001, Husband used funds from the line of credit to purchase other properties: the Montecito house, the Tempe townhouse, and a share of an office building. Wife argued that the disclaimer deed was invalid, so the 6618 Property was a community asset and, therefore, she was entitled to a share of the properties subsequently purchased using the community asset. Wife also requested $120,000 in attorneys' fees.
¶6 The family court concluded that Wife failed to show any credible evidence of fraud and upheld the disclaimer deed. As a result, the court awarded the 6618 Property and all subsequently-acquired properties to Husband as his separate property. The court ordered Husband to pay $10,000 toward Wife's attorneys' fees, finding that Wife's unreasonable positions outweighed the fact that Husband had far greater financial resources. The court denied Wife's motion for new trial on the issues of the disclaimer deed and attorneys' fees. Wife then filed a notice of appeal from the decree and denial of the motion for new trial. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1), (5)(a).
The court granted Wife's motion for new trial on issues that are not relevant to this appeal.
We cite to the current version of the statute unless otherwise noted.
DISCUSSION
I. Burden of Proof
¶7 Wife contends the family court erroneously concluded that she had the burden of proving that the disclaimer deed was obtained as a result of fraud, undue influence, or mistake. The appropriate burden of proof is a question of law which this court reviews de novo. Am. Pepper Supply Co. v. Fed. Ins. Co., 208 Ariz. 307, 309, ¶ 8, 93 P.3d 507, 509 (2004).
¶8 Wife relies on In re Estate of Harber, 104 Ariz. 79, 88, 449 P.2d 7, 16 (1969), which held that spouses may enter a contract to divide their property outside a divorce or separation, but that when such a postnuptial agreement is:
attacked by a wife on the grounds that the transaction was fraudulent or coerced, or is inequitable or unfair, the wife may have a judicial determination at that time whether the agreement is invalid as to her, and that it is the husband's burden to prove by clear and convincing evidence that the agreement was not fraudulent or coerced, or that it was not unfair or inquitable.(Emphasis added.) Citing the highlighted language, Wife contends that the superior court erred in placing the burden of proving fraud on Wife. ¶9 Harber, however, did not involve a disclaimer deed but a postnuptial agreement between the spouses. Id. at 80-81, 449 P.2d at 8-9. And a postnuptial agreement is "an agreement between spouses" addressing the division of assets in the event of a separation, divorce or death. Black's Law Dictionary 1206 (8th ed. 2004). A disclaimer deed, on the other hand, is entered into during the marriage and operates to rebut the presumption of community property. See Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, 524, ¶ 11, 169 P.3d 111, 114 (App. 2007); Bender v. Bender, 123 Ariz. 90, 93, 597 P.2d 993, 996 (App. 1979) (noting that married couples can convey their separate or community property interests to one another). Bender, for example, held that a disclaimer deed signed by one spouse stating he or she had no interest in the property would be enforced absent any fraud or mistake. 123 Ariz. at 94, 597 P.2d at 997. Although the Bender spouse did not allege fraud or mistake, this court held that fraud and mistake are affirmative defenses which must be proven by the party asserting the defense. Id. We conclude that Bender, and not Harber, governs the burden of proof issue because this case involves a disclaimer deed, not a postnuptial agreement.
Husband argues that Wife waived the defenses of mistake, undue influence, or fraud by failing to raise them in her pretrial statement or at trial. Wife's pretrial statement specifically claimed that the disclaimer deed was procured through Husband's fraud and misrepresentations. At trial, Wife testified, without objection, that she did not understand the meaning of the disclaimer deed and that she took payment for her share of the 6618 Property as result of Husband's threats and coercion. Although the superior court did not find this testimony credible, Wife adequately raised the arguments below. Wife also raised these arguments in her motion for new trial. Therefore, we find no waiver.
¶10 Furthermore, any affirmative defense must be proven by the party asserting it. Id.; see also Gutierrez v. Gutierrez, 193 Ariz. 343, 346-47, ¶ 7, 972 P.2d 676, 679-80 (App. 1998) (holding that the party asserting a fact has the burden of establishing that fact (citing Troutman v. Valley Nat'l Bank of Ariz., 170 Ariz. 513, 517, 826 P.2d 810, 814 (App. 1992))). The party asserting fraud must do so by clear and convincing evidence. See Powers v. Guaranty RV, Inc., 229 Ariz. 555, 562, ¶ 27, 278 P.3d 333, 340 (App. 2012). Thus, the family court properly concluded that Wife had the burden of proving fraud by clear and convincing evidence.
II. Evidence of Fraud
¶11 Wife contends that evidence of Husband's fraud was "unequivocally" established by a 2006 deed of trust for the line of credit on the 6618 Property which states that Husband was an "unmarried man." Although Husband was still married in 2006, this does not establish that the 2001 disclaimer deed Wife admittedly signed was fraudulently or mistakenly obtained. The family court disregarded Wife's testimony regarding the disclaimer deed as not credible. And we do not reweigh conflicting evidence or the family court's credibility determinations. See O'Hair v. O'Hair, 109 Ariz. 236, 240, 508 P.2d 66, 70 (1973) ("the duty of a reviewing court begins and ends with the inquiry whether the trial court had before it evidence which might reasonably support its action viewed in the light most favorable to sustaining the findings, and, second, that the reviewing court will not weigh conflicting evidence on appeal") (citations omitted); Gutierrez, 193 Ariz. at 347-48, 972 P.2d at 680-81 (noting that we "will defer to the trial court's determination of witnesses' credibility and the weight to give conflicting evidence"); Hurd v. Hurd, 223 Ariz. 48, 52, ¶ 16, 219 P.3d 258, 262 (App. 2009). The evidence supports the court's conclusion that the disclaimer deed was valid.
III. A.R.S. § 25-214
¶12 Wife contends the disclaimer deed was ineffective to convey Wife's interest in the 6618 Property to Husband because A.R.S. § 25-214(C) requires both spouses' signatures. We review the issue of statutory interpretation de novo. Cooke v. Ariz. Dep't of Econ. Sec., 232 Ariz. 141, 144, ¶ 13, 302 P.3d 666, 669 (App 2013).
Husband contends Wife waived this argument by failing to cite § 25-214 in her pretrial statement or at trial. Wife's pretrial statement did not specifically cite § 25-214 but questioned: "whether a Disclaimer Deed is ever capable of transferring an interest in property." We conclude this is sufficient to preserve this issue for appeal, particularly because Wife's motion for new trial also raised this issue.
¶13 Section 25-214(C)(1) requires the joinder of the signature of both spouses in "[a]ny transaction for the acquisition, disposition or encumbrance of an interest in real property[.]" Section 25-214 is intended to protect the marital community. All-Way Leasing, Inc. v. Kelly, 182 Ariz. 213, 216, 895 P.2d 125, 128 (App. 1994). The statute does not require both spouses to sign when one spouse is conveying his or her interest to the other. In fact, in both Bell-Kilbourn and Bender we recognized the validity of disclaimer deeds signed by one spouse; the spouse disclaiming his or her community interest in the property. Consequently, Husband was not required to sign the disclaimer deed after Wife signed the deed and handed it to Husband disclaiming her community interest in the 6618 Property. As a result, we affirm the property allocation in the decree.
To the extent Wife argues on appeal that the family court failed to impose community liens for the community income and labor spent to improve the 6618 Property and the other after-acquired properties, Wife did not cite to any evidence regarding such community expenditures. "Issues not clearly raised and argued in a party's appellate brief constitute waiver of [any] error on review." Jones v. Burk, 164 Ariz. 595, 597, 795 P.2d 238, 240 (App. 1990); see also ARCAP 13(a)(6) (2014). Thus, we do not consider this argument.
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IV. Attorneys' Fees Award
¶14 Wife requested $120,000 in attorneys' fees, and the family court awarded her $10,000. Pursuant to A.R.S. § 25-324(A), the court may award attorneys' fees to one spouse in a dissolution action "after considering the financial resources of both parties and the reasonableness of the positions each party has taken throughout the proceedings[.]" We review an award of attorneys' fees for an abuse of discretion. See Magee v. Magee, 206 Ariz. 589, 590, ¶ 6, 81 P.3d 1048, 1049 (App. 2004).
¶15 Wife contends the family court based its award on her position regarding the disclaimer deed, which she claims was not unreasonable. Wife also contends that because there is a substantial disparity in financial resources favoring Husband, the court abused its discretion in awarding her only $10,000.
¶16 A disparity in financial resources by itself does not mandate an award of fees to the poorer party. See Myrick v. Maloney, 235 Ariz. 491, 494, ¶ 9, 333 P.3d 818, 821 (App. 2014); Magee, 206 Ariz. at 593, ¶ 18, 81 P.3d at 1052. "If the [superior] court finds such a disparity, it is then authorized to undertake its discretionary function of determining whether an award is appropriate." Magee, 206 Ariz. at 593, ¶ 18, 81 P.3d at 1052; see also Myrick, 235 Ariz. at 494, ¶ 9, 333 P.3d at 821. The court is to consider the reasonableness of the parties' positions when making that discretionary determination.
¶17 Although the family court recognized the financial disparity between the parties, the court detailed nine separate unreasonable positions Wife maintained throughout the litigation. The court then awarded Wife only a portion of the fees she requested. The evidence supports the court's findings. Therefore, the court did not abuse its discretion by awarding Wife less than one hundred percent of her requested attorneys' fees.
ATTORNEYS' FEES ON APPEAL
¶18 Both parties request an award of attorneys' fees and costs on appeal; both also contend the other party's actions on appeal are sanctionable. See ARCAP 25; Ariz. R. Fam. L.P. 31 (cited by Husband) and A.R.S. § 25-324(B) (cited by Wife). We conclude neither party has taken unreasonable positions on appeal and order each party to bear his or her own attorneys' fees on appeal.
CONCLUSION
¶19 We affirm the decree of dissolution.