Opinion
2 CA-CV 2022-0086-FC
02-13-2023
In re the Marriage of Andrea Steele, Petitioner/Appellee, v. Stephen K. Steele, Respondent/Appellant.
Karp &Weiss P.C., Tucson By Jennifer Manzi Counsel for Petitioner/Appellee Aboud & Aboud P.C., Tucson By John Eli Aboud Counsel for Respondent/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court.
Appeal from the Superior Court in Pima County No. D20201656 The Honorable Wayne E. Yehling, Judge
Karp &Weiss P.C., Tucson By Jennifer Manzi Counsel for Petitioner/Appellee
Aboud & Aboud P.C., Tucson By John Eli Aboud Counsel for Respondent/Appellant
Judge Eckerstrom authored the decision of the Court, in which Presiding Judge Brearcliffe and Judge Kelly concurred.
MEMORANDUM DECISION
ECKERSTROM, JUDGE
¶1 Stephen ("Steve") Steele appeals from the trial court's decree of dissolution of his marriage to Andrea Steele. He challenges the court's determination that the proceeds from the sale of the former marital residence are community funds that should be divided equally between the parties. For the reasons that follow, we affirm.
Factual and Procedural Background
¶2 The material facts are undisputed. The parties were married in 2008 in Illinois. They relocated to Arizona in 2013 and purchased a home in Tucson ("the house"). They took title to the house as "Stephen K. Steele and Andrea Steele, husband and wife."
¶3 Andrea filed for divorce in June 2020. The house was sold in September 2020, generating a net profit of approximately $217,500. A two-day trial occurred in May 2021. Among other issues not before us on appeal, the parties disputed whether the proceeds from the sale of the house should be considered community property belonging equally to the parties or Steve's sole and separate property with a community lien.
¶4 The trial court issued its ruling in July 2021. It noted that the ruling was based on the court's review of the file, including exhibits admitted at trial and consideration of the "demeanor and credibility of the witnesses while testifying."
¶5 With regard to the proceeds from the sale of the house, the trial court first found that Steve had used his separate property to make the down payment of approximately $105,000. The court then addressed whether Steve had overcome by clear and convincing evidence the legal presumption that, by placing the title to the house in the names of both spouses, Steve had "intended to make a gift of his separate property contributions toward the acquisition of the property, and thus the proceeds from the sale of it, to the marital community."
¶6 The trial court's analysis of this question turns primarily on a statement dated May 1, 2013, handwritten by Steve. That document reads as follows:
Andrea, As you know, I have agreed to take the title to our upcoming home in Tucson with you, even though I am using the money from the sale of my White Tail Lane house and premarital retirement accounts to buy it. I am doing this in order to [e]nsure your ownership of the house after my death. I intend to commit approximately $100,000 of my personal monies to that end, and, will reflect both our names on the home. I would like you to sign this note evidencing my testamentary commitment to you.
A signature appears below the foregoing handwritten text. Steve characterized this exhibit as Andrea's "acknowledgement of [his] testamentary intent re: the title." He offered it in support of his testimony that he had allowed the deed to the house to list both parties' names solely to ensure that Andrea would become the owner if Steve predeceased her while they were married.
¶7 Andrea denied signing the May 2013 statement. After hearing from handwriting experts and the parties, the trial court found that Andrea's signature on the document was genuine, was affixed after Steve wrote the statement, and was "an acknowledgement of the contents of that statement."
¶8 However, the trial court concluded that the May 2013 statement was insufficient to overcome the presumption that Steve's contribution of his separate property to purchase the house was a gift to the marital community. In particular, it noted the absence of any language limiting the extent of the gift. Based on its finding that the gift presumption had not been overcome, the court ruled that the proceeds from the sale of the house were community funds that, subject to offsets, should be divided equally between the parties.
¶9 The trial court entered a decree of dissolution in December 2021, but did not issue a final, appealable order until June 2022. This appeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Steve filed an initial notice of appeal of the dissolution decree in January 2022, when certain matters remained pending before the trial court. He then filed a motion in this court to return jurisdiction to the trial court to allow it to conduct an already scheduled hearing. Finding that the dissolution decree's finality language under Rule 78(c), Ariz. R. Fam. Law P., was "erroneous" because a claim remained outstanding, and in the absence of finality language under Rule 78(b), we concluded that the notice of appeal had been filed prematurely, requiring us to dismiss the appeal for lack of jurisdiction.
Discussion
¶10 On appeal, Steve challenges the trial court's conclusion that his down payment on the house was a gift to the community. He contends that the May 2013 statement proves the down payment was not such a gift and that the house was his separate property rather than community property.
¶11 "We view all the evidence and reasonable conclusions therefrom in the light most favorable to supporting the trial court's decision regarding the nature of the property as either community or separate." Hatcher v. Hatcher, 188 Ariz. 154, ¶ 157 (App. 1996). However, we review de novo the characterization of property as community or separate, which is a legal determination. See Hammett v. Hammett, 247 Ariz. 556, ¶ 13 (App. 2019). We then review a trial court's division of assets for an abuse of discretion, id., deferring to its factual findings unless clearly erroneous, Danielson v. Evans, 201 Ariz. 401, ¶ 13 (App. 2001).
¶12 The parties agree that, through the deed that conveyed the house to both of them "as husband and wife," they took title as joint tenants. See A.R.S. § 33-431(A). In Arizona, "[i]t is well established that when a spouse places separate property in joint tenancy with the other spouse a presumed gift occurs and the presumption can only be overcome by clear and convincing evidence." In re Marriage of Inboden, 223 Ariz. 542, ¶ 9 (App. 2010). If, after considering the evidence, the trial court sustains the presumption of a gift, "the community and joint property must be equitably divided between the parties." Hatcher, 188 Ariz. at 159.
Because Arizona law presumes a gift in the situation at issue here, we need not address Steve's arguments regarding the requirements for a valid inter vivos gift or whether the necessary elements were present in this case. See Toth v. Toth, 190 Ariz. 218, 221 (1997) ("gifts of joint tenancy property are not irrevocable inter vivos transfers" but, rather, subject to equitable division upon dissolution).
¶13 Steve testified at trial that he had been concerned regarding the state of his marriage at the time the house was purchased and that he did not intend to gift his separate property contributions toward the purchase to the marital community. But the trial court found itself "unpersuaded that [Steve] shared any of his concerns with [Andrea]"-a factual finding to which we must defer. See Danielson, 201 Ariz. 401, ¶ 13. Steve's "after-the-fact testimony that the property was placed in joint tenancy only as a means of avoiding probate and not as an intended gift" was not sufficient to overcome the presumed gift, Valladee v. Valladee, 149 Ariz. 304, 307 (App. 1986), particularly where that testimony related only to "the hidden intentions of one of the parties," id. (quoting Sloane v. Sloane, 132 Ariz. 414, 416 (App. 1982)).
¶14 Rather, only "evidence tending to prove a common understanding or an agreement that the character of the property was to be other than joint tenancy" will suffice to overcome the gift presumption created by the joint tenancy. Id. (quoting Sloane, 132 Ariz. at 416). Thus, Steve was required to provide evidence of some "agreement or understanding between the parties that the property was not in reality a joint tenancy and that there was no intent to make a gift." Sloane, 132 Ariz. at 416. Here, the trial court found that Andrea had signed the May 2013 statement "without discussion between the parties as to its legal effect" and that the statement itself is "the only evidence regarding the parties' mutual understanding regarding the legal effect" of placing the house in the names of both parties. The question thus becomes whether the May 2013 statement, standing alone, is sufficient to overcome the gift presumption.
¶15 Steve insists the May 2013 writing signed by Andrea was a "post-nuptial agreement" that overcame the gift presumption by clear and convincing evidence. He contends the trial court erred in giving it "no legal effect." But the court's ruling refers to the document only as a "statement." The ruling contains no findings supporting Steve's contention that the May 2013 statement is a valid and binding post-nuptial agreement, much less any determination that it qualifies as such.
¶16 To be enforceable, a purported post-nuptial agreement must comply with heightened standards. Austin v. Austin, 237 Ariz. 201, ¶¶ 11-13, 20 (App. 2015) (discussing "requirements" of In re Harber's Estate, 104 Ariz. 79, 88 (1969)). Those standards require the party arguing for the enforceability of the agreement to demonstrate by clear and convincing evidence that the spouse was advised of the agreement's effect, or his or her rights under the agreement. See id. ¶ 20. Here, Andrea's pretrial statement avowed that-if she signed the statement at all (which she "adamantly denie[d]")-she did so without counsel and without understanding its impact, rendering it nonbinding and unenforceable. No transcript of the trial appears in the record before us. In the absence of that transcript, we must presume that the evidence adduced at trial supported the trial court's implicit conclusion that the May 2013 document is merely a "statement" written by Steve and signed by Andrea, not a valid and binding post-nuptial agreement. See Kohler v. Kohler, 211 Ariz. 106, n.1 (App. 2005) (in absence of transcript, appellate court presumes record supports trial court's ruling).
¶17 Regardless, the May 2013 statement does not overcome the gift presumption. Steve argues that it "evidences the parties' clear, written intent concerning the character of the property." He claims "what the parties intended and believed" was that "putting Andrea's name on the title was an expression of Steve's testamentary intent that she have ownership of the house after his death, which means she would have no ownership interest before his death." But he contends elsewhere that his handwritten words "clearly and unequivocally establish" only "that Steve did not intend to make a present gift to [Andrea] of the house but that by putting her name on the title, he intended her to have ownership of the house after his death." (Emphasis added.) He goes on to argue that it is "clear" from the May 2013 statement that "Steve intended to protect his separate property and at the same time ensure his wife's ownership of the house" only after his death "with a document (title to the property) that he believed expressed his testamentary intent." (Emphasis added.) Steve also contends that, if he had intended to make a gift, "there would have been no reason for him to prepare any agreement" and the May 2013 statement "would not even exist."
¶18 Even if these statements accurately reflect what Steve himself intended to communicate through the handwritten statement, it does not follow that both parties shared the same intent or any "common understanding or agreement" that the jointly held property was to be anything but jointly owned. Valladee, 149 Ariz. at 307. In other words, the fact that Steve may have intended a particular result does not mean that Andrea understood, much less agreed to, Steve's intended result.
¶19 Steve contends "it was clearly stated [Andrea's] ownership interest would accrue only after his death." He claims the statement "is clear" regarding what would occur if the house was sold before Steve's death or in the event of divorce, namely that "Andrea would have no ownership interest-only a potential community interest lien." We cannot agree. It is true that the May 2013 statement references Steve's intention to ensure Andrea's ownership of the house "after [his] death"-which he called his "testamentary commitment" to her. But it does not state that she would otherwise have no ownership interest in the house, despite her name being included alongside Steve's, without limitation, on the title.
As the trial court noted, the deed in this case was legally insufficient to transfer full ownership of the house to Andrea after Steve's death without the need for probate or another estate planning mechanism. Such a result could have been achieved through a beneficiary deed, will, or trust, but Steve did not utilize any such mechanism, as he concedes on appeal.
¶20 Indeed, as the trial court correctly noted, nothing in the May 2013 statement expressly (a) limited the extent of the gift, (b) mentioned what would occur if the marriage ended in divorce, (c) warned that Steve expected to recover his separate property if the house were sold before his death, or (d) indicated that Andrea disclaimed any interest in the property. Reading the statement as Steve proposes requires inferring language he did not include or effects that are not spelled out.
¶21 The statement here thus differs markedly from the post-nuptial agreement at issue in Bender v. Bender, 123 Ariz. 90 (App. 1979), cited by Steve. That agreement specified that the property in question was "the sole and separate property of the [husband] having been purchased with [his] separate funds," clarified that no gift was intended, and repeatedly expressed that the signing wife disclaimed any interest in or claim to the property. Id. at 93. Those terms were indeed, as the Bender court concluded, "clear and unambiguous" on the face of the agreement. Id. at 94. The same cannot be said here.
¶22 As noted above, the trial court expressly found that Andrea had signed the May 2013 statement without discussing with Steve its legal effect or his concerns regarding the state of their marriage-factual findings to which we defer. See Danielson, 201 Ariz. 401, ¶ 13. In view of those findings, the court reasonably refused to infer from the sparse text of the statement that Andrea had agreed and understood that her interest in the house would be limited.
¶23 Steve challenges the trial court's findings and ultimate ruling as unsupported by testimony, documentary evidence, and the facts. Under our rules, "[i]f the appellant will contend on appeal that a judgment, finding or conclusion, is unsupported by the evidence or is contrary to the evidence, the appellant must include in the record transcripts of all proceedings containing evidence relevant to that judgment, finding or conclusion." Ariz. R. Civ. App. P. 11(c)(1)(B). Nevertheless, Steve has not provided a transcript of any portion of the two-day trial that culminated in the findings and ruling he now challenges on appeal. As noted above, in the absence of a transcript, we presume the record supports the trial court's ruling. Kohler, 211 Ariz. 106, n.1.
¶24 Both parties request their attorney fees and costs on appeal pursuant to A.R.S. § 25-324. In the exercise of our discretion, we deny those requests. As the successful party, Andrea is entitled to recover her costs on appeal, upon her compliance with Rule 21(b), Ariz. R. Civ. App. P.
Disposition
¶25 For the foregoing reasons, we affirm the judgment of the trial court.