August, 2011 was a good month for me. You win some cases and you lose some, but we obtained some very favorable rulings in August. The biggest of these came down right at the end of the month. It involved a remarkable man whose gritty determination ultimately got him the justice he felt he deserved.
The case was a divorce that recently went to trial. My client, the husband (Husband), was a paraplegic before marrying his wife (Wife) about eight years ago. Husband brought significant assets into the marriage, including a house he owned free and clear. At the time he married Wife, Husband also had a medical malpractice case pending.
During the marriage, Husband borrowed all the equity out of his home and used it to buy a large tract of land. He also settled his med mal case and used 100% of those proceeds to buy two additional large tracts of land. In lieu of doing a will and trust, Husband put Wife’s name on the deeds to all three pieces of real estate so Wife would be provided for in the event of Husband’s death. These three large tracts of land were the primary assets in dispute at our trial.
At the time Husband put Wife’s name on the three properties, Husband was unaware that under Arizona law, when title to separate property real estate is taken in joint names (husband and wife) during a marriage, the law presumes that the separate property holder intended to make a gift of his separate property to the marital community. Under Arizona law, the burden is then on the person claiming the real estate should NOT be treated as marital property to prove by clear and convincing evidence that, by putting his wife’s name on the deed with him, he did NOT intend to make a gift to her.
If the court finds by clear and convincing evidence that a gift was not intended, the court will affirm the property to party who owned the real estate before the marriage. In the case of real estate acquired during the marriage with separate funds, the court will affirm the real estate to the party whose separate funds were used for the purchase. Overcoming the presumption of a gift has proven to be a tall order indeed. In most of the reported Arizona cases, the courts have found that a gift in fact was intended or at least that the evidence presented at trial was not clear-and-convincing enough to rebut the presumption of a gift. As a result, these issues seem to rarely go to trial. The separate property owner sees that it will be extremely difficult to overcome the presumption of a gift, so he decides to not spend the time and attorney’s fees to take his shot at trial.
Not so with my client. The child psychologist used in our case on the custody issues characterized my client as having an “indomitable spirit.” I believe that spirit and determination spurred my client on to pursue this case all the way to trial. He knew what was fair and right, and he was willing to go the distance to get it. He never gave up, and he never gave in. At trial, we presented evidence that when Husband put Wife’s name on the properties, he only intended to provide for Wife in the event of his death and that he did not intend to make a gift to her.
We also presented evidence showing that Husband would need over one hundred future costly surgeries and that his med mal proceeds (used to purchase two of the large tracts of land) would be needed to pay for his future bills related to the medical malpractice. We argued it would be extremely unfair to award Wife 50% of the properties when Wife would have no obligation to pay Husband’s future medical bills. We demonstrated that Wife had never even seen the large piece of land purchased with Husband’s home equity which he brought into the marriage and that it would be unfair to award her any portion of that piece based solely on the fact that Husband had put her name on the deed. Wife stated in her deposition and at trial that “it wasn’t about fairness” and that it was only “about what the law says.” Well, apparently fairness counted to our judge. At the end of the day, the judge found sufficient “clear and convincing” evidence to award the three parcels of land to my client, the Husband.
I recognize that the result obtained in this case was extraordinary and represents a broad departure from the result that would be indicated by the weight of the reported Arizona case law. Our win in this case is by no means a guarantee or even an indicator of future success in other cases. But I learned an important lesson from my client in this case and from the experience of taking this case to trial. It is this: If you try you may fail, but if you fail to try you definitely will not succeed.
Watch for my upcoming article titled “Unequal but Equitable Division of Assets in Divorce.” This article will give a somewhat more detailed explanation of Arizona law on these issues. Visitors to my website will be able to access this article by clicking on the “Articles” button on the home page.
Copyright © 2011 by Scoresby Family Law – J. Kyle Scoresby, P.C. All rights reserved.