Ross v. Negron-Ross

CourtNew Mexico Court of Appeals
DecidedApril 25, 2017
Docket33,418
StatusPublished

This text of Ross v. Negron-Ross (Ross v. Negron-Ross) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ross v. Negron-Ross, (N.M. Ct. App. 2017).

Opinion

1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

2 Opinion Number: ___________

3 Filing Date: April 25, 2017

4 NO. 33,418

5 GARY M. ROSS,

6 Petitioner-Appellee,

7 v.

8 STEPHANIE NEGRON-ROSS,

9 Respondent-Appellant.

10 APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY 11 Alisa A. Hadfield, District Judge

12 L. Helen Bennett, P.C. 13 L. Helen Bennett 14 Albuquerque, NM

15 for Appellee

16 Stephanie Negron 17 Ocean Park, PR

18 Pro Se Appellant 1 OPINION

2 GARCIA, Judge.

3 {1} This case arises from a question of first impression regarding whether a marital

4 community estate is entitled to an equitable lien on a spouse’s sole and separate

5 property when community funds have contributed to the equity in the property but the

6 property has diminished in value due to declining market conditions. We hold that the

7 community’s contributions to the sole and separate property create the right to a

8 community lien even when the property decreased in value. We adopt the formula

9 utilized by the Arizona Court of Appeals in Valento v. Valento, as the method for

10 calculating the community lien in this case and as an extension of the principles set

11 forth in our prior case law. See 240 P.3d 1239, 1243-45 (Ariz. Ct. App. 2010). As a

12 result, we reverse the district court on this issue. On remand, we leave it to the

13 discretion of the district court to determine the proper apportionment of this

14 community lien. We further hold that the district court did not abuse its discretion in

15 determining that (1) substantial evidence existed regarding Wife’s breach of her

16 fiduciary duty to Husband through the embezzlement of funds from his dental

17 practice, and (2) the parties were required to pay their own attorney fees.

18 BACKGROUND

19 {2} This appeal comes before this Court following the dissolution of marriage and 1 division of property owned by the parties. Gary M. Ross (Husband) and Stephanie

2 Negron-Ross (Wife) were married on September 11, 2010. At the time they were

3 married, both parties owned assets of significant value. Husband, age fifty-eight at

4 the time of the marriage, was a dentist and owned a private dental practice. Husband

5 also owned several rental properties held by a limited liability corporation, the

6 commercial property where his practice resides, and his personal residence in

7 Albuquerque, New Mexico (the Spring Creek residence). Husband purchased the

8 Spring Creek residence in 2004 for $799,000. Husband paid $160,000 as a down

9 payment on the Spring Creek residence. The Spring Creek residence subsequently

10 depreciated in value and was appraised at $700,000 at trial. Additionally, the Spring

11 Creek residence was subject to two mortgages totaling $559,131 at the time of trial.

12 {3} Prior to the marriage, Wife, age fifty-four at the time of the marriage, worked

13 in marketing for seventeen years and owned her own business for twelve years. Wife

14 testified that she donated real property in Puerto Rico to her daughters in September

15 2009. However, she continued to make mortgage payments and receive rent from the

16 property. The district court characterized the donation as “alleged” and found that

17 Wife’s testimony was not credible. During the marriage, Wife worked at Husband’s

18 dental practice earning a gross monthly income of $5,000. The district court found

19 that during the marriage, “Wife breached her fiduciary duty and embezzled money

2 1 and stole property from Husband’s dental practice [in] the sum of $48,341.” Husband

2 was subsequently reimbursed through insurance for those losses.

3 {4} The parties separated on September 9, 2012, after less than two years of

4 marriage, and Husband filed for a petition for dissolution of marriage on October 26,

5 2012. A minute order, filed on February 22, 2013, set an interim division of income

6 and expenses. At the time the interim order was entered, Husband’s monthly income

7 was found to be $9,026 and Wife’s monthly income was found to be $2,860. The

8 district court entered a partial divorce decree dissolving the parties’ marriage on June

9 21, 2013. Following several days of trial, the district court entered a final decree and

10 judgment (final judgment) on October 4, 2013.

11 {5} The district court’s final judgment included factual findings and rulings

12 regarding the distribution of the parties’ property including the real estate, bank

13 accounts, and other assets. We only address those findings and rulings that are

14 relevant to this appeal. With regard to the Spring Creek residence, the district court

15 found that “[a]fter deducting the mortgage debt and Husband’s sole and separate

16 down payment the Spring Creek residence has a negative value” and that “the

17 expenditures on the Spring Creek residence during the marriage” did not increase its

18 value. Husband was awarded the Spring Creek residence as his sole and separate

19 property, and the district court found “no community lien” to have been created

3 1 against this residential property. Based upon several enumerated factors, the district

2 court also ruled that “[e]ach party shall pay their own attorney fees[.]”

3 {6} On appeal, Wife contests three of the district court’s findings of fact or legal

4 rulings: (1) that the Spring Creek residence was not subject to a community lien, (2)

5 that Wife breached her fiduciary duty to Husband by embezzling a significant amount

6 of money from his dental practice, and (3) that each party pay their own attorney fees.

7 DISCUSSION

8 I. The Community is Entitled to a Lien on Separate Property That 9 Depreciates in Value When Community Funds Were Used to Pay the 10 Mortgage That Benefitted the Separate Property

11 {7} Wife argues that the district court erred in declaring that no community

12 property lien was created against Husband’s separate property assets. Whether the

13 district court erred in finding no community lien on the Spring Creek residence is a

14 question of law that we review de novo. See NMSA 1978, § 40-3-8(A), (B) (1990)

15 (defining separate and community property); Styka v. Styka, 1999-NMCA-002, ¶ 8,

16 126 N.M. 515, 972 P.2d 16 (“[W]e review questions of law de novo.”).

17 {8} “In New Mexico, property takes its status as community or separate property

18 at the time and by the manner of its acquisition.” Zemke v. Zemke, 1993-NMCA-067,

19 ¶ 18, 116 N.M. 114, 860 P.2d 756 (internal quotation marks and citation omitted).

20 “[A]ll property brought to . . . marriage by either spouse or acquired during marriage

4 1 by gift, bequest, devise or descent, together with its rents, issues and profits[,]” is

2 separate property. Portillo v. Shappie, 1981-NMSC-119, ¶ 12, 97 N.M. 59, 636 P.2d

3 878. All property “acquired by either or both spouses during marriage, which is not

4 separate property,” as well as its rents, issues, and profits, is community property. Id.

5 However, “[a]pportionment is appropriate when separate property is enhanced

6 through community efforts [(funds),] or when an asset is acquired with both separate

7 and community funds.” Trego v. Scott, 1998-NMCA-080, ¶ 5, 125 N.M. 323, 961

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Related

Muse v. Muse
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Jurado v. Jurado
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Allen v. Allen
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Dorbin v. Dorbin
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Valento v. Valento
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Weddington v. Weddington
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Talley v. Talley
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Rhoades v. Rhoades
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Dwyer v. Davis
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