Lynch v. Lynch

• Decision Date: 24 April 1990
• Docket Number: CA-CV,No. 1,1
• Citation: 791 P.2d 653,164 Ariz. 127
• Parties: Bonita J. LYNCH, Petitioner-Appellee, v. Donna L. LYNCH, Personal Representative of the Estate of Michael S. Lynch, Respondent-Appellant. 88-240.
• Court: Arizona Court of Appeals

Page 653

791 P.2d 653

164 Ariz. 127

Bonita J. LYNCH, Petitioner-Appellee, v. Donna L. LYNCH, Personal Representative of the Estate of Michael S. Lynch, Respondent-Appellant.

No. 1 CA-CV 88-240.

Court of Appeals of Arizona Division 1, Department D.

April 24, 1990.

[164 Ariz. 128] J. Douglas McVay, Phoenix, for respondent-appellant.

Fogel and Lamber by Dennis M. Lamber and Kenneth J. Love, Phoenix, for petitioner-appellee.

OPINION

FIDEL, Judge.

A man who won the lottery before the pending dissolution of his marriage seeks to reverse the trial court's grant of half his winnings to his wife. We hold that the winnings were community property and affirm. In the course of our decision, we reexamine the "will to union" doctrine of In re Marriage of Fong, 121 Ariz. 298, 589 P.2d 1330 (App.1978).

FACTS

Michael Lynch (husband) and Bonnie Lynch (wife) were married in 1968. Their only child was born in 1971. The couple separated in 1985, and within a year husband began living with a woman named Donna Williams. Wife filed for dissolution shortly after.

Wife's petition was uncontested, and at a default hearing on February 10, 1987, wife testified that the marriage was irretrievably broken. See A.R.S. § 25-312(3). A decree of dissolution is ordinarily entered at the conclusion of a default hearing. However, on February 10, the trial court took the matter under advisement and, on February 19, vacated the hearing because husband had received untimely notice. ¹

On February 21, husband and Donna Williams won a $2.2 million jackpot in the Arizona State Lottery. Each owned half a share of the winning ticket. Wife then filed an amended petition in the unconcluded dissolution seeking half of husband's share. This time husband answered, the case went on to trial, and in the ultimate decree of dissolution the trial court awarded wife half of husband's lottery share.

Husband has appealed the trial court's ruling on three grounds. ² By each argument, he attempts to establish that the parties acquired no community property after February 10, 1987, when the invalid default hearing was held. First, he argues that a marital community lasts only as long as the parties' "will to union" and that these parties' will to union had ended by the time of wife's testimony on February 10 that the marriage was irretrievably broken. Second, he argues that, by this testimony, wife waived her community interest in his future acquisitions. Last, he contends that, because wife's lawyers gave untimely notice of the February 10 hearing, wife is estopped from denying that the marital community ended on that date.

We consider each argument in turn.

COMMUNITY DURATION

When an Arizona spouse acquires an asset before marital dissolution, Arizona law treats the asset as community property unless it falls within one of several statutory exceptions. This "bright line" rule is established by A.R.S. § 25-211, which provides: "All property acquired by either husband or wife during the marriage, except that which is acquired by gift, devise or descent, is the community property of the husband and wife." (Emphasis added.) A marriage endures in Arizona--and thus the acquisition of community property continues--"until the final dissolution is ordered by the court." Flowers v. Flowers, 118 Ariz. 577, 580, 578 P.2d 1006, 1009 (App.1978).

In some jurisdictions, acquisition of community property ceases when spouses begin to live "separate and apart." See, e.g., Cal.Civ.Code § 5118 (Deering 1984); In re Marriage of Baragry, 73 Cal.App.3d 444, 140 Cal.Rptr. 779 (1977). See also Wash.Rev.Code Ann. § 26.16.140 (1986). In Arizona, however, demarcation by decree "avoids the factual issue of when the couple began living apart, and provides appropriate treatment for the on-again-off-again manner in which some couples try to resolve their differences and patch up their marriages." Effland, Arizona Community Property Law: Time for Review and Revision, 1982 Ariz.St.L.J. 1, 10-11.

An Arizona couple that wishes to end the acquisition of community property before (or without) dissolution has a statutory means to do so. A.R.S. § 25-313(B) provides for entry of a decree of legal separation that terminates "community property rights and liabilities ... as to all property, income and liabilities received or incurred after [its] entry." In the absence of a decree of legal separation, however, acquisition of community property continues in Arizona until the decree of dissolution is filed. A.R.S. § 25-211; Jurek v. Jurek, 124 Ariz. 596, 597, 606 P.2d 812, 813 (1980); Flowers v. Flowers, 118 Ariz. at 580, 578 P.2d at 1009.

WILL TO UNION

No legal separation decree was entered in this case, and the parties' marriage had not ended when husband won the lottery. Husband's lottery share was not "acquired by gift, devise or descent" ³; thus, it qualifies as a marital community asset pursuant to A.R.S. § 25-211. Husband argues, however, that the trial court should have found that his marital community ended when the spouses' "will to union" ended--at a point before he won the lottery and no later than wife's testimony on February 10 that the marriage was irretrievably broken.

The will to union doctrine derives from Spanish community property law and contributed to this court's resolution of In re Marriage of Fong, 121 Ariz. 298, 589 P.2d 1330 (App.1978). As summarized by Fong, "Spanish community property law would declare that property acquired after the 'union of wills' has ceased would not be considered community property...." Id. at 304, 589 P.2d at 1336.

Though Fong employed the will to union rationale to equitably resolve a hard and unusual case, Fong stopped short of importing the doctrine wholesale into Arizona law. To explain the narrow standing of the doctrine in Arizona, we review Fong' § facts and disposition in detail.

The Facts of Fong

Alfonso Fong married Ngan Woon Chow Fong in China in 1923. The couple lived together only briefly before Alfonso began a series of travels that led him eventually to the United States. During a brief reunion in China, the couple conceived a child, John Fong, who was born in 1936. When Alfonso returned to the United States, he attempted to bring his family over, but was frustrated by the onset of the Second World War. In 1946, Alfonso was misinformed that Ngan had died. The following year he married Lily Fong and brought John to live with them in Phoenix. During a 1957 trip to China, Alfonso met Ngan, but she concealed her identity and was introduced as his late wife's sister. In 1972, John Fong brought Ngan to this country, and Alfonso finally learned that she was still alive. By then Alfonso and Lily had seven children and had accumulated considerable property. 121 Ariz. at 300-01, 589 P.2d at 1332-33.

Ngan initiated dissolution proceedings, and the trial court awarded her $800 per month in spousal maintenance, but held that she was equitably estopped from claiming a marital community share in the property Alfonso had accumulated over the years. Id. at 300, 304, 589 P.2d at 1332, 1336. The court of appeals found equitable merit in this ruling, but concluded that the theory of estoppel had not been pled or raised at trial. Id. at 302, 589 P.2d at 1334. The court pressed the will to union doctrine into service, however, to achieve a similar result. Id. at 304, 589 P.2d at 1336.

What Fong Did and Did Not Decide

The Fong court significantly chose not to decide whether the will to union concept was incorporated into Arizona's statutory definition of community property as property "acquired ... during the marriage." The court thus deliberately avoided holding that Alfonso and Ngan had ceased to acquire community property when their will to union ended and before their marriage was judicially dissolved. 121 Ariz. at 304 n. 1, 589 P.2d at 1336 n. 1.

Instead, the court assumed that the assets in question were community property of Alfonso and Ngan. Id. It then examined the trial court's power to divide these assets unequally between the parties. The source of this power was A.R.S. § 25-318(A), which requires the trial court to "divide the community ... property ... equitably, though not necessarily in kind." 121 Ariz. at 303, 589 P.2d at 1335, quoting A.R.S. § 25-318(A) (emphasis added). Equitable division normally imports an equal division. See, e.g., Hatch v. Hatch, 113 Ariz. 130, 133, 547 P.2d 1044, 1047 (1976); Styers v. Superior Court, 161 Ariz. 477, 479, 779 P.2d 352, 354 (App.1989). However, "equitable and equal allocation are not synonomous.... The court may depart from equal division ... where equity requires." Styers, 161 Ariz. at 479, 779 P.2d at 354.

There were ample reasons for unequal division in Fong. As a law review note explains Alfonso's good faith belief in Ngan's death, combined with her perpetuation of that belief through deception and lack of contact with Alfonso, could be construed as an abandonment. Following this abandonment, approximately $250,000.00 worth of real property was accumulated through the mutual efforts of Lily and Alfonso. Since this property was not earned through the mutual efforts of the community of Alfonso and Ngan, denying Ngan an equal share of the property earned by Alfonso and Lily would have been appropriate.

Note, A New Dimension in Arizona Community Property Law, 22 Ariz.L.Rev. 131, 133-34 (1980).

The equitable claims of the juridical marital community of Alfonso and Ngan contrasted sharply with those of the putative marital community of Alfonso and Lily, and the contrast was tailor-made for the will to union rationale, described in Fong as follows:

[I]t was the mutual loyalty, the mutual sharing of the burdens of marriage, the joint industry and labor of the spouses to further and advance the success and well-being of the marriage and of the family, which entitled them to share in the profits.

121 Ariz. at 303, 589 P.2d at 1335, quoting W. de Funiak & M. Vaughn, Principles of...