Martin v. Martin

• Decision Date: 15 July 1986
• Docket Number: CA-CIV,No. 1,1
• Citation: 156 Ariz. 440,752 P.2d 1026
• Parties: In re the Marriage of Mary Maxine MARTIN, Petitioner-Appellee, v. Richard George MARTIN, Respondent-Appellant, Union Oil Company of California, Additional Defendant. 7959.
• Court: Arizona Court of Appeals

Page 1026

752 P.2d 1026

156 Ariz. 440

In re the Marriage of Mary Maxine MARTIN, Petitioner-Appellee, v. Richard George MARTIN, Respondent-Appellant, Union Oil Company of California, Additional Defendant.

No. 1 CA-CIV 7959.

Court of Appeals of Arizona,

Division 1, Department D.

July 15, 1986.

[156 Ariz. 442] Lewis and Roca by Jeremy E. Butler, Joseph S. Jackson, Paul G. Ulrich, Phoenix, for respondent-appellant.

Favour, DePasquale, Moore & Schuyler, P.A. by Janis Ann Sterling, Prescott, for petitioner-appellee.

OPINION

BROOKS, Judge.

This is an appeal from a decree of dissolution distributing various marital assets between husband, a California resident, and wife, a resident of Arizona. The relevant facts are as follows.

Richard Martin (husband) and Mary Martin (wife) were married in Wyoming in 1950. Due to the nature of husband's work, the parties travelled extensively throughout the United States and the world. In August, 1979, the parties returned to the United States from Singapore, where husband had worked for Union Oil Company of California. The parties became domiciled in California, where husband's job was located. Shortly thereafter, they bought a townhouse in Prescott, Arizona as a planned retirement home. Wife moved into the Prescott townhouse in December, 1979, taking with her a substantial portion of the furnishings from the couple's California home. Husband remained in California, intending to join his wife in Prescott upon his planned retirement. During the period they remained separated, husband gave wife money for living expenses and payments on the townhouse mortgage. Things did not bode well for the marriage, however, and wife filed this action seeking dissolution of the marriage in 1982.

During the parties' three year separation prior to the action for dissolution, husband lived in California and worked for Union Oil Company. He maintained almost total control over the parties' extensive marital assets, sending only a fixed and relatively small monthly sum to his wife in Arizona. At no time has husband ever resided in Arizona.

At the conclusion of the evidence, the trial court found that certain shares of Gulf Oil stock and a partial interest in a trust known as the Dry Lake Farm trust, which husband claimed as his separate property, were in fact community property. The trial court also ruled that, under Arizona law, husband's post separation earnings in California were community property. After dividing the community assets and liabilities between the parties, the court awarded wife a money judgment in the amount of $46,688 "representing [her] share of the net community income" for the three years the parties were separated. The court also awarded a second money judgment in the amount of $9,473 to wife which represented funds in several joint savings accounts that husband depleted in order to make court-ordered spousal maintenance and attorney's fees payments to wife. Wife was also awarded $2,000 a month in spousal maintenance.

Husband now appeals alleging that the trial court made numerous errors in dividing the property between the parties and in awarding spousal maintenance to wife. We will address each of these allegations separately.

I.

Husband first contends that the trial court erred in finding that 100 shares of Gulf Oil stock and a 2/15ths interest in the Dry Lake Farm trust were community property. We disagree.

The record shows that husband received an initial one-fifth interest in the Dry Lake Farm trust as a gift in 1962. Wife properly concedes that this one-fifth interest is husband's separate property. Husband contends that he bought the 100 shares of Gulf Oil stock and the additional 2/15ths interest in the Dry Lake Farm trust with separate funds which he received as income from this initial one-fifth interest in the Dry Lake Farm trust. He argues, therefore, that the trial court erred in not finding that both the Gulf Oil stock and the 2/15ths interest in the Dry Lake Farm trust were his separate property.

Two hurdles confront husband's claim that the Gulf Oil stock and the 2/15ths interest in the Dry Lake Farm trust are his separate property. The first is that both assets were acquired during the marriage and are therefore presumed to be community property. Bender v. Bender, 123 Ariz. 90, 597 P.2d 993 (App.1979); Matter of Estate of Messer, 118 Ariz. 291, 576 P.2d 150 (App.1978). Husband therefore has the burden of proving by clear, satisfactory, and convincing evidence that these assets were purchased with his separate funds. Bourne v. Lord, 19 Ariz.App. 228, 506 P.2d 268 (App.1973). Secondly, in carrying this burden, husband is hindered by the fact that while the parties were residents of New Mexico, the income from husband's initial separate property interest in the Dry Lake Farm trust was deposited into a New Mexico joint bank account along with his regular salary, which was clearly community property. It was allegedly with these comingled funds that husband purchased the Gulf Oil stock and the additional 2/15ths interest in the Dry Lake Farm trust. The law in Arizona is clear that where separate and community funds are so comingled that they become indistinguishable, they are presumed to be community property. Blaine v. Blaine, 63 Ariz. 100, 159 P.2d 786 (1945); Flowers v. Flowers, 118 Ariz. 577, 578 P.2d 1006 (App.1978); Ivancovich v. Ivancovich, 24 Ariz.App. 592, 540 P.2d 718 (App.1975). The burden is then upon the party claiming a separate property interest in the funds to prove it, together with the amount, by clear and satisfactory evidence. Cooper v. Cooper, 130 Ariz. 257, 635 P.2d 850 (1981).

We find that husband has failed in his burden of proof. While he claims that he sufficiently traced the source of the funds used to purchase both the Gulf Oil stock and the additional interest in the Dry Lake Farm trust to his separate funds, our review of the record reveals quite the opposite. Husband's testimony at trial as to the source of the funds used to acquire these two assets was uncertain at best. Moreover, he was unable to produce any convincing documentation or records showing that the funds used to purchase these assets were traceable to his separate funds. We therefore affirm the trial court's ruling that both the 100 shares of Gulf Oil stock and the additional 2/15ths interest in the Dry Lake Farm trust were community property.

II.

Husband next contends that the trial court erred by applying Arizona rather than California law to the issue of whether his post-separation earnings were separate or community property. Under A.R.S. §§ 25-211 and 25-213, post-separation earnings are community property in Arizona until a final decree of dissolution is entered. Jurek v. Jurek, 124 Ariz. 596, 606 P.2d 812 (1980); Matter of Estate of Messer, 118 Ariz. 291, 576 P.2d 150 (App.1978). Under California law, however, such earnings are considered the separate property of the spouse who acquires them. Cal.Civ.Code § 5118 (West 1983). We are thus confronted with a conflict of law question.

Husband contends that where parties are domiciled in different states when marital property is acquired, the law of the state where the acquiring spouse is domiciled at the time applies to determine the property's disposition upon dissolution. Restatement (Second) of Conflict of Laws, § 258, comment c (1971). He claims that since wife was domiciled in Arizona and he was domiciled in California when the post-separation earnings were acquired, California law should be applied to characterize these earnings as his separate property.

While husband agrees that Arizona's quasi-community property law, A.R.S § 25-318(A) ¹, would normally supersede the Restatement's choice of law rule and convert his earnings into community property, Woodward v. Woodward, 117 Ariz. 148, 571 P.2d 294 (App.1977), he argues that Arizona law should not apply where only one of the parties is domiciled in this state. In support of this argument, he relies on In re Marriage of Roesch, 83 Cal.App.3d 96, 147 Cal.Rptr. 586 (App.1978). In Roesch, the California Court of Appeals refused to apply California's quasi-community property law to a situation where only one of the parties was domiciled in that state. The court held that California law was applicable only where both spouses are domiciled in California. Roesch, 83 Cal.App.3d at 107, 147 Cal.Rptr. at 593.

Husband contends that since California's quasi-community property law is so similar to our own, ² see Sample v. Sample, 135 Ariz. 599, 602, 663 P.2d 591, 594 (App.1983), we should, by analogy, adopt California's view. Wife counters by arguing that this issue has already been decided against husband in Woodward v. Woodward, supra.

We begin our analysis by noting that Arizona has not decided the issue of whether our quasi-community property law supersedes the usual choice of law rule stated in comment c to the Restatement (Second) of Conflict of Laws § 258 in cases such as the one at hand. Contrary to wife's claim, Woodward did not decide the issue. Woodward held only that where § 25-318(A) applies, it necessarily supersedes the Restatement's choice of law rule. However, the issue of whether the statute applies where only one spouse is domiciled in Arizona was not addressed. The issue is thus one of first impression in this jurisdiction.

We are not persuaded that we should follow California's lead on this issue. It seems clear from our reading of Roesch that the court's refusal in that case to apply California's quasi-community property law to cases where only one spouse is domiciled there rests upon a misinterpretation of past California case law. The Roesch court refused to invoke California law where only one spouse was domiciled in that state because it was confronted with what it perceived to be constitutional limitations imposed in Addison v. Addison, 43 Cal.Rptr. 97, 399 P.2d 897 (1965). In Addison, the California Supreme Court addressed...