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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

HOLLY LYN BUTLER-HINTZ, Petitioner/Appellant/Appellee,

v.

FREDERICK ERNEST HINTZ, Respondent/Appellee/Appellant.

No. 1 CA-CV 18-0428 FC

Appeal from the Superior Court in Maricopa County

No. FN2017-052438

The Honorable Roy C. Whitehead, Judge

AFFIRMED IN PART; REVERSED AND REMANDED IN PART

COUNSEL

The Law Office of Carrie M. Wilcox, PLLC, Phoenix

By Carrie M. Wilcox, Sabra Barnett

Counsel for Petitioner/Appellant/Appellee

Frederick Ernest Hintz, Glendale

Respondent/Appellee/Appellant

FILED 9-26-2019
BUTLER-HINTZ v. HINTZ

Decision of the Court

2

MEMORANDUM DECISION

Presiding Judge Maria Elena Cruz delivered the decision of the Court, in 

which Judge Kent E. Cattani and Judge Kenton D. Jones joined.

C R U Z, Judge:

¶1 Frederick Ernest Hintz (“Husband”) appeals the superior 

court’s dissolution finding of a community lien on Husband’s 

condominium and the calculation of the community’s share of the sale of 

the parties’ business. Holly Lyn Butler-Hintz (“Wife”) cross-appeals the 

judgment giving Husband and Wife joint custody over their two dogs. For 

the following reasons, we affirm in part, and reverse and remand in part.

FACTS AND PROCEDURAL HISTORY

¶2 On May 26, 1990, the parties were married in Phoenix. In 

2006, Husband purchased a condominium to use as his insurance 

company’s place of business in Peoria. In 2008, Wife signed a disclaimer 

deed waving any interest in the condominium. The parties agree the 

condominium is Husband’s sole and separate property. Prior to filing of 

the petition for dissolution, Husband sold the insurance business to his 

adult daughter from a previous relationship. Initially, Husband disclosed 

the sales price as $175,000. Then, during the pendency of the divorce,

Husband executed a contract addendum purportedly reducing the

purchase price to $50,285.95. Still, the superior court accepted $175,000 as 

the final purchase price.

¶3 On the scheduled trial date, instead of proceeding to trial, the 

parties participated in a settlement conference with the superior court. As 

a result of that settlement conference the parties entered into an agreement

under Arizona Rule of Family Law Procedure 69. That agreement included 

final resolution on distribution of personal property and refinancing of the 

loan secured by the marital residence. The parties agreed to have the court 

resolve the following issues based on briefing and without a trial: (1) 

negative equity of the marital residence, (2) determination as to any 

community interest in Husband’s condominium, (3) distribution of the 

parties’ dogs, and (4) each parties’ application for attorneys’ fees.
BUTLER-HINTZ v. HINTZ

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¶4 After considering each of the parties’ briefs, the court issued 

an under advisement ruling via minute entry. Of relevance here, the court

ruled that, because community funds were used to benefit the property, 

there is a community lien on Husband’s condominium and Wife is entitled 

to one-half of that lien. The court also ruled that the value-at-dissolution 

formula in Drahos v. Rens, 149 Ariz. 248, 250 (App. 1985), should be applied 

to calculate the amount of the community’s lien. To that end, the superior

court ordered an appraisal.

¶5 The court-ordered appraisal noted that Husband purchased 

the condominium for $206,860 in 2006, and that by April 2018 the value had 

appreciated to $210,000. However, in calculating the value of the 

community lien the superior court used Wife’s proposed purchase price of 

$170,000. The superior court also ruled the insurance business was sold for

$175,000 and Wife was entitled to half of that amount. Lastly, over Wife’s 

objection, the court ordered joint custody of the parties’ two dogs.

¶6 Husband appeals the imposition of a community lien on the 

condominium as well as the purchase price used to calculate Wife’s share 

of the sale of the business. Wife cross-appeals the dog custody and 

visitation ruling. We have jurisdiction pursuant to Arizona Revised 

Statutes (“A.R.S.”) section 12-2101(A)(1).

DISCUSSION

I. Standard of Review

¶7 “In apportioning community property between the parties at 

dissolution, the superior court has broad discretion to achieve an equitable 

division, and we will not disturb its allocation absent an abuse of 

discretion.” Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13 (App. 2007). The 

superior court abuses its discretion when it “commits an error of law in the 

process of exercising its discretion.” Kohler v. Kohler, 211 Ariz. 106, 107, ¶ 2

(App. 2005). “[W]e consider the evidence in the light most favorable to 

upholding the superior court’s ruling and will sustain the ruling if it is 

reasonably supported by the evidence.” Boncoskey, 216 Ariz. at 451, ¶ 13.

II. Community Lien on Husband’s Condominium

¶8 Separate property of a spouse does not become community 

property only because community funds are used to pay the mortgage. 

Drahos, 149 Ariz. at 249. “The community, which contributed capital to the 

separate property, is nevertheless entitled to some form of compensation.” 

Id. “The community has the right to an equitable lien against the separate 
BUTLER-HINTZ v. HINTZ

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property even though the character of that property has not changed.” Id.;

see also Honnas v. Honnas, 133 Ariz. 39, 40 (1982) (“[T]he community is 

entitled to share in the enhanced value of the property due to this

expenditure of [community] funds . . . .”).

¶9 Husband argues the superior court abused its discretion 

when it imposed a community lien on the increase in value of Husband’s 

separately-owned condominium because, according to him, the 

condominium is not residential property, but rather a business property.

¶10 We now examine the proper characterization of Husband’s 

condominium. Arizona’s tax law defines “[b]usiness” as “includ[ing] all 

activities or acts, personal or corporate, that are engaged in or caused to be 

engaged in with the object of gain, benefit or advantage, either directly or 

indirectly.” A.R.S. § 42-5001(1). “Real estate,” on the other hand, is defined 

as “includ[ing] . . . any estates in land as defined in title 33, chapter 2, articles 

1 and 2, regardless of whether located in this state.” A.R.S. § 32-2101(48)

(footnote omitted). The condominium used for the parties’ insurance 

business is an estate in land, a tangible building with a legal description 

identifying a discreet location within this state. Even if used for a business 

purpose, the condominium at issue here is real estate.

¶11 Husband misunderstands our holding in Drahos, which is 

more expansive and “applies when community funds are used to benefit 

but not necessarily improve separate property.” Drahos, 149 Ariz. at 250. 

Like in Drahos, here community funds were used to pay the mortgage 

during the duration of the marriage, a benefit to one of the spouse’s 

separate property. In addition, the condominium increased in value during 

the marriage. Much like in the case at bar, in Drahos “it was only alleged 

that community funds were used to pay the mortgage.” Id. “There was no 

indication in the record that the increased value of the residence [was] in 

any way attributable to anything besides the general trend of rising real 

estate values.” Id. Thus, the community was entitled to a lien for part of 

the increase in value of the property.

¶12 Here, it was Husband’s burden, as the party opposing the 

community lien, to show separate funds were used to pay his 

condominium’s mortgage. Id. at 251. Instead of making such a showing, 

Husband argues the community has benefitted from his sole and separate 

property by receiving a tax advantage, and by providing a place for the 

community business to conduct its operation. He also argues Wife’s 

community efforts were not responsible for any increase in the value of the 

business condominium. Lastly, Husband asserts that the monies 
BUTLER-HINTZ v. HINTZ

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withdrawn by Wife from the business accounts should be counted against 

the community as a further benefit.

¶13 “[I]t was within the trial court’s discretion to start with the 

presumption that all of the growth in [the husband’s separate property] was 

community property and then look to the evidence presented by [the 

h]usband to see if he had managed to overcome that presumption.” 

Rueschenberg v. Rueschenberg, 219 Ariz. 249, 257, ¶ 35 (App. 2008).

¶14 The parties agreed the condominium mortgage payments 

were paid from the insurance business account. The parties also agreed

that the insurance business was a community asset. Consequentially, the 

superior court found that “community funds were used to benefit the 

property and that the property has experienced an increase [in value]

during the marriage.” Therefore, the superior court did not abuse its 

discretion in also finding the community was entitled to a lien against it.

III. Applicability of Drahos Value-at-Dissolution Formula

¶15 Husband also argues that the superior court abused its 

discretion when it applied the value-at-dissolution formula in Drahos, to 

determine the value of any community lien.1 He argues the superior court 

should have used the formula in Rueschenberg to assess the active and 

passive contributions of Wife to the increase in value. We disagree.

¶16 Arizona courts are not bound by any one method when 

calculating a community lien. Rueschenberg, 219 Ariz. at 255, ¶ 25. In

Drahos, we held that when community funds are used to benefit separate 

property, applying a value-at-dissolution formula to calculate a community 

lien upon real property is appropriate. Drahos, 149 Ariz. at 250; see also

 

1 The Drahos formula is as follows:

The separate property interest is determined by 

adding the down payment to the product of the 

down payment plus principal payments made 

with separate property divided by the purchase 

price times the appreciation [in value]. The 

community property equitable lien interest is 

determined by adding the principal balance 

paid by the community to the product of the 

community property principal payments 

divided by the purchase price times the 

appreciation in value. Drahos, 149 Ariz. at 250.
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Honnas, 133 Ariz. at 41 (reaffirming a value-at-dissolution formula for real 

property cases).

¶17 Moreover, Rueschenberg is inapposite here. In that case the 

property at issue was a business, not real property. Rueschenberg, 219 Ariz.

at 250. There the court-appointed special master conducted a business 

valuation using the capitalization of earnings method, which factored in the 

business’ normalized earnings and the community’s labor in determining 

the rate at which the community should be credited for the increase in value 

of the business. Id. at 251. By contrast, real property, unless used as a rental 

property, is a form of passive investment that does not typically generate 

regular earnings during the time it is owned. Payments made toward the 

purchase obligation, along with fluctuations in the real estate market, and 

in some instances labor, are factors that contribute to the overall increase in 

its value. Increase in value of a business and of real property is determined 

by different types of calculations. In calculating the value of a business, the 

business valuation is generally used to establish the value of assets and of 

some stream of income. But in calculating the value of appreciation of real 

property, the appraisal seeks to determine the appreciation in value of a 

property from the time of purchase to a predetermined date. Regardless of 

the fact that the condominium was used for a commercial purpose, a valueat-dissolution formula may be used. Lawson v. Ridgeway, 72 Ariz. 253 (1951) 

(applying a value-at-dissolution formula to rental home business). 

Therefore, the superior court did not err when it applied the Drahos valueat-dissolution formula in determining the value of the community lien to 

be placed upon the condominium.

IV. Drahos Calculation

¶18 “A factual finding is clearly erroneous if no substantial 

evidence supports it.” City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 

172, 189, ¶ 58 (App. 2008). We evaluate each of Husband’s arguments 

regarding the purchase price and mortgage balance used to calculate the 

community lien on the condominium in turn. However, for the reasons 

stated below we do not address Husband’s arguments regarding the 

appraisal date used by the superior court.

A. Purchase Price

¶19 Husband argues the superior court erred when it used the 

incorrect purchase price of the condominium to calculate the community 

lien. He alleges that he bought the condominium for $270,000, including 

mandatory tenant improvements, and used separate funds provided by his 
BUTLER-HINTZ v. HINTZ

Decision of the Court

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mother which left a balance of $170,000. The parties agree the mortgage 

balance of the condominium was $170,000. Although Wife’s position is that 

the purchase price of the condominium was $170,000, she argued in her 

final brief that “[c]ommunity funds were used to make the purchase[] and 

pay the mortgage,” implicitly acknowledging that the purchase price 

exceeded the amount of the mortgage.

¶20 Before the decree of dissolution was entered, Husband and 

Wife acknowledged that evidence provided by Husband supported a 

purchase price of $206,860. Additionally, the court-ordered appraisal also 

identified a purchase price of $206,860. Despite the acquiescence of the 

parties and the evidence before the superior court, the decree of dissolution 

adopted a purchase price of $170,000, as suggested by Wife in her final brief 

and in her proposed decree. Whether the additional funds above the 

mortgage amount were contributed by Husband out of his separate funds 

or by the community is a question of fact for the superior court to resolve. 

Regardless of that determination, because the superior court’s finding of a

$170,000 purchase price is not supported by substantial evidence, it is 

clearly erroneous. Accordingly, we reverse and remand for an application 

of the Drahos formula utilizing a purchase price supported by the evidence.

B. Mortgage Balance

¶21 Husband argues that the superior court used an incorrect 

remaining mortgage balance to calculate the community lien.

¶22 In his final brief Husband presented the superior court with 

what was characterized as a loan payoff document stating that the 

remaining balance on the mortgage as of June 5, 2017,2 was $124,867.37. 

Wife, consistent with her position in the joint pretrial statement, and in 

Husband’s representation in his brief regarding the community lien, listed 

a mortgage balance of $121,090.67 in her proposed decree. The superior 

court adopted Wife’s suggested mortgage balance when it adopted her 

proposed decree.

¶23 The superior court’s factual finding regarding the contested 

issue of the remaining balance on the condominium’s mortgage was not 

clearly erroneous. Accordingly, the superior court did not err in accepting 

the mortgage loan figure proposed by Wife as part of the Drahos calculation.

 

2 The actual date of service was over a month earlier, on April 25, 2017.
BUTLER-HINTZ v. HINTZ

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C. Appraisal Date

¶24 Husband did not object to the appraisal date in the superior 

court. Therefore, Husband’s argument on appeal that the appreciation in 

value of the condominium should be measured by use of the appraised 

value on the date of service of the petition is waived and we do not entertain 

it now. See Airfreight Exp. Ltd. v. Evergreen Air Ctr., Inc., 215 Ariz. 103, 109-

10, ¶ 17 (App. 2007) (holding an argument waived on appeal by failing to 

raise it to the superior court).

V. Sale of Business

¶25 Husband argues the trial court erred in calculating the 

community’s interest in proceeds of the insurance business’ sale when it 

used a sale price of $175,000. “We defer to the trial court’s factual findings 

unless clearly erroneous.” Clear Channel Outdoor, Inc., 218 Ariz. at 189, ¶ 58. 

“Nevertheless, we draw our own legal conclusions from the facts found or 

implied by the family court.” Valento v. Valento, 225 Ariz. 477, 481, ¶ 11

(App. 2010).

¶26 According to Husband, after Wife filed her petition for 

dissolution of the marriage, the sale price of the business was reduced to 

$50,285.95. Nonetheless, the superior court made a factual determination 

that Husband sold the business to his daughter for $175,000. Husband’s 

sole argument on appeal regarding the sale of the business is that Wife 

failed to disclose the contract addendum showing the lower amount as the 

sales price. He does not explain why he could not similarly have submitted 

the addendum to the superior court, or why the court’s credibility 

determination was clearly erroneous. Because there is evidence to support 

the court’s finding, we hold the superior court did not err in ruling that the 

total sales price of the insurance business was $175,000.

VI. Dogs

¶27 Wife appeals the superior court’s decree of dissolution 

granting Husband and Wife joint custody and visitation of the parties’ 

dogs. Husband takes no position on appeal.

¶28 Wife argues that Arizona law does not authorize the superior 

court to grant joint custody and visitation of dogs and that said orders are 

contrary to the purpose of the law—to provide finality to the parties.

Therefore, Wife argues that the superior court’s decision awarding the 

parties joint custody and visitation of the dogs should be reversed.

Husband did not file an answering brief addressing this matter. “When a 
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debatable issue is raised on review, the failure to file an answering brief 

generally constitutes a confession of error.” Gibbons v. Indus. Comm’n, 197 

Ariz. 108, 111, ¶ 8 (App. 1999). Accordingly, we treat Husband’s failure to 

respond as a confession of error and reverse the superior court’s orders 

mandating that the two dogs be kept together and exchanged between the 

parties on a monthly basis. We remand this issue to the superior court for 

a final allocation of ownership of the dogs among the parties.

VII. Attorneys’ Fees and Costs

¶29 Both parties request an award of attorneys’ fees and costs 

under A.R.S. § 25-324 and Arizona Rule of Civil Appellate Procedure 21. In 

the exercise of our discretion we decline to award either party their 

attorneys’ fees. Because both parties partially prevailed on appeal, we also 

decline to award costs to either party.

CONCLUSION

¶30 For the foregoing reasons, we affirm in part, and reverse and

remand in part, for further proceedings consistent with this decision.