Cruz v. Cruz, Jr.

Opinion

Territorial Law Library ell CTi~ _~,_t_,-

2 IN THE SUPERIOR COURT OF GU~~;::. ":: C(;URT 3 MELONY JAMES CRUZ DOMESTIC CASE NO. # 0195-11 4

5 Plaintiff, 1 v. PARTIAL FINDINGS OF FACT 6 and CONCLUSIONS OF LAW 7 GREGORIO BLAS CRUZ. JR. 1 )

8 Defendant. ~ ) 9

10 This matter came on for Bench Trial before the HONORABLE JUDGE ELIZABETH

11 BARRETT-ANDERSON, on February 17, 2012. Plaintiff appeared and was represented by

12 Attorney William B. Pole. Defendant was present and represented by Attorney Ron Moroni. The

13 Court ruled from the bench on all matters, bu reserved on the issue of character and disposition

14 ofthe marital residence. Having reviewed the trial briefs of counsels, and further considering this

15 matter, the Court issues the following Partial Findings ofF act and Conclusions of Law as to the

16 marital residence and debts.

17 FINDING OF FACT

18 1. The parties were married on June 30, 2007, on Guam.

19 2. The marital residence was purchased on September 26, 2007, by Warranty Deed

20 as joint tenants. De! Trial Exhibits D and E.

21 3. The parties signed a mortgage with the United States Department of Agriculture

22 Rural Housing Service on September 27,2007 for the sum of One Hundred Sixty

23 Thousand One Hundred and Twenty-Eight Dollars ($160,128.00).Plf. Trial Ex.

24 1. The remaining balance on the USDA loan is approximately $153,907.43. De!

25 Trial Ex. B.

26 4. There is a second mortgage executed by the parties with Guam Housing 1 Corporation with a current balance of approximately $37,876.18. Def Trial Ex. 2 c. 3 5. The parties did not present at trial an appraised value for the marital residence. 1 4 6. Plaintiff took out a personal loan after separation for the purchase of a vehicle 5 which Defendant personally guaranteed. Plf Trial Testimony. This debt is not 6 community property, and is not subject to this action. 7 7. The total approximate community debt is $191,783.61. 8 8. The Court denied dissolution ofthe marriage on the grounds of extreme physical 9 cruelty. The parties were awarded a divorce on the basis of irreconcilable 10 difference. 11 CONCLUSIONS OF LAW 12 It is a rebuttable presumption on Guam that property acquired by either or both spouses 13 during marriage is community property. 19 GCA §61 05( a). The Guam Supreme Court has held, 14 however, that "property held by spouses as co-tenants in joint tenancy is separate property" 15 Babauta v. Babauta 2011 Guam 15; ~26. 19 GCA §6101(a)(8). The issue of characterization is 16 important as it relates to satisfaction of the outstanding community debt, which is primarily the 17 remaining balance of the mortgage on the marital residence. Community debts must fIrst be 18 satisfIed from community property and all property in which the spouses own an undivided equal 19 interest as joint tenant, excluding the residence of the spouses unless such other property is 20 insuffIcient, then from the residence. 19 GCA §61 04( a). 21 Plaintiff argues that the marital residence should be characterized as community property 22 despite the language of the joint tenancy because she had no knowledge that the property was 23 taken under any other theory than community property. Plf Trial Brief In support of her 24

25 1 The parties each attempted to present the Court with testimony of broker's price opinions, more connnonly referred to as "drive-by opinions" on the value of a certain piece of property. The Court was reluctant to accept 26 any testimony of a broker's price opinion as it would not give the Court a true market value of the residence.

Page 2 of 4 1 argument she testified that they purchased the residence "as a married couple" and "it belonged 2 to both of us." These statements do nothing to alter the provision that property held in co-tenancy 3 as joint tenants is separate property. 19 GCA §61 01(a)(S). Joint tenancy is not inconsistent with 4 the concept of a husband and wife owning property during a marriage. The distinction is in the 5 right of survivorship which is not affected by a subsequent divorce. 6 Whether or not the marital residence is community or separate does not affect the security 7 interest that both mortgage companies have upon the residence. The remaining mortgages must 8 be satisfied from the marital residence whether it is characterized as community or separate. 9 Nonetheless, the Court agrees with Defendant that under Babauta the marital residence is 10 separate property, but the remaining debts (mortgages) are community. 11 The only issue is whether the Court should order the parties to sale the marital residence 12 to satisfy the remaining mortgages. Plaintiff wants the property sold in order to improve her 13 credit. Defendant does not want to sale the property because he is currently living in the 14 residence, and intends to have his children live there once he assumes primary residential custody 15 this summer. Defendant also testified that USDA has granted the parties a two year moratorium, 16 to 2013, to assist in the current national housing crisis. He also testified that all payments are up 17 to date, and he would be able to refinance the residence if permitted. 18 The Court is permitted to dispose of community property by sale or partition. 19 GCA 19 §S412. The Court is also permitted to use the separate property of the parties, to include the 20 residence held in joint tenancy, to satisfy the community debt where there is insufficient funds 21 from other community assets to satisfy the debt. There was no evidence that the marital residence 22 cannot satisfy the mortgages, and in the absence of such evidence the Court must assume the 23 mortgages are fully secured. 24 Plaintiff argues that Babauta stands for the proposition that the Court can order the sale 25 of separate property under Section 61 04( a). Babauta does not specifically address whether 26 Page 3 of 4 '.

1 separate property can be ordered sold under § 8412 because that was not an issue in front of the

2 trial court. The Court will not read more into Babauta than is plainly stated by the Supreme

3 Court. While §61 04( a) permits disposition of separate property assets to satisfy community

4 property debts, it does not require the property to be sold. The mortgages are either current or

5 under a moratorium. The entire community debt is secured by the marital residence in the event

6 of default, and Defendant has kept the payments current. Defendant intends to remain in the

7 residence and to prepare it for his children when he assumes primary custodial care this summer.

8 The Court does not find it necessary to order the marital residence sold in order to satisfy the

9 community debts. The solution for Plaintiff s credit concern is as suggested by Defendant at trial;

10 mutual agreement of the parties to refinance the community debt to relieve Plaintiff of her

11 obligation and titled interest.

12 The Defendant is ORDERED to provide this Court with Final Findings of Fact and

13 Conclusions of Law which incorporate the Court's rulings from the bench relative to grounds,

14 custody and visitation on February 17, 2012, as well as an Interlocutory and Final Decree of

15 Divorce nun pro tunc to February 17, 2012. Hearing on this matter presently set/or April 25,

16 2012 at 2:00 p.m. is cancelled.

18 SO ORDERED. _M_AR_O_9_2012_ 2012.

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22 &·(~Ji&( HONORAB E ELIZABETH ARRETT-ANDERSON Judge, Superior Court of Guam 23

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