Egizzii v. Egizzii ( 2018 )


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  •                       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    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
    DIANE E. EGIZII, Plaintiff/Appellee,
    v.
    DAVID M. EGIZII, Defendant/Appellant.
    No. 1 CA-CV 17-0199
    FILED 4-12-2018
    Appeal from the Superior Court in Maricopa County
    No. CV2014-054538
    The Honorable Susan M. Brnovich, Judge
    REVERSED AND REMANDED IN PART; AFFIRMED IN PART
    COUNSEL
    Jeffrey M. Proper PLLC, Phoenix
    By Jeffrey M. Proper
    Co-Counsel for Defendant/Appellant
    Bonnie L. Booden Attorney at Law, Phoenix
    By Bonnie L. Booden
    Co-Counsel for Defendant/Appellant
    Viles Law Office LLC, Phoenix
    By James E. Viles
    Counsel for Plaintiff/Appellee
    EGIZII v. EGIZII
    Decision of the Court
    MEMORANDUM DECISION
    Judge Jennifer B. Campbell delivered the decision of the Court, in which
    Presiding Judge Lawrence F. Winthrop and Judge Paul J. McMurdie joined.
    C A M P B E L L, Judge:
    ¶1             Defendant/Appellant David Egizii argues the superior court
    erred in deciding Plaintiff/Appellee Diane Egizii did not owe him
    contribution for either mortgage payments or maintenance and repairs on
    a home they owned as joint tenants. For the following reasons, we affirm in
    part, reverse in part, and remand for further proceedings.
    FACTS AND PROCEDURAL BACKGROUND1
    ¶2            David and Diane were married in Arizona in June 1970 and
    divorced in June 1972. The couple briefly separated following their divorce
    but reconciled shortly thereafter and stayed together for more than four
    decades. The couple never got remarried and had separate finances
    throughout the remainder of their relationship.
    ¶3             In June 1988, David and Diane purchased a foreclosed
    property in “bad disrepair”on East Arroyo Verde Drive (the “Arroyo
    Home”) through a trustee sale. The trustee’s deed upon sale conveyed the
    property to “David M. Egizii and Diane E. Egizii, his wife, as joint tenants
    with right of survivorship.” David and Diane took title to the Arroyo Home
    subject to the previous homeowners’ existing loan with the Saguaro
    Savings and Loan Association (the “Saguaro Mortgage”). Also in June 1988,
    David took out a second loan for $100,000, secured by a deed of trust on the
    Arroyo Home, from Metropolitan Bank (the “Metropolitan Mortgage”).
    ¶4            The parties lived together in the Arroyo Home, raised two
    children together, and represented themselves as a married couple to
    friends, neighbors, and business associates. David earned the majority of
    the couple’s income, while Diane started multiple small businesses and
    performed the majority of the housework and yardwork. Both David and
    1 We view the facts in the light most favorable to upholding the
    superior court’s ruling. Sw. Soil Remediation, Inc. v. City of Tucson, 
    201 Ariz. 438
    , 440, ¶ 2 (App. 2001).
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    EGIZII v. EGIZII
    Decision of the Court
    Diane contributed portions of their incomes to shared household expenses,
    and both paid for various renovations to the house and property.
    ¶5             In March 2014, Diane moved out of the Arroyo Home, as the
    relationship had grown increasingly “corrosive.” In October, Diane
    initiated a partition action of the Arroyo Home.
    ¶6           After a bench trial, the superior court ordered that the Arroyo
    Home be listed for sale and the proceeds from the sale be applied as follows:
    After the payment of costs and expenses incurred in the sale and any
    outstanding mortgages or liens, David would receive payment for
    approximately $19,000 paid for homeowner’s insurance, $71,000 paid for
    property taxes, and $183,000 paid from his sole and separate funds used to
    buy the Arroyo Home. The remaining proceeds would be split equally, but
    Diane would pay David approximately $39,000 for satisfaction of an
    outstanding loan plus attorney fees from her share.
    ¶7            David filed a motion for reconsideration, arguing he was
    entitled to reimbursement for payments he had made to satisfy both the
    Saguaro and Metropolitan Mortgages. The court held:
    First, the Court does not believe that Defendant [David]
    provided proof at trial that the mortgage was a joint
    obligation. At trial, Defendant was adamant that he
    purchased the property with sole and separate funds, the
    house was his alone, and he made the mortgage payments
    from his sole and separate funds. In addition, the Court found
    that Defendant received all of the benefit of paying the
    mortgage throughout the years by taking the tax deduction.
    Defendant also testified the mortgage funds were used by
    him to pay his bills. In Equity, the Court denied Defendant’s
    request for contribution.
    Accordingly, the court denied David’s motion for reconsideration.
    DISCUSSION
    ¶8           Under Arizona Revised Statutes (“A.R.S.”) sections
    12-1218(B) and (C), real property that cannot be fairly partitioned without
    depreciating its value must be sold by an appointed commissioner; the
    court must then divide the proceeds of the sale “between the persons
    3
    EGIZII v. EGIZII
    Decision of the Court
    entitled thereto according to their respective interests.”2 The fundamental
    objective in a partition suit is to equitably divide a property so as to confer
    no unfair advantage on any cotenant, but “the only relevant equities are
    those which arise out of the relationship of cotenancy.”3 McCready v.
    McCready, 
    168 Ariz. 1
    , 3 (App. 1991) (citation omitted); see also Collier v.
    Collier, 
    73 Ariz. 405
    , 414 (1952) (partition is an equitable proceeding). We
    review the superior court’s exercise of equitable discretion for abuse
    thereof. See Michaelson v. Garr, 
    234 Ariz. 543
    , 544, ¶ 5 (App. 2014). The court
    “abuses its discretion when it makes an error of law in reaching a
    discretionary conclusion or when the record, viewed in the light most
    favorable to upholding the trial court’s decision, is devoid of competent
    evidence to support the decision.” Id. (citation omitted).
    I.     Contribution for Mortgage Payments
    ¶9             David argues the superior court erred by ruling that he was
    not entitled to reimbursement for payments toward the Saguaro Mortgage.
    He claims there is not substantial evidence in the record to support the
    superior court’s characterization of the Saguaro Mortgage as David’s sole
    responsibility, and that the court wrongly conflated the Saguaro and
    Metropolitan Mortgages after considering his motion for reconsideration.
    We agree.
    ¶10            “The ownership of property by joint tenancy originally
    derives from common law” and is fundamentally “a way two or more
    persons take and hold property as if they were one person.” Graham v. Allen,
    
    11 Ariz. App. 207
    , 208 (App. 1970). Generally, then, “[w]hen one joint tenant
    expends sums to benefit the other joint tenant, . . . the paying joint tenant is
    entitled to reimbursement.” Bowart v. Bowart, 
    128 Ariz. 331
    , 337 (App. 1980)
    (wife was entitled to reimbursement for using her separate funds to pay the
    spouses’ joint-tenancy obligations, including mortgage payments and
    taxes); see also Valladee v. Valladee, 
    149 Ariz. 304
    , 309 (App. 1986) (“Under
    the general rules of joint tenancy, a tenant has a right to contribution from
    2 We cite to the current version of the applicable statute unless
    revisions material to this decision have occurred since the events in
    question.
    3 Despite their marriage-like relationship throughout their joint
    ownership of the Arroyo Home, David and Diane were not married and we
    do not consider any equities relating thereto. See Carroll v. Lee, 
    148 Ariz. 10
    ,
    16 (1986) (“[T]he law will not give non-marital cohabitating parties the
    benefit of community property.”).
    4
    EGIZII v. EGIZII
    Decision of the Court
    his cotenants for expenditures . . . made for the benefit of the common
    property.” (citations omitted)); Brown v. Brown, 
    58 Ariz. 333
    , 336 (1941) (It
    is “well settled that, where one of two obligors equally bound pays off and
    discharges the obligation, he is entitled to recover from the other the
    proportion that he was obligated to pay.”). “However, before a tenant can
    claim a right to such contribution, it must appear that there existed a
    common obligation or liability among the cotenants at the time the
    contributing tenant made the expenditure or incurred the obligation.”
    Valladee, 149 Ariz. at 309 (citations omitted).
    ¶11            In both its initial ruling and its ruling following David’s
    motion for reconsideration, the superior court appears to have conflated the
    Saguaro and the Metropolitan Mortgages. The court referred only to “the
    mortgage payments” and “the mortgage” in its rulings, finding David had
    provided no proof that “the mortgage” was a “joint obligation” but rather
    that he had used the mortgage funds to pay his own bills. As David
    acquiesces, this characterization holds true as applied to the Metropolitan
    Mortgage. Simply stated, there was no evidence at trial that the
    Metropolitan Mortgage was a common obligation incurred for the benefit
    of both joint tenants. David testified that those funds were used to pay off
    “whatever debt [he] had at that time” and that Diane’s name was only on
    the loan because “the bank wouldn’t loan the money without both
    signatures.”
    ¶12           The record clearly establishes, however, that the facts
    surrounding the Saguaro Mortgage do not support the superior court’s
    characterization of “the mortgage” as David’s sole obligation. The available
    evidence instead demonstrates that the Saguaro Mortgage was a
    preexisting obligation that David and Diane jointly assumed at the time
    they took title to the Arroyo Home and under which they were equally
    bound.
    ¶13            First, Diane testified that she was aware she and David were
    “assum[ing] a loan that was against the property already” and that she
    herself had made some mortgage payments at some point, although she
    had no records or evidence thereof. David testified that they purchased the
    Arroyo Home through a foreclosure and it was “subject to a first mortgage,”
    initially held by Saguaro Savings and ultimately held by Bank of America.
    David also testified that he paid approximately $212,000 over the life of the
    Saguaro Mortgage.
    ¶14       Second, the trustee’s deed upon sale proclaimed that the
    Arroyo Home was conveyed to “David M. Egizii and Diane E. Egizii, his
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    EGIZII v. EGIZII
    Decision of the Court
    wife, as joint tenants with right of survivorship,” pursuant to “the authority
    and powers given to Trustee by law and by that certain Deed of Trust . . .
    made by Warren L. Foletta and Judith E. Foletta, his wife.” The deed of
    release and reconveyance eventually sent to David from Bank of America
    noted that “the indebtedness secured by the Deed of Trust executed by
    Warren L. Foletta and Judith E. Foletta (Trustors) to Saguaro Services Inc.
    (Trustee) for Saguaro Savings and Loan Association (Beneficiary) dated
    05/10/1977 . . . has been fully paid.” David testified that the “first mortgage
    holder would not take Warren F[o]letta off of . . . any documents,” and that
    the first mortgage was released in the name of the Folettas after he had paid
    it off in full. Further, Bank of America sent a letter, dated March 2006 and
    addressed to “Warren Foletta/Judith Foletta/C/o David Egizii,” returning
    one of David’s checks because “the loan is now paid in full.”
    ¶15            The record is clear that the Arroyo Home was subject to an
    existing mortgage at the time David and Diane took title as joint tenants in
    1988. They both benefitted from assuming the Saguaro Mortgage, as doing
    so allowed them to jointly take title to the property. There is no competent
    evidence contradicting David’s testimony that the Saguaro Mortgage was a
    joint obligation and that he paid it off over time from his own finances. The
    superior court therefore abused its discretion by concluding that the
    Saguaro Mortgage was David’s sole responsibility. The Saguaro Mortgage
    was a joint obligation David and Diane assumed together, and David is
    entitled to contribution for the mortgage payments he made in
    extinguishing that joint debt over the years. We therefore remand to the
    superior court for a determination of the exact amount to which David is
    entitled from the proceeds of the sale of the Arroyo Home.
    II.    Contribution for Maintenance and Repairs
    ¶16            David argues the superior court erred by not awarding him
    contribution for the maintenance and repair expenses he put into the
    Arroyo Home over the years. He contends that this court should award him
    reimbursement—not only for the list of over $10,000 worth of itemized
    expenditures he submitted to the superior court as “maintenance repairs
    and utilities”—but also for over $72,000 he submitted as “improvements”
    because the superior court should have categorized those items as
    maintenance and repairs as well. David’s opening brief is virtually devoid
    of any controlling or even persuasive authority supporting either
    proposition. He has therefore waived these arguments on appeal. See State
    v. Carver, 
    160 Ariz. 167
    , 175 (1989) (“In Arizona, opening briefs must present
    significant arguments, supported by authority, setting forth an appellant’s
    position on the issues raised. Failure to argue a claim usually constitutes
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    EGIZII v. EGIZII
    Decision of the Court
    abandonment and waiver of that claim.”(citations omitted)); ARCAP
    13(a)(7)(A).
    ¶17           Further, even if he had not waived the argument that
    maintenance and repair costs are categorically distinct from improvements,
    we are not persuaded that we should assess their reimbursable value
    differently. Arizona law does not clearly dichotomize these proposed
    categories, but it is a well-established rule that, “[w]here a co-tenant makes
    improvements in good faith, which are permanent and useful or necessary
    to the enjoyment of the property, the court as a general rule awards him the
    resulting increase in the value of the estate, and not the actual cost” of the
    improvements. In re Marriage of Berger, 
    140 Ariz. 156
    , 163 (App. 1983)
    (citations omitted). The record supports the superior court’s finding that:
    The Court finds the testimony of Zach Bunch credible that this
    property is valuable as a “knock down” property. In other
    words, the improvements didn’t increase the value of the
    property because this is the type of property that someone
    buys to knock down the house and rebuil[d].
    We therefore decline to award David contribution for any improvements,
    maintenance, or repairs.
    CONCLUSION
    ¶18            For the foregoing reasons, we reverse and remand on the
    issue of contribution for the Saguaro Mortgage, but affirm the court’s denial
    of contribution for David’s claimed improvements, maintenance, or repairs.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    7