Thomas v. Thomas

• Decision Date: 17 March 2009
• Docket Number: No. 1 CA-CV 07-0471.,1 CA-CV 07-0471.
• Citation: 220 Ariz. 290,205 P.3d 1137
• Parties: James Edward THOMAS, Petitioner/Appellee/Cross-Appellant, v. Jonnie Rae THOMAS, Respondent/Appellant/Cross-Appellee.
• Court: Arizona Court of Appeals

205 P.3d 1137

220 Ariz. 290

James Edward THOMAS, Petitioner/Appellee/Cross-Appellant, v. Jonnie Rae THOMAS, Respondent/Appellant/Cross-Appellee.

No. 1 CA-CV 07-0471.

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

March 17, 2009.

Owens & Perkins, PC By Alona M. Gottfried, Scottsdale, Attorneys for Petitioner/Appellee/Cross-Appellant.

Hunt, Vanderott-Grogan & Hossler By David J. Hossler, Yuma, Attorneys for Respondent/Appellant/Cross-Appellee.

OPINION

BROWN, Judge.

¶ 1 Jonnie Thomas ("Wife") appeals from the portion of the trial court's post-decree order finding a California condominium ("condo") to be an undivided marital asset and ordering her to re-convey a one-half interest in the condo to James Thomas ("Husband") as a tenant in common. For the reasons that follow, we conclude that the trial court did not have jurisdiction to address Husband's claims relating to the condo.¹

BACKGROUND

¶ 2 Husband and Wife married on November 26, 1960. On January 8, 1998, the parties stipulated to a decree of dissolution. The decree failed to reference the condo, which the parties purchased during their marriage. In October 2005, Husband filed a motion for order to show cause in the dissolution action requesting enforcement of the decree. Among other things, he requested that the trial court award him one-half of the equity in the condo.

¶ 3 At the show cause hearing, Husband testified that the parties intentionally omitted the condo from the decree of dissolution with the understanding that they would continue to jointly own the property and that each could use the condo "at different times." Husband acknowledged that in September 1998 he signed a quitclaim deed conveying the condo to Wife but asserted that she recorded the deed in breach of their agreement. According to Husband, the parties orally agreed that in exchange for his quitclaim deed to the condo, Wife would convey to Husband by quitclaim deed her interest in another home ("the 7th Avenue property") to allow him to use the home as collateral to secure a loan. Per the agreement, Wife would not record the quitclaim deed to the condo unless Husband died or failed to make the payments on the loan secured by the 7th Avenue property.

¶ 4 Husband testified that after he obtained the loan, he promptly "quitclaimed" the 7th Avenue property back to Wife. He then used the proceeds of the loan to pay outstanding obligations on the condo, a loan on wife's vehicle, taxes, and the closing costs for the loan. Husband also stated that he timely made all payments owing on the loan from 1998 through 2004, until Wife sold the home. Nonetheless, Wife recorded the condo quitclaim deed on October 29, 1998. Although Wife recorded the quitclaim deed almost immediately after the transaction, Husband testified that Wife continued to treat him as a co-owner of the condo as evidenced by her demand that he pay one-half of the post-decree repair and maintenance costs on the condo.

¶ 5 Wife testified that pursuant to the parties' agreement, she did not record the condo quitclaim deed "until [she] felt like there was a need," and that she opted to do so when Husband remarried. In addition, contrary to Husband's testimony, Wife also stated that prior to her sale of the 7th Avenue property, the bank notified her that Husband had not kept the loan current. On cross-examination, Wife acknowledged that after the decree was entered, only Husband made loan payments on the condo, and when asked, she testified that she would be willing to re-convey Husband's one-half interest in the condo if he paid her the $62,719.15 balance remaining on the 7th Avenue property at the time of its sale.

¶ 6 Following the presentation of evidence, Wife questioned for the first time the trial court's jurisdiction over Husband's request for his share of the condo. The court noted its own concerns as to whether Husband's claim was properly raised in the dissolution matter and recognized that lack of subject matter jurisdiction may be raised at any time. The court ultimately determined it had jurisdiction over Husband's claim relating to the condo and ordered Wife to reconvey her one-half interest to Husband upon his payment to her of $62,720.00 plus interest. Wife timely appealed and we have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(B) (2003).

DISCUSSION

¶ 7 Wife contends that the trial court lacked the requisite subject matter jurisdiction to order her to re-convey a one-half interest in the condo to Husband. Specifically, Wife argues that following entry of the dissolution decree, the condo was no longer marital property and thus was not subject to a post-decree reallocation. In response, Husband argues that the condo is community property and thereby subject to the jurisdiction of the trial court. Husband further asserts that Wife breached the parties' property/financial agreements by recording the condo quitclaim deed and therefore it is "inequitable" for her to be permitted to retain ownership of the condo as her sole and separate property.²

¶ 8 We review a trial court's legal conclusions, including questions of jurisdiction, de novo. In re Marriage of Crawford, 180 Ariz. 324, 326, 884 P.2d 210, 212 (App. 1994). In a dissolution proceeding, the superior court is vested only with jurisdiction provided by law. A.R.S. § 25-311 (2007) ("The superior court is vested with original jurisdiction to hear and decide all matters arising pursuant to this chapter[.]"); Weaver v. Weaver, 131 Ariz. 586, 587, 643 P.2d 499, 500 (1982) ("Title 25 defines the boundaries of a dissolution court's jurisdiction, and the court may not exceed its jurisdiction even when exercising its equitable powers."); Fenn v. Fenn, 174 Ariz. 84, 87, 847 P.2d 129, 132 (App.1993) ("Every power that the superior court exercises in a dissolution proceeding must find its source in the supporting statutory framework."); Andrews v. Andrews, 126 Ariz. 55, 58, 612 P.2d 511, 514 (App.1980) ("Dissolution of marriage is a statutory action in Arizona, and a trial court has only such jurisdiction as is given to it by statute."). Thus, we turn first to the dissolution statutes to determine whether the trial court had jurisdiction in the dissolution action to determine the parties' dispute relating to ownership of the condo.

¶ 9 Division of property in a dissolution proceeding is governed by A.R.S. § 25-318(A) (Supp.2008),³ which provides generally that a court shall divide community, joint tenancy, and other property held in common equitably, and shall assign each spouse's sole and separate property to such spouse. Additionally, A.R.S. § 25-318(D) states that "community, joint tenancy and other property held in common for which no provision is made in the decree shall be from the date of the decree held by the parties as tenants in common, each possessed of an undivided one-half interest."

¶ 10 It is undisputed that Husband and Wife intentionally omitted any reference to or allocation of the condo in their stipulated decree. Based on the plain language of A.R.S. § 25-318(D), the condo they acquired during marriage and held as community property transmuted by operation of law to separate property, with each party holding a one-half interest as a tenant in common upon entry of the dissolution decree. See Dempsey v. Oliver, 93 Ariz. 238, 241, 379 P.2d 908, 909 (1963) (finding that effect of a divorce on omitted property was to make the former spouses tenants in common, with each party having a separate interest subject to separate disposition); Becchelli v. Becchelli, 17 Ariz.App. 280, 283, 497 P.2d 396, 399 (1972) (holding as a matter of law that deed conveying property to husband and wife as tenants in common gave wife undivided one-half interest in the property); see also Monaghan v. Barnes, 48 Ariz. 213, 214, 61 P.2d 158, 159 (1936) (noting that mother and daughter's ownership of real property as tenants in common gave each of them an undivided one-half interest as sole and separate property); Potthoff v. Potthoff, 128 Ariz. 557, 561, 627 P.2d 708, 712 (App.1981) (recognizing that property retains its status as community or separate unless changed by agreement of the parties or by operation of law). Contrary to the trial court's determination, upon entry of the dissolution decree, the condo was no longer an "undivided marital asset," but the separate property of Husband and Wife. Thus, the court in the dissolution action lacked jurisdiction to consider Husband's claim that he should be awarded an interest in the condo.

¶ 11 In McCready v. McCready, the former husband and wife jointly purchased real property nearly two years after the trial court entered a decree of dissolution. 168 Ariz. 1, 2, 810 P.2d 624, 625 (App.1991). The parties took title to the property as "husband and wife" and as joint tenants. Id. Twelve years after they bought the property, the husband filed a "post-dissolution cause of action seeking an order of the court requiring an `auction sale' of the subject property." Id. Following a hearing on the matter, the trial court found that the property was held by the parties as tenants in common, but nonetheless determined that the parties had "submitted themselves to the equitable jurisdiction of the court by requesting relief regarding disposition of their commonly held property." Id. On appeal, the husband argued that the trial court lacked subject matter jurisdiction to allocate property acquired after dissolution. Id. at 3, 810 P.2d at 626. We determined the trial court lacked jurisdiction to dispose of the non-marital property and that absent an agreement between the parties, the only lawful means to dispose of the property was pursuant to "the applicable partition statutes." Id. We further held that the parties could not, by consent, give the court jurisdiction. Id. at 4, 810 P.2d at 627.

¶ 12 Husband contends that McCready is inapplicable because, unlike the circumstances here, the...