Shurman v. Shurman

CourtCourt of Appeals of Arizona
DecidedSeptember 21, 2021
Docket1 CA-CV 21-0038-FC
StatusUnpublished

This text of Shurman v. Shurman (Shurman v. Shurman) 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
Shurman v. Shurman, (Ark. Ct. App. 2021).

Opinion

NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

In re the Marriage of:

TAMBRALA G. SHURMAN, Petitioner/Appellant,

v.

BRUCE D. SHURMAN, Respondent/Appellee.

No. 1 CA-CV 21-0038 FC FILED 9-21-2021

Appeal from the Superior Court in Yavapai County No. V1300DO201980285 The Honorable Christopher L. Kottke, Judge Pro Tempore

AFFIRMED

COUNSEL

Davis Miles McGuire Gardner, Tempe By Spencer T. Schiefer Counsel for Petitioner/Appellant

Mull & Brown, PLLC, Prescott By John G. Mull Counsel for Respondent/Appellee SHURMAN v. SHURMAN Decision of the Court

MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which Presiding Judge Cynthia J. Bailey and Judge Jennifer M. Perkins joined.

C R U Z, Judge:

¶1 Tambrala G. Shurman (“Wife”) appeals from the superior court’s order granting Bruce D. Shurman’s (“Husband”) Arizona Rule of Family Law Procedure (“Rule”) 83 motion to alter or amend the judgment. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Husband and Wife moved to Arizona to co-own and operate a bed and breakfast business. They purchased a property that contained multiple rental structures, including the parties’ marital home. Husband and Wife took out two loans totaling $130,000 to build an additional rental structure on the property. Later, Husband and Wife borrowed an additional $150,000 to purchase a second property, which contained a single-family home. The three loans did not directly encumber the properties and were not secured by the properties. At the time of the divorce, the mortgage balance on the first property was about $274,000.

¶3 Husband and Wife did not pay themselves a salary but used the business income to pay their personal expenses. The parties did not segregate their business and personal finances and failed to maintain profit or loss statements, balance sheets, bookkeeping, monthly statements, or any other regular business records.

¶4 Wife petitioned for dissolution in 2019 after twenty-one years of marriage and two children, one of whom was a minor at the time of the dissolution proceedings. Both Husband and Wife sought ownership of the real property and bed and breakfast business. The court held an evidentiary hearing to determine the separate values of the parties’ property and business.

¶5 Following the hearing, the superior court found that neither party provided evidence of the business’ value, concluding it had a value of zero. The court found the parties’ real property was worth $983,772.98, but it offset the value of the property by the amount of the mortgage and

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the three loans. The court awarded the business and real property to Wife and ordered her to pay an equalization payment to Husband of $144,483.24, to be paid in monthly installments of $1,000.

¶6 Husband filed a Rule 83 motion to alter or amend the decree. The court granted Husband’s motion, finding the division of property to be inequitable. The court ordered the parties’ business be valued, and the business and real property sold and divided equally.

¶7 Wife timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(2).

DISCUSSION

¶8 Wife argues the superior court erred in granting Husband’s Rule 83 motion. We review a court’s ruling on a motion to alter or amend for an abuse of discretion. Stock v. Stock, 250 Ariz. 352, 354, ¶ 5 (App. 2020). Under Rule 83, “[t]he court may on its own or on motion alter or amend all or some of its rulings” if “the decision, findings of fact, or judgment is not supported by the evidence or is contrary to law.” Rule 83(a)(1)(H). The superior court found the property division in the original decree was inconsistent with the law, the business valuation finding was contrary to the evidence, and the amount of the equalization payment to Husband was error.

¶9 Under A.R.S. § 25-318(A), the court must “divide the community, joint tenancy and other property held in common equitably, though not necessarily in kind.” Generally, “all marital joint property should be divided substantially equally unless sound reason exists to divide the property otherwise.” Toth v. Toth, 190 Ariz. 218, 221 (1997). The superior court, be it the judge originally assigned to the case or a subsequently-assigned judge, enjoyed the discretion to modify its orders by finding that the decree was inequitable and failed to divide the parties’ property substantially equally. See Rogone v. Correia, 236 Ariz. 43, 48, ¶ 10 (App. 2014) (holding “consideration of a Rule 60 motion by a newly assigned judge raises no jurisdictional concerns”); see also Peterson v. Speakman, 49 Ariz. 342, 348 (1937) (“The jurisdiction of the court, no matter by which judge it is exercised, is that of the whole court, and not of one judge nor division thereof.”). This finding was not error.

¶10 Wife, however, contends the record supported the property division in the original decree and that a larger equalization payment to Husband was unnecessary because the business had no value. Wife argues the business’ tax returns support this conclusion and demonstrated the bed

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and breakfast reported losses in its first couple years of operation, and that since 2017 had generated only minimal profits.

¶11 While “[t]he valuation of assets is a factual determination that must be based on the facts and circumstances of each case,” and the court “has discretion to rely on various methods of valuing a professional practice,” insufficient evidence supported the court’s findings in the original decree, because they were not based on a recognized valuation method. Kelsey v. Kelsey, 186 Ariz. 49, 51 (App. 1996). After hearing evidence at trial, the court found that “neither party presented evidence as to the value of the parties’ business.” The court noted the tax returns for the business “reflect minimum income yielded” since 2017, and “considered that the family is covered for health insurance through Arizona Health Cost Containment System.” The court concluded the “business has not been a high-income earning endeavor,” and with “no solid evidence[] upon which to assign a value to the parties’ business,” it “assigned zero value.”

¶12 The court’s finding that the business had no value contradicted evidence that the business generated some profits in the years before the community ended and provided for the parties’ personal expenses during the marriage. Wife testified that the parties had personal monthly expenses of around $7,700, which were paid with business income. Further, the tax records showed that the business’ income increased every year since it opened; this was not compelling evidence the business had no value when the community ended. We agree that the court’s original decree erroneously valued the business at zero.

¶13 It was also inequitable to award the business to Wife but assign half of the business’ debt to Husband. Wife testified that the parties took three loans for business purposes, and pursuant to the parties’ “business plan.” In her brief, Wife admits the loans are “associated with the real estate and business.” The agreement for one loan named the community business as the borrower. The court offset the value of the parties’ real property, and Husband’s equalization payment, with the amount of the loans, even though that debt did not directly encumber the property.

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Related

Toth v. Toth
946 P.2d 900 (Arizona Supreme Court, 1997)
Kelsey v. Kelsey
918 P.2d 1067 (Court of Appeals of Arizona, 1996)
Marriage of Kohler v. Kohler
118 P.3d 621 (Court of Appeals of Arizona, 2005)
Peterson v. Speakman
66 P.2d 1023 (Arizona Supreme Court, 1937)
Dole v. Hon. blair/dole
463 P.3d 849 (Court of Appeals of Arizona, 2020)
Stock v. Stock
479 P.3d 859 (Court of Appeals of Arizona, 2020)
Rogone v. Correia
335 P.3d 1122 (Court of Appeals of Arizona, 2014)

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Bluebook (online)
Shurman v. Shurman, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shurman-v-shurman-arizctapp-2021.