Court Opinion

ID: 9946263
Source: CourtListenerOpinion
Date Created: 2024-02-29 16:04:51.251533+00
Date Added: 2024-06-11T14:25:33.839715
License: Public Domain

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

              KEVIN FOSTER BONAM, Petitioner/Appellant,

                                        v.

                GENESIS M. BONAM, Respondent/Appellee.

                           No. 1 CA-CV 23-0277 FC
                                FILED 2-29-2024

           Appeal from the Superior Court in Maricopa County
                          No. FN2020-003405
                    The Honorable Max Covil, Judge

   AFFIRMED IN PART; REVERSED AND REMANDED IN PART

                                   COUNSEL

Rose & Associates PLLC, Chandler
By Timothy J. Rose
Counsel for Petitioner/Appellant

Genesis M. Bonam, Glendale
Respondent/Appellee
                            BONAM v. BONAM
                            Decision of the Court

                       MEMORANDUM DECISION

Presiding Judge Paul J. McMurdie delivered the Court’s decision, in which
Judge Maria Elena Cruz and Judge Cynthia J. Bailey joined.

M c M U R D I E, Judge:

¶1             Kevin Bonam (“Husband”) appeals from the superior court’s
decree dissolving his marriage to Genesis Bonam (“Wife”) and the court’s
denial of his motion for an amended judgment. Husband contests the
court’s equitable lien calculation on his sole and separate property. He
asserts that the court erred by (1) failing to order an appraisal for the marital
residence as of the date of marriage and (2) not including Husband’s home
equity line of credit (“HELOC”) in the equitable lien calculation. We find
no error on these issues, but because of mathematical errors, we remand for
the superior court to recalculate the equitable lien.

              FACTS AND PROCEDURAL BACKGROUND

¶2           In 2015, before the parties’ marriage, Husband bought a home
(“Carver Property”) and took the title in his name. The next year, Husband
and Wife married. They used the Carver Property as their marital residence.
In 2018, Husband took out a HELOC to purchase solar panels for the Carver
Property.

¶3             Husband petitioned for dissolution in 2020. The court held an
evidentiary hearing on the petition, during which neither party presented
an appraisal of the Carver Property. Wife testified that she requested an
appraisal on the property, but Husband did not cooperate. The court
ordered an appraisal of the property at the time of service. It also ordered
the parties to submit proposed Drahos1 calculations after the appraisal and
provide supplemental briefs on whether the HELOC was a community
debt.

¶4            The appraiser valued the Carver Property at the time of
service at $295,000 and documented that the HELOC-financed solar panels

1      See Drahos v. Rens, 149 Ariz. 248, 250 (App. 1985).

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did not contribute to the property’s value, per guidelines. In Husband’s
briefing, he presented two Drahos calculations, one that included the
HELOC and one that did not. He did not provide a calculation employing
the Drahos/Barnett formula.2 He argued the court should use the Drahos
calculation without including the HELOC and then divide the HELOC as a
community debt. Husband argued the HELOC should be a community
debt equally divided because he bought the solar panels during the
marriage to benefit the community. He argued the benefits to the
community included an increased value of the home, a tax rebate, and
lower electricity bills. Wife argued she should not be responsible for the
HELOC debt because the solar panels, per appraisal guidelines, did not
contribute to the property’s value and because she did not meaningfully
benefit from lowered electricity bills.

¶5            In September 2022, the superior court issued the dissolution
decree. The court found that the Carver Property was Husband’s sole and
separate property, but the community had an equitable lien. The court
calculated the community’s equitable lien and awarded Wife $19,747 as her
community interest. It also found that the HELOC was a community debt
but ordered that Husband pay 100% of the HELOC. It reasoned:

      [B]ecause the solar panels do not contribute to the overall
      value of the residence, Wife should not bear any of the debt
      associated with the panels. It appears that the only benefit the
      solar panels have was a reduced electricity bill. Insofar as
      Wife cannot benefit from a lowered electricity bill (because
      the property is Husband’s sole and separate), and the solar
      panels did not contribute to appreciation of the house
      whatsoever (per the appraiser), it would be unjust and
      inequitable to make her responsible for any portion of the
      solar panels. Indeed, making Wife responsible for any debt
      associated with the solar panels would effectively nullify any
      lien she has in the property.

¶6         Husband moved for an amended judgment under Arizona
Rule of Family Law Procedure 83, which the court denied. Husband

2      Barnett v. Jedynak, 219 Ariz. 550 (App. 2009), modified Drahos to
account for the post-marriage appreciation on a spouse’s separate property.
Saba v. Khoury, 253 Ariz. 587, 591, ¶ 12 (2022). Our supreme court upheld
the modified formula and called it the Drahos/Barnett formula. Id. at 592,
¶ 14. But the original Drahos formula remains valid. See id. at 592, ¶ 16.

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appealed, and we have jurisdiction under A.R.S. §§ 12-120.21(A)(1),
12-2101(A)(1), and Arizona Rule of Family Law Procedure 78(c).

                               DISCUSSION

¶7            The superior court has broad discretion in apportioning
community property at dissolution to achieve an equitable division.
Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13 (App. 2007). And we will not
disturb the community property apportionment absent an abuse of
discretion. Barnett v. Jedynak, 219 Ariz. 550, 553, ¶ 10 (App. 2009). An abuse
of discretion occurs when the record is “devoid of competent evidence to
support the decision” or when the court commits “an error of law . . . in the
process of reaching a discretionary conclusion.” Hurd v. Hurd, 223 Ariz. 48,
52, ¶ 19 (App. 2009) (cleaned up).

A.   The Superior Court Did Not Abuse Its Discretion by Not Ordering
an Appraisal of the Carver Property for the Date of Marriage.

¶8            Husband argues that the court erred by ordering an appraisal
of the Carver Property for the date of service of the dissolution petition
rather than the date of marriage. He contends that “[b]y not ordering an
appraisal for the date of marriage, Husband was not credited for any
prenuptial appreciation in the Carver Property, while the community was
erroneously awarded all of the appreciation since Husband purchased the
Carver Property in 2016.”

¶9            It is true that, when appropriate, “the separate property
interest should be given credit for pre-nuptial appreciation.” Drahos v. Rens,
149 Ariz. 248, 250, n.1 (App. 1985). And “when separate property
appreciates both prior to and after the marriage date, the community’s
interest in any post-nuptial appreciation should be a factor of the
community’s contributions to principal divided by the value of the
property at the time of marriage.” Barnett, 219 Ariz. at 555, ¶ 21.

¶10           But it is a party’s burden to present evidence, not the court’s.
See Troutman v. Valley Nat’l Bank of Ariz., 170 Ariz. 513, 517 (App. 1992)
(“The party who asserts a fact has the burden to establish that fact.”); see
also Gutierrez v. Gutierrez, 193 Ariz. 343, 350, ¶ 27 (App. 1998) (A party
cannot fail to offer certain evidence and then complain that the superior
court abused its discretion by ignoring that evidence.). If Husband believed
“the relevant value for determining the community’s interest in later
appreciation [was] the value on the date of marriage,” he should have
provided the superior court with that appraisal. Husband failed to provide

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                            BONAM v. BONAM
                            Decision of the Court

the figures required to account for any prenuptial appreciation. He has thus
waived the right to claim it was error not to consider it.

B.  The Superior Court Did Not Err by Not Including the Husband’s
HELOC in the Equitable Lien Calculation.

¶11           “The existence and the value of an equitable lien present
mixed questions of fact and law.” Valento v. Valento, 225 Ariz. 477, 481, ¶ 11
(App. 2010). “[W]e defer to the trial court’s factual findings but review legal
conclusions de novo.” Saba v. Khoury, 253 Ariz. 587, 590, ¶ 7 (2022). And
“[w]e view the evidence in the light most favorable to upholding the trial
court’s judgment.” Id.

¶12           The purpose of an equitable lien is to reimburse the marital
community for its contributions to a spouse’s separate property. Saba, 253
Ariz. at 590, ¶ 8. Our supreme court clarified that when calculating an
equitable lien, the Drahos/Barnett formula is only a “starting point . . . . from
which courts can evaluate whether the facts of a specific case warrant a
modification of or departure from that formula.” Id. at 592, ¶ 16. If the court
departs from the formula, the equitable lien must reflect “the amount of the
community contribution and a division of equity reflecting the increase in
value due to the community contribution.” Id.

¶13           The superior court employed the Drahos formula and used the
Carver Property’s mortgage balances at the time of marriage and the date
of service to determine the community’s contributions to the principal. It
did not include the HELOC in these mortgage balance figures. Husband
argues that the superior court must include the HELOC in this calculation.

¶14            But the Drahos formula “apportion[s] to the community the
increase in the property’s value attributable to the community’s mortgage
payments.” Saba, 253 Ariz. at 591, ¶ 11. And the superior court found that
the HELOC-financed solar panels did not increase the Carver Property’s
value. See id. at 590, ¶ 7 (We defer to the superior court’s factual findings.).
Thus, the community did not need to be reimbursed for its contributions to
the HELOC. The court also had the discretion to depart from the Drahos
formula to achieve an equitable outcome. See id. at 592, ¶ 16. The court did
not err by calculating the equitable lien without the HELOC.

C.  The Superior Court Abused Its Discretion by Miscalculating the
Community’s Equitable Lien.

¶15            We address the superior court’s miscalculation sua sponte. See
State v. Fernandez, 216 Ariz. 545, 554, ¶ 32 (App. 2007) (“Although we do not

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                           BONAM v. BONAM
                           Decision of the Court

search the record for fundamental error, we will not ignore it when we find
it.”). The court used the Drahos formula to calculate the community’s lien.
See Drahos, 149 Ariz. at 250. Drahos provided that the formula requires
“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.” Id. The algebraic equation is as follows:

      Where “A” = appreciation in value of the property since
      purchase;

      Where “B” = the purchase price of the property; and

      Where “C” = community contributions to the principal,

      The value of community’s lien on the property is:

             C + [C/B × A]

Barnett, 219 Ariz. at 554, ¶ 16. The property’s appreciation, represented by
“A,” “is typically calculated by subtracting the value of the property on the
date of purchase from the appraised value on the date of service.” Saba, 253
Ariz. at 591, ¶ 12, n.2.

¶16         Here, the superior court considered and calculated the
community’s equitable lien as follows:

      A retroactive appraisal of the house was obtained by the
      parties post-trial. The appraisal indicates the house was worth
      $295,000 at the time of service. The mortgage balance at the
      time of the marriage was $220,888.32. The mortgage balance
      as of the date of service was $204,282.14. Therefore the
      community paid $16,606.18 toward[] the [principal]. Given
      the figures above, the Drahos calculation would be: $16,606.18
      + ($16,606.18/$220,888.32) × $295,000 = $38,747.55. Wife is
      entitled to $19,747.55.

As evidenced by its calculations, the superior court used the Carver
Property’s appraisal at the time of service, $295,000, as its appreciation
value. But the court failed to subtract the property’s value on the date of
purchase from the appraisal figure. See Saba, 253 Ariz. at 591, ¶ 12, n.2.
Because the court used the property’s mortgage balance at the time of
marriage, $220,888.32, as the property’s purchase price (“B” value), it
should have subtracted that figure from the $295,000 appraisal figure to

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                            BONAM v. BONAM
                            Decision of the Court

determine the property’s appreciation and then calculated the lien
accordingly.

¶17           We remand for a correct calculation. If, on remand, the parties
present the court with new figures, the appreciation value may vary. Still,
the court must subtract the purchase price, or a figure standing in for the
purchase price, from the appraisal for the time of service to reach the correct
appreciation value. See Saba, 253 Ariz. at 591, ¶ 12, n.2.

                    ATTORNEY’S FEES AND COSTS

¶18          Husband requests attorney’s fees and costs under A.R.S.
§ 25-324. Per our discretion, we decline Husband’s request. Because
Husband did not prevail on the issues he raised, he is also not entitled to
costs.

                               CONCLUSION

¶19           We affirm the issues Husband raises on appeal but remand
for the superior court to calculate correctly the community’s equitable lien
on the Carver Property.

                           AMY M. WOOD • Clerk of the Court
                           FILED: AA

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