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Hatcher v. Hatcher8/29/1996
court's award of the real properties to husband as his separate property was based on the erroneous determination that the insurance proceeds were exclusively the property of husband. Indeed, in order to award the real properties to husband as his separate property, the court had to find that the insurance proceeds with which the residence and the apartment complex were purchased belonged solely to husband. Blaine v. Blaine, 63 Ariz. 100, 108-09, 159 P.2d 786, 790 (1945) (where claim is made that property purchased during marriage is the separate property of one of the spouses, fund with which property was acquired must be clearly shown to have been separate property of such spouse). Because the trial court erred in this finding, the award to husband cannot stand, and we must remand this case to the trial court for additional fact-finding and Disposition. Because the funds used to purchase the real properties were part community funds and part husband's separate property, the trial court must revisit wife's claim that, in placing title in joint tenancy with wife, husband made a gift of his separate property to her. See, e.g., Cely v. DeConcini, McDonald, Brammer, Yetwin & Lacy, P.C., 166 Ariz. 500, 506, 803 P.2d 911, 917 (App. 1990) (where further fact-finding is required after reversal on appeal, reviewing court will remand to trial court for resolution of unresolved issues).
Where separate funds of one spouse have been used to purchase real property and title has been taken in joint tenancy, a presumption arises that a gift to the non-contributing spouse was intended. Battiste v. Battiste, 135 Ariz. 470, 472, 662 P.2d 145, 147 (App. 1983). The spouse seeking to overcome that presumption has the burden of establishing the separate character of the property by clear and convincing evidence. Cupp, 152 Ariz. at 164, 730 P.2d at 873. The presumption of gift cannot be overcome simply by husband's after-the-fact testimony that the property was placed in joint tenancy for some other reason than as an intended gift. Valladee v. Valladee, 149 Ariz. 304, 307, 718 P.2d 206, 209 (App. 1986). If, after considering the evidence in light of these principles, the trial court sustains the presumption of gift, the community and joint property must be equitably divided between the parties; if wife's claim of gift is again rejected, the trial court must assign each spouse's separate property and then equitably divide community and joint property. A.R.S. § 25-318(A).
Conclusion
We find that the portion of the VPA disability proceeds which represented compensation for husband's loss of earning ability during marriage should have been classified as community property. The part of the disability benefits representing post-dissolution diminution in earning capacity was his separate property. The trial court must determine whether husband's use of some of these disability proceeds classified as separate property to purchase the residence and apartment complex in joint tenancy with right of survivorship constituted a gift to his wife. We reverse the trial court's classification of the VPA disability proceeds and the residence and apartment complex as husband's separate property, and remand with an order directing additional fact-finding and Disposition, including an equitable division of the properties between the parties, in accordance with this opinion and pursuant to A.R.S. § 25-318(A).
JON W. THOMPSON, Judge
Concurring
RUDOLPH J. GERBER, Presiding Judge
EDWARD C. VOSS, Judge
Page 1 2 3 4 Arizona Personal Injury Attorneys
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