Cardenas-Teran v. Vega-Fernandez

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
ROSALVA CARDENAS-TERAN, Petitioner/Appellee,
v.
RUBEN VEGA-FERNANDEZ, Respondent/Appellant.
No. 1 CA-CV 22-0377 FC
FILED 4-11-2023
Appeal from the Superior Court in Maricopa County
No. FC2021-004262
The Honorable James N. Drake, Jr., Judge
REVERSED AND REMANDED
COUNSEL
Bert L. Roos Attorney at Law, Phoenix
By Bert L. Roos
Counsel for Petitioner/Appellee
Pittman Law Offices, PLLC, Mesa
By Samuel Q. Pittman
Counsel for Respondent/Appellant
CARDENAS-TERAN v. VEGA-FERNANDEZ
Decision of the Court
MEMORANDUM DECISION
Judge Maurice Portley 1 delivered the decision of the Court, in which Vice
Chief Judge David B. Gass and Judge Brian Y. Furuya joined.
P O R T L E Y, Judge:
¶1 The superior court found that mistake or fraud made a
disclaimer deed ineffective to overcome the presumption that real property
purchased during the parties’ marriage was community property. We hold
that the court erred because not only were the defenses of mistake and
fraud not properly alleged, but also they were not supported by sufficient
evidence. We reverse the community-property award as to this real
property only and remand for the superior court to designate that property
as separate, determine the value of any community lien, and allocate the
property accordingly.
FACTS AND PROCEDURAL HISTORY
¶2 Rosalva Cardenas-Teran (“Wife”) and Ruben Vega-
Fernandez (“Husband”) married in 2009. The next year, Husband took out
a secured loan and acquired title to a residence (“the Residence”) in his
name. According to Husband, and confirmed by Wife in a
contemporaneous disclaimer deed disavowing any interest in the
Residence, Husband used his separate property for the $800 down payment
and the closing costs.
¶3 Wife petitioned for dissolution in 2021. She asserted in her
pretrial statement that the Residence was community property, but she did
not allege in that statement or in her pleadings that the disclaimer deed was
the product of mistake or fraud. She instead stated that the mortgage
company had required that the Residence be titled in Husband’s name due
to Wife’s undocumented immigration status and financial considerations.
¶4 At trial, Wife testified that she sought only the equity
accumulated in the Residence during the marriage. She stated that she had
1 The Honorable Maurice Portley, Retired Judge of the Court of
Appeals, Division One, has been authorized to sit in this matter pursuant
to Article 6, Section 3, of the Arizona Constitution.
2
CARDENAS-TERAN v. VEGA-FERNANDEZ
Decision of the Court
signed “something for [Husband] so that they would be able to give him
the [Residence]” and believed that if she did not sign, “then they were going
to ask [for immigration] documentation from [her], and [she] didn’t want
to get involved in that” because she “didn’t have documentation to be able
to give them and [she] really liked the house.” She further commented that
she “obviously . . . wasn’t counting on the idea that ten years later [she] was
going to get divorced.” She testified that she has only a very basic
understanding of English, which was the language used in the loan
documents and the disclaimer deed. She stated she did not remember
whether any documents were translated for her and did not know what she
signed except she “knew that [she] needed to sign it so that [Husband]
could get the house.”
¶5 The superior court ultimately ruled in the dissolution decree
that the Residence was to be equally divided as community property
because Wife’s testimony established mistake or fraud by clear and
convincing evidence. Husband timely appeals, arguing that the Residence
is his separate property. We have jurisdiction under A.R.S. § 12-2101(A)(1).
DISCUSSION
¶6 The superior court’s classification of property as community
or separate is a question of law that we review de novo. Bell-Kilbourn v. Bell-
Kilbourn, 216 Ariz. 521, 523, ¶ 4 (App. 2007).
¶7 Though property acquired during the marriage
presumptively is community property, a disclaimer deed rebuts that
presumption and is enforceable absent mistake or fraud. Id. at 523–24,
¶¶ 7–11; Bender v. Bender, 123 Ariz. 90, 92–93 (App. 1979). As an initial
matter, a party challenging a disclaimer deed must identify that challenge
in the pretrial statement in order to properly present it for trial. See Ariz. R.
Fam. L.P. 76.1(g)(6); Leathers v. Leathers, 216 Ariz. 374, 378, ¶ 19 (App. 2007)
(construing identical provision in civil rules). Further, mistake or fraud
must be pled affirmatively and proved by clear and convincing evidence.
Bender, 123 Ariz. at 94; Femiano v. Maust, 248 Ariz. 613, 616, ¶ 10 (App. 2020),
disapproved of on other grounds by Saba v. Khoury, 516 P.3d 891, 897, ¶¶ 18–19
(Ariz. Sept. 14, 2022).
¶8 Here, the superior court correctly recognized that the
disclaimer deed rebutted the community-property presumption. The court
erred, however, by invalidating the disclaimer deed based on mistake or
fraud. As an initial matter, those defenses were not properly before the
3
CARDENAS-TERAN v. VEGA-FERNANDEZ
Decision of the Court
court—Wife neither pled them 2 nor squarely identified them in her pretrial
statement, and at trial she testified that she sought only a share of
community equity.
¶9 Moreover, even assuming the court could consider mistake or
fraud, the evidence was insufficient to support either defense. Mutual
mistake exists when the parties’ written agreement does not express their
intent, and unilateral mistake exists when one party engaged in fraud or
other inequitable conduct. Hill-Shafer P’ship v. Chilson Fam. Tr., 165 Ariz.
469, 473 (1990); Jeffries v. First Fed. Savs. & Loan Ass’n of Phx., 15 Ariz. App.
507, 510 (1971). Fraud requires, inter alia, proof that one party relied on the
other’s knowingly false material representation. Comerica Bank v.
Mahmoodi, 224 Ariz. 289, 291–92, ¶ 14 (App. 2010). Here, there was no
evidence of mutual mistake. And though Wife’s testimony suggested that
the disclaimer deed may not have been translated for her and she may not
have fully understood the import of her signature on that document, she
did not present clear and convincing evidence that she signed in reliance
on another’s knowingly false representation or other inequitable conduct.
¶10 The only conclusion supported by the evidence is that the
Residence is Husband’s separate property. That said, if the community
made contributions to the Residence during the marriage, the community
is entitled to an equitable lien based on the value of those contributions. See
Bell-Kilborn, 215 Ariz. at 524, ¶ 12. We note that depending on the evidence,
an equitable lien may result in an allocation substantially like the one
appealed.
CONCLUSION
¶11 We reverse the superior court’s characterization of the
Residence as community property. We remand for the court to award the
Residence to Husband as his separate property and determine the extent to
which Wife is entitled to a share in the equity based on community
2 Because Wife did not plead mistake or fraud, we need not determine
whether the heightened pleading standard required in civil cases applies in
family law cases. Before the family law rules were enacted, we applied the
civil standard in family law. See Bender, 123 Ariz. at 94. The family law
rules, however, do not describe a heightened pleading standard for fraud
or mistake—they merely provide that a respondent must “state in simple
terms its defenses to each claim asserted against the party.” Ariz. R. Fam.
L.P. 24(b)(1)(B).
4
CARDENAS-TERAN v. VEGA-FERNANDEZ
Decision of the Court
expenditures. In the exercise of our discretion, we deny Husband’s
requests for attorney’s fees on appeal under A.R.S. §§ 12-341.01 and 25-324.
AMY M. WOOD • Clerk of the Court
FILED: AA
5