WESTROM v. WESTROM

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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 In re the Marriage of: ) ) JENNIFER WESTROM, ) ) Petitioner/Appellee, ) ) v. ) ) MIKE WESTROM, ) ) Respondent/Appellant. ) __________________________________) DIVISION ONE FILED: 04/02/2013 RUTH A. WILLINGHAM, CLERK BY: GH 1 CA-CV 12-0124 DEPARTMENT C MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. FC2010-007970 The Honorable Pamela S. Gates, Judge AFFIRMED Hallier & Lawrence, PLC By Andrea Christine Lawrence and Phoenix Jones Skelton & Hochuli, PLC By Eileen Dennis GilBride Attorneys for Petitioner/Appellee Phoenix Law Office of John C. Churchill By John A. Shannon, Jr. Attorneys for Respondent/Appellant Phoenix J O H N S E N, Judge ¶1 Mike dissolution Westrom decree, ( Husband ) arguing the timely superior appeals court from a erroneously awarded certain real property to Jennifer Westrom ( Wife ). We affirm. FACTS AND PROCEDURAL BACKGROUND ¶2 The parties married on May 5, 2005. marriage, Husband owned two parcels of Prior to the farmland in called the Renstrom Property and the Giese Property. Minnesota During the marriage, Husband transferred title of those properties to MJW Holdings, LLC, a company managed equally by Husband and Wife and solely owned by M & J Property Holdings, LLC. relevant corporate document is not in the Although the record, Husband acknowledges that M & J Property Holdings was owned by a family trust that he acknowledgment created that with the Wife. family Consistent trust owned M with & Husband s J Property Holdings, which in turn owned MJW Holdings, Wife testified that she owned 50 percent of MJW Holdings. ¶3 Wife petitioned for dissolution on December 17, 2010. On December 21, 2010, Husband caused the sale of the Renstrom Property for nearly $1,375,000 and used approximately $672,000 of the sale proceeds to purchase parcel of Minnesota farmland. the Amundsen Property, another He used approximately $325,000 of 2 the sale proceeds to purchase an interest in KLM Hydroponics Investments LLC. 1 ¶4 After Renstrom Property property. awarding a trial, and the the superior Giese court Property found both were that the community The court then equitably divided the marital assets, Husband the Giese Property and the interest in KLM Hydroponics, and awarding Wife the Amundsen Property. ¶5 Husband timely appealed. pursuant to Arizona Revised This court has jurisdiction Statutes ( A.R.S. ) section 12- 2101(A)(1) (West 2013). 2 DISCUSSION A. Legal Principles. ¶6 Husband argues the superior court erred in finding that the Renstrom Property and Giese Property were community property and by dividing the marital property substantially equally. The superior court s characterization of property is a conclusion of law that we review de novo, In re Marriage of Pownall, 197 Ariz. 577, 581, ¶ 15, 5 P.3d 911, 915 (App. 2000), but we will not disturb its factual determinations unless they are clearly erroneous, Hrudka v. Hrudka, 186 Ariz. 84, 92, 919 P.2d 179, 187 (App. 1995). A finding of fact is not clearly erroneous if 1 Husband used the remaining sale proceeds to pay off debts secured by the Renstrom Property. 2 Absent material revisions after the relevant date, we cite a statute s current version. 3 substantial evidence supports it, even if substantial conflicting evidence exists. Kocher v. Dep t of Revenue of Ariz., 206 Ariz. 480, 482, ¶ 9, 80 P.3d 287, 289 (App. 2003). B. Transmutation. ¶7 Property separate property. acquired by A.R.S. a § spouse prior 25-213(A) to (West marriage 2013). is The character of the property is not changed after marriage except by commingling, gift, agreement or otherwise. See Muchesko v. Muchesko, 191 Ariz. 265, 271, 955 P.2d 21, 27 (App. 1997). Thus, the parties may, [by] their intent, transmute the character of separate property to community property. Noble v. Noble, 26 Ariz. App. 89, 93, 546 P.2d 358, 362 (1976). ¶8 It is undisputed that Husband acquired the Renstrom Property and the Giese Property before the parties marriage. Wife argued, and the superior court found, that Husband converted those properties to community property during the marriage. particular, the court found the circumstances In clearly demonstrated that Husband intended to effect a change in the status of the property when he transferred title of the Renstrom Property and Giese Property to MJW Holdings. The court also found Husband was not credible when he testified that he did not intend for the Renstrom Property and the Giese Property to become community property. 4 ¶9 There is ample evidence to support the superior court s finding that Husband intended to transmute the Renstrom Property and the Giese Property to community property. Wife testified that estate-planning during the parties meetings with their attorney, Husband told the attorney that he wanted all of his property to become community property. Wife further testified the the purpose of the family trust and limited liability companies was for estate planning and to avoid liability, and that she intended to transmute her sole and separate property to community property when she and Husband created the trust. Husband agreed Wife s real property changed status at the time the trust was formed, but denied that had been his intent with respect to his own property. We cannot say the superior court erred by accepting Wife s testimony and finding Husband was not credible when he testified that he did not intend to transfer any interest in his sole and separate property to the community. ¶10 The superior court s determinations of the credibility of the witnesses, coupled with Husband s documented transfer of the property to MJW Holdings, which allowed Wife joint control, support the court s conclusion that Husband intended to effect a change in the status of his separate property. Accordingly, we affirm the court s determination that the Renstrom Property and the Giese Property were community property. C. Equitable Division of Community Property. 5 ¶11 Husband also argues the superior court erred by dividing the community property equally, rather than equitably. ¶12 The superior property equitably, court though is not regard to marital misconduct. In most cases, dividing required to necessarily divide in community kind, without A.R.S. § 25-318(A) (West 2013). jointly held property substantially equally will be the most equitable unless there exists a sound reason to divide the property otherwise. In re Marriage of Inboden, 223 Ariz. 542, 544, ¶ 6, 225 P.3d 599, 601 (App. 2010) (citations omitted). The superior court s determination of what is equitable will depend on the particular facts of the case, id. at 545, ¶ 13, 225 P.3d at 602, and it should consider all factors that bear on the equities of the division, including the length of the marriage; the contributions of each spouse to the community, financial or otherwise; the source of funds used to acquire the property to be divided; the allocation of debt; as well as any other factor that may affect the outcome, id. at 547, ¶ 18, 225 P.3d at 604. The superior court has broad discretion to determine what allocation is equitable under the circumstances, and we will not disturb its ruling absent a clear abuse of discretion. ¶13 Id. at 544, ¶ 7, 225 P.3d at 601. Husband argues the superior court erred by dividing the parties assets and debts substantially equally because Wife s contributions to the Renstrom Property and Giese Property were 6 negligible. Although the source of funds for the disputed properties was one factor the court was permitted to consider in arriving at an equitable division of property, evidence relating to other factors also was presented at trial. married for more than five years and The parties were Wife testified they contributed joint funds, including monies she earned through her employment, to pay the farms taxes and insurance. evidence indicated investments without Husband mortgaged Wife s the knowledge In addition, properties or consent, and made received additional undisclosed monies from the sale of the properties and took monies from the parties jointly held accounts. Accordingly, this is not one of the rare occasions when the circumstances, facts, and fairness required the court to award property mainly to one spouse. See Toth v. Toth, 190 Ariz. 218, 221-22, 946 P.2d 900, 903-04 (1997). The superior court did not abuse its discretion in equally dividing the community property. CONCLUSION ¶14 For the foregoing reasons, we affirm the decree. Both parties request an award of attorney s fees on appeal pursuant to A.R.S. § 25-324 (West 2013). Having considered the relevant factors under § 25 324, and in the exercise of our discretion, we deny both requests. Wife is entitled As the prevailing party on appeal, however, to recover costs upon 7 compliance with Arizona Rule of Civil Appellate Procedure 21. See A.R.S. § 12 341 (West 2013). _______________/s/_______________ DIANE M. JOHNSEN, Judge CONCURRING: ______________/s/__________________ SAMUEL A. THUMMA, Presiding Judge _____________/s/___________________ MICHAEL J. BROWN, Judge 8

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