Marriage of Bell-Kilbourn v. Bell-Kilbourn

169 P.3d 111, 216 Ariz. 521, 515 Ariz. Adv. Rep. 27, 2007 Ariz. App. LEXIS 199
CourtCourt of Appeals of Arizona
DecidedOctober 23, 2007
Docket1 CA-CV 07-0068
StatusPublished
Cited by88 cases

This text of 169 P.3d 111 (Marriage of Bell-Kilbourn v. Bell-Kilbourn) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marriage of Bell-Kilbourn v. Bell-Kilbourn, 169 P.3d 111, 216 Ariz. 521, 515 Ariz. Adv. Rep. 27, 2007 Ariz. App. LEXIS 199 (Ark. Ct. App. 2007).

Opinion

OPINION

TIMMER, Judge.

¶ 1 Kari Bell-Kilbourn (‘Wife”) appeals from a decree of dissolution of her marriage to Joshua Bell-Kilborn (“Husband”), challenging only the family court’s ruling that a house titled in Wife’s name is community property. To resolve this appeal, we revisit this court’s decision in Bender v. Bender, 123 Ariz. 90, 597 P.2d 993 (App.1979), and clarify that an owning spouse sufficiently rebuts the presumption that real property is a community asset when purchased during the marriage if the non-owning spouse executes an enforceable deed disclaiming an interest in the property at the time of acquisition. Because the family court reached the opposite conclusion, we vacate the property division provisions in the dissolution decree regarding the house and remand for further proceedings.

BACKGROUND 1

¶ 2 Husband and Wife married on February 15, 2000, and subsequently had two children. During the marriage, the couple decided to purchase a house and enlisted the services of Acorn Housing to assist them with obtaining necessary financing. In order to maximize the chances of obtaining financing, the parties decided to improve Wife’s credit rating and then apply for a loan solely in her name. Consequently, the parties used community funds to pay all separate and community debt in Wife’s name. Upon the Wife’s subsequently submitted application, a lender loaned Wife money to purchase the house and repay the down payment provided by the seller. On March 24, 2003, the seller conveyed the house by warranty deed to Wife, “a married woman as her sole and separate property.” The next day, Husband executed a disclaimer deed, renouncing any interest in the house and acknowledging the house as Wife’s sole and separate property. Thereafter, the parties lived in the house with their children and used community funds to pay the mortgage until June 2005 when the parties separated and Husband moved from the house. Wife alone then paid the mortgage.

¶3 Husband filed for dissolution of the marriage on October 21, 2005. The family court held an evidentiary hearing on August 22, 2006 to resolve various issues, including the division of assets. Subsequently, the family court ruled that the house was community property, reasoning as follows:

It seems clear that it was not the intention of either party that Husband would be gifting his interest in the residence at closing to Wife. As noted it was and still is understood that to obtain financing because of Husband’s relatively poor credit only Wife would be on the deed and the note — hence the disclaimer deed.
The residence is clearly community property but for the disclaimer deed and the Court now finds that in light of the parties’ intent and to be fair and equitable the residence should be found to be community property notwithstanding the deed.

The court also ordered the parties to sell the house and further ordered Husband to pay Wife one-half the total mortgage payments paid by Wife since the parties’ separation. Wife then filed a motion for new trial, which the family court denied. This appeal followed.

DISCUSSION

¶ 4 Wife contends the family court erred by characterizing the house as community property. Specifically, she argues (1) the evidence did not support the family court’s finding that the parties intended the house to be a community asset, and (2) the *523 family court failed to properly consider the effect of the disclaimer deed. We review the court’s distribution of property for an abuse of discretion. Hrudka v. Hrudka, 186 Ariz. 84, 93, 919 P.2d 179, 188 (App.1995). We review the court’s classification of property as separate or community, however, de novo as a question of law. In re Marriage of Pownall, 197 Ariz. 577, 581, ¶ 15, 5 P.3d 911, 915 (App.2000).

¶ 5 Wife essentially argues that in the face of the warranty and disclaimer deeds, the family court erred by ruling that the house was a community asset. Husband responds that the house was presumptively a community asset because it was acquired during the marriage, see Brebaugh v. Deane, 211 Ariz. 95, 97-98, ¶ 6, 118 P.3d 43, 45-46 (App.2005), and Wife failed to rebut that presumption merely by pointing to the disclaimer deed. “Property takes its character as separate or community at the time [of acquisition] and retains [that] character” throughout the marriage. Honnas v. Honnas, 133 Ariz. 39, 40, 648 P.2d 1045, 1046 (1982). Thus, to resolve this appeal, we must determine the character of the house at the time of acquisition.

¶ 6 Both parties cite our decision in Bender, 123 Ariz. 90, 597 P.2d 993, to support their respective positions. In that case, Mr. Bender purchased a trailer park in his name during the marriage as his sole and separate property and his wife, Mrs. Bender, signed a disclaimer deed renouncing any interest in the park. Id. at 92, 597 P.2d at 995. Mr. Bender later sold the park. Id. During the parties’ dissolution proceeding eight years later, the family court held that the balance due on the sales contract from the buyer of the park was Mr. Bender’s sole and separate property. Id.

¶7 On appeal, this court rejected Mrs. Bender’s contention that the family court erred in its ruling. Id. We reasoned that married couples are free to determine the status of their property, and the disclaimer deed constituted a binding contract that must be enforced in the absence of fraud or mistake. Id. at 92-93, 94, 597 P.2d at 995-96, 997. The court acknowledged the principle set forth in In re Sims’ Estate, 13 Ariz.App. 215, 475 P.2d 505 (1970), that spouses may convey separate and community property interests between them but only if done by a written instrument accompanied by contemporaneous conduct indicating an intent to convey such interests. Bender, 123 Ariz. at 93, 597 P.2d at 996. The court determined that Sims’ Estate did not apply, however, because Mrs. Bender never had an interest in the trailer park to convey in light of her disclaimer at the time of acquisition. Id. at 94, 597 P.2d at 997.

¶ 8 Wife argues Bender is on point with this case, and we should reach the same result. Husband counters that Bender

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Bluebook (online)
169 P.3d 111, 216 Ariz. 521, 515 Ariz. Adv. Rep. 27, 2007 Ariz. App. LEXIS 199, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marriage-of-bell-kilbourn-v-bell-kilbourn-arizctapp-2007.