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In re Marriage of Bobrow

Court of Appeals of Arizona, First Division

March 9, 2017

In re the Marriage of: PAM CASE BOBROW, Petitioner/Appellee/Cross-Claimant,
v.
KENNETH S. BOBROW, Respondent/Appellant/Cross-Claimant. [1]

         Appeal from the Superior Court in Maricopa County No. FN2013-004259 The Honorable Christopher T. Whitten, Judge

         AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

          Dickinson Wright PLLC, Phoenix By Steven D. Wolfson, Anne L. Tiffen Counsel for Petitioner/Appellee/Cross-Claimant

          Fennemore Craig, P.C, Phoenix By Alexander R. Arpad Co-Counsel for Respondent/Appellant/Cross-Claimant

          Fromm Smith & Gadow PC, Phoenix By Stephen R. Smith Co-Counsel for Respondent/Appellant/Cross-Claimant

          Judge Paul J. McMurdie delivered the opinion of the Court, in which Presiding Judge Diane M. Johnsen and Judge Jon W. Thompson joined.

          OPINION

          McMURDIE, Judge:

         ¶1 In these consolidated appeals, we resolve two issues of first impression in this state. The first issue is whether a divorcing spouse is entitled to reimbursement for paying community obligations while the petition for dissolution is pending, or whether a matrimonial presumption of a gift should apply. We hold there is no presumption of a gift once the petition for dissolution is filed. The second issue is whether the parties may stipulate to a prevailing-party standard for attorney's fees in a premarital agreement. We hold that such agreements violate public policy per se, and that courts should apply the statutory standards contained in Arizona Revised Statutes ("A.R.S.") section 25-324 (2016).[2]

         ¶2 Kenneth S. Bobrow ("Husband") and Pam Case Bobrow ("Wife") separately appeal from their decree of dissolution. Husband appeals the denial of his claim for reimbursement of community expenses he paid following the filing of the petition for dissolution. Wife appeals the denial of her request for attorney's fees.[3]

         ¶3 For the reasons stated below, we hold the superior court erred by finding that Husband's post-petition payments of community expenses constituted a gift, and remand to allow the superior court to determine the offset to which Husband is entitled. We affirm the denial of attorney's fees to Wife.

         FACTS AND PROCEDURAL BACKGROUND

         ¶4 When the parties married in 2002, they entered into a premarital agreement ("Agreement"). Although the parties stipulated in the superior court the Agreement was valid and enforceable, they disputed how the Agreement should be applied. What was not in dispute, however, was that the Agreement provided, in the event of a dissolution, Wife would not receive spousal maintenance.

         ¶5 On October 7, 2013, Wife filed a petition for dissolution. Thereafter, Husband voluntarily made monthly loan payments due on Wife's vehicle and the marital residence.[4] At trial, Husband requested an offset of approximately $77, 000 for Wife's share of the community expenses he paid toward the marital residence. Husband also requested an offset for the monthly loan payments that he paid toward Wife's vehicle. The superior court denied both requests, holding the payments were "gifts, " because Husband had voluntarily paid these expenses without an agreement for reimbursement.

          ¶6The court found, given the totality of the decree, neither party was entitled to attorney's fees under the prevailing-party standard in the Agreement. The court later denied, without comment, Wife's motion for a new trial on the issue of attorney's fees, which also sought fees pursuant to A.R.S. § 25-324.

         ¶7 Both parties filed multiple amended notices of appeal from the decree and the denial of post-decree motions.[5] The appeals were consolidated, and this court has jurisdiction pursuant to A.R.S. § 12-2101(A)(1), (5)(a).

         DISCUSSION

         A. Husband's Payments Toward Community Debt After the Filing of the Petition for Dissolution Were Not a Gift.

         ¶8 Matrimonial law in Arizona recognizes that, in certain circumstances, courts will treat a transaction between spouses as a gift unless contrary intent is evidenced at the time. For example, when real property is paid for with separate funds, but title is taken in the name of both spouses, a gift is presumed. Becchelli v. Becchelli, 109 Ariz. 229, 232 (1973), superseded on other grounds by statute, A.R.S. § 25-318, as recognized in Jordon v. Jordan, 132 Ariz. 38, 39 (1982). This presumption is based on the premise that "the [party] is discharging [his or her] legal duty to provide support for [the other spouse]." Becchelli, 109 Ariz. at 232. In order to overcome the presumption, the burden falls on the party claiming it is not a gift, and the evidence must be clear, satisfactory, and convincing. Blaine v. Blaine, 63 Ariz. 100, 108 (1945).

         ¶9 This court has extended the gift presumption to a situation in which a spouse voluntarily uses separate property to pay community expenses during the marriage. Baum v. Baum, 120 Ariz. 140, 146 (App. 1978). In such a case, the spouse is entitled to reimbursement from the other spouse "[o]nly if there is an agreement to that effect." Id. We explained:

To rule otherwise would be to require all married persons to keep detailed accounts of all the money they spent during the marriage and of all community expenses. We do not believe this is the intent of the Arizona statutes regulating ...

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