NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. 

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

In re the Matter of: 

STEVEN J. MONTGOMERY, Petitioner/Appellant,

v.

MELISSA LYNN DIVINE, Respondent/Appellee.

No. 1 CA-CV 16-0187 FC

Appeal from the Superior Court in Maricopa County

No. FN2014-003832

The Honorable Carolyn K. Passamonte, Judge Pro Tempore

AFFIRMED

COUNSEL

Wees Law Firm LLC, Phoenix

By James F. Wees

Counsel for Petitioner/Appellant

Sloma Law Group, Phoenix

By Melinda M. Sloma 

Counsel for Respondent/Appellee
MONTGOMERY v. DIVINE

Decision of the Court

2

MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in 

which Chief Judge Michael J. Brown and Judge Patricia Starr1 joined.

T H U M M A, Judge:

¶1 Steven J. Montgomery (Husband) appeals from a divorce 

decree awarding an equitable lien to Melissa L. Divine (Wife) on Husband’s 

separate real property. Because Husband has shown no error, the award is 

affirmed.

FACTS2 AND PROCEDURAL HISTORY

¶2 After marrying in 2006, in September 2014, Wife accepted 

service of Husband’s petition for dissolution. Wife sought a community lien

on the marital residence (which Husband acquired before marriage), 

asserting community funds had been used to pay two loans on the 

property. Wife asserted the house had appreciated in value during the 

marriage and sought an equitable lien for $44,922.23. Husband asserted the 

house had not appreciated in value during the marriage and there had been 

“no increase in the equity in the home for a meaningful assertion of a 

community lien.”

¶3 At trial, Husband testified that the community paid toward 

loans on the property but the value of the house had decreased during the 

marriage. Husband submitted a Zillow printout showing the value of the 

house in 2014 to be $363,813. Husband did not take issue with an appraisal 

valuing the house at $350,000 in September 2014, the month he served the 

petition for dissolution on Wife.

 

1 The Honorable Patricia Starr, Judge of the Arizona Superior Court, has 

been authorized to sit in this matter pursuant to Article VI, Section 3 of the 

Arizona Constitution.

2 On appeal, this court views the evidence in the light most favorable to 

upholding the decree entered after a bench trial. See Valento v. Valento, 225 

Ariz. 477, 481 ¶ 11 (App. 2010).
MONTGOMERY v. DIVINE

Decision of the Court

3

¶4 Husband testified that, in 2005, he obtained a loan on the 

property for approximately $265,000 to $270,000 to buy out his mother’s 

half interest in the house at a time when the fair market value was between 

$425,000 and $525,000. Husband confirmed a May 2005 disclosure showing

the loan was for $270,000, of which $267,782.40 was financed. Husband also 

acknowledged a bank statement showing the balance owed in July 2014 

was $235,025.27.

¶5 Husband testified that he obtained a home equity loan on the 

property for either $65,000 or $55,000 “when [the parties] were getting 

married.” Wife testified that Husband obtained the home equity loan before 

marriage. Husband further testified that the home equity loan had an 

outstanding balance of $35,914.77 in mid-August 2014.

¶6 In the decree, the superior court found the house was 

Husband’s sole and separate property and that, because mortgage 

payments were made on the property during the marriage, the property 

was subject to an equitable lien. The court found that (1) the house had 

depreciated in value during the marriage, (2) Husband had positive equity 

and (3) “community contributions to the mortgage have increased 

Husband’s equity in the property by paying down the principal.”

¶7 The court then found that “the first mortgage of $267,000.00 

was reduced to $235,025.27 during the marriage, resulting in a community 

contribution of $31,974.73.” The court found the home equity loan “was 

originally an obligation of $60,000 (the average between the $55,000.00 to 

$65,000.00 that Husband stated was the original [home equity loan]

balance). The [home equity loan] was reduced to $35,914.77 during the 

marriage, resulting in a community contribution of $24,085.23.”

Accordingly, the court found that the total community contribution to the 

reduction in principal on the loans was $56,059.96 and that Wife was 

entitled to half that amount, or $28,029.98, as her half interest in the 

community lien.

¶8 This court has jurisdiction over Husband’s timely appeal 

pursuant to Article 6, Section 9, of the Arizona Constitution and Arizona 

Revised Statutes (A.R.S.) sections 12-120.21(A)(1) and -2101(A)(1) (2017).3

 

3 Absent material revisions after the relevant dates, statutes and rules cited 

refer to the current version unless otherwise indicated.
MONTGOMERY v. DIVINE

Decision of the Court

4

DISCUSSION

¶9 Entitlement to, and value of, an equitable lien on separate real 

property are mixed questions of law and fact subject to a de novo review.

See Valento v. Valento, 225 Ariz. 477, 481 ¶ 11 (App. 2010). Factual findings 

by the superior court will be affirmed unless clearly erroneous. Id. When

community funds are used to pay the mortgage on separate property, the 

community is entitled to an equitable lien due to the expenditure of 

community funds. Id. at 481 ¶ 12; Barnett v. Jedynak, 219 Ariz. 550, 553–54 ¶ 

14 (App. 2009). Calculating the equitable lien depends on whether the value

of the property appreciated or depreciated during the marriage. Drahos v. 

Rens, 149 Ariz. 248, 250 (App. 1985) (appreciation); Barnett, 219 Ariz. at 555

¶ 21 (appreciation); Valento, 225 Ariz. at 482 ¶¶ 15–16 (depreciation).

¶10 Husband argues the evidence did not show whether the 

property had appreciated or depreciated in value during the marriage, 

meaning no community lien could be calculated. However, Husband 

advised the court in the joint pretrial statement that the house had not 

appreciated during the marriage. And Husband testified that the house 

depreciated in value during the marriage. Husband’s testimony that the fair 

market value of the house in 2005 (shortly before the marriage) was 

between $425,000 to $525,000 and his testimony acknowledging an 

appraisal valuing the property in September 2014 (the month he served the 

petition for dissolution) to be $350,000 provides a reasonable basis for the 

court’s finding that the house depreciated in value during the marriage.

¶11 Husband argues the court erred in awarding an equitable lien 

in the absence of specific information required to calculate the lien, 

including the purchase price of the house, its value as of the time of 

marriage, the amount of the loan reduction during marriage and the value 

of the house at the time of the service of the petition. The variables Husband 

identifies, however, are for an appreciation scenario. Drahos, 149 Ariz. at 

250; Barnett, 219 Ariz. at 555 ¶ 21. In a depreciation scenario, when there is 

positive equity, the court “recognize[s] a community lien in an amount 

equal to the reduction in principal indebtedness attributable to the 

community contribution.” Valento, 225 Ariz. at 482 ¶ 15. That is what the 

court did here.

¶12 Nor has Husband shown the superior court erred in finding 

positive equity remained. The court seems to have accepted Husband’s 

Zillow printout showing the value of the house in 2014 to be $363,813.

Husband testified that he had no issue with an appraisal showing the value 

of the property in September 2014 to be $350,000. The court found Husband 
MONTGOMERY v. DIVINE

Decision of the Court

5

owed $235,025.27 on the first loan and $35,914.77 on the second loan near 

the time of service of the petition. The record supports these factual 

findings. Based on those findings and comparing the value of the house at 

the time of service as testified to by Husband with the amount of loan debt 

at about that same time, the court did not err in finding positive equity 

remained at the time of dissolution.

¶13 Next, Husband challenges the calculation of the reduction of 

principal indebtedness, contending the superior court had no evidence of 

the amount of reduction and erred in making its own computation. The 

court found that the first loan was reduced from $267,000 (a proxy for the 

actual loan amount of $267,782.40) to $235,025.27 during the marriage and 

the home equity loan was reduced from “$60,000 (the average between the 

$55,000.00 to $65,000.00 that Husband stated was the original [home equity 

loan] balance) . . . to $35,914.77.” These findings are not clearly erroneous.

Husband does not challenge the $267,000 amount.

4 Husband also 

acknowledged a July 2014 bank statement, near the time of dissolution, 

showing the balance owed on that loan to be $235,025.27. The court 

appropriately exercised its discretion in averaging the range of figures 

provided by Husband as to the initial balance of the home equity loan 

shortly before the marriage and Husband testified that the home equity 

loan had an outstanding balance of $35,914.77 shortly before service of the 

petition for dissolution. Based on these findings, the court correctly 

calculated the amount of the principal reduction of each loan to determine 

the community lien. Even if Wife did not compute the actual amount of the 

reduction of principal indebtedness, the record supports the court’s 

calculation, and Husband has shown no error.

¶14 Finally, Husband argues the court could not impose an

equitable lien against real property flowing from the reduction of non-real 

estate related debt. The test, however, focuses on reduction in indebtedness, 

not the nature of the debt. See Valento, 225 Ariz. at 482 ¶ 15. Because 

community funds were used to pay the indebtedness on the real property, 

the court appropriately imposed an equitable lien.

 

4 Husband’s only challenge to the use of the $267,000 amount is that the 

court lacked the original loan balance pre-dating his 2005 refinance to buy 

out his mother’s half interest. However, the relevant number in the 

calculation is not the original loan balance.
MONTGOMERY v. DIVINE

Decision of the Court

6

CONCLUSION

¶15 Because Husband has shown no error, the equitable lien is 

affirmed. Each side is to bear their own attorneys’ fees. Wife is awarded 

taxable costs contingent upon her compliance with Arizona Rule of Civil 

Appellate Procedure 21.