NOTICE:
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
IN THE COURT OF APPEALS
STATE OF ARIZONA
DIVISION ONE
TINA BLASER dba EXECUTIVE MARBLE
& STONE CO.,
)
)
)
Plaintiff/Appellant, )
)
v.
)
)
MICHAEL P. SALVINI and BARBARA
)
J. SALVINI, husband and wife;
)
THE SALVINI GROUP, INC.,
)
)
Defendants/Appellees. )
__________________________________)
1 CA-CV 10-0183
DIVISION ONE
FILED: 06/30/2011
RUTH A. WILLINGHAM,
CLERK
BY: DLL
DEPARTMENT D
MEMORANDUM DECISION
(Not for Publication Rule 28, Arizona Rules
of Civil Appellate
Procedure)
Appeal from the Superior Court in Maricopa County
Cause No.
CV2009-003751
The Honorable Larry Grant, Judge
AFFIRMED IN PART; REVERSED AND REMANDED
Gallagher & Kennedy PA
By
Robert J. Itri
Attorneys for Plaintiff/Appellant
Phoenix
The Marhoffer Law Firm PLLC
By
David Marhoffer
Attorneys for Defendants/Appellees
Scottsdale
O R O Z C O, Judge
¶1
Tina
Blaser
(Blaser),
doing
business
as
Executive
Marble and Stone Company, appeals from the grant of a motion for
summary judgment which dismissed Barbara Salvini (Barbara) from
the underlying lawsuit.
For the reasons stated below, we affirm
in part, reverse in part, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
¶2
Barbara and Michael (Michael) Salvini (collectively the
Salvinis) were married in 1993 and have resided in California
during
their
marriage.
Michael
is
the
sole
shareholder
and
employee of the Salvini Group, Incorporated (SGI), a broker of
marble and stone, based in California.
¶3
In December 2002, the Salvinis entered into a post-
nuptial agreement (the Post-Nuptial Agreement), which took effect
in
January
2003.1
The
relevant
aspects
of
the
Post
Nuptial
Agreement stated:
1. The character of the real property located
at
1349
Cerritos
Drive,
Laguna
Beach
[(Family Residence)], California is changed
from community property to the separate
property of Barbara.
2. The character of the business ventures owned
by Michael, including but not necessarily
limited to, the business known as Corsi &
Nicolai,
Incorporated
and
any
business
operations arising out of Michael’s general
contractor’s
license
are
changed
from
community property to the separate property
of Michael.
1
The purpose of the Post-Nuptial Agreement was to transmute
from community property into separate property any community
property shared by the Salvinis and was prompted by the
Salvini’s estate planning.
2
3. Each party shall have no right, interest, or
obligation relating to the separate property
of the other.
Each party’s earnings and
accumulations from the effective date of
this agreement forward are to remain said
party’s separate property.
For purposes of
this
agreement,
the
phrase
“separate
property” is designed to include salaries,
income,
personal
property,
retirement
fund(s), business earnings, any appreciation
in real estate, stocks, dividends, gains,
income or property acquired by one party
during the marriage by gift, devise, descent
or
inheritance,
and
earnings
gains
or
winnings earned or received or acquired or
bestowed upon one particular party.
4. Each party shall be responsible for his or
her own debts, liabilities or liens, both
present and future.
5. Each party waives and releases all marital
property rights in the other’s estate that
he or she might otherwise have or obtain.
On the death of husband or wife, the
decedent’s property will pass by will or
intestate succession to decedent’s heirs as
if the marriage between husband and wife had
never occurred.
¶4
After entering into a contract with SGI, Blaser filed a
lawsuit in Arizona against SGI and the Salvinis alleging breach
of contract, fraud, and negligent misrepresentation.
SGI and the
Salvinis filed a motion to dismiss, claiming a lack of personal
jurisdiction.
Before Blaser responded to the motion to dismiss,
Blaser, Michael, and SGI entered into a settlement agreement (the
Settlement Agreement).
¶5
Under the Settlement Agreement, SGI and Michael agreed
to pay Blaser $17,500, under a timeline for specific payments.
3
Barbara did not sign or agree to the Settlement Agreement or its
provisions.
payment
In December 2008, SGI and Michael made the first
to
Blaser
Agreement.
pursuant
to
the
terms
of
the
Settlement
No further payments were made and Blaser filed suit
against SGI and the Salvinis alleging breach of contract and
breach of implied covenant of good faith and fair dealing.2
¶6
Barbara filed a motion to dismiss because she was not a
party to the Settlement Agreement and claimed she did not share
any
community
response
judgment.
to
property
the
motion
with
to
Michael.
dismiss
Blaser
and
a
filed
motion
a
for
joint
summary
Blaser alleged the following assets were purchased or
in existence prior to the Salvinis entering into of the PostNuptial Agreement: (1) Wells Fargo Checking Account, and (2) the
Charles Schwab Brokerage Account and (3) the Family Residence
located in Laguna Beach, California.
Blaser argued that: the
Post-Nuptial Agreement transmuted only the expressly identified
property;
monies
contributed
to
the
Wells
Fargo
and
Schwab
accounts were community property; and Salvini and SGI committed a
material breach of the Settlement Agreement.
the
trial
court
granted
against Michael only.
Blaser’s
motion
for
In December 2009,
summary
judgment
The court went on to state:
2
In the Settlement Agreement the parties agreed that if a
breach occurred, jurisdiction and venue would be in Phoenix,
Arizona.
4
The Court further finds as a matter of law
that as a result of this transformation of
this community property to separate property
that there is no community property in the
marriage between Michael P. Salvini and
Barbara J. Salvini.
IT IS ORDERED that [Barbara’s] Motion to
Dismiss is granted.
This case is dismissed
in its entirety.
IT IS FURTHER ORDERED that [Blaser’s] Motion
for Summary Judgment is denied.
¶7
Blaser filed a request for clarification of the trial
court’s orders and argued neither SGI nor Michael opposed SGI’s
inclusion in the court’s grant of summary judgment.
requested
“the
Court
identify
the
particular
Blaser also
provision
or
provisions of the agreement that the Court found to effect a
transmutation of those community assets so that the record is
clear.”
¶8
Before the trial court could rule on the request for
clarification, Blaser timely appealed.
We remanded this matter
to the trial court to rule on the request for clarification.
trial
court
nunc
Michael and SGI.
pro
tunc
granted
summary
judgment
The
against
Furthermore, the trial court clarified its
prior ruling by pointing to paragraph three of the Post-Nuptial
Agreement (Paragraph Three).
¶9
We
have
jurisdiction
pursuant
Statutes (A.R.S.) section 12-2101.B (2003).
5
to
Arizona
Revised
DISCUSSION
¶10
On appeal Blaser argues the trial court’s determination
of the effect the Post-Nuptial Agreement had on assets including
Michael’s companies, the Wells Fargo and Charles Schwab accounts,
was erroneous.
Blaser also contends the court erred in its order
denying the grant of summary judgment in favor of Blaser and
against SGI.
Because the trial court has addressed this issue in
Blaser’s favor and neither the Salvini’s nor SGI object, we do
not address it herein.
¶11
We review a trial court’s grant of summary judgment de
novo, while viewing the evidence in the light most favorable to
Blaser.
Espinoza v. Schulenburg, 212 Ariz. 215, 216, ¶ 6, 129
P.3d 937, 938 (2006).3
¶12
All
property
real
or
personal,
acquired
marriage is presumed to be community property.
(C.F.C.) § 760 (2006).
during
a
Cal. Fam. Code
Property acquired during the marriage by
gift, bequest, devise, or decent, including rents and profits
derived
770(a).
from,
is
that
spouse’s
separate
property.
C.F.C.
§
When funds are commingled the presumption is that they
are community property, unless they can be traced.
3
See v. See,
The Salvinis currently reside in California, therefore in
addressing the assets and Post-Nuptial Agreement we look to
California laws for guidance. Lorenz-Auxier Fin. Grp., Inc. v.
Bidewell, 160 Ariz. 218, 221, 772 P.2d 41, 44 (App. 1989) (this
Court must look to the state of Oregon to determine the status
of the community property because that is the couple’s state of
domicile).
6
64 Cal. 2d 778, 784, 51 Cal. Rptr. 888, 892 (1966) (once funds
are
commingled
the
party
claiming
they
are
separate
property
bears the “burden of keeping records adequate to establish the
balance of community income and expenditures at the time an asset
is acquired with commingled property”).
¶13
California’s statutory scheme allows married persons to
alter their property rights when certain requirements are met.
Under
C.F.C.
§
852(a)
(2004),
married
persons
may
transmute
community property to the separate property of one or the other,
if
the
transmutation
is
“made
in
writing
by
an
express
declaration that is made, joined in, consented to, or accepted by
the spouse whose interest in the property is adversely affected.”
The California Supreme Court held that a writing is an express
declaration
only
if
it
states
on
its
face
that
a
change
in
character or ownership of the subject property is being made.
Estate of MacDonald, 51 Cal. 3d 262, 264, 794 P.2d 911, 913
(1990).
In 2005, the California Supreme Court confirmed its
holding in MacDonald.
In re Marriage of Benson, 36 Cal. 4th
1096, 1106-07, 116 P.3d 1152, 1158 (2005).
writing
must
reflect
a
transmutation
on
Under Benson, “the
its
face,
and
must
eliminate the need to consider other evidence in divining this
intent.”
Id.
7
The Agreement’s Effect on the Salvini’s Assets
I.
SGI – Ownership and Incomes
¶14
Blaser argues the language of paragraph two of the Post
Nuptial Agreement (Paragraph Two) is limiting and intends to only
include businesses such as Corsi & Nicolai, Inc. and others in
which
Michael
uses
his
general
contractor’s
are
We disagree.
transmuted as Michael’s separate property.
license
In
pertinent part, Paragraph Two states:
The character of the business ventures owned by
Michael, including but not necessarily limited to, the
business known as Corsi & Nicolai, Incorporated and
any business operations arising out of Michael’s
general
contractor’s
license
are
changed
from
community property to the separate property of
Michael.
(emphasis added).
¶15
The
demonstrated
parties
that
do
Corsi
&
not
dispute
Nicolai,
Inc.
that
and
Paragraph
other
Two
businesses
created by Michael, using his general contractor’s license, are
his
separate
paragraph,
determine
property.
we
if
look
a
In
only
interpreting
to
transmutation
the
was
the
meaning
Post-Nuptial
made.
See
of
Agreement
id.
this
to
(extrinsic
evidence is excluded to prove the writing made a transmutation).
¶16
The introductory sentence of Paragraph Two sets out the
subject of the paragraph in the Post-Nuptial Agreement.
The
intent of this sentence is to ensure that “business ventures
owned
by
Michael”
are
his
separate
8
property.
Paragraph
Two
continues to clarify that Michael also owns the businesses that
were present when the Post-Nuptial Agreement was made.
Blaser
contends
limited
to,”
the
statement
limits
the
“including
businesses
Michael’s separate property.
but
which
not
are
However,
necessarily
transmuted
to
We disagree and instead find that
the plain meaning of the Post-Nuptial Agreement is inclusive and
seeks to include all businesses owned by Michael.
The statement
“including but not necessarily limited to,” makes it clear that
the
businesses
property
are
which
not
are
to
“limited
be
to”
considered
those
Michael’s
where
he
separate
uses
his
contractor’s license.
¶17
We find no error in the trial court’s interpretation of
Paragraph
Two
that
the
businesses
are
Michael’s
separate
property.4
II.
Wells Fargo and Charles Schwab Accounts
¶18
Blaser
contends
the
Wells
Fargo
and
Charles
Schwab
accounts remained community property after the effective date of
the Post-Nuptial Agreement because they were not specifically
transmuted.
which
on
property.
Under Estate of MacDonald, there must be a writing
its
face
transmutes
community
property
51 Cal. 3d at 264, 794 P.2d at 913.
4
to
separate
Accounts or
We also find that the SGI stock Michael owned is covered by
Paragraph Two because it defines the character of his business
ventures.
Therefore we do not address Blaser’s arguments
regarding Paragraph Three in regards to Michael’s businesses.
9
property
acquired
during
the
marriage
are
presumed
to
be
community property, yet this principle is inapplicable to those
acquired before the marriage.
In re Marriage of Leversee, 156
Cal. App. 3d 891, 895-96, 203 Cal. Rptr. 481, 483 (Cal. Ct. App.
1984).
¶19
Paragraph
Three
states,
“Each
party
shall
have
no
right, interest, or obligation relating to the separate property
of the other . . . ‘separate property’ is designed to include
salaries, income, personal property, retirement fund(s), [and]
business earnings.”
Agreement,
attempts
This paragraph, like the entire Post-Nuptial
to
take
all
of
the
Salvinis’
community
property and transmute it to separate property.
¶20
The Wells Fargo and Charles Schwab accounts were opened
prior
to
the
effective
While
Paragraph
Three
date
of
the
of
the
Post-Nuptial
Post-Nuptial
Agreement.5
Agreement
defines
Michael and Barbara’s individual salaries as separate property,
there is nothing in the Post-Nuptial Agreement indicating that
the Wells Fargo or Charles Schwab accounts or any other account
was
transmuted
property.
from
community
Furthermore,
there
property
is
5
no
to
Barbara’s
indication
in
separate
the
Post-
The Salvinis agree that both Michael and Barbara’s name
were on the Wells Fargo account, however Barbara claims Michael
was only a beneficiary of the account. On appeal, this Court is
not directed to evidence that indicates Michael was merely a
beneficiary of the account nor to a detailed record of each
party’s separate property placed into the account.
10
Nuptial Agreement that Michael agreed to the transmutation of the
Wells Fargo or Charles Schwab accounts, or any other bank account
from community property to separate property.
¶21
Therefore,
we
find
that
the
trial
court
erred
in
finding that the Wells Fargo and Charles Schwab accounts were
Barbara’s separate property, when there was no mention of either
account
in
the
Post-Nuptial
Agreement
or
any
indication
that
Michael agreed to the transmutation of either account.6
¶22
Although the Post-Nuptial Agreement failed to transmute
the accounts into Barbara’s separate property, the Salvinis did
not show what funds they had deposited into the accounts, the
nature of those funds, community or separate, and whether the
funds in the account may have become community assets because of
post-agreement commingling.
CONCLUSION
¶23
We affirm the judgment of the trial court with the
exception of those portions pertaining to the Wells Fargo and
Charles Schwab accounts.
We reverse the trial court’s rulings
regarding the Wells Fargo and Charles Schwab accounts, vacate the
6
Blaser asserts the post-lawsuit transfers from the Wells
Fargo and Charles Schwab accounts were not valid because they
were fraudulently transmuted.
As the evidence before us is
insufficient to determine the status of the Wells Fargo and
Charles Schwab accounts, we remand this issue for the trial
court to determine whether transfers from the accounts after the
filing of the lawsuit were fraudulently made in accordance with
Cal. Civ. Code. § 3439.04.
11
grant of Barbara’s motion to dismiss to the extent of the Wells
Fargo
and
Charles
Schwab
accounts,
and
remand
for
further
proceedings consistent with this decision.
/S/
___________________________________
PATRICIA A. OROZCO, Judge
CONCURRING:
/S/
____________________________________
PATRICIA K. NORRIS, Presiding Judge
/S/
____________________________________
JOHN C. GEMMILL, Judge
12
