Opinion ID: 403699
Heading Depth: 2
Heading Rank: 2

Heading: The Community Property Issue

Text: 31 As noted above, Republic could have rebutted National's prima facie case for quiet title relief by proving that the FSLIC-to-Goldbergs conveyance passed title to the ranch as community property. This result would follow because under Arizona law, community property is not liable for the separate debts of one spouse. 6 Hamada v. Valley National Bank, 27 Ariz.App. 433, 436, 555 P.2d 1121, 1124 (1976). National contended that the deeds in evidence were sufficient, as a matter of law, to establish that joint tenancy interests, rather than community property interests, were created by the conveyance. In opposition, Republic failed to present any factual evidence, but instead rested entirely on the strength of Arizona's presumption in favor of community property. Consequently, we are not put to the task of determining whether the non-moving party's evidence is sufficient to raise a genuine issue of fact; rather we must decide only whether National's motion on this particular issue was adequately supported. 32 It is a well-settled principle of law in Arizona that all property acquired by either or both of the spouses during coverture is presumed to be community property. King v. Uhlmann, 437 P.2d 928, 943 (Ariz.1968); Bender v. Bender, 123 Ariz. 90, 597 P.2d 993, 995-96 (Ariz.App.1979). This presumption is a creature of state law and we must look to the law of Arizona for the effect it is to be given in these proceedings. Fed.R.Evid. 302. 33 In Porter v. Porter, 67 Ariz. 273, 195 P.2d 132 (1948), the Arizona Supreme Court described the presumption as follows: 34 This presumption can be rebutted only by 'strong,' 'satisfactory,' 'convincing,' 'clear and cogent,' or 'nearly conclusive evidence.' In this respect it differs from most legal presumptions that are dispelled immediately upon the production of any evidence negativing the presumption. The court must be satisfied that the property really is separate before it can state that the presumption has been dispelled. As long as there is any doubt, the property acquired during coverture must be presumed to be community property. 35 Id. 195 P.2d at 136. Therefore, unlike most other presumptions, Arizona's community property presumption shifts to the party opposing the presumption the burden of proving the creation of an estate other than community property. However, since it was incumbent upon National as the moving party to demonstrate the absence of genuine issues of fact and that it was entitled to prevail as a matter of law, the presumption has only a limited impact in this setting. 36 Despite the strength of this presumption, Arizona recognizes (t)he right of a husband and wife to hold property as joint tenants in derogation of their community property status ... provided it clearly appears that the spouses agreed the property should be taken in that manner. Safley v. Bates, 26 Ariz.App. 318, 548 P.2d 31, 33 (1976). Applying these principles to the conveyance of real property, Arizona's Supreme Court has held that: 37 As between husband and wife a joint tenancy is an exception to the community property rule of this state and in derogation of the general policy of that system of holding property, and this being true a clause in a deed creating a joint tenancy between them should be effective only where it clearly appears that both spouses have agreed that the property should be taken in that way. A deed is generally signed by the grantor only, hence, before a joint tenancy clause may be held binding on the grantees and the community property law thereby defeated, we think it necessary not merely that the deed contain language creating such an estate but that it further appear that the deed was accepted by the spouse whose property it is sought to bring within its terms, knowing that it contained that provision. If the deed itself contains nothing showing this fact, such, for instance, as an acceptance of the terms thereof in the handwriting of the grantees, or an endorsement by the recorder that it was placed of record at the request of the deceased spouse, it might be established by any proper extrinsic evidence. 38 In re Baldwin's Estate, 50 Ariz. 265, 71 P.2d 791, 795 (1937). 39 In the instant case, National presented two deeds which purport to convey title to the ranch from FSLIC to the Goldbergs. Both deeds are dated April 17, 1967, and contain a joint tenancy clause. One of the deeds was recorded on June 21, 1967. There is no written acceptance by the Goldbergs in that deed, and it bears a notation that it was recorded at the request of FSLIC without J.T. acceptance. The other deed was recorded on the following day, June 22, 1967, and contains an acknowledgment executed by both Goldbergs which recites that their signatures evidence their intention to acquire said premises as joint tenants with the right of survivorship, and not as community property or as tenants in common. 40 Republic has argued that the deed first recorded effectively passed title to the Goldbergs and in the absence of their signed acceptances thereon, conveyed the ranch to them as community property. It maintains, therefore, that to create a joint tenancy estate, it was necessary for the Goldbergs to convey the ranch to a third party and then to expressly accept a reconveyance back in joint tenancy form. This argument rests on a misreading of the Baldwin case. The Baldwin court made clear that spousal acceptance of a joint tenancy estate need not appear on the deed itself. 71 P.2d at 795. The mere fact that a deed which purports to convey property to husband and wife as joint tenants contains no written acceptance of that estate by the grantee-spouses does not make the deed legally ineffective to create a joint tenancy. Although such a deed, standing alone, is insufficient evidence to overcome the presumption in favor of community property, extrinsic evidence is admissible to demonstrate that the spouses did in fact knowingly accept the property as joint tenants. Baldwin, supra, 71 P.2d at 795. The second deed recorded, which was signed by Philip and Ruth Goldberg, is proper extrinsic evidence to prove that they knowingly accepted the property as joint tenants. 41 Nevertheless, Republic argues that the notation on the first deed (Record as is (at the) Request of FSLIC without J.T. acceptance) and the timing of the recordation of the second deed is evidence subject to conflicting inferences giving rise to triable issues of fact. It is asserted that this evidence supports an inference that the grantor, FSLIC, intended to convey the ranch as community property by recording a deed containing a joint tenancy clause, but knowing it to be facially insufficient to defeat the community property presumption. Although undisputed evidentiary facts may support contradictory inferences, the inferences must have a sufficient evidentiary basis. Bieghler, supra, 633 F.2d at 531; Neely, supra, 584 F.2d at 345. In drawing inferences, the trier of fact is not permitted to resort to speculation and surmise. British Airways, supra, 585 F.2d at 953. The evidence in this record is simply not susceptible to the inferences suggested by Republic. Parties are entitled to have the determination of their rights rest on more than speculation and guesswork. Here, the connection between the proffered evidence and conclusions urged is too tenuous to permit a jury to make it. Neely, supra, 584 F.2d at 346. 42 The evidence submitted by National in support of its motion for summary judgment leads to only one reasonable conclusion: that it was the intention of the parties to convey the ranch to the Goldbergs as joint tenants, and that the Goldbergs knowingly accepted the joint tenancy interests therein. To the extent that the judgment on this issue rests upon the district court's interpretation of Arizona's law regarding the sufficiency of the evidence to defeat the community property presumption, it must be given deference and we will reverse on that basis only if the interpretation is clearly wrong. Gee v. Tenneco, Inc., 615 F.2d 857, 861 (9th Cir. 1980). Republic has cited no Arizona decisions, nor have we found any, that would suggest a reversal on this issue.