Kuker v.
| Decision Date | 28 June 2017 |
| Docket Number | No. 2 CA-CV 2016-0149-FC,2 CA-CV 2016-0149-FC |
| Parties | IN RE THE MARRIAGE OF STEVEN RAY KUKER, Petitioner/Appellee, and COURTNEY A. KUKER, Respondent/Appellant. |
| Court | Court of Appeals of Arizona |
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).
Appeal from the Superior Court in Pima County
The Honorable Lori B. Jones, Judge Pro Tempore
AFFIRMED IN PART AS MODIFIED; VACATED IN PART AND REMANDED
Wyland Law, P.C., Tucson
By Dawn Wyland
Counsel for Petitioner/Appellee
West, Longenbaugh & Zickerman, PLLC, Tucson
By Anne Elsberry and Joseph N. Mendoza
Presiding Judge Vásquez authored the decision of the Court, in which Chief Judge Eckerstrom and Judge Howard1 concurred.
¶1 Courtney Kuker appeals from the decree of dissolution of her marriage to Steven Kuker. She challenges the decree on multiple grounds, including the division of property, the calculation of child support, and the award of attorney fees. Because the trial court erred in dividing a portion of the parties' 2013 federal tax refund, we vacate and modify the decree as described herein. In addition, for the reasons described below, we vacate the child-support award and remand for proceedings consistent with this decision. We otherwise affirm.
¶2 We view the facts in the light most favorable to affirming the trial court's rulings. Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, n.1, 169 P.3d 111, 112 n.1 (App. 2007). Courtney and Steven were married in March 2013. They have one minor child. Steven filed a petition for dissolution of marriage in January 2015. At trial, the disputed issues included the disposition of the parties' property and related equalization payments, their regular parenting schedule, child support, and attorney fees. After resolving these issues and several post-trial motions, the court entered a decree of dissolution. Thisappeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21 and 12-2101(A)(1).
¶3 Courtney first argues that the trial court erred by not equitably dividing Steven's 2014 federal tax refund of $136,488.2 She contends that "the overpayment of federal income taxes . . . created an asset that was presumptively community property." Although we review the division of property for an abuse of discretion, we review the characterization of property as separate or community de novo. In re Marriage of Pownall, 197 Ariz. 577, ¶ 15, 5 P.3d 911, 915 (App. 2000).
¶4 Generally, community property includes "[a]ll property acquired by either husband or wife during the marriage." A.R.S. § 25-211(A); see also Cockrill v. Cockrill, 124 Ariz. 50, 52, 601 P.2d 1334, 1336 (1979) (). Separate property, by contrast, consists of "[a] spouse's real and personal property that is owned by that spouse before marriage and that is acquired by that spouse during the marriage by gift, devise or descent, and the increase, rents, issues and profits of that property." A.R.S. § 25-213(A).
¶5 "[W]here community property and separate property are commingled, the entire fund is presumed to be community property unless the separate property can be explicitly traced." Cooper v. Cooper, 130 Ariz. 257, 259, 635 P.2d 850, 852 (1981), quoting Porter v.Porter, 67 Ariz. 273, 281, 195 P.2d 132, 137 (1948); accord Roden v. Roden, 190 Ariz. 407, 410, 949 P.2d 67, 70 (App. 1997). The spouse seeking to overcome the community-property presumption "has the burden of establishing the separate character of the property by clear and convincing evidence." Schickner v. Schickner, 237 Ariz. 194, ¶ 22, 348 P.3d 890, 895 (App. 2015); see also Kennedy v. Kennedy, 93 Ariz. 252, 255, 379 P.2d 966, 969 (1963) ().
¶6 Here, the trial court awarded Courtney an equalization payment of $8,686 for the parties' 2013 and 2014 federal tax refunds. The court's reasoning, based on the position taken by Steven, was as follows: The parties' 2013 federal tax refund was $132,869. Although Steven carried over that amount as a credit toward his 2014 taxes, the court determined what portion of the $132,869 was community property to which Courtney was entitled to half. Steven had previously paid a $95,000 advance toward the parties' 2013 federal taxes. A $4,139 credit was also carried over from Steven's separate 2012 federal taxes. The court treated both of these amounts—totaling $99,139—as Steven's separate property. The 2013 refund, less that amount, equals $33,730. Because the parties had been married for nine of the twelve months of 2013, the court determined that nine-twelfths of that amount, $25,299, constituted the community-property portion of the 2013 refund. The court then concluded that Courtney's half of the community-property portion was $12,649.50.
¶7 For 2014, the parties filed their taxes separately. Steven's federal refund was $136,488, which, as mentioned above, included the $132,869 refund carried over from the 2013 taxes. Because the trial court had already determined the community- and separate-property portions of the 2013 refund, all that remained to be distributed of Steven's 2014 refund was $3,619. Courtney received a federal refund of $11,547. The court added those two amounts—$3,619 and $11,547—to determine the total community refund, $15,166, half of which is $7,583. The court thus concluded that Courtney's summed portion of the 2013 and 2014 refunds was $20,232.50; the court then subtracted the $11,547 Courtney had already received in tax refunds, leaving a total, rounded up, of $8,686 due her.
¶8 On appeal, Courtney relies solely on the community-property presumption to argue that the trial court failed to equitably divide Steven's 2014 federal tax refund of $136,488. She does not suggest in any meaningful way that the court erred in finding Steven had overcome the community-property presumption by establishing the separate-property character of the $95,000 advance for the 2013 taxes.3 See Ariz. R. Civ. App. P. 13(a)(7) (). Accordingly, we deem this issue waived and do not address it further. See Polanco v. Indus. Comm'n, 214 Ariz. 489, n.2, 154 P.3d 391, 393 n.2 (App. 2007).
¶9 Courtney, however, contends that the $4,139 should not be considered Steven's separate property because "that overpayment was used to pay the parties' 2013 tax bill." Although that amount was carried over from 2012 and applied to 2013, the parties owed no taxes for 2013, leaving the $4,139 as a credit. To the extent Courtney is arguing that Steven commingled the $4,139 and failed to overcome the community-property presumption, we disagree. Steven testified that the $4,139 was his separate property from his 2012 tax refund. The parties were not married until March 2013. Steven also provided copies of his 2012 and 2013 tax returns tracking that amount. Steven therefore "explicitly traced" the $4,139 and met his burden of establishing its separate-property character. Cooper, 130 Ariz. at 259, 635 P.2d at 852, quoting Porter, 67 Ariz. at 281, 195 P.2d at 137; cf. Kingsberry v. Kingsberry, 93 Ariz. 217, 223-24, 379 P.2d 893, 897 (1963) ().
¶10 Courtney additionally argues that the trial court should not have reduced the community-portion share of the $33,736 by three-quarters based on the parties' being married for nine months of 2013. She reasons that Steven did not overcome the community-property presumption because "there was no evidence provided at trial to distinguish between when the income was earned" and "there is [no] basis on the record to assume earnings were equal for every month of 2013." She also asserts, "There is also no evidence which accounts for [her] income taxes paid via her W-2 and the child tax credit for her two children (not of the marriage) which benefitted both parties." We agree.
¶11 Steven presented no evidence to show what portions of the 2013 federal tax refund were the result of pre- and post-marriage earnings or activities. Rather, he simply calculated the community-property amount based on the number of months the parties were married. This is not consistent with the explicit-tracing requirement. See Cooper, 130 Ariz. at 259, 635 P.2d at 852. Steven had the burden of presenting clear and convincing evidence to show what portion of the presumptively community-property refund was his separate property. See § 25-211(A); Schickner, 237 Ariz. 194, ¶ 22, 348 P.3d at 895. Simply put, "[t]he trial court was furnished no intelligent guide which would enable it to separate" the refund. Evans v. Evans, 79 Ariz. 284, 287, 288 P.2d 775, 777 (1955).
¶12 Accordingly, the trial court erred in concluding that $25,299 constituted the community-property portion of the 2013 federal tax refund. See Marriage of Pownall, 197 Ariz. 577, ¶ 15, 5 P.3d at 915. Instead, the entire $33,736 is community property, of which Courtney is entitled to $16,868. We therefore vacate the $8,686 equalization payment awarded to Courtney and modify it to include an additional $4,218. Courtney is awarded an equalization payment against Steven in the amount of $12,904 for the parties' 2013 and 2014 federal taxes.
¶13 Courtney next argues that "[t]he trial court erred when it did not accept [her] evidence regarding $10,000 of the $20,000 of [her] separate property funds...
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