IN RE ESTATE OF LAMPARELLA

• Decision Date: 28 March 2005
• Docket Number: No. 1 CA-CV 04-0124.,1 CA-CV 04-0124.
• Citation: 210 Ariz. 246,109 P.3d 959
• Parties: In the Matter of the ESTATE OF Angelo L. LAMPARELLA, deceased. Norma C. Lamparella, Personal Representative, Appellee/Cross-Appellant, v. Pamela Lamparella, Appellant/Cross-Appellee.
• Court: Arizona Court of Appeals

109 P.3d 959

210 Ariz. 246

In the Matter of the ESTATE OF Angelo L. LAMPARELLA, deceased.

Norma C. Lamparella, Personal Representative, Appellee/Cross-Appellant, v. Pamela Lamparella, Appellant/Cross-Appellee.

No. -0124.

Court of Appeals of Arizona, Division 1, Department A.

March 28, 2005.

As Amended June 20, 2005.

Murphy Law Firm, Inc. By Thomas J. Murphy, Phoenix, Attorneys for Appellant/Cross-Appellee.

Thomas M. Shaw, Mesa, Attorney for Appellee/Cross-Appellant.

OPINION

NORRIS, Judge.

¶ 1 In this appeal, we address the effect of two Arizona statutes on the disposition of proceeds from an annuity policy. The first statute, Arizona Revised Statutes ("A.R.S.") § 25-318(B) (Supp.2004), provides that community property not disposed of in a dissolution decree is thereafter owned by the former spouses as tenants in common. The second statute, A.R.S. § 14-2804 (1995), provides that a divorce automatically rescinds any pre-dissolution revocable disposition or appointment of property made by a divorced spouse to that person's former spouse.

¶ 2 We hold A.R.S. § 25-318(B) does not apply when a decree effectuates an explicit property settlement agreement that disposes of all of the parties' marital assets. We also hold the automatic revocation mandated by A.R.S. § 14-2804 can not be avoided by spousal inaction. Thus, if a divorced spouse wishes to redesignate the former spouse as beneficiary of a revocable disposition of property, such redesignation must be in writing and must comply with all other applicable requirements.

FACTS AND PROCEDURAL HISTORY

¶ 3 Pamela married Angelo L. Lamparella in June 1988. In June 1996, Angelo submitted an application to Jackson National Life Insurance Company to purchase a single premium deferred annuity policy. Angelo's application indicated the annuity policy was to replace an existing Allied Signal Retirement Plan. Jackson National Life issued the annuity policy in November 1996. The policy identified Angelo as the annuitant and owner and designated Pamela as the beneficiary. Angelo paid $106,832.59 for the policy with a check drawn on an Allied Signal Savings Plan account.

¶ 4 In July 1999, Pamela filed a commercially produced, pre-printed "fill-in-the-blanks" pro per petition for dissolution of marriage. Pamela and Angelo jointly completed Section V of the petition, entitled "Community Property and Debts." Section V contained sub-sections that allowed Pamela and Angelo to list and describe the community property and debts they wished to assign to each other. Pamela and Angelo completed these sub-sections in longhand and assigned certain items of real and personal property to each other.

¶ 5 Angelo and Pamela did not explicitly mention the annuity policy in the sub-sections of Section V they completed in longhand. However, Section V contained two other provisions which Pamela and Angelo selected that disposed of the remainder of their personal property and any pension and retirement benefits. As to the former, the parties checked a box next to a provision ("the personal property clause") that stated each "of the parties shall retain any and all personal property in their respective possessions and/or control." As to the latter, the parties checked a box next to a provision ("the retirement benefits clause") that stated each of the "parties shall retain as their own, any and all pensions and/or retirement benefits pursuant to their employment which are due and/or to become due." The petition requested the court to enter an order distributing the parties' community property and community debts as they had requested.

¶ 6 Angelo accepted service but did not contest the petition. A default dissolution decree was entered on March 9, 2000. The decree — also a commercially prepared, pre-printed form-recited Pamela and Angelo had agreed upon the division of community property and debts as set forth in an attached exhibit. Pamela and the estate did not provide the probate court with a copy of this exhibit and the record does not reflect whether any such exhibit was ever attached to the dissolution decree. However, neither Pamela nor the estate argued in the court below that the decree failed to correspond to Section V of the petition.

¶ 7 Thereafter, Angelo did not take any steps to remove Pamela as the policy beneficiary. On June 20, 2001, however, he withdrew $69,822.85 from the $139,645.70 accumulation value of the annuity.

¶ 8 Angelo died on January 18, 2002. The probate court appointed Angelo's mother, Norma, as Personal Representative for Angelo's estate. In July 2002, the estate submitted a claim to Jackson National Life for the proceeds of the annuity policy. While the estate's claim was pending, Pamela also submitted a claim to Jackson National Life for the annuity proceeds.

¶ 9 Faced with these competing claims, Jackson National Life filed a petition with the probate court to deposit the disputed annuity policy benefits with the court. The court authorized Jackson National Life to deposit the disputed funds and, on March 14, 2003, it deposited $76,328.45 with the clerk of the court.

¶ 10 In February 2003, Pamela and the estate filed competing claims with the probate court for the annuity proceeds. The estate asserted Pamela's claim to the annuity proceeds was barred by A.R.S. § 14-2804(A). Section 14-2804(A) provides that a divorce revokes any pre-dissolution revocable disposition or appointment of property made by a divorced person to that person's former spouse. This statute applies to probate and non-probate transfers.¹

¶ 11 In response, Pamela argued A.R.S. § 14-2804(A) was inapplicable because Angelo had made an affirmative decision to retain her as the annuity policy's beneficiary by not removing her as the beneficiary after entry of the dissolution decree. She also asserted the annuity proceeds had not been disposed of by the dissolution decree and argued she was entitled to a community property share of the proceeds pursuant to A.R.S. § 25-318(B). Section 25-318(B) provides that community property not disposed of in a dissolution decree is owned "thereafter" by the parties "as tenants in common, each possessed of an undivided one-half interest." ¶ 12 The estate eventually moved for summary judgment. It asserted Pamela had no claim to the policy as a tenant in common under A.R.S. § 25-318(B) because the policy had been assigned to Angelo under the personal property clause or, if construed as a retirement plan, under the retirement benefits clause. The estate also argued Pamela had no claim to the annuity proceeds as a beneficiary because A.R.S. § 14-2804(A) revoked her beneficiary status and Angelo would have had to take "affirmative action" to rename her as his beneficiary.

¶ 13 Pamela opposed the estate's summary judgment motion by, in part, incorporating arguments she raised in a motion for partial summary judgment on the A.R.S. § 25-318(B) issue. She submitted two affidavits in connection with the pending motions.

¶ 14 In the first affidavit, Pamela stated Angelo had "affirmatively intended" to keep her as the beneficiary on the annuity policy because he had not changed the beneficiary designation and wanted her to have the "death benefits." She explained Angelo had hoped for a reconciliation and had "loved [her] until the day he died." In the second affidavit, Pamela stated she and Angelo had evenly divided their marital estate, and had jointly completed the form "Assignment of Property and Debts,"² but had "inadvertently forgot to include" the annuity policy.

¶ 15 After oral argument on the parties' cross-motions, by minute entry entered August 22, 2003, the probate court ruled in favor of the estate and rejected Pamela's claims to the annuity benefits. It relied on the retirement benefits clause as well as A.R.S. § 14-2804:

Although the Decree of Dissolution did not specifically refer to the exact retirement plans owned by the parties, Pamela Lamparella clearly requested that each party be granted same as their individual sole and separate property in the Petition she filed. The evidence does not support her claim that Angelo affirmatively decided not to remove her from the policy. Such an affirmative act would have required Angelo to submit a post-dissolution beneficiary designation for his ex-wife. Pamela's claim to the annuity benefits ended at the time of dissolution when she requested the court to grant to each party their respective retirement/pension plans. Her beneficiary designation was revoked as a matter of law pursuant to A.R.S. § 14-2804 at the time of the dissolution.

¶ 16 After the court's ruling, the estate submitted an application for an award of attorneys' fees under A.R.S. § 12-341.01(A) and/or for sanctions, and Pamela moved for reconsideration. The probate court denied the estate's fee request and Pamela's motion for reconsideration. On December 4, 2003, the probate court entered a formal order, final under Arizona Rules of Civil Procedure 54(b), granting the estate's summary judgment motion and directing the clerk of the court to release the monies on deposit to the estate. The clerk released the monies to the estate on December 17, 2004. Thereafter, the probate court entered signed orders denying the estate's fee request, Pamela's motion for reconsideration and another motion filed by Pamela seeking to stay distribution of the annuity proceeds to the estate.³

¶ 17 Pamela timely appealed from the probate court order granting the estate's motion for summary judgment. We have jurisdiction over Pamela's appeal pursuant to A.R.S. § 12-2101(J) (2003).

STANDARD OF REVIEW

¶ 18 We review the trial court's grant of summary judgment de novo. Great Am. Mortgage, Inc. v. Statewide Ins. Co., 189 Ariz. 123, 125, 938 P.2d 1124, 1126 (App.1997). We review the facts and inferences therefrom in the light most favorable to the party against whom judgment was entered. Id. at 124, 938 P.2d at 1125. Summary judgment is appropriate only...