1 IN THE COURT OF AP P EALS O F THE S TATE O F NEW MEXICO
Opin ion Number : ______________

F ilin g Date : January 3, 2018

DocketNo. A-1- CA-34523

JOH NN Y A . GAB RI ELE,

P etitioner -Appellant,

v.

DE BORRA H L. G AB RI ELE, a/k /a DE BBIE G AB RI ELE, Respondent-Appellee.

AP P EA L F RO M THE D ISTRIC T C OU RT OF CO LF AX CO UN TY Sarah C. Backu s, DistrictJudge

Mic ha e l D ano ff

& As so c iate s, P.C. Michae l L . Danof

f Albuquerque , NM for Appe llant

Ka mm & Mc Conne ll, L .L .C. Te rr e nc e R. K amm Raton, NM for Appe llee

OP IN ION

HANISEE , Judge.
{1} Husband a

ppeals th e district cour

t’s division of property

that resulted f

rom the parties’ dissoluti on of marr iag e. Specif ically , Husband c ontends the district court e rre d by fa ili ngto d istri bute a ll p ro pe rt y and fi nd ing that fo ur

so le and se pa rate pr op e rt

y a g re e me nts that Husband sig ned shortly befor e Hus b an d fi l ed for divorc e we re va lid. For the r easons dis c us se d b e low , w e a ff

ir m in pa rt , r e ve rs e in p art , a

nd re mand fo r f ur the r p ro c e e din g s.2

BACK GR OUND
{2} J ohnny

Gabr iele (Husband) a

nd Debor rah G abrie le (Wife) w ere marrie d on Fe bruar y 15, 2006. Husband filed a

petition for divorce on J uly 22, 2013. A t rial was held to deter mine how the mar ital property would be divided, af

ter whic h the par

ties submitt ed propose d fi nd ing s o f fact and

c on c lus ion s o f l aw. Th e dis tr ic t c ourt iss ue d it s d e c isi on

and or de r i n w h i c h i tg r an t e d

d i s s o l u t i o no f

t h e p art i e s ’ m ar

r i a g e a n d d i s t r i b u t e d t h e m ar i t a l p r o p e rt y, inc lud ingre a l e state , c a sh , o the r a sse ts, and lia bil iti e s. {3} Husband a

ppeale d and make s the fo l l o wi n g claims: (1) the district c ourt err ed by concludingthat the s o lea

n d s e p a r a te p roper ty agree ments (SSP As) that Husba nd signe d wer e va lid , e nf or c e a ble c on tr a c ts; (2 ) t

he dis tr ic t c ourt

e rr e d in its dis tr ibutio n o f t

he pa rt ie s’
mari ta l r e sid e nc e —k

nown as th e F ra

nc is H ome —w hic h H us ba nd ha d a c qu ir e d p ri or

to
marr ia g e ; and

(3 ) t he dis tr ic t c ourt

fa ile d to a dd

re ss H us ba

nd ’s c la ime d inte re sts —b oth separ ate a nd community

—in various other pr operty , including a 1955 Chevrolet that Wife had g iven him as a birthday g ift, a prope rty

located in Te x as (the T exas property ), and Wife’ s income ea rned dur ing the marria g e. We addr ess ea ch of Husband’s claims in tur n, rese rving dis c us sio n o f m or e sp e c if ic fa c ts whe n p e rt ine nt t o o ur le g a l ana ly sis

.
I. Whether t he F our SSPAs Ar e Valid, En forceable Contrac ts

A. Addition al F acts {4} I n 2007, Wife—who had a background as a

nursing home administ ra tor and a Master’ s deg ree in business—started an a ssisted livi ng business called Colfa x Senior Care , L L C (CSC ), a limited liability com p an y (LL C ) i n which Wife wa s the single reg istered member. CSC pu rcha sed a r esidential prope rty (262 F ranc is) out of which to oper ate a n a ssi ste d li vin g fa c ili ty

fo r $ 92 ,0 00 . Wif

e te sti fi e d th a t th e “ sta

rt -u p mo ne y ” fo r C SC c a me from $50,000 of he r sepa

rate saving s and a $20,000 loan from her children. H usband testified that he contributed $29,000 from his smaller retire ment fund for the down pay ment on 262 Fr ancis a nd that he par

ticipated in the business by helping to remodel a

nd maintain the fac ility . Wife disputed that Husband contributed a ny funds to p u rc h ase 262 Fra ncis. The distric t co urt resolve d this disput e in Husband’ s favor , finding that Husband “ contributed approximately

$29,000 of his separ ate f unds to [ the] purchase [of 262 Fra ncis].”
{5} C S C w a s e x p an d e d i n 2 0 0 9

- 1 0 i no r d e r t o m e e tg r o w i n g d e m an d i nt h e c o m m u n i t y, an d t h e b u s i n e s s p u r c h a s e d a l o t( 2 5 1 F r an c i s ) o nw h i c ht o c o n s t r u c ta n e w , l ar g e r

f a c i l i t y. B oth pa rt ie s ag re e that Hus ba

nd c on tr ibute d $10 ,0 00 fr om his re tir e me nt savin g s to purc ha se 251 Fr ancis and loaned CS C $80,000 to construct the new facility

. CSC took out a $528,000 bank loan to fina

nce the rema inder of the construction proje ct. 262 Fr ancis wa s sold after 251 Fr ancis ope ned.
{6} I n J uly

2012, Wife started makingplans to expand the business ag ain, includingThe re cord doe s not specify CSL ’s date of

cre ation. 1

3 construction of a

new, $1.5 million facility . Acc ordi n g t o Wife, when she disc ussed her expan s i o n plans with Husband, he w as “a damant that [she] not do it” beca use he w as c on c e rn e d a

bo ut “ [s]o muc h lia

bil ity [,]” bo th fi na

nc ia l and le g a l. Wi fe c on su lte d a

bu sin e ss lawy e r a bo ut f or min g a ne w L L C f

or the e xpand e d b us ine ss t

hat c ou ld b e Wif

e ’s sep arate proper ty in order to r elea se Husband f rom all liability associate d with the new business. The la w y e r h e lp e d Wi f e “ dr aw u

p th e n e w L L C” an d

in f o r me d h e r th a t s h e “could crea te a document” that would put “all the liability , financ ial, leg al ” o n W i fe. W ife testified that Hus b an d wa s “very

please d that there was . . . a way that we c ould both have what we wanted. It was a g ood compromise.”
{7} On April 25, 2013, the pa rties sig ned fo u r S S P As . I n addition to two SS PAs de sig natin g , r e sp e c tiv e ly , th e ne w L L C ( Col fax Sen ior L ivi ng , L L C ( CSL )) and

the pr op e rt

y for the ne w fa cility

(the State Stree t property ) as the se parate prope rty o f W ife, ther e we re two SSP As that desig nate d C S C (the e x isting L L C) and 251 F ranc is (the exist ing a ssisted liv ingfa c ili ty

) a s W if e ’s se pa rate pr op e rt

y . T he SSPA s p ro vid e d th a t H us ba nd “ e xpre ssl y wa ive s, re lin qu ish e s, and re le a se s any

and a ll r ig ht, tit le , c la im, or

int e re st i n an d to ” bo th piece s of re al proper

ty as well as the L L Cs’ “Membe rship I ntere st.” After Husband a

nd Wife sig ne d th e SSPA s, Wif

e c on tin ue d w iththe de ve lop me nt of CSL

. She purc ha se d th e State 1 Street proper

ty in Ma y 2013 for $120,000 with money from “[her] business” and two ba nk l o an s

. Ho we v er , o n ce d i v o rc e p ro ce ed i n gs co m m en ce d i n J u l y 2 0 1 3 , W i fe d ec i d edn o tt o go fo rw ard wi th t he e xpans ion

pr oje c t. {8} At t h e t i m e o f t r i a l , C S C w a s u n d e r c o n t r a c t f o r s a l e f o r $ 6 2 0 , 0 0 0

. S u

b s e qu e nt t o trial, afte r the sales transac tion was completed a nd CSC ’s debts we re pa id off, $257,461.26 was plac ed in t he reg istry of the c ourt. Reg ardingCSL , Wife testified that she believe d the plans for the State Street projec t that she had c ommissi oned we re se llable but that she wa s not awar e of a

ny one who wa s interested in purc hasing the projec t. She also descr ibed CSL ’s outst an d in g d e b ts , b u t t

h e d is tr ic t c o u rt d id

n o t m a k e an y

s p e c if ic f in d in g s o r

c o n c lusions
re g ard ingthe amou

nt o f t ho se de bts

. {9} Husband a

rgued to the district cour

t that he “r ece ived no consider ation” under the SSP As, there by

invalidating the m, and that Wife “bre ache d her f iduciary duty to [ Husband] by her conver sion of community proper ty to her sole a

nd separ ate pr operty .” Wife conte nded that “[ t ] h e co n s i deration for the [SS PAs] was to fr ee [Husband] of all liability and debt associate d with the business then and in the futur e, which w as c o nsiderable .” The district court found that Husband “de sired to b e relieved of r esponsibility for e x isting debt a

nd l i a b i l i t y o f b o t h c o mp an i e s , an d f u tu r e d e b t an d l i a

b i l i t y o f t h e b u s i n e s s e s an d

t h e p r o p e rt y”
and c on c lu ded th at “ [b]y

sig nin g the a g re e me nts [Hu sb and ] wa s r e lie ve d o f r e sp on sib ili tyTh e dis tr ic t c ourt ma de the se fi nd ing s in its a me nd e d de c isi on and or de r a s a re su lt 2 of this Court’s order of

limit ed re mand f

or entry of deta iled finding s of fa ct conc erning whether eac h of the four

SSP As was supporte d by consideration.
As this Court has previously explained, Sec tion 40- 3-8 mere ly “dea ls w ith classes 3 of prope rty

and not with h o w p roper ty may be cha ng ed to a diff

ere nt class.” Estate of Fletche r v. Jac kson , 198 0- NM CA -0 54 , ¶ 45, 94 N. M. 57 2, 61 3 P. 2d 71 4; see § 40-3-8( A)(5) ( d e f i n i n g o n e t yp e o f

“ s e p ar a t e p r o p e rt y” a s “ p r o p e rt y d e s i g n a t e d a s s e p ar a t e p r o p e rt y b y a written ag ree ment betwee n the spouses, including a dee d or other writte n ag ree ment
conce rning proper

ty held by the spouses . . . [,] i n wh i ch the pr operty is designated as separ ate pr operty”). Wife f ails to e x plain how comingwithin the statutory classification of

“ se pa rate pr op ert y ” alone re nd e rs the SSPA s— wh ic h atte mpt e d to tr ans mut e c omm un ity proper ty to separa te prope rty

—valid, enfor cea

ble contra cts. To the ex tent Wife argues that Section 40-3-8( A)(5) is disposi tive of the que stion whether the proper ties identified in the SSP As are Wife’s separ ate pr operty , we reje ct such a rgument as unsupported by any authority

. See Curry v. Great Nw. Ins. Co. , 2014-NMCA-031, ¶ 28, 320 P.3d 482 (“Where a par ty cites no authority to support an arg ument, we may assume no such authority exis ts.”).

4 for the de bt as well as the liability .” As such, the district c ourt awa rded Wife, among othe r 2 things, 251 Fr ancis, the State Stree t property , CSL and its assets, and CSC—including the entire $257,461.26 of

proce eds fr om the sale of CSC—all subject to debt there on.

B. Ana lys is
{10} Husband re lies on g ener al principles of contra ct l aw and argues that the district cour t
err ed in concluding that the S SPAs are valid beca use (1) they

lacke d mutual assent, and ( 2) Wif e ’s pr omi se of

re le a sin g Hu sb and

fr om lia bil ity wa s illus or

y , thus the y a lso la c ke d v a lid consideration. Wife relies on the definition of “se parate prope rty ” conta ined in NMSA 1978, Section 40-3-8 ( 1 9 9 0 ), t o support the validity of the de signation of the businesses and proper ties identified in the SSP As as Wife’s sepa rate proper

ty

. Neither

party has addr essed 3 the import of NMSA 1978, Section 40-2-2 (1907), wher ein the L eg islature statuto ri l y set forth the contra ct rig hts of marrie d persons. We be g in w i t h t h e s tatute. See H ughes v. Hughes , 1981-NMSC-110, ¶ 19, 96 N.M. 719, 634 P.2d 1271 (“In New Me x ico, transa ctions betwee n husbands and wive s are g over n ed b y S ection 40-2-2[.] ”); Pr im us v . Cl ar k , 1944- NMSC-030, ¶ 13, 48 N.M. 240, 149 P.2d 535 (explaining t hat “[t] ransa ctions betwee n husband and w ife are controlled by the . . . statute” a nd analy zing the cha lleng ed agree ment within the context of the statute).

1. Se c ti on 4 0- 2- 2: Co nt r ac t Righ ts of M ar r ie d P e r so ns {11} I n New Me x ico, “[e]ither husband or wife may enter into any eng ag ement or tr ans a c tio n w ith the oth e r, or wi th a ny oth e r p e rs on

re sp e c tin g pr op e rt

y , w hic h e ith e r m ig ht, if un marr ie d[.]” Se c tio n 40 -2 -2

. Ho we ve r, su c h tr ans a c tio ns be tw e e n s po us e s are su bje c t toConstructive fra ud is “ a brea ch of a leg al or equitable duty irrespe ctive of the mora l 4 g uilt of the fra

ud fea sor, and it is not ne cessa ry that actua l dishonesty

of purpose nor intent to dece ive exist .” Snell v. Cornehl , 1970-NMSC-029, ¶ 8, 81 N.M. 248, 466 P.2d 94.

5 “the g ener al rules of

co m mon law which c ontrol the ac tions of persons occ upying confide ntial relations wit h eac h other.” Id. I nterpre ting this statute, our Supreme Court has h el d t h at t ra n s ac t i o n s b et we e n s p o u s es i nwh i ch o n e s p o u s e “ s ec u re d a d ec i d edad v an t age over the [ot her]” ar e “pr esumptively fra udulent.” Beals v. Ares , 1919-NMSC-067, ¶¶ 73, 82, 90, 25 N.M. 459, 185 P. 780. That is beca use a husband and wife ar e fiduc iaries upon whom
are imposed “ ‘the obligation of exercising the hi g hest g ood faith towar ds [each other ] i n any dealingbetwee n them, and [which] pre clude[s e ach] from obtainingany advanta g e over

[t he other] by m ea ns of any

misrepre sentation, conc ealment, or adver se pre ssure.’ ” Id. ¶ 76 (q uo tin g wi th a

pp ro va l Do l l i ve r

v. Dolliver , 3 0 P. 4, 5 ( Ca l. 1 89 2) (i n b ank )) ; see Primus , 1944-NMSC-030, ¶ 15 (e x plaining that the statute g overningthe contra ct rig hts of marrie d pe rs on s “ c re a te s in

law a fi du c iary re latio ns hip be tw e e n hus ba nd and wi fe ” ). I n s uc h c a se s, in order to ove rcome the pre sumption of fraud, i t is the dut y of t he spouse who has g ained the adva ntag e “to show ( a) the pay ment of an ade quate c onsideration, (b) full disclosure by him [or he r] a s to the ri g hts of

the [oth e r] a

nd the value and

e xten t of

the c omm

un ity proper ty , and (c ) that the [other] had competent a nd independe nt advice i n co n fe rring the benef its upon [ him or h er] .” Be als , 1 91 9- NM SC- 06 7, ¶ 9 0. Whe re the a dv anta g e d s po us e fails to make this showing , the district court is to “set aside the [agr eeme nts] . . . in question, to a sc e rt a in t

he va lue and e xten t of the c omm un ity pr op e rt

y , . . . and to div ide the c omm un ity proper ty betwee n the par

ties[.] ” Id. ¶ 93.

2. Whe th e r Wife G ain e d a D e c ide d Ad va nt ag e Ove r Husb and, The r e by C r e at ing a P r e sum pt ion of C ons tr uc ti ve F r aud
{12} Where one spouse rec eives g rossly inadequate consider ation for f orfe iting his or her interest in commu n ity

proper ty , the other spouse is considere d to have g ained a decide d ad v an t age t h ro u gh co n s t ru ct i v e f ra u d , re n d er i n g t h e t ra n s ac t i o nv o i d ab l e. See P rimus , 1944- 4 NMSC-030, ¶¶ 12, 21, 22 (conc luding that ther e existed a “leg al pre sumption of constructive fra ud” whe re t h e wi fe r ece ived only $1,000 from the c ommunity estate w orth $50,000); Be als , 1919-NMSC-067 , ¶¶ 72, 82 ( concludingthat the husband ha d “sec ured a decide d advanta g e over

the wife ” whe re the wife r ece ived only $4,000 and her

interest in the subjec t proper ty was be tween $35,000 a

nd $75,000). Our Supre me Cour t h a s a lso f ound constructive fra ud wher e one spouse “had a nd took an adva

ntag e in the matter s s urroundingthe conveyance of . . . prope rty .” T ru jil lo v . P ad

illa , 1968-NMSC-090, ¶ 6, 79 N.M. 245, 442 P.2d 203. The main question we a re conce rned with is whether the parties we re “ barg aining on an equa l footing” in satisfac t i o n of their f iduciary duties to one another

. Primus , 1944- NMSC-030, ¶¶ 15, 21. Where the evidenc e indicate s they wer e not, we ma

y find construc tive fra ud.
{13} Her e, the r ecor d indicates that the net value of CSC was $257,461.26 a s ref lected by6

the proce eds place d in the reg istry of the court following the sale and pay ment o f d eb t s of CSC . Thus, Husband’s one-ha lf community interest was approximately $128,000. Under the SSP As, Husband r ece ived $0 in e x chang e for convey ing his inter est to Wife. Eve n assuming Husband re ceive d the non-moneta ry “consi d er ation” of be ing r elieved of all financ ial and leg al liability

by signingthe SSP As—which a rgu m ent we addre ss below—Husband’ s c on sid e ra ble fo rf e iture su pp or ts a pr e sumpt ion of c on str

uc tiv e fr a ud

. Ad dit ion a lly , we no te that prior to askingHusband to sig n the S S P As , W i fe had consulted a divor ce a ttorney as well as a business attorney , and it was Wife who dr afte d and provide d Husband with the SSP As. The r ecor d contains no i ndication t hat Husband—though he had a c hance to review the S SPAs prior to signing them—had independent counsel reg arding the ag ree ments. Ba sed on the fore g oing f

acts, a long w ith our statutory authority and lega l prec edent, we conclude th a t W if e g a in e d a d e c id e d a dv an ta g e o v e r

H u s b an d thr o u g h th e SS PA s

. We , th e r e f o r e , n e xt consider whether Wife met her burden to show ( a) pr ovision of adequate consider ation, (b) full disclosure to Husband as to his rig hts a nd extent of the community proper ty , and (c) that Husband had competent a nd independe nt leg al advice prior to sig ning the SSP As. Se e Be als , 1919-NMSC-067, ¶ 90.

3. Whe th e r Wife M e t H e r Burd en of Pr ov ing She M e t H e r F iduc iar y D ut ie s in Ent e r ing Int o t he SSP As Wit h Hus band

a. Consid erat ion
{14} I n a contr act be tween spouse s where one spouse g ains a de cided a dvantag e over the other, the a dvantag ed spouse be ars the bur den of pr oving that adequate consider ation was p ro v i d ed to support the contr act. See id. “ Co n s id e r a ti o n c o n s is ts o f a p r o mi s e to do something that a par

ty is under no leg al obligation to do or to for bear from doing some thing he has a leg al rig ht to do.” Hey e v. Am. Golf Corp. , 2003-NMCA-138, ¶ 12, 134 N.M. 558, 80 P.3 d 4 95 . Apr omi se by on e pa rt y to re le a se fr om lia

bil ity and ind e mni fy or

ho ld h arm le ss the othe r party ag ainst damag es soug ht by a third par

ty may constitute adequate consider ation to support a contra ct. See Nak ashima v. State Farm Mut. Auto. Ins. Co. , 2007-NMCA-027, ¶ 13, 141 N.M. 239, 153 P.3d 664 (“A dequate consideration is present in a contra ct wher e something is soug ht by

the promisor in exc h an ge fo r his promise and is g iven by the promisee in exchang e for that promise.” ( internal quotation m ar ks and citation omitted)). L ikewise, promising to assume the debt of another may be valid conside ration. See id. ; see al so Tho rn ton v . W

olf , 2 0 0 7

- 1 3 2 , p

. 2 ( L a

. Ap p

. 3 Ci r

. 5 /3 0 /0 7 ) ; 9 5 8 So

. 2 d 1 3 1 , 1 33 (“A ssumption of a debt is valid consideration for the tra nsfer of prope rty .”). To de termine t h e p ar t i es ’ i n t en t

— i n cl u d i n g as t o t h e c o n s i d er at i o np ro v i d ed

— we co n s i d er

“t h e l an gu age employ ed by

them; and wher e such la

ng uag e is not ambig uous, it is conclusive.” Gree ntree So lid W as te Au th. v. Ct

y. o f Lin c oln , 2016-NMCA-005, ¶ 14, 365 P.3d 509 (internal quotation marks an d citation omitted). Where the pa rties’ languag e is unambig uous, we “ca nnot ch an ge [the] l anguag e for the bene fit of one pa

rty to the detriment of a

nother.” Nearburg v. Y

ates Petroleum Corp. , 1997-NMCA-069, ¶ 23, 123 N.M. 526, 943 P.2d 560.7

{15} Her e, Wife conte nds that the consider ation she provided to suppor t the SSP As was
a pr omi se that H us ba

nd wo uld be re le a se d fr om a ll fi na nc ia l re sp on sib ili ty

and le g a l li a bil ity for e ach of the prope rties identified in the SSPAs. The district court, appa rently rely ing on Wife’s testimony

to that effe ct, ag ree d, fi n d i n g t h at Husband “desire d to be re lieved of
re sp on sib ili ty fo r exis tin g de bt an d lia bil ity of bo th c omp anie s, and futur e de bt a

nd lia bil ity of the businesses a

nd the prope rt[ie s ] ” an d concludingthat “[a]s consideration for the [S SPAs, Husband] was re lieved of all further financ ial responsibility

and leg al liability

for the businesses.” T he proble m with this conclusion, howe ver, is that the SSPAs themselves contain no indication of this purporte d consideration.
{16} Eac h of t he two SSP As relating to re al prope rty (one f or 251 F ranc is and one for the S t at e S t re et p ro p er t y

) p ro v i d es , i nfu l l , t h e f

o l l o wi n g:

Pursuant to .

. . [S ection] 40-3-8( A)(5)

. . . , [W ife] and [Husband] ag ree that the pr op e rt

y loc a te d at: [(address)]

is he r e b y d e s ig n a te d

a s th e s e p ar a te p r o p e rty

o f [Wi f e ]. [H u s b an d ] h ere by
e xpre ssl y g ra nts and c on ve y s th e a

bo ve de sc ri be d p rop ert y

to [Wif e ], w ith Spe c ia l Warr ant y Cov e na nts . [H us ba

nd ] furt he r e xpre ssl y

wa ive s, re lin qu ish e s, and re le a se s any and a ll rig ht, tit le , c la im, or int e re st i n a

nd to the above descr ibed prope rty , here tofore or here afte r ac quired.

Th e pa rt ie s f ur the r a g re e that a ll c omm

un ity inc ome of

the pa rties us e d to acquir e or pur chase t h e p re mises or make r epair s or improvements ther eon now o r in th e f

u tu r e , in c lu d in g c o mm

u n it y f u n d s o r in c o me o f th e parties used to pay

any indebtedness now or

here after s ec ured by

lien ag ainst the p r e mi s e s is h e r e b y

d e s ig n a te d

a s th e s e p a

r a te p r o p e rty

o f [Wi f e ].

The SSPAs for the L L Cs provide:
Pursuant to . . . [Section] 40-3- 8(A)( 5)

. . . , [W ife] and [Husband] agr ee that the M e mb e r s h i p I n t e r e s ti n[C S C / C S L ], a N e w M e xi c o l i m i t e d

l i a b i l i ty
c o r p o r a ti on, [i s ] h e r e b y

d e s ign a te d

a s th e s e p ar a te p r o p e rty o f [Wi f e ]. [Hu sb and ] expressly

g ra nts and c on ve y s th e a

bo ve de sc ri be d M e mbe rs hip I ntere st to [ W i fe]. [Husband] further expressly

waives, r elinquishes, and rele ases a ny and all rig ht, titl e, o r i n tere st in and to the above de scribed Membership Intere st, heretof ore or here afte r ac quired.

On their fa ce, the S S P As contain no languag e indicatingwhat conside ration Husband
rec eived in exchang e for

his rel i n q u i shment of all rig hts and interest in the prope rties and businesses. The d i s t rict cour t concluded—a

nd we a g ree —that the SSP As “a re not8

ambig uous.” Critically , they are unambig uously silent a s to Wife’ s consideration to support the agr eeme nts, y et the district cour t took and appar ently

relied on pa

rol evidenc e—Wife’s te sti mony that Hu sb and

wa s r e le a se d o f “ a ll l ia

bil ity” —in

or de r t o f ind c on sid e ra

tio n. Th is
was e rror beca use par ol evidence is properly admitted on l y i n circ umstances whe re a docu m ent or contract is fa cially ambig uous or to aid the cour t in determining whether a contra ct’s terms are am biguous. See R uggles v. Ruggles , 1993-NMSC-043, ¶¶ 56- 57, 116 N.M. 52 , 8 6 0 P. 2 d

1 8 2 ( e xp la in in g th a t b e c a u s e o f amb igu it

y in th e p arti e s ’ marital
se ttl e me nt a g re e me nt, “ e xtri ns ic e vid e nc e of the pa rt ie s’ int e nt may

be c on sid e re d to a id i n int e rp re tin g its te rm s” ); Mark V, I nc. v. M ellekas , 1993-NMSC-001, ¶ 11, 114 N.M. 778, 845 P.2d 1232 (stating that c ourts “may also con s i d er the context i n which the a g ree ment was made to dete rmine whe ther the pa rty ’s words a

re a mbiguous” ). Howe ver, “ no [ ex t ri n s ic] evide n ce should be rec eived whe n its purpose or ef fec t is to contradict or va ry the ag ree ment’s terms.” Mark V , 1993-NMSC-001, ¶ 13.
{17} The c lear

purpose of

Wif e’ s t es t i m ony

was to var

y the terms of the SSP As by supply ing c onsideration whe re none was expressly provided. When a sked to e x plain “what it is y ou explained to [ Husband] that [ the SSP As] would do[ ,]” W ife testified:

Release him of al l l i abil ity . At one point Ibasica lly rea d it. I t’s like a two
se nte nc e do c ume nt. I t say s that [Hu sb and ] doe s n ot w ant t o h a ve any int e re st
or inv olv e me nt i n w hate ve r p ro je c t or pr op e rt y and that he ass igne d th a t to me. And we discussed it, that he wouldn’t have any liability

. He wouldn’t be responsible for

the, y ou know, 1.5 m i llion doll ars I was g oing to bor

row. An d, a g a in, if

we g ot s ue d h e wo uld

n’ t be

. . . a

pr op e rt y ow ne r i n th a t.

Th is te sti mony

is r e ve a lin g in t

hat Wif e ’s e xplanatio n o f what sh e un de rs too d th e SSPA s to say clea rly g oes bey ond what the ag ree ments, in fact, sa y . The SSPAs si mply

do not say

that Husband “wouldn’t have any liability ” or that he “wouldn’t be responsible for the

. . . 1 .5 milli on dollars [W ife] was g oing to bor row.” And to t h e ex tent there is lang uag e in the SSP As that could ar g uably be construe d as indicating an intent to indemnify Husband a s Wife descr ibed, ambig uities i n a co n t ra ct ar e to be c onstrued most strong ly ag ainst the draf ter—he re, Wife. Se e Sc hu ltz & Lin ds ay Con str . Co. v. Sta te , 1972-NMSC-013, ¶ 6, 83 N.M. 534, 494 P.2d 612. By admitting th i s ev i d en ce a nd failing to give primacy to the unambig uous SSP As in its construction of the ag ree ments, the district court ef fec tively rea d into the SS PAs a provision that is not there , which it was not at liberty to do. See A rchunde v. Int’l Surplus Lines Ins. Co. , 1 9 9 5

- N M CA

- 1 1 0 , ¶ 2 3 , 1 2 0 N

. M

. 7 2 4 , 9 0 5 P. 2 d 1 1 2 8 ( “ We wi ll not r e a d

i n t o a c o n t r a c tp r o v i s i o n s t h a tt h e p art i e s t h e m s e l v e s h a v e n o ts e e nf i tto include.”) . Particularly

in light of W ife’s f

iduciary duties in contrac ting with Husba nd and the heig htened g ood faith obligation to pre vent Wife from takingadvanta g e of H usband by
me ans of c on c e a lme nt or mis re pr e se ntatio n, we c on c lud e that the SSPA s a re un e nf or c e a ble as contra cts for la ck of c onsideration. See F igueroa v. THI of N.M. at Casa Arena Blanca, LLC , 2013-NMCA-077, ¶ 17, 306 P.3d 480 (“Consideration is a prer equisite to the leg al formation of a

valid contra ct.”)

.Given that CSC and CS Lwer e set u p as sing le-membe r L L Cs with W ife a s the 5 member and that the rea l pr operty at issue (251 F ranc is and the State Street pr operty ) wa s the proper ty of the L L Cs, we fail to se e—and the parties f ail to expl ain—how Husba nd had any pe rs on a l f

ina nc ia l r e sp on sib ili ty

or le g a l li a bil ity for any of the su bje c t pr op e rt ie s to be g in with. SeeNMSA 1978, § 53 -1 9 -1 3 (1 993) (pr oviding that “ the debts, oblig ations and lia bil iti e s o f a [L L C], whe the r ar isi ng in co ntr a c t, tor t or oth e rw ise , s ha ll b e so le ly the de bts , obligations and li abilities of t he [ L L C] ”). To the ex tent he did not, this further supports our conclusion that the SSPAs lacked conside ration. See H urley v . Hurley , 198 0 -NMSC-067, ¶ 16, 94 N.M. 6 4 1 , 615 P.2d 256 (expl aining that “a pr omise to do what a pa rty is alrea dy ob lig a te d b y

c on tr a c t or law to do is n ot s uf fi c ie nt c on sid e ratio n f

or a pr omi se ma de in return” ), ov e rru le d o n o ther gr ou nds b yEl lsw or th v . E lls wor th , 1981-NMSC-132, ¶ 6, 97 N.M. 133, 637 P.2d 564.
9 b. F ull Dis closure and Ind ependent Legal Couns el
{18} Even a ssuming ar g uendo that Wife’s testimony was a dmissibl e and supplied sufficie nt e vidence of considera tion—meaning a valid contra ct was f ormed—the SSPAs are
ne ve rt he le ss v oid a

ble . T hat is be c a

us e the re is n o e vid e nc e that ( 1) Wif e dis c los e d to Husband th e value of

the prope rties and businesse s to be conve y ed or H usband’s rig hts—and, importantly , potential liability —there in; and (2) Husba nd had re ceived 5 competent a

nd independe nt advice prior to signingthe SSP As. Se e Be als , 1919-NMSC-067, ¶ 90. The undisputed f

acts of this case are that Wife had a Ma ster’s de g ree in business, was an experienc ed business woman, a nd was in char g e of manag ing and decision-making for the business. I t is also un d i s puted that Husband ha d a hig h school educ ation and wa s not involved in the manag ement of the business, other than providing g ener al maintenanc e wor k at the assisted l i v i n g facility . Particularly in light of this power

imbalance and Wife’s dominant positi on respe cting the business, it wa s imperative that Wi fe disclose to Husband the bu sin e ss’ s a sse ts a

nd his ri g hts the re in a

nd that H us ba

nd have ind e penden t cou ns e l in consideringthe ramifications of ente ring into the SS PAs. See Fate v. Owens , 2001-NMCA040, ¶ 25, 130 N.M. 503, 27 P.3d 990 ( “[A] fiduciary [] is require d to fully disclose mater ial fac ts and information relating to the [fiduciar y relationship] . . . even if

the [one to whom the duty is owed] ha[s] not asked for the i nformation. .

. . The duty of disclosure is a hallmark of a f iduciary relationship.” (internal quotation marks and c itations omi tted)). Cf. Unser v. Unser , 1974-NMSC-063, ¶¶ 16- 17, 86 N.M. 648, 526 P.2d 790 (explaining t hat i n order for there to be pre sumptive fraud, one party must be “in the dominant position[ ,]” and finding
n o p resumpti on of fr aud bec ause it wa s “questionable a s to whether the relationship of dominance” exis ted wher e the wif e had be en “advised by

independe nt leg al counse l” prior to signingthe ag ree ment).
{19} Be cause the re cord indicates that Wif e failed to meet her

burden to ove rcome the presumption of constructive fra ud, we hold that the SSPAs—even if validly formed—w ere voidable at Husba

nd’s elec tion and must be set aside. Se e Tru jil lo , 1968-NMSC-090, ¶ 7; Be als , 1919-NMSC-067, ¶ 93. We reve rse the district c ourt’s distribution of the prope rties10

cover ed by

the SSP As and re mand for f urther pr ocee dings in lig ht of this opinion.

II. Whe th e r th e Di st r ic t C our t E r r e d in D ist r ibut ing th e Equ it y in t he F r anc is H o me {20} Husband a

rgues that the district cour t err ed in its distribut ion of the F ranc is Home by failing to awar d him his $30,000 separ ate property interest in t he home, whic h was the dow n pay ment he made when he purcha sed the home prior to me eting Wife. Wife argues that there was substantial evide nce to support the district court’s finding s and conc lusions reg arding distribution of the Fr ancis Home , which we re pr emised upon the c onclusion that whateve r s e p ar a t e i n t e r e s tH u s b an d p o s s e s s e d

i nt h e F r an c i s H o m e w a s t r an s m u t e d t o a c omm un ity interest. We ag ree with Husband that the district cour t erre d.

A. Stand ard of Review
{21} To the extent Husband ar g ues that there is an ins ufficie nt fac tual basis to support the district court’s finding s of fa ct reg arding the Fr ancis Home, “we revie w the evidenc e in the light most favor able to support the [district] court ’s finding s, resolving all conflicts and indulgingall permissibl e i n fe re n ces in fa vor of the de cision below.” Jones v . Schoellkopf , 2005-NMCA-124, ¶

8, 138 N.M. 477, 122 P.3d 844. Howeve r, to the extent Husband attac ks t h e d i s t ri ct co u rt ’s co n cl u s i o n s o f l aw r espec ting the F ranc is Ho m e— i n cl u d i n g t h o s e f i n d i n gs that function as c onclusions—our revie w is de novo. See id. ; se e als o Bena vi dez v. Benav idez , 2 00 6- NM CA -1 38 , ¶ 2 1, 14 0 N .M . 6 37 , 1 45 P.3 d 1 17 (“ We a re de fe re nti a l to fa c ts f ound by the dis tr ic t c ourt , b ut w e re vie w c on c lus ion s o f l aw d e no vo .”). We a lso revie w de novo que stions of law , including thr eshold deter minations reg ardingwhether pr op e rt y is separa te or c omm

un ity or wh e the r t

he c omm un ity ha s a c qu ir e d a

n inte re st i n separ ate pr operty

. Se e Ar

no ld v . A rn old, 2003-NMCA-114, ¶ 6, 134 N.M. 381, 77 P.3d 285 (explaining that “ the threshold question of whe ther [the h] u s b an d ’s ac cumulated va cation leave and sick lea

ve ar e community

proper ty is a q u es t i o n o f l aw, whic h we r eview de
no vo ” ); Ro ss v . Ne

gr on -R os s , 2017-NM C A-061, ¶ 7, 400 P.3d 305 (ex plaining that “[w]hether the district court e rre d in finding no c ommunity lien on the Spring Creek residenc e [(separ ate pr operty )] is a question of law that we revie w de novo” ).

B. The District C ourt Erre d in Concl u d i n g T h at the F rancis Hom e Was Transm uted F rom Husb and’s S eparate P ropert y to Com m uni ty P ropert y {22} The district cour

t entere d the following finding s of fact reg arding the Fr ancis Home :

5. Pr ior

to t he marr ia g e , in 20 04 , [H us ba nd ] ha d p ur c ha se d [th e F ra nc is Home]. The purchase price was $147,000 and [ Husband] had made
an a pp ro xima te $3 0, 00 0 d ow n- pa y me nt.

. . . .We note that two day s after submitt ing he r written c losi n g argume nt, Wi fe f iled a 6 document titled “Supplement to Closing A rgum ent” in which she cited in her “list of authorities” this Court’s dec ision in Macias v. M acias , 1998-NM CA

- 1 7 0 , 1 2 6 N.M. 303, 968 P.2d 814, and provided the f ollowing pa

re n t hetical e x planations: “(Sepa rate proper

ty , the [F ra nc is H ome ], pl a c e d in

joi nt o wn e rs hip a lon g wi th i nte nt to tr ansm ute re su lts in transm u t at ion) and (Court should consider fac tors 1) dee d to community , 2) mortg ag e by community , 3) intent of g rantor, 4) co mm unity pay ment of mortg ag e, taxes, maintenanc e and upg rade s) and ( propert y ac q u i red dur ing ma rriag e pre sumed to be community and burde n re sts wi th p ro te sti ngsp ou se to p ro ve oth e rw ise ). ” Ho we ve r, Wif e c ite d n o o the r a

uth or ity and offere d no additional argument or ana ly sis to support a finding of transmutation. Wife’s appe ll a te ar g u me n ts

—

w h ic h ma

k e n o r e f

e r e n c e to tr an s mutati o no r c it e an y r eleva nt authority to defe nd the district court’s c onclusion that a transmutation occ urre d—further support our under standing that it was n ev er Wife’s position that the Fra ncis Home wa s transmuted. Se e Sta te e

xre l. H um an Se rv

s. De p’ t v. S tap le s ( In re Doe ), 1982-NMSC-099, ¶¶ 3, 5, 98 N.M. 540, 650 P.2d 824 (expl aining that appellate courts should not rea ch issues that the par

ties have f

ailed to ra ise in their brief s).

E v e n t h o u gh W if e a sse rt e d in

he r p ro po se d f

ind ing s th a t H us ba

nd de e de d th e F ra

nc is 7 Ho me to h ims e lf

and Wif e “ wi th th e int e nt t o ma ke the pr op e rt

y c omm un ity

11 14

. Soo n a ft e r t

he marr ia g e , [H us ba

nd ] tr ans fe rr e d th e [F ra

nc is H ome ] to him se lf and [Wife ]. Th e parties re fi na nc e d th e de bt o n th e ho us e to g et a more favor able inter est rate . [Husband] testified that the re ason he di d s o w a s b e c a

u s e h e b e li e v e d ma

r r ia g e w a s “ s a c r e d

. ” T his act t r an s m u t e d

t h e [ F r an c i s H o m e ] i n t o c o m m u n i t y p r o p e rt y.
15. Duringthe m ar ri ag e, the pa rties made the mortg ag e pay ments and made a pproxi mately

$40,000 worth of improve ments to the hous e. At the time of trial th e v al ue of the [Franc is Home] was $150,000. No appra isal was off

ere d. ([Husband] estim ated the va lu e at $140,000 and [W ife] estimated the value at $160,000.) The re is $94,000 owing on the mortg ag e. The equity in the proper

ty is approxim ately

$56,000. F ro m th e se fi nd ing s, the dis tr ic t c ourt c on c lud e d, “ Th e F ra nc is [H ome ] is c omm

un ity proper ty . The pa rties ar e entitled to one- half e ach of the $56,000 equity

in the house.”
{23} The fir st flaw in the district cour t’s conclusion is that Wife n ev er contended that Hu sb and ’s se pa

rate int e re st i n th e F ra

nc is H ome ha d b e en tra

ns mut e d into c omm

un ity pr op e rt y . Wif e ’s c la ims and

c on te nti on s— a s w e ll as he r ope nin g and c los ingargume nts to the district court—re veal that Wife be lieved she w as entitled to either ( 1) re imbursement of one-ha lf of the $40,000 of improvements the community made to the Fr ancis Home , or (2)
on e -h a lf of the re ma ini ng“ c omm

un ity e qu ity” in t

he ho me a ft e r H us ban d w a s r e pa id h is down pay ment. I n other wor ds, the position W ife took an d h er proposed distribution of 6 p r o p e r t y e v i n c e h e r

b e l i e f t h a tt h e F r an c i s H o m e w a s H u s b an d ’ s s e p ar a t e p r o p e rt y. See 7proper ty [,] ”within that same propose d finding Wife s u g g ests the inhere ntly contra dictory
c on c lus ion

tha t “ [i]f [H us ba

nd ] g e ts c re dit

fo r h is $ 32 ,0 00 do wn

pa y me nt t he re is s til l $34,000 in community

equity .” In other wor ds, Wi fe’ s as s er t i o n as to Husband’ s intent
c ann ot b e re c on c ile d w ith the wa y in whic h s he c a lc ulate d h e r c la ime d inte re st i n th e F ra nc is Ho me , i. e ., a s a

c omm un ity lie n r a the r t

ha n a n u nd ivi de d o ne -h a lf

int e re st. I f Wi fe wa s tr

uly
c la imi ngthat H us ba

nd int e nd e d to tr ans mut e the F ra nc is H ome fr om h is s e pa

ra te pr op e rt y to community

proper ty , Wife would have claimed one- half intere st in the full equity of the home rather than the full equity minus Husband’s down pay ment (sepa

rate proper

ty).

12 Tre go v . S c ott , 1998-NMCA-080, ¶

5, 125 N.M. 323, 961 P.2d 168 (explaining that the wife had “c oncede d, by

her c hosen m ethod of calc ulating the monies due her , that the prope rties in dispute remained se parate” be cause the wife ’s “own c omputations ” revea led that she assumed the c ommunity ’s intere st was an appor tioned interest in the incr ease d value of the
se pa rate pr op e rt

y ). As we dis c us s b e low , Wif e on ly c on te nd e d th a t th e re wa s a c omm un ity lien on the Fr ancis Home , which would entitle Wife to a diff ere nt, lesser int ere st in the Fr ancis Home than would the conc lusion that a transmutation occur red.
{24} Th e se c on d a

nd mor e pr ob le matic fl aw i n th e dis tr ict c ourt ’s c on c lus ion that a transmutation had occ urre d is that it is c ontrary to N ew Mexi co ca se law, which establishes
a hig h le g a l st a

nd ard fo r p ro vin g tr ans mut a tion. “Tran smutatio n is a g e ne ra l te rm

us e d to de sc ribe arr a

ng e me nts be tw e e n s po us e s to c on ve rt pr op e rt y fr om s e pa

ra te pr op e rt

y to community

proper ty and vice versa .” Allen v. Allen , 1982-NMSC-118, ¶ 13, 98 N.M. 652, 651 P.2d 1296. W hile New Mexi co rec og nizes tra nsmutation, this Court has explained that “[t] he spouse who argues i n favor of transmutation ca

rries what has be en var iously descr ibed
as a ‘diffic ult’ or a ‘hea

vy ’ burde n[.] ” Macias , 1 99 8- NM CA -1 70 , ¶ 12 . T ra ns mut a tio n mu st be proven by “cle ar and convincing evidenc e of spousa l intent to do so.” Id. A deed, other document showingjoint ti tle, or mortg ag e note alone is not conclusive of intent to transmute. See id. ¶ 13 (e xpla ini ng that “ a de e d o r o the r d oc ume nt s ho wi ngjoi nt t itl e do e s n ot t ra ns mut e separ ate pr operty

if there is no intent to do so” and that “a mortga g e may be evidence of such intent to transmute, but it is not conclusive a nd is not, by

itself, substantial evidenc e of intent to transmute” ( omission, emphasis, int erna l quotation mar ks, and citation omitted)). Proving “tra nsmutation requires e vidence of intent on the par t of the g rantor spouse .” Id.
{25} Her e, the district cour t’s finding s make clear that it relied on three thing s to support its conclusion that transmutation occur red: (1) that soon after

marria g e, Hu s b a

n d “ tr a n s f err ed the [ Fr ancis Home] to himself and [ Wife;] ” (2) that Husband a nd Wife “re financ ed the de bt on the house to g et a more favor able inter est ra te[;] ” and ( 3) Husband’ s statement that he

“ tho ug ht b e ingmarr ie d w a s k ind of a sa c re d th ing ” wh e n a sk e d b y his a tto rn e y

wh a t hi s intention was when he added Wife’s name to the deed. Nowher e did the district cour t find that H us ba

nd int e nd e d to make a

g if t to Wif e or c re a te in h e r a

n und ivi de d o ne -h a lf

int e re st in the Fr ancis Home

. And indeed, under New Mexi co transmutation law and g iven (1) the absenc e of e vidence in the rec ord indicatingthat Husband ha d the re quisite intent to effec t tr ans mut a tio n, (2 ) t

he fa c t th a t Wif

e c on c e de d th a t th e F ra

nc is H ome wa s H us ba

nd ’s se pa rateThis f igur e is ba sed on an assumption that the Fr ancis Home was va lued at $160,000 8 at the time of trial per W ife’s testimony and that there rema ined a balanc e of $94,000 on the mortg ag e.
13 pr op e rt y , a nd (3 ) that Wif

e e mpl oy e d a lit ig a tio n str a te g y de sig ne d to pr ote c t on ly he r i nte re st in the community l i en on the pr operty , it could not have. We hold that the district court’s
c on c lus ion

tha t th e F ra nc is H ome wa s tr ans mut e d f ro m H us ba

nd ’s se parate pr op e rt

y int o community

proper ty i s incorre ct as a

matter of la

w. Thus, we r ever se the district cour t’s
awa rd to Wife of an a

utomatic one-ha lf interest in the F ranc is Home’s equity

. The que stion that rema ins, then, is to what por t i o n

— if any —of the e quity

in the Fr ancis Home is W ife entitled?

C. Ac quis it ion of a C om m unit y I nt e r e stin Se par at e P r ope r tyand A ppor ti onm e nt Thereof
{26} As previously noted, W ife’s positi on during trial was that the marital community had
ac qu ir e d an inte r e s t in th e F r an c is H o me o f w h ic h Wi f e w a s e n ti tl e d to o n e
- h a lf . Wife’s primary argument in this re g ard w as that the c ommunity had contr ibuted $40,000 to various ho me imp ro ve me nts —in c lud ingthe a dd iti on of “ ha rd wo od fl oo rs , a larg e nic e de c k, so me new door s, new win dow treatments, kitchen, bathroom, sinks, counter tops, kitchen
a pp lia nc e s, fu rn iture ” —th a t Wif

e be lie ve d inc re a se d th e va lue of the ho me . Wif

e ini tia lly contende d she should “re cover [one-half] of the re mod el co s t t o ” the F ranc is Home, or $ 2 0 , 0 0 0

. In h e r

c l o s i n g ar g u m e n t , W i f

e a d d e d a c l a i mf

o r o n e
- h a l f “ t h e c o m m u n i t y e qu i t y” in the home, which she calc ulated to be $17,000. Wife a rrived at the fig ure of

$17,000 by first assuming the district co urt would find that there was $66,000 in total equity in the home, then subtrac ting what Wi fe de scribed a s Husband’s “ down pay ment as s o l e and 8 separ ate pr operty

($32,000),” which would leave $34,000 in “community equity ” to which Wife would be entitled to one-ha l f, o r $ 1 7 , 0 00. Wife continued to seek one -half of the $40,000 remode l cost in addition to t he $17,000 of community equity . As stated, the district
c ourt awa rd e d Wif e on e -h a lf ($ 28 ,0 00 ) o f t

he tot a l e qu ity

it d e te rm ine d to e xist in

the F ra nc is Home ($56,000) based on its conc lusion that a transmutation occur red.
{27} Whe re , a s he re , a pa rt y c la ims that a

pp re c iatio n d

ur ingmarr ia g e of

se pa ra te pr op e rt y is owing to c ommunity

contributions, apportionment is the proper method of dete rmining the respe ctive intere sts—i.e., separa te and c ommunity

—in the asset upon dissolution. See Do rb in v . D or bin , 1986-NMCA-114, ¶ 15, 105 N.M. 263, 731 P.2d 959. “[A] pportionment is a leg al conc ept that is proper ly applied to an asset acquir ed by marrie d people with mix ed
mon i es

— t h at is, partly

with community

and par tly with separate funds.” Id. ¶ 29 (inter nal quotation marks omitt ed ). An “a sset acquir ed” ma y include the incr ease d equity in one spouse’s sepa

rate rea l property

. See id. ¶ ¶ 1 1 , 2 4 , 2 7 ( a

p p o rt i o n i n g t h e “ a

p p r e c i a t i o ne qu i t y” in t h e wife’ s separ ately

owned townhouse betwee n the wife ’s sepa rate interest and the
c omm un it y ’s inte re st) ; see also Mic helson v. Mic helson , 1976-NMSC-026, ¶¶ 20- 22, 89 N.M. 282, 551 P.2d 638 (aff irming the district court’s a ppo rt i o n ment of the e quity in the14

pa rt ie s’ ho me —w hic h w a s ori ginal ly acqu ir ed with t he hu sb and ’s se pa

rate proper ty —betwee n “community

expenditures of time, eff

ort and money” (the community ’s interest) a nd “the nor

mal appre ciation of prope rty ” (the husband’s sepa rate interest))

. {28} To de te rm i n e w h e t h e r a p p o rt i o n m e n t

i s a p p r o p r i a t e , t h e d i s t r i c tc o u rtm u s tf i r st decide whether

the community

has, in fac t, a cquire d an intere st in the separate prope rty

. See Martinez v. Block

, 1993-NMCA-093, ¶

13, 115 N.M. 762, 858 P.2d 429 (“Apportionment is appropriate only

when a n asset has been a cquire d or its equity value incr ease d throug h the
us e of bo th s e pa rate and c omm un ity fu nd s. ” ). I f the re is no e vid e nc e of a c omm un ity int e re st in the equity

of sepa rate proper

ty , the sepa

rate interest is enti t l ed to the full value of the proper ty and appor

tionment is not proper

. Se e He rtz v . H e rtz , 1983-NMSC-004, ¶¶ 22- 23, 99 N.M. 320, 657 P.2d 1169 (holding that the husba nd was e ntitled to the full v al ue of appre ciation of h i s separ ate pr operty rathe r than only

“propor tionate appr eciation” wher e there was no e vidence to support apportionment of the a pprec iation).
{29} I n g ener al, when proper ty is “ acquir ed as separ ate pr operty , it retains such c hara cter even thoug h community funds may

later b e employ ed in making improvements or discharg ing a

n indebtedness ther eon.” Cam pb e ll v . Cam

pb e ll , 1957-NMSC-001, ¶ 80, 62 N. M. 33 0, 31 0 P.2d 26 6. Ho we ve r, the c omm un ity may a c qu ir e an inte re st i n— sp e c if ic a lly a li en on—separate proper ty wher e the community ’s contributions have e nhance d the value
o f th e s e p ar a te p r o p e rty

. See R os s , 2017-NMCA-061, ¶ 8 (“The community

is . . . entitled to a lien ag ainst t he sepa rate proper

ty of a spouse for the c ontributions made by the community that enhanc ed the value of the proper ty during marria g e.”) . Contributions by the community

do not, alone, g ive rise to a c ommunity interest. See M

artinez , 1993-NMCA-093, ¶ 12 (e x plaining that “the sim ple fact that the community has expended funds or

labor on a separ ate a sset does not, by itself, g ive rise to either

a community

interest i n t h e as s et or a ri g ht t o r e imb ur se me nt f

or mon e y sp e nt o n th e a sse t” ). Ra the r, it is on ly the inc re a se —if any —in the value of

the asset attributable to community contributions that is apportioned among separ ate and community interests. See J

urado v. Jurado , 1995-NMCA-014, ¶ 10, 119 N. M. 52 2, 89 2 P. 2d

96 9; Martinez , 1993-NMCA-093, ¶ 11 (“[U]nder New Mexi co law the community

is entitled to an equitable lien ag ainst [a spouse’s] separate proper ty only to the
e xten t th a t th e c omm

un ity c an s ho w t

hat it s f un ds or la bo r e nh a nc e d th e va lue of

the pr op e rt

y or inc re a se d th e e qu ity

int e re st i n the p ro pe rt

y .” ). “ Any

inc re a se in t

he va lue of

se pa rate proper ty is presumed to be separ ate unless it is rebutted by direc t and positive evidenc e that the incre ase w as due to c ommunity funds or labor .” Jurado , 1995-NMC A- 0 14, ¶ 11. The party claiming the exist ence of a c ommunity lien on separ ate p ro p er t y bear s the burden of p r o v i n g t h a tt h e p r o p e rt y’ s a p p r e c i a t i o ni s a t t r i b u t a

b l e t o t h e e x p e n d i tu r e o f c o m m u n i t y, rathe r than sepa

rate , funds. See Trego , 1998-NMCA-080, ¶ 8.
{30} Her e, in orde r to be entitled to a community lien on the Fr ancis Home , it was Wife’s burd e n to pr ov e that so me po rt ion (u p to the fu ll a mou

nt) of the ho me ’s a

pp re c iatio n e qu ity
a t th e tim e of dis so lut ion wa s attri buta ble to the ho me imp ro ve me nts ma de wi th c omm un ity funds and/or the community ’s contributions t o p aying down the principa l balance on theSee, e.g ., Trego , 1 99 8- NM CA -0 80 , ¶ 13 (“No on e me tho d o f a pp or tio nme nt i s 9 favor ed above all others; the trial c ourt may use whatever m et h od will achieve substantial jus tic e , a nd is sup po rt e d by su

bs tanti a l e vid e nc e in t

he re c or d. ” ); Do rb in , 1986-NMCA-114, ¶¶ 23- 24, 31-33 ( discussing two f ormulas for a

pportioning pr operty , one that the Do rb in Court adopted and a

pplied (the Mo or e formula) and one that our Supreme Court ha d applied in e arl ie r c a se s ( “ fa ir

re tur n” fo rm ula )) ; se e als o Ch an c e v . Ki tc he ll , 1983-NMSC-012, ¶ 6, 99 N. M. 44 3, 65 9 P.2 d 89 5 ( e xpla ini ngthat a pa rt y c la imi nga

c omm un ity int e re st i n s e pa

rate proper ty is entitled only to “the value of the improve ments to the proper ty , not the cost of the improvements” a

nd that “whe n deter

mining a c o m m u nity

interest in community

funds expended on beha lf of prop er t y purcha sed by

a spouse be fore marria g e, the r ule has
c omm on ly

e xclu de d p ay

me nts fo r t a xes, ins ur anc e and int e re st” ); Miche lson , 1 97 6- NM SC026, ¶¶ 20- 22 (af

firming the t rial court’s calc ulation of the va lue of the c ommunity lien on the par ties’ home (the husband’s separ ate proper ty) wher e the tria l court first deduc ted from the ho me ’s va lue a t th e tim e of tr ia l $1 4, 00 0 o f t

he hu sb a nd ’s se pa rate pr op e rt

y us e d to purcha se the lot on which the home was built); Do rb in , 1986-NMCA-114, ¶ 21 (explaining th at the c omm

un ity is “ e nti tle d to a

lie n f or mor tg a g e pa y me nts ma de wi th c omm

un ity money , but only

to the extent that the mortga g e princ ipal was re duced” ).

15 mortg ag e. Se e Do rb in , 198 6- NM CA -1 14 , ¶ 21 ; c f. Mi tc he ll v . M

itc he ll , 1986-NMCA-028, ¶¶ 48-49, 104 N.M. 205, 719 P.2d 432 (af firming the district c ourt’s calc ulation of t he community ’s lien and its refusal “ to cre dit the community with any appre ciation in the value of [the husband’s sepa

rate ] property ” whe re the re w as “no evidenc e as to the value of [t he claimed] improvements”). H oweve r, the dist rict court’s finding s—which addressed the nonissue of transmutation rather than the disputed issue of whethe r the c ommunity had ac quired an intere st in (to wit, a communit y lien on) the F ranc is Home—are insufficient to allow us to decide whether

Wife met her bur den. See G reen v . Gen. Accident Ins. Co. of Am. , 1987-NMSC-111, ¶ 21, 106 N.M. 523, 746 P.2d 152 (“When finding s wholly fail to resolve in any meaning ful way

the basic issues of

fac t in d i s p u t e, they

become clea

rly insufficient to p e rm it the re vie wi ngc ourt to d e c ide the c a se a t a ll. ” (a lte ratio ns , inte rn a l qu otatio n ma rk s, and citation omitted)). As suc h, we r emand to the di strict court for the entry of findings of fac t on the question of the existence of a community lien on the Fr ancis Home

. See G reen , 1987-NMSC-111, ¶ 22 (“Where the ends of justice require , [an a

ppellate court] ma

y rema nd
a ca se to district court for the makingof prope r finding s of fa ct

. ”)

. I f t he district cour t deter mines that the comm unity acquir ed an inter est in the Fr ancis Home , it must then proce ed to appor

tion the equity

in the Fr ancis Home betwee n Husband’s se parate intere st and the communi ty ’ s inte rest in ac corda nce w ith New Mexico case law. Se e Ro ss , 2017-NMCA- 9 061, ¶ 12.
{31} We e mph a size tha t w e do no t pa ss on (1 ) wh e the r the c omm un ity a c qu ir e d a

n inte re st in H usband’s separ ate proper ty , or (2) the pr oper a

pportionment of such intere st, assuming the evidenc e supports a f

inding that one exis ts. Those deter minations must be made in the first instance on r emand. We hold only that the district court e rre d i n co ncluding that the Fr ancis Home was tra

nsmuted from Husband’s separ ate property to community proper ty and16

in distributi ng the equity

in the Fr ancis Home in acc ordanc e with that conc lusion.

III. Whether t he D is t r ic t C o ur t P r o pe r ly A dd r e s s e d a nd Distributed Other P ropert y
The 1955 Chevrolet
{32} Husband a

rgues that the district cour t failed to make a dete rmination about and proper ly distribute Husband’s intere sts in a 1955 Chevrolet. At trial, Husband te stified that Wife had g iven him the car for his birthday

in either 2009 or 2010 and that beca use Husband was busy , Wife reg istered the car in her name. Wife objecte d to Husband’s testimony based on Husband’s f

ailure to include the prope rty in his cl ai ms and contentions, but the district court ove rruled th e objection and allowed the te stimony . Husband then te stified that the vehicle w as worth a

ny wher e fr om $14,000 to $20,000 and that he had inve sted $5,000 of separ ate pr operty

to install a new eng ine i n the car. The only other testimony

reg ardingthe 1955 Chevrolet wa s made during Husband’s explanation of his basis for believingthat Wife was lay ing g roundwork “ to fi nally g et rid of [him,] ” a pla n that he stated inc luded, “Eve ry thing that ha

ppened thr oug hout the marria g e now th at I o p en ed my ey es. The [S SPAs] , the g iving he r daug hter the house , the ‘55 Chevy leav ing , the Dura max l eaving , the mule leaving .” (Empha sis added.) H usband off ere d no other testim ony reg arding the 1955 Chevrolet nor did he cross-e x amine Wife about the c ar. {33} Hu sb and ’s pr op os e d f ind ing s in c lud e d the fo llo wi ng re late d to the 19 55 Che vr ole t:

24

. [Wife ] g ave [Hu sb and ] the 19 55 Che vr ole t a s a g if t.

25

. Th e e ng in e in sta lle d into t he 19 55 Che vr ole t w a s th e se pa ra te p r o p e rty o f [H u s b an d ].

26. The va lue of the 1955 Chevr olet was $20,000.

27. [W ife] appropriated th e 1 9 5 5 Ch e vrolet and r e-g ifted it to her childre n or so ld i t.

2 8

. [Hu s b an d ] d id

n o t r e li n qu is ho r

c o n s e n t t o th e r e mo v a l o f th e 1955 Che vr ole t.

29. [Husband] did not rece ive compensation for the loss of the 1955 Che vr ole t.

Husband’s r equeste d conclusions of lawincluded that he is e ntitled to compensation f or the value of the 1955 Chevrolet and reimburse ment for the va lue of his sepa rate proper

ty in the
car . Wi f e ’ s p r o p o s e d

f in d in g s an d

c o n c lu s io n s d id

n o t c o n ta in

an y me n ti o no f

th e 1955 Chevrolet. The district court did not include any finding s or conc lusions reg ardingthe 195517

Chevrolet in its order, w hich Husband a rgues constituted er

ror a nd require s remand.
{34} We first observe that the district court wa s under no oblig atio n t o t ake evidence reg ard in g p r o p e rty th a t H u s b an d c o n c e d e d a t tr ia l w a s n o t li s te d in h is c la im s and contentions. See R utter v. Rutter , 1964-NMSC-242, ¶ 17, 74 N.M. 737, 398 P.2d 259 (holding that the district court prope rly reje cted e vidence related to an issue “outside of the issues raised by the pl eading s”). Once the district court allowed Husband to testify reg arding the 1955 Ch ev y , howeve r, the que stion is whether it err ed by not enteringfinding s or a conclusion about the ve hicle. I t is well- es t ab l i s h ed that a district c ourt’s fa ilure to make a specific reque sted finding of fa ct constitutes a findingag ainst the reque sting pa rty

. See Olivas v. Olivas , 1989-NMCA-064, ¶ 15, 108 N.M. 814, 780 P.2d 640. Particularly wher e the re questing party

has the burde n of proof

as H u sband did here , cf. W allace v. W

anek, 1970-NMC A- 0 4 9 , ¶ 9 , 81 N.M. 478, 468 P.2d 879 (explaining that “[h]e who alleg es the aff irmative m ust prove” ), “the district court prope rly could have decide d that [t he] husband did not meet his burden . . . and the ref ore c ould r ejec t [the] husba nd’s proposed f

indings of fac ts and conc lusions of l aw o n this matter.” Olivas , 1989-NMCA-064, ¶ 15. Her e, the district court—pre sented with little more than Husband’ s stand-alone testimony about “the ‘55 Chevy leaving ” and his a ssertion reg ardingits eng ine—could have de cided that Husba nd
wa s no t c re dib le and fa ile d to me e t hi s b ur de n o f p ro vin g tha t th e re we re pr op e rt

y int e re sts in the 1955 Chevy that require d distribution. “I t is the sole responsibility of the trier

of fa ct to we ig h the te sti mony , de te rm ine the c re dib ili ty of the wi tne sse s, re c on c ile inc on sis te nc ie s, and dete rmine whe re the truth lies, and we, a s the revie wing co u rt , d o n o t weig h the
cre dibilit y

of live witnesses.” N.M. Taxa t i o n & Rev enue D ep’t v . Casias T rucking , 2014- NMCA-099, ¶ 23, 336 P.3d 436 (alter ation, internal quotation m arks, a nd citation omitted).
{35} Not o n ly

d o w e c o n c lu d e th a t t

h e d is tr ic t c o u rt d id

n o t e r r in r e f u s in g to a d o pt Husband’s pr oposed finding s and conc lusions reg ardingthe 1955 Chevrolet, it would have been e rror

to adopt Husband’s pr oposed finding s number twenty -seve n, twenty -eig ht, and twenty -nine g iven that there was no e vidence to suppor t the m. T here was no testimony that Wife appropr iated or re- g ifted the car , that Husband did not consent to re moval of the c ar, or that he ha d never

rec eived c ompensati o n fo r i t

. As such, the district cour t’s eff ective conclusi o n that Husband fa iled to meet his burden of claiming and provingthat he had separ ate a nd community

proper ty interests in the 1955 Chevrolet supported its rejection of Husband’s pr oposed finding s. Se e Ru sse ll v . R us se ll , 1990-NMCA-080, ¶ 17, 111 N.M. 23, 8 0 1 P

. 2 d 9 3 (“ A trial cour t is only require d to make finding s of such ultimate fa cts as ar e nece ssary to determine the issues.”). We hold that the district cour t did not err by

enter ing no finding s or conc lusions reg ardingthe 1955 Chevrolet in its order

.
The Texas Pr operty {36} Hu sb and

make s a m arke dl y

sim ila r a rgume nt w ithre sp e c t to the Te xas p ro pe rt y which he and Wife co-sig ned for and ac quired duringthe marr iag e. Husba nd acknow ledg es t h a tt h e d i s t r i c tc o u rtm a d e t h e f o l l o w i n g f

i n d i n g r e g ar d i n g t h e T e x a s p r o p e rt y:18 24. The pa

rties co- signe d a purc hase f or [ W i fe] ’s daug hter . . . . The y we re name d o n th e de e d a nd mor tg a g e

. Th e mon e y fo r the purc ha se c ame fr om [Wif

e ’s da ug hte r]. Whe n the y we re no lon g e r c o- sig ne rs , the par ties quitclaimed the prope rty to [ Wife’s daug hter]. The par ties h a d n o r e a l i n t e r e s ti nt h e p r o p e rt y.

B ut H us ba

nd c on te nd s th a t th e dis tr ic t court “ fa il[e d] to de te rm ine the c omm un ity int e re st in the Texas [ p]roperty ,” which w e under stand t o b e a ch al l eng e to the suff iciency of the
e vid e nc e to s up po rt

the dis tr ic t c ourt ’s fi nd ing . We re vie w f or su bs tanti a l e vid e nc e to deter mine whether

there is “such re levant evide nce that a re asonable mi n d wo u ld find adequate to support a conc lusion.” State ex re l. King v. B & B Inv. G rp., Inc. , 2 01 4- NM SC024, ¶ 12, 329 P.3d 658 (interna l quotation marks and citation omitted). “[W ]e review the
e vid e nc e in the li ght most f avo ra ble to s up po rt

the tr ia l c ourt ’s fi nd ing s, re so lvi nga ll conflicts an d i n d ulgingall permissible infer ence s in favor of the dec ision below.” Jones , 2005-NMCA-124, ¶

8.
{37} Wif

e te sti fi e d that sh e and

Hu sb and c o- sig ne d a

no te in o rd e r f

or he r d a ug hte r t o purcha se t h e T ex as prope rty and that Wife’s da

ug hter pa id the down pay ment. Wife and Hu s band eve ntually

deede d the house to Wife’s daughter a fter Wife’ s daug hter ha d been workingfor a

while and “ felt like she . . . c ould handle it [by ] herse lf[.] ” Husband testified that he did not know the sou rc e o f t h e funds used for the down pay

ment for the T exas proper ty . This, alone, is substantial evidenc e to suppor t the district c ourt’s finding that the parties ha d no rea l interest in the Texas proper ty , thus making it unnecessa ry for the district court to distribute any

thing r elated the reto.

W i f e’ s I n co me {38} Husband a

rgues that t he dis trict court erre d by failing to addre ss and distribute Wife’s $2 83 ,0 00 of

e arn ing s d

ur ingthe marr ia g e . In su

pp or t of thi s argume nt, Hu sb and c ite s to thi s Court’s decision in Ir

win v . I rwi n in which we e x plai n ed t hat “unde r Ne w Mexico
c omm un ity pr op e rt y law[, ] e a c h spo us e ha s a one -h a lf ow ne rs hip int e re st i n a ll c omm un ity income or c ommunity

asse t s ac q u i red dur ing the marria g e.” 1996- NMCA-007, ¶ 13, 121 N. M. 26 6, 91 0 P. 2d

34 2. B ut Ir

win does not stand for the proposition that any money ear ned during the m arr iag e was community proper ty that neede d to be divi ded between the parties at the time of divorc e as H usband conte nds. Ir win , in fa c t, a pp lie d th e lim iti ngpr inc ipl e to t h e ge n er al ru l e r ega rd i n g i n co m e e arn edd u ri n g m arri age th at “o n ce co m m u n i t y

. . . ea rn i n gs are expended, rather than be i n g co n verte d into an asset, ther e is no community asset to be share d or mana g ed, and the spouse m akingthe expenditure has no duty to reimburse the community

absent some specia l circumstanc e.” Id. This Court rejec ted the wife ’s ar g ument in Ir win that sh e wa s e nti tle d to an a uto matic on e -h a lf

int e re st i n th e hu sb and ’s inc ome ear ned duringtheir sepa

ration per iod when the husba nd had alr ea d y expended all of the funds. Id. ¶ 14.19

{39} He re , H us ba

nd pr e se nte d n o e vid e nc e re g ard ing the status of Wif e ’s $2 83 ,0 00 in
e arn ing s, i.e ., wh a t por

tio n, if any , h a d n ot b e e n e xpe nd e d o r c on ve rt e d to a sse ts a nd wo uld thus be ava ilable for distribution. His theory —that Wife “conve rted community assets to her
own use a nd the community

is entitled to reimbursement for the value of

those assets”—w as not supported by

substantial evidence , or any evidenc e for that matter. W e thus hold that the district court prope rly

reje cted Husba

nd’s re quest and did not err by not distributi ng Wife’s income ea

rned dur ing the marria g e.
CO NC LU SION
{40} We r e ve rs e the dis tr ic t c ourt ’s jud g me nt w ithre sp e c t to the SSPA s a nd the F ra nc is Home and r emand f

or further proce eding s consistent with this opinion. We affirm the district
c o u rt ’ s d i s t r i b u t i o no f

a l l o t h e r p r o p e rt y. {41} IT IS SO ORDERED.

____________________________________ J. MILES H ANISEE, Ju dge

WE CONCUR:

_________________________________ LINDA M. VA NZ I, Chief Ju dge

_________________________________ TIMOTHY L. GARCIA, Judge