Grantham v. Sims, 2 CA-CV 2015-0107

CourtCourt of Appeals of Arizona
PartiesTRENA L. GRANTHAM, A SINGLE WOMAN, Plaintiff/Appellee, v. PHILLIP K. SIMS, A SINGLE MAN, Defendant/Appellant.
Docket NumberNo. 2 CA-CV 2015-0107,2 CA-CV 2015-0107
Decision Date13 September 2016

PHILLIP K. SIMS, A SINGLE MAN, Defendant/Appellant.

No. 2 CA-CV 2015-0107


September 13, 2016

See Ariz.
R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).

Appeal from the Superior Court in Gila County
The Honorable Gary V. Scales, Judge



Law Offices of Thomson, Montgomery & DeRose, Globe
By Jerry B. DeRose
Counsel for Plaintiff/Appellee

Mandel Young PLC, Phoenix
By Taylor C. Young and Erin Ford Faulhaber
Counsel for Defendant/Appellant

Page 2


Presiding Judge Howard authored the decision of the Court, in which Judge Espinosa and Judge Staring concurred.

HOWARD, Presiding Judge:

¶1 Following a bench trial, the trial court found in favor of Trena Grantham on her claims for conversion, breach of fiduciary duty, and constructive trust against her former husband, Phillip Sims, and awarded her damages. On appeal, Sims contends the court erred because Grantham's claims were barred by various statutes of limitation, their dissolution decree did not grant Grantham an interest in the stocks at issue, the award of damages was excessive, and the court improperly calculated the accrual date for the calculation of prejudgment interest. Because the court did not err, we affirm.

Factual and Procedural Background

¶2 Following a bench trial, "[w]e view the facts in the light most favorable to sustaining the trial court's judgment." Sw. Soil Remediation, Inc. v. City of Tucson, 201 Ariz. 438, ¶ 2, 36 P.3d 1208, 1210 (App. 2001). Grantham and Sims were married in September 1988. Between 2000 and 2001, Sims's employer granted him two sets of stock options and an award of restricted stock (collectively, the "disputed stock rights").

¶3 In February 2002, Grantham filed a petition for dissolution of the marriage and, that November, a domestic relations court entered the decree of dissolution. The decree states Grantham and Sims "agreed during the trial to equally divide the stock options," and orders an attorney to prepare an agreement "to equally divide the stock options." For unknown reasons, that agreement was never prepared.

Page 3

¶4 Between July 2005 and March 2007, the award of restricted stocks vested1 and Sims exercised most of the stock options on three different dates.2 In June 2009, Sims sent Grantham an e-mail telling her he had accepted a new job. He exercised the remaining stock options when he began working for his new employer. The net proceeds from the transfer of all the disputed stock rights totaled $402,334.30.

¶5 Sims did not tell Grantham when the restricted stock award vested or when he had exercised the stock options, nor did he send her any of the proceeds. In April 2012, Sims informed Grantham for the first time about the July 2005 exercise of stock options and offered to give her half the proceeds from that transaction. He did not tell her about the subsequent exercising of the options or vesting of the restricted stock.

¶6 In June 2013, Grantham sued Sims, alleging claims of conversion, breach of fiduciary duty, breach of contract, constructive trust, declaratory relief, and requesting a partition. As noted above, the trial court found in Grantham's favor on the conversion, breach of fiduciary duty, and constructive trust claims. It awarded her a total of $201,312.14, representing approximately one-half of the net profit of the transfer of stocks, plus prejudgment interest from the

Page 4

date of each transaction. We have jurisdiction over Sims's appeal pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).

Statutes of Limitation

¶7 Sims first argues the trial court erred by failing to find that Grantham's claims were time-barred pursuant to the five-year limitation set forth in A.R.S. § 12-1551. Sims contends that Grantham's claims accrued when the dissolution decree was entered in 2002, making her 2013 complaint untimely.

¶8 Section 12-1551(B) provides, "An execution or other process shall not be issued on a judgment after the expiration of five years from the date of its entry unless the judgment is renewed." "Whether [§ 12-1551] applies is a question of law which we determine de novo." Johnson v. Johnson, 195 Ariz. 389, ¶ 9, 988 P.2d 621, 623 (App. 1999). We will affirm the trial court if it is correct for any reason. Forszt v. Rodriguez, 212 Ariz. 263, ¶ 9, 130 P.3d 538, 540 (App. 2006).

¶9 Sims first notes that the trial court stated "it is clear that [Grantham] is suing on the Decree itself" and contends § 12-1551 therefore must apply. But the court made that statement in explaining why Grantham could not recover under a contract theory. The court stated many times that it was adjudicating Grantham's property rights. For example, it stated Grantham "acquired a separate and distinct one half interest in those options," Sims's actions "seriously interfere[d] with [Grantham's] rights to the property," Sims "unjustly held [Grantham's] property," and "[t]he Decree . . . declared one half of the stocks to be Property of [Grantham] but left such property in the exclusive control of [Sims]."

¶10 The trial court here properly dealt with this case as an adjudication of property rights, rather than an "execution" upon the decree. § 12-1551. Grantham's interest in the stocks initially arose by virtue of Arizona's community property laws. See A.R.S. § 25-211; see also Brebaugh v. Deane, 211 Ariz. 95, ¶ 6, 118 P.3d 43, 45-46 (App. 2005) (stock options granted by employer during marriage presumptively community property); cf. A.R.S. § 25-318(D) (property "for which no provision is made in the decree" is held as tenants in common). As the court here noted, the trial court in the

Page 5

dissolution proceedings "adjudicated the rights and interests of the parties."

¶11 Moreover, Grantham did not file a petition to enforce the decree, which might have constituted an "execution . . . on a judgment." § 12-1551(B); see Johnson, 195 Ariz. 389, ¶ 11, 988 P.2d at 623-24. She instead initiated a civil action against Sims for several causes sounding in contract, tort, and equity. Although Sims insists that Grantham's lawsuit was, effectively, a petition to enforce the decree, the proceedings are different and, accordingly, governed by different rules of procedure. See Ariz. R. Fam. Law P. 91(A) (delineating procedural requirements for post-decree petitions to enforce); see also Ariz. R. Civ. P. 1 (proscribing that rules of civil procedure govern "all suits of a civil nature"); see also Kline v. Kline, 221 Ariz. 564, ¶¶ 13, 25-27, 212 P.3d 902, 906, 909 (App. 2009) (noting that family court and civil actions governed by different rules of procedure).

¶12 And claims for a constructive trust, conversion, and breach of fiduciary duty each have separate and distinct elements requiring different proof from that required to support a petition to enforce. Compare, e.g., Turley v. Ethington, 213 Ariz. 640, ¶ 9, 146 P.3d 1282, 1285 (App. 2006) ("courts will impose constructive trusts if there has been a breach of fiduciary duty"), and Miller v. Hehlen, 209 Ariz. 462, ¶ 34, 104 P.3d 193, 203 (App. 2005) (elements of conversion), and Restatement § 874 & cmt. a (describing breach of fiduciary duty), and Ariz. R. Civ. P. 3 (civil action commences "by filing a complaint with the court") with Ariz. R. Fam. Law P. 91(A) (party "shall file a petition" indicating, "at a minimum, the nature of the proceeding, the estimated time for the entire hearing, and the relief sought").

¶13 Additionally, the relief and damages available to a claimant differs depending upon the nature of the action she brings. See Ariz. R. Fam. Law P. 91(A), (S) (party may request relief necessary to enforce judgment; attorney fees may be awarded); see also Acheson v. Shafter, 107 Ariz. 576, 578, 490 P.2d 832, 834 (1971) (exemplary, punitive damages available in conversion action); Dooley v. O'Brien, 226 Ariz. 149, ¶¶ 18-19, 244 P.3d 586, 591 (App. 2010) (attorney fees not available in breach of fiduciary duty action unless duty "expressly created by contract"); Deutsche Credit

Page 6

Corp. v. Case Power & Equip. Co., 179 Ariz. 155, 163, 876 P.2d 1190, 1198 (App. 1994) (attorney fees available in conversion action only if arising out of breach of contract claim). Sims's attempts to conflate the different actions are unavailing. And despite Sims's discussion of the various agreements under which Grantham's rights did not arise, we agree with the trial court that Grantham simply sought an adjudication of her property rights in this action. Therefore, § 12-1551 is inapplicable.

¶14 Sims also relies on Johnson for the proposition that Grantham's action here is subject to § 12-1551's limitation period. In that case, the wife filed a petition to enforce a dissolution decree because her former husband failed to pay her the portion of his monthly retirement the decree awarded her. Johnson, 195 Ariz. 389, ¶¶ 2-3, 9, 988 P.2d at 622-23. We found the wife entitled only to the arrearages accrued within five years before she filed the latest petition to enforce the decree pursuant to § 12-1551(B). Id. ¶ 10. But the wife there brought a "petition to enforce the decree." Id. ¶ 5. And the payments in Johnson were immediately due upon entry of the decree and the husband's subsequent reception of each retirement payment. Id. ¶ 2. The court in Johnson was not presented with the question of whether property rights resulting from a decree could be enforced in an independent action and that decision is thus not instructive in resolving our case.

¶15 Sims additionally relies on three cases from other states in which former spouses were barred by their state's dormant judgment statute from enforcing a dissolution decree to support his position. In Larimore v. Larimore, the wife filed a motion to compel the preparation of a qualified...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT