Koizumi v. Morogiello ( 2022 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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 Marriage of:
MICA KOIZUMI, Petitioner/Appellant,
v.
JAMES CHARLES MOROGIELLO, Respondent/Appellee.
No. 1 CA-CV 21-0683 FC
FILED 9-15-2022
Appeal from the Superior Court in Maricopa County
No. FN2020-003303
The Honorable Gregory Como, Judge
AFFIRMED
COUNSEL
kdlaw P.C., Scottsdale
By Kiilu Davis, Sally M. Colton
Counsel for Petitioner/Appellant
Owens & Perkins, P.C., Scottsdale
By Michael J. Clonts
Counsel for Respondent/Appellee
KOIZUMI v. MOROGIELLO
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Brian Y. Furuya delivered the decision of the Court, in
which Judge Jennifer B. Campbell and Judge Paul J. McMurdie joined.
F U R U Y A, Judge:
¶1 Mica Koizumi (“Wife”) appeals portions of the superior
court’s decree dissolving her marriage to James Charles Morogiello
(“Husband”), including orders regarding the division of certain assets and
debts and its award of fees. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 Wife and Husband were married in August of 2006 and have
no children. As relevant to this appeal, the parties’ assets included an
investment account with E*Trade (“E*Trade Account”), as well as an
Investment Retirement Account through Charles Schwab Corporation.
(“Schwab IRA”).
¶3 Wife filed a petition for dissolution in July of 2020. At trial,
Wife and Husband were the sole witnesses to testify and both introduced
various documentary evidence associated with their respective positions.
¶4 In its decree, the court found Husband had proved by clear
and convincing evidence that certain stocks directly transferred into the
parties’ E*Trade Account in October of 2017 (“Transferred Stocks”) were
inherited from Husband’s father’s estate. Thus, the decree held that the
Transferred Stocks were Husband’s sole and separate property. The decree
also found the parties had agreed to split the Schwab IRA evenly and
ordered that Wife and Husband receive 50% of that account. Further, the
court ordered that Wife deliver certain items of personal property to
Husband. Finally, the court declined to award either party their attorneys’
fees.
¶5 Wife moved to alter or amend the judgment under Arizona
Rule of Family Law Procedure (“ARFLP”) 83. The court denied this motion.
Wife timely appealed the denial of her motion and the underlying
dissolution decree. We have jurisdiction pursuant to Arizona Revised
Statutes (“A.R.S.”) §§ 12-120.21(A)(1) and -2101(A)(1)–(2).
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DISCUSSION
I. Property & Debt Division.
¶6 Wife challenges the court’s characterization and division of
property interests and debt between the parties. The superior court’s duty
in dividing property in a dissolution is to “assign each spouse’s sole and
separate property to such spouse” and to “also divide the community, joint
tenancy and other property held in common equitably, though not
necessarily in kind[.]” A.R.S. § 25-318(A). Aside from property acquired by
gift, devise, or descent, or after service of a petition for dissolution of
marriage, all property acquired during marriage is presumed to be
community. See A.R.S. § 25-211(A)(1)–(2). To overcome this presumption, a
spouse claiming that property is sole and separate has the burden of
proving by clear and convincing evidence that it was acquired by gift,
devise, or descent. See Am. Exp. Travel Related Serv. Co., Inc. v. Parmeter, 186
Ariz. 652, 654 (App. 1996).
¶7 We review the court’s division of property for an abuse of
discretion and review the characterization of property de novo. Helland v.
Helland, 236 Ariz. 197, 199 ¶ 8 (App. 2014). But we emphasize that
“[r]esolution of any conflict in the evidence is for the trier of fact,” Lewis v.
Midway Lumber, Inc., 114 Ariz. 426, 429 (App. 1977), and it is beyond our
function to “reweigh the evidence or determine the credibility of
witnesses.” Brown v. U.S. Fid. & Guar. Co., 194 Ariz. 85, 92 ¶ 36 (App. 1998).
A. Characterization and Division of the E*Trade Account.
¶8 Wife argues the court erred in finding that the Transferred
Stocks were Husband’s sole and separate property. She claims Husband’s
evidence was insufficient to overcome the presumption that all stocks in the
parties’ E*Trade Account were community property. We disagree.
¶9 “We defer to the trial court with respect to any factual
findings explicitly or implicitly made, affirming them so long as they are
not clearly erroneous, even if substantial conflicting evidence exists.” John
C. Lincoln Hosp. & Health Corp. v. Maricopa Cty., 208 Ariz. 532, 537 ¶ 10 (App.
2004), quoting Twin City Fire Ins. v. Burke, 204 Ariz. 251, 254 ¶ 10 (2003);
Kocher v. Ariz. Dep’t of Revenue, 206 Ariz. 480, 482 ¶ 9 (App. 2003). “A finding
of fact cannot be clearly erroneous if there is substantial evidence to support
it.” Lewis, 114 Ariz. at 429; see also Parmeter, 186 Ariz. at 655 (in the context
of property characterization, “[w]e will sustain the trial court’s judgment if
any reasonable evidence supports it”).
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Decision of the Court
¶10 Here, Husband testified1 that the Transferred Stocks were
transferred directly from his deceased father’s estate into the parties’
E*Trade Account. Husband offered into evidence a copy of his father’s
trust, which generally provided, in part, for the distribution of his father’s
estate to Husband upon death. Husband also submitted statements from
the E*Trade Account reflecting the direct transfer of the Transferred Stocks,
with no associated purchase price. Based upon this evidence, the court
found Husband had overcome the presumption that the Transferred Stocks
were community property by clear and convincing evidence. Therefore, the
Transferred Stocks were part of Husband’s inheritance, not subject to
equitable division.
¶11 Citing our unpublished decisions in Chauncey v. Chauncey, 1
CA-CV 19-0696, 2021 WL 827633 (Ariz. App. March 4, 2021) (mem. dec.),
and Glassmoyer v. Glassmoyer, 1 CA-CV 17-0333, 2018 WL 1870538 (Ariz.
App. April 19, 2018) (mem. dec.), Wife counters that Husband’s evidence
did not meet his burden to prove that the Transferred Stocks were sole and
separate property. Wife’s reliance on these cases is misplaced for two
reasons. First, her analysis mistakes evidentiary sufficiency for necessity.
Neither Chauncey nor Glassmoyer set any new evidentiary standards to be
applied in all cases. Rather, “[t]he determination of whether evidence is
‘clear and convincing’ is committed to the trial court.” Parmeter, 186 Ariz.
at 655 (quoting Estate of Page v. Litzenburg, 177 Ariz. 84, 92 (App. 1993)).
Second, Chauncey and Glassmoyer concerned the tracing of cash transfers
between accounts instead of stock transfers. Thus, these cases are also
distinguishable on their facts.
¶12 Husband’s documentary evidence corroborates his testimony
that the Transferred Stocks were inherited from his father’s estate. See
Dumes v. Harold Laz Advert. Co., 2 Ariz. App. 387, 388 (1965) (“The
uncontradicted testimony of an interested party may be rejected, but where
the testimony of an interested party is supported by ‘disinterested
corroboration,’ a rejection of that evidence amounts to arbitrary action by
1 Throughout briefing, the parties refer to a “transcript” of the
September 1, 2021 trial, which is included in the appendixes to their briefs.
Although it appears Wife filed a notice with the superior court ordering a
transcript, a certified transcript was never filed with the court to make it a
part of the record. Generally, we do not consider “transcripts” that are not
designated as part of the record. See Baker v. Baker, 183 Ariz. 70, 72–73 (App.
1995). However, under the limited circumstances in this case, we will
consider it because neither party objected and they both reference what
seems to be the same “transcript.”
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the court.”). When viewed in the light most favorable to upholding the
court’s decree, Bowser v. Nguyen, 249 Ariz. 454, 456 ¶ 8 (App. 2020), the
finding that the Transferred Stocks constitute Husband’s inheritance was
not clearly erroneous. Consequently, the court did not err in finding the
Transferred Stocks to be Husband’s separate property.
¶13 Further, because the court’s characterization of the
Transferred Stocks as Husband’s sole and separate property was not in
error, Wife’s arguments that the Transferred Stocks were not equitably
divided also fail. A.R.S. § 25-318(A) (requiring the court to assign a spouse’s
sole and separate property to that spouse).
B. Characterization and Division of Schwab IRA.
¶14 Wife argues that if Husband’s evidence regarding the
Transferred Stocks was sufficient to prove it was sole and separate
property, then her evidence regarding the sole and separate character of the
Schwab IRA should likewise be sufficient to establish that asset as her sole
and separate property. But this position contradicts Wife’s joint pretrial
statement and testimony.
¶15 Divorcing parties must exchange and file a pretrial statement.
See ARFLP 76.1. “The pretrial statement controls the subsequent course of
the litigation and is intended to avoid unfair surprise at trial.” Bobrow v.
Bobrow, 241 Ariz. 592, 598 ¶ 28 (App. 2017) (cleaned up).
¶16 In her joint pretrial statement, Wife represented that the
Schwab IRA was a rollover account containing premarital funds. However,
she also stated she was “unable to obtain documentation to support this
[position],” and she “propose[d] this account be divided equally.” At trial,
although Wife again equivocated as to the characterization of the Schwab
IRA, she ultimately testified she did not have documentation to support her
position and could not prove that it was her sole and separate property. In
any event, Wife asked the court to adopt the recommendation she made
regarding the disposition of the Schwab IRA; that is, that the account be
split equally between Wife and Husband. This is exactly what the court did,
and we do not believe this was error. Wife conceded any dispute she could
have argued to contest the presumption that the Schwab IRA was
community property. On this record, we conclude Wife was bound by her
position in her pretrial statement, her trial testimony, and her request that
the court divide the Schwab IRA equally.
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KOIZUMI v. MOROGIELLO
Decision of the Court
C. Debt Division.
¶17 Wife also claims the court inequitably divided some
community debts. She argues she paid $27,000 from her sole and separate
property to discharge tax liability allegedly related to Husband’s
inheritance and therefore should be awarded an equalization to reimburse
her for use of her separate property to satisfy the debt. She further claims
the community should be responsible for $10,000.00 in credit card debt she
incurred before filing of the Petition to pay her attorneys’ fees in this case.
¶18 As to Wife’s claim regarding the tax debt, Arizona presumes
that when a spouse makes a voluntary payment using their separate
property to pay a community expense during marriage, that payment is a
gift to the community. See Baum v. Baum, 120 Ariz. 140, 146 (App. 1978). In
such cases, the paying spouse is entitled to reimbursement “[o]nly if there
is an agreement” to reimburse. Id.; Bobrow, 241 Ariz. at 595 ¶ 9. Tax debts
that arise during marriage are presumed to be community liabilities, unless
proven otherwise by clear and convincing evidence. See Hammett v.
Hammett, 247 Ariz. 556, 562 ¶ 29 (App. 2019).
¶19 Here, Wife offered no evidence that she had an agreement
with Husband to reimburse her for payment of the tax debt using her
separate property. Thus, although the court did not address this issue, her
claim for equalization fails for this reason, and we must affirm the court’s
denial of that claim. See Glaze v. Marcus, 151 Ariz. 538, 540 (App. 1986) (“We
will affirm the trial court’s decision if it is correct for any reason, even if that
reason was not considered by the trial court.”).
¶20 Moreover, the court observed Wife failed to present evidence
sufficient to determine what percentage of that debt was attributable to
Husband’s separate property, if any, and therefore denied Wife’s request
for equalization stemming from her payment of that debt. The record
supports that determination.
¶21 Wife did provide evidence that a payment was made to the
Internal Revenue Service. But Wife’s testimony alone points to Husband’s
inheritance as the origin of the tax debt, and nothing establishes what
proportion of the tax debt was due to Husband’s inheritance. It was within
the court’s discretion to disregard Wife’s uncorroborated testimony. Dumes,
2 Ariz. App. at 388 (“The uncontradicted testimony of an interested party
may be rejected.”). We are required to view the evidence in the light most
favorable to upholding the decree and not reweigh the evidence. Bowser,
249 Ariz. at 456 ¶ 8; Brown, 194 Ariz. at 92 ¶ 36. Thus, the court correctly
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Decision of the Court
denied Wife equalization for payment of the tax debt because the evidence
she offered was insufficient.
¶22 Regarding Wife’s claim that the court erred in not treating her
$10,000 in attorneys’ fees as a community obligation, Wife cites Cardinal &
Stachel, P.C. v. Curtiss, 225 Ariz. 381, 384, ¶¶ 7, 10 (App. 2010), for the
proposition that pre-petition fees may benefit the community by facilitating
the orderly and lawful division of assets and such fees need not be incurred
with the primary intent to benefit the marital community for them to
constitute a community obligation. While this may be true in “certain
circumstances” for “some cases,” the Curtiss case does not require a court
to presume that pre-petition attorneys’ fees benefit the parties’ marital
community. Curtiss, 225 Ariz. at 384 ¶¶ 7, 10. Instead, the party claiming
that such pre-petition fees are community in nature bears the burden of
affirmatively establishing that “some benefit was intended for the
community.” Id. at 384 ¶ 10.
¶23 Here, the record establishes only that Wife believed her
$10,000 expenditure on pre-petition fees should be a community obligation
because “as far as [she knew, Husband] used community funds to pay his
attorney fees, as well[,]” and she felt “it’s [fair] for . . . it to be considered
community.” There is little in the record regarding how Husband obtained
funds for his attorneys’ fees. His testimony at trial was that he sold his sole
and separate stock. But regardless of whether Husband used community
funds to pay for his fees or not, Wife’s testimony was insufficient to prove
that her incurring of debt for fees intended some benefit for their marital
community. Thus, the court did not err in assigning Wife the $10,000 charge
for her pre-petition attorneys’ fees as her sole and separate debt.
II. Return of Certain Personal Property.
¶24 In his pretrial statement Husband disclosed a list of certain
items of personal property he wanted to be returned after Wife vacated the
marital residence. At trial, he reiterated his desire for Wife to return those
items. Wife replied she thought Husband’s request for these items was “a
bit petty,” but otherwise did not contest the request.
¶25 On appeal, Wife objects to the return of Husband’s personal
property, arguing the court failed to “conclusively establish that the
additional property items requested by Husband were in Wife’s
possession” or to establish the value of these items. However, because Wife
did not raise these arguments below, we decline to address them here. See
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Decision of the Court
McDowell Mountain Ranch Land Coal. v. Vizcaino, 190 Ariz. 1, 5 (1997) (parties
may not raise arguments for the first time on appeal).
III. Attorney’s Fees
¶26 As a final matter, Wife objects to the court’s denial of her
request for attorney’s fees, which we review for abuse of discretion. See
Magee v. Magee, 206 Ariz. 589, 590 ¶ 6 (App. 2004). Wife challenges the
court’s findings pursuant to A.R.S. § 25-324(A) that Husband did not act
unreasonably in the litigation. Wife asserts Husband’s behaviors were
unreasonable, but the trial court found that neither party acted
unreasonably in the litigation. The record supports that finding. Therefore,
the court did not abuse its discretion by denying Wife’s request for
attorney’s fees.
CONCLUSION
¶27 Because Wife has shown no error, we affirm the decree.
¶28 Both parties request an award of their respective attorney’s
fees under A.R.S. § 25-324 and taxable costs on appeal. In our discretion, we
award Husband his reasonable attorney’s fees on appeal pursuant to A.R.S.
§ 25-324(A), given the comparative state of the parties’ financial resources
and the positions they have taken on appeal. We additionally award
Husband his taxable costs. Husband’s award of fees and costs is contingent
upon his compliance with Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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