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Cash Compensation for the Other Spouse’s Waste of Community Assets

Posted on : December 27, 2016, By:  Christopher Hildebrand
Cash Compensation for the Other Spouses Waste of Community Assets

Cash Compensation for the Other Spouse’s Waste of Community Assets

Arizona law gives family courts authority to divide community property equitably between divorcing spouses. This can mean giving one spouse more property if the other has wasted or disposed of community assets. But how about money? Can a court order one spouse to pay the other money to compensate for a waste of community assets? In Martin v. Martin, 752 P.2d 1038 (Ariz. 1988), the Arizona Supreme Court addressed this issue.

Facts and Procedure

Mrs. Martin and Mr. Martin were married for 29 years and traveled widely for Mr. Martin’s job. In 1979, husband’s work took him to California. The couple bought a retirement home in Arizona. Wife moved there in December 1979 and husband sent her living expenses and paid the mortgage. Throughout the next three years, Mr. Martin had total control over the parties’ assets. In 1982, wife sued for dissolution.

In April 1983, the parties stipulated that Mr. Martin would pay Mrs. Martin temporary monthly maintenance payments of $1,725. Under the same agreement, Mr. Martin got the authority to withdraw certain amounts from their joint savings accounts.

Cash Compensation for the Other Spouses Waste of Community Assets.

Cash Compensation for the Other Spouses Waste of Community Assets.

In the decree of dissolution, the trial court divided the parties’ community property. The court awarded assets totaling $184,843 to wife and $215,211 to the husband. He also ordered Mr. Martin to pay Mrs. Martin $46,688. This represented her share of the community income earned during their three years of separation. It was based on their gross income with certain deductions, like tax payments and mortgage payments.

 

The trial court ordered the husband to pay Mrs. Martin the additional sum of $9,473. The court found that he withdrew more money from the community accounts than was allowed under the order. Husband appealed.

The Court of Appeals ruled that trial court did not have the authority to make money awards. It reversed the awards of $46,688 and $9,473 and remanded the case to the superior court for entry of a revised judgment.

The Supreme Court accepted Mrs. Martin’s petition for review.

Arizona Law

The Arizona Supreme Court reviewed the statutes setting out a superior court’s authority in a divorce case. The statutes direct the superior court first to assign each spouse his or her sole and separate property.

Next, they direct the court to equitably divide community property and other property held in common. When dividing the property, the statute allows the court to consider wrongful, unreasonable and improper uses of the common property.

The court can compensate one spouse for the misuse of the common property by the other. The statute specifically allows it to award the innocent spouse a greater share of community property to offset the lost property.

The Supreme Court found a clear legislative intent to ensure a fair division of common property. The Court also noted another statutory method to compensate an innocent spouse for the misuse or destruction of common property by the other. Under A.R.S. § 25-319(B)(11), the superior court can consider excessive or abnormal expenditures as factors in making an award of spousal maintenance. The trial court, in this case, did not award wife more marital property to compensate her for any dissipation. Nor did it factor the dissipation into a larger award for maintenance.

The trial court simply arrived at the amounts improperly expended and ordered Mr. Martin to pay Mrs. Martin her share.

 

Authority to Order Money Judgment

The Arizona Supreme Court cited its ruling in Weaver v. Weaver, 643 P.2d 499 (1982). That case held that no Title 25 statute authorized monetary compensation to one spouse for the destruction of separate property by the other.

However, the present case does not involve separate property but community property. In statutory interpretation, the courts must determine and give effect to the legislative intent. Here, however, the history of the statute does not provide assistance in determining its meaning. It came from the Uniform Marriage and Divorce Act but was amended extensively. Therefore, the Court found little assistance from the uniform act.

Instead, the Court analyzed the language used in the statute to describe its purpose. Its obvious purpose was to provide a standard for the disposition of community and common property in a dissolution proceeding.

The core is an equitable division of property made without regard to marital misconduct. However, under the law, a court can consider excessive or abnormal expenditures of the community property. The court can make the division of property equitably. It does not necessarily need to be made in kind.

Financial Compensation for Waste of Community Assets by a Spouse.

Financial Compensation for Waste of Community Assets by a Spouse.

This language supports the position that the statute authorizes the court to make a compensatory award of money. Sometimes, the Supreme Court noted, it is impossible to effectively divide the property of the spouses.

The statute authorizes the court to make an equitable division of property in that case. It can award the property to one spouse and money to the other spouse representing that spouse’s share of the property. Similarly, A.R.S. § 25-318(C) allows a court to impress a lien upon the marital property awarded to a spouse. This can be done to secure the payment the other spouse’s interest. And A.R.S. § 25-318(A) permits the court to award a sum of money to one spouse to compensate for their interest in community assets awarded to the other.

The Court found that this authority also allows a money award for the value of community assets dissipated by one spouse. It found case law to that effect from Delaware, Maryland, and Missouri. The Supreme Court ruled that this should also be the rule applied in Arizona.

Disposition

The Arizona Supreme Court vacated that portion of the opinion of the Court of Appeals dealing with the issue decided here. It affirmed the judgment of the superior court.

Jennifer, thank you for being my attorney. I could not have been more pleased with the outcome of my family court hearing. Everything you have done for me throughout this case reflects in the final ruling of the judge. You helped me keep my head together and taught me a lot about myself as a person. I learned so much about my life from observing and listening to you. I will take all the advice you gave me to continue taking responsibility for my choices, continue to put the kids' needs first, and always stay truthful. Your diligence, dedication, and persistence in my case made what seemed impossible, possible. You are a wonderful person and an amazing attorney and I am stronger and more confident because of you.
A Google User
A Google User
20:31 20 Sep 17
I just want to again thank the Firm for working with me all that it has. I could not have done anything without everyone's assistance. You, Chris and Stacey have been and continue to provide me with compassion and hard work towards my case. Also a very special thanks to Kip for taking my case in the beginning. Also continued support from him and his dedication to providing me with his expertise in this matter.
A Google User
A Google User
21:41 07 Nov 17
After interviewing several law firms, I came across Jennifer Shick, and her firm, who I hired to represent me for my Family Court case. Jennifer has extensive knowledge of the law and is determined to bring the truth to every issue involved within the case. Throughout my case, Jennifer was prepared meticulously as well as went above and beyond all of my expectations. Even when the other party tried to differ from the truth, lie to the Judge, and turn situations around, Jennifer remained attentive and provided substantial evidence to show the judge the facts as well as the proof to support what was the best interests of my children. Additionally, Jennifer helped me endure many difficult experiences, situations and inspired me to remain positive throughout the entirety of my case. Her kindness, compassion, and professionalism helped me through very difficult times and made the process feel a thousand times lighter on my shoulders. She truly has my children and my best interest at heart and I trust her perspective as well as her honesty on each and every aspect of my case. She lessened the burden on my shoulders and even when I felt like the case was not going to go in my favor, Jennifer was open-minded and reassured me that the Judge would, in fact, see the truth, which he did and the case went in my favor. After nine months of court, everything finally came together. I cannot declare how much Jennifer has been an outstanding attorney. She addressed each and every issue with diligence, she cares about her clients and their families. Jennifer genuinely cares about her clients and her dedication to the details of the case was remarkable. Overall, I am extremely pleased with Jennifer’s services and I am truly thankful that I was so blessed to have her represent my children and me. I highly recommend Jennifer as one of the best attorneys in Arizona and if the situation ever arises, I will definitely have her represent my children and me again.
Google User
Google User
14:58 04 Oct 17
Dear Stacey and Kip, How can I ever thank you enough for helping me through the most difficult time in my life? I couldn't put into words my heartfelt gratefulness. You both were so compassionate and professional at every given moment throughout this process with me. I thank you from the bottom of my heart. You helped me to regain my freedom.
A Google User
A Google User
16:03 22 Nov 17
I was a client of Attorney Kevin Park for the dissolution of a divorce in 2016. And since I had never had the need to hire an attorney before for any purpose, I was somewhat apprehensive of the process. But the very calm and professional demeanor of Mr. Park eased my fears. He adeptly answered all my questions and I clearly knew the process and what to expect. And the skilled manner he communicated with opposing counsel was perfect. When it came down to negotiating with my spouse’s counsel, I knew I had selected the best attorney for my situation. What I noticed and appreciated was that he was using just the right amount of pressure with opposing counsel as was necessary. If you find yourself in this situation, you will want a seasoned professional like Mr. Park on your side. I'm very grateful that he was my attorney and not the opposition!
A Google User
A Google User
22:14 28 Jun 17
Chris is a smart and aggressive attorney for his clients. Chris always tries to reach a fair settlement of his cases. I’ve represented clients when Chris was the opposing counsel and while he is professional and amicable to work with, he does not back off on what he needs to do for his client
A Google User
A Google User
18:16 18 Sep 17
Kevin Park of Arizona Estate Planning Attorneys was just what I needed for my divorce. He was very approachable and personable. He was quick to recognize what I needed and provided it quickly and efficiently. I hope to never need a divorce lawyer again, but if I know anyone else who does, I will definitely recommend Kevin.
A Google User
A Google User
19:22 23 Aug 17
I feel that Tracey Van Wickler is certainly one of the best family lawyers around. She is logical, intelligent, and truly cares. Tracey always does what is in the clients best interest, does it well, timely and with integrity. She is good at keeping her clients informed as to what is going on and clear in her communication both written and verbally. I have recommended Tracey to other people and will continue to recommend her. I recommended Tracey to someone who was having issues with their ex-wife and his response was, “I know how good she is because I went up against her and she ate me for lunch”. This same person was so impressed with her, he even recommended her to someone else, WOW, that is impressive! I am exceptionally happy with her attention to detail, her ability to explain things in ways that are easy to understand, as well as her ability to keep everyone focused on the most important things. I would recommend Tracey to anyone who may be in need of her services.
A Google User
A Google User
17:44 23 Jun 16
I retained Hildebrand Law after interview a number of firms in the valley. Working with Michael C. was incredibly easy and informative. My case progressed in such a organized and thought out way to ensure that my needs were met. Michael was incredibly proactive and was able to see far ahead into my case to steer clear of some roadblocks. I would not hesitate to recommend Michael Clancy, and Hildebrand Law in general, to anyone.
Bassam Ziadeh
Bassam Ziadeh
21:20 02 Apr 18
I have worked with Hildebrand law for about 8 years. They are always ready to serve, provide guidance and give you a few options. When they provide you options they also take the time to walk you through the pros and cons of each and give you a recommendation of what is best, but will listen to you and support whatever course you choose after making and educated choice. I’d recommend them to my closest friends and feel Chris Hildebrand is now a friend to me.
Larry Flint
Larry Flint
21:53 27 Feb 18
Despite the unfortunate situation I found myself in, Chris Hildebrand @ Hildebrand Law helped me maneuver every step with professionalism, expertise, and even a sensitivity that was an added bonus.Chris and his staff helped me even when I didn't know I needed the help. In other words. . . they made sure we did not leave anything undone. And in the rare instance we needed the expertise of another professional, Chris knew exactly who to recommend.Chris also knew, because of his experience, what to anticipate down the road of litigation. That meant we were better prepared to meet the challenges head on, which lead to a more equitable and fair outcome. I appreciated that Chris did his best to meet my every need in a timely fashion, even if I had a simple question that required only a phone call or e-mail or if we needed to talk face-to-face.I highly recommend Chris Hildebrand @ Hildebrand Law, PC.
Sam Franchimone
Sam Franchimone
22:09 12 Sep 13

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