Enforce Property Settlement Agreement in Arizona

The Scottsdale community property attorneys at Hildebrand Law, PC want you to understand how to enforce a property settlement agreement in Arizona. You need to also know the limitations on how you may enforce a property settlement agreement in Arizona. The Arizona Supreme Court in the case of Proffit v. Proffit determined whether the wife in the case could be held in contempt of court for failing to turn over funds she received as a result of cashing in husband’s sole and separate bonds owned by the husband prior to the parties’ marriage.

The defendant, Jeanne C. Proffit, was involved in a divorce filed by her husband on May 4, 1966. Before the marriage, the plaintiff, Delbert Proffit, owned United States Series E Savings Bonds valued at $6300.

Husband reissued those bonds during the parties’ marriage in both he and his wife’s name on March 11, 1966 for the sole purpose of ensuring those bonds would be inherited by Jeanne in the event of his death.

Jeanne was ordered by the Arizona trial court to transfer possession of the United States Savings Bonds, as well as certain jewelry, to Delbert. The court specifically found the bonds were Delbert’s sole and separate separate property because he owned the bonds prior to the parties’ marriage and, further found, Delbert had only had them reissued in case of his untimely death and did not intend to transfer those bonds to the community.

Wife returned the rings in a timely manner, but admitted to cashing the savings bonds prior to the separation, without the husband’s consent or permission. The trial court, therefore, issued an order requiring Jeanne to pay husband back the value of his separate property..

Jeanne failed to paid Husband the $6300 as ordered and,therefore, failed to comply with the court’s order. Delbert filed a Petition for Contempt against Jeanne for failing to comply with the order to pay him the $6300 and she was subsequently held in contempt of court and was ordered to be incarcerated for her willful and contemptuous failure to comply with the court’s order.

Jeanne filed a timely appeal regarding the authority of the court to hold her in contempt for non-payment of the $6,300 to enforce the property settlement agreement. The Arizona Supreme Court held that the trial court had the authority to enter an order for Jeanne to turn over the money she had in her possession from the sale of the bonds as that constituted an order to return the “res” of Delbert’s sole and separate.

The appellate court indicated a trial court does not, pursuant to Arizona Revised Statute Section 25-318, have the authority to order Jeanne to divest herself of her sole and separate property, but it does have authority to order her to return Delbert’s sole and separate property that is in her “possession”.

The Supreme Court, however, held that the trial court was mistaken in holding Jeanne in contempt of court because the issue pertained to the division of property, as opposed to spousal maintenance or child support, which cannot be enforced by contempt. Specifically, the Arizona Supreme Court held that Arizona constitutional provisions in Article II, Section 18 barring imprisonment for the collection of a debt applied to the case and reversed the trial court’s ruling holding Jeanne in contempt of court and ordering her incarceration, citing with authority the prior Arizona Supreme Court case of Stone v. Stidham.


Enforce Property Settlement Agreement | What You Need to Know

The take away from this case is that an Arizona divorce court may order a party to return the other person’s sole and separate property to enforce property settlement agreement in Arizona and, further, can order the parties to exchange items of community property that is in the other’s possession. The court may also order a party to pay a sum of money to one party to either equalize the division of community property or to award a spouse for the value of his or her sole and separate property sold or transferred by the other spouse. The court does not, however, have the authority to hold a party in contempt of court for failing to pay a sum of money so ordered; thereby leaving the spouse whose sole and separate property was wrongfully disposed of having to rely upon other civil collection remedies, such as writs of execution, attachment, and/or garnishment.


Enforce Order for Return of Separate Property

In a similar case, the Court of appeals in the Thorn v. Thorn case addressed whether a trial court had the authority to order a spouse to return the sole and separate funds of the other spouse in a divorce decree.

Susan Thorn had signed over to Stuart Thorn about $940,000 of stocks and bonds before the divorce. Evidence was conflicting about why she did so; he claimed it was a gift, she claimed it was under duress. The divorce court ordered Stuart to return the portfolio or its equivalent to Susan, and Stuart appealed that order.

The Court of Appeals reviewed this order under the abuse of discretion standard, as the question of whether something is a gift requires a weighing of facts. The superior court judge found that Susan did not intend the transfer as a gift, citing the “proxy” agreement the couple had likewise signed that gave Susan the right to demand the return of the stocks if she had buyer’s remorse. The appellate court found that this was not an abuse of discretion.


Order to Return Stocks or their Equivalent Not Money Judgment

Next, the Court reviewed Stuart’s argument that the superior court’s order that he return the stocks and bonds or – if they were no longer in the same form, that he give Susan $940,000, minus the value of any stock already returned.

In Arizona, a divorce court can assign each spouse’s separate property to her, but cannot order one spouse to pay a money judgment to the other for damage to separate property, pursuant to the Arizona Supreme Court decision in Weaver v. Weaver. The Court of Appeals, however, refused to characterize the lower court order as a money judgment. Rather, it found that the order simply required Stuart to return Susan’s separate property, minus the value of any of it that was previously returned. This was, it held, well within the court’s authority.