Neely v. Neely
| Decision Date | 14 January 1977 |
| Docket Number | CA-CIV,No. 2,2 |
| Citation | 563 P.2d 302,115 Ariz. 47 |
| Parties | Richard Wayne NEELY, Appellant/Cross Appellee, v. Sue NEELY, Appellee/Cross Appellant. 2123. |
| Court | Arizona Court of Appeals |
This is an appeal from an amended dissolution decree directing, inter alia, payment of alimony and child support, dividing community property and ordering appellant-husband to pay community obligations and attorneys' fees.
The parties were married in Coolidge, Arizona, on February 9, 1952, and have four children, ages 19, 17, 14 and 7. At the time of the trial the two eldest children were emancipated. The appellee/cross appellant was a full-time housewife and the appellant a full-time self-employed farmer.
It is appellant's contention that the lower court abused its discretion in distributing the community property of the parties. Numerous allegations of error have been propounded in support of this position. Appellee, on the other hand, argues that no abuse of discretion is manifest except in the trial court's award of certain insurance policies which she believes are her sole and separate property. We find that neither contention has merit and affirm.
Appellant asserts that although his award amounted to $711,280.94, he was ordered to pay debts and obligations of $635,494.49, 1 leaving an equity distribution of $75,786.45. This sum, it is claimed, is disproportionately small when contrasted with appellee's award of $219,831.37. Appellee, however, has disputed certain computations of her husband and claims that her one-half interest in the net assets coupled with credits amounts to $239,367.22 and the award actually made by the trial court was therefore proper.
We start with the premise that apportionment of community property rests within the sound discretion of the court. Nace v. Nace, 104 Ariz. 20, 448 P.2d 76 (1968). The discretionary power is very broad and will not be disturbed unless it clearly appears that it has been abused. Hatch v. Hatch, 23 Ariz.App. 487, 534 P.2d 295 (1975).
Standards for property distribution pursuant to a dissolution judgment are set forth in A.R.S. § 25--318 (Supp.1973), which provides in part:
The touchstone of proper apportionment is whether a directed distriction is equitable in nature. The trial court is not required to divide the property evently. McClennen v. McClennen, 11 Ariz.App. 395, 464 P.2d 982 (1970). Other criteria may be considered in addition to the mathematical computations submitted by the parties involved. Age, financial condition, health, opportunities and previous standard of living are all factors to be evaluated by the court below. See, Wick v. Wick, 107 Ariz. 382, 489 P.2d 19 (1971); Spector v. Spector, supra. Further, A.R.S. § 25--318 explicitly allows the court to consider excessive or abnormal expenditures as well as destruction, concealment or fraudulent disposition of community property.
Our review of the record reveals there was evidence from which the trial court could have concluded that the community assets had a total value of $808,134.54. From these appellee received assets, free and clear of encumbrances, of a total value of $65,535. According to appellant, he was ordered to pay community debts and obligations in the sum of $484,099.49. 2 But there was also other evidence from which the court could have concluded that in computing the amount of the community obligations this figure should be $452,905.42. 3 We thus arrive at the following computations:
The trial court gave the wife a note from the husband in the sum of $140,000 which, rounded off, is $27,921 more than would appear necessary to equalize the shares of community assets. However, the record also shows the wife should receive credit for community property which was used to enhance the separate estate of the husband and for the development of a crop from which the wife will derive no benefits. This totals $28,000. There was further testimony that the husband spent $1,200 to $1,300 worth of the community property on his girlfriend and that community property in the sum of $35,000 had been concealed by the husband. We would then arrive at the following:
CREDITS TO WIFE
ITEM AMOUNT
Future crop expenditures $28,000.00
Spent on girlfriend 1,200.00
Concealed receipts 35,000.00
----------
$64,200.00
Less 1/2 Community -32,100.00 32,100.00
Difference Between Necessary
Adjustments and
Note Given to Wife -27,921.00
----------
$ 4,179.00
We thus see from the above computation that the trial court could have required the husband to give the wife a note for $144,179. We therefore conclude that there was no disparity in the division of the property, nor any abuse of discretion on the part of the trial court in ordering the husband to pay appellee's attorneys' fees and court costs in the sum of $11,406.
The second question presented for our determination concerns the validity of the trial court's distribution of the parties' insurance policies. It is the wife's contention that the lower court abused its discretion and distributed the policies contrary to law since they were her sole and separate property. She argues that when one spouse has turned over ownership of an insurance policy to another spouse in order to avoid estate taxes it is conclusive and incontrovertible that a gift has been created. We disagree.
In its initial decree the trial court awarded appellee/cross appellant those insurance policies in which she was listed as owner. All other policies went to her husband. However, in its amended decree, the court revised its previous decision and took certain policies 'owned' by Marie Sue Neely and awarded them to appellant. In turn, a policy 'owned' by Richard Neely was awarded to appellee. The court, in its judgment, stated that the insurance policies were a part of the community assets of the parties. In Arizona, property acquired during marriage is presumed to be community property. 4 Armer v. Armer, 105 Ariz. 284, 463 P.2d 818 (1970); Porter v. Porter, 101 Ariz. 131, 416 P.2d 564 (1966). This presumption may be rebutted, however, by clear and convincing evidence. Kennedy v. Kennedy, 93 Ariz. 252, 379 P.2d 966 (1963). One method of rebuttal is to introduce substantial evidence that a party has made a gift of his interest in the community property. Freedman v. United States, 382 F.2d 742 (5th Cir. 1967). Where the intent of the parties is clear, effect will be given to that intent. Lincoln Fire Insurance Co. v. Barnes, 53 Ariz. 264, 88 P.2d 533 (1939). Therefore, in the case sub judice, we must ascertain whether a gift was in fact made.
Although Richard Neely testified that his intention in designating his wife as owner of the policies was to allow the insurance proceeds to bypass his estate in avoidance of estate taxes, it is apparent that he was unaware that changing ownership could effectively result in a gift to appellee. Evidence exists from which the trial court could have found that Mr. Neely did not intend to divest himself of his community interest in said policies. Indeed, appellant stated at one point that it was his wish to keep the policies on the children to insure their security should something happen to him and to enable them to pay any taxes levied upon his estate. His wife was to have the two policies in which she was named as insured. At no time did either party file a federal gift tax return.
The essential elements of a gift inter vivos are 'that the donor manifest a Clear intent to give to the party claiming as donee and give to the latter before death full possession and control of the property (emphasis ours).' O'Hair v. O'Hair, 109 Ariz. 236, 508 P.2d 66 (1973). In short,...
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