Fraudulent Quit Claim Deed is Ineffective in an Arizona Divorce
In Arizona, a spouse signing over property by quitclaim generally gives up all interest in it. However, that isn’t always the case.
In Armer v. Armer, 463 P.2d 818 (1970), the Arizona Supreme Court considered several quitclaim deeds a spouse signed. It reviewed each to determine whether the spouse intended to relinquish her interest in the property.
Facts of the Case
Mr. and Mrs. Armer were married for 18 years and had four children. The divorce court divided their community property between the two of them, and Mr. Armer appealed the division. He particularly disputed the court’s ruling regarding two pieces of real estate. The court called them: 1. the Black Canyon property and 2. the Coon Creek property.
The Black Canyon Property
Husband argues that the Black Canyon property was his separate property rather than community property. However, wife asserted in the pleadings that it was community property and husband failed to contest this until appeal. Therefore he waived the issue.
This property was acquired in the names of both husband and wife. However, wife executed a quitclaim deed to Mr. Armer to take advantage of his Veterans’ Exemption from property taxation.
The Court found that Mrs. Armer did not intend the quitclaim of the land to be a gift of her interest. Rather, it was done for tax purposes. Since there was no clear intention by the wife to give away her interest, the community property character remains unchanged.
The Coon Creek Property
Husband claims that the Coon Creek property is not community property. He says it is the property of his mother, currently on the title as the owner.
During the Armer’s marriage, they purchased this house in Coon Creek, intending to live there. They took title to the property in both their names as joint tenants. But because there were no schools in the area, they did not move.
Unknown to Mrs. Armer and against her wishes, Mr. Armer’s mother paid off the principal of $20,000. Mr. Armer then suggested that his mother is allowed to live in the property and she agreed.
Mr. Armer then asked his wife to sign a quit claim deed of the property to his mother. He told her that the deed would never be notarized or filed. He said it was to provide security to his mother in case the two of them died in an accident. Again, she agreed. Husband then signed the deed and his mother filed it. Mrs. Armer did not learn what had actually happened until the divorce.
The trial court ruled that the money paid by Mr. Armer’s mother was a gift to the community. It further determined that the Armer’s had owned the property as tenants in common, not community property. Therefore each spouse could transfer their own interest.
It ruled that husband only transferred his own half to his mother since he acted fraudulently in getting Mrs. Armer to sign the deed.
The Supreme Court agreed that the money paid by husband’s mother was a gift to the community. The mother’s own testimony showed her intention to gift the money to the couple. However, it found that Mr. Armer and Mrs. Armer held the property as community property, not as tenants in common.
The Court found that husband acted fraudulently in notarizing and filing the deed after he promised he would not do so. A husband in Arizona is considered the head of the family. However, he is not entitled to sell community property without his wife’s permission.
The Court found that this fraud made the entire quitclaim deed void. The Deed did not transfer any interest in husband’s mother, but rather the entire property remained the community property of the Armer’s.
The Court reversed that part of the trial court’s judgment dealing with the ownership of Coon Creek Ranch. It sent the case back to the trial court to divide the Coon Creek property between Mr. and Mrs. Armer.