In re the Marriage of: BILLY WILLIAM BUCKHOLTZ, Petitioner/Appellant,
MIRTA ELIZABETH BUCKHOLTZ, Respondent/Appellee.
from the Superior Court in Maricopa County No. FN2016-091038
The Honorable Theodore Campagnolo, Judge
Shumway PLC, Mesa By Steven H. Everts Counsel for
Berkshire Law Office, PLLC, Tempe By Keith Berkshire
(argued), Erica L. Gadberry Counsel for Respondent/Appellee
Paul J. McMurdie delivered the opinion of the Court, in which
Presiding Judge Jennifer B. Campbell and Judge Kent E.
Billy William Buckholtz ("Husband") appeals the
decree dissolving his marriage to Mirta Elizabeth Buckholtz
("Wife"). We hold when a marital separation
agreement is presented to the superior court under Arizona
Revised Statutes ("A.R.S.") section 25-317, the
superior court must determine whether the agreement is
enforceable, and if the agreement is enforceable, determine
whether it is "unfair." We also hold that parties
to a separation agreement may consider their sole and
separate property when creating an agreement, and if they do
so, the superior court also may consider the parties'
sole and separate property in determining whether the
agreement is unfair under A.R.S. § 25-317. We emphasize,
however, that this is so only if they have acted with full
knowledge of the nature of the property involved, including
knowing whether the property at issue is a community or
separate asset. For the following reasons, we reverse and
remand the decree in this case for proceedings consistent
with this opinion.
AND PROCEDURAL BACKGROUND
Husband and Wife were married in 1978. On June 3, 2013, after
individually consulting with attorneys, they signed a
Marriage Separation Agreement (the "Agreement") to
divide their property and debts. The Agreement stated Husband
"will remain" in their marital residence and the
parties "agreed upon a division of all assets, owned or
possessed by them as marital property or separate property .
. . [and] are in possession of all of those assets to which
he or she is respectively entitled." The parties also
agreed that any "debt accumulated as of the date of this
Agreement is the debt of the individual party, regardless if
the debt was incurred as a result of joint credit." The
Agreement did not specifically reference any other assets or
The parties have raised arguments regarding two significant
assets. The first asset is the parties' home.
Approximately one month before signing the Agreement, the
house was appraised at $257, 500. Around the time the
Agreement was signed, Wife quit-claimed all right, title, or
interest in the house to Husband. Husband refinanced the
house, and the same day the parties signed the Agreement,
Husband transferred $127, 435 to Wife, approximately one-half
of the house's equity.
The other significant asset is Wife's 401 (k) account.
After the parties married, Wife began working for an airline
and in April 2013, her 401(k) was valued at $152, 122. On
June 3, 2013, in a separate document, Husband quit-claimed
all right, title, or interest in Wife's 401(k) to Wife
"as her sole and separate property." It is unclear
why the parties used a "quit-claim deed" to
transfer Husband's interest in Wife's 401(k), but
Husband testified he knew that by signing the document he was
giving up his rights to Wife's 401(k).
The Agreement, however, did not reference Wife's 401(k)
account or the equity in the community home. The Agreement
also did not reference a monthly benefit payment Husband
receives from the military related to his service before the
parties married. The parties and the superior court referred
to Husband's military benefit as both a disability
payment and a pension. Regardless of the type of military
benefit, both parties agree on appeal the benefit is
Husband's sole and separate property.
More than three years after Husband and Wife signed the
Agreement and the "quit claim deeds," Husband
petitioned for dissolution of the marriage. Neither party
sought spousal maintenance and they do not have any minor
children; therefore, the only issue before the court was
division of the parties' assets and debts. In his
petition, Husband admitted that the parties entered into the
Agreement, but alleged that provisions of the Agreement were
not fair and equitable. At an evidentiary hearing, Husband
argued the Agreement unfairly and inequitably divided the
parties' home and Wife's 401(k) because Wife received
approximately half the equity in the house and all of her
401(k) account. Husband claimed he was entitled to fifty
percent of the value of Wife's 401(k) as of the date the
parties signed the Agreement, plus any increase in value he
would have obtained from his share between that date and the
termination of the community estate.
Following the evidentiary hearing, the superior court entered
a decree of dissolution. The court found the parties freely,
knowingly, and voluntarily entered into the Agreement, and
that the Agreement was valid and binding and fairly and
equitably divided the community property and debts as of June
3, 2013. The court then incorporated the Agreement into the
decree. The court affirmed the house as Husband's
separate property pursuant to the Agreement; affirmed the
payment of $127, 435 to Wife as her share of the community
interest in the house; and awarded Wife her 401(k), with
Husband having no claim to the account. The court confirmed
Husband's "military pension" was his sole and
separate property, with Wife having no claim to the benefit.
The court also distributed the parties' community debts
and other community assets, including household furnishings,
cars, life insurance policies, and bank accounts.
Pursuant to Arizona Rules of Family Law Procedure 82 and 83,
Husband moved to correct the findings of fact, for an amended
judgment, and for a new trial. The court denied the motions.
Husband timely appealed, and we have ...