Hammett v. Hammett
247 Ariz. 556
| Ariz. Ct. App. | 2019Background
- Parties married in Nevada in 2009 after Wife entered the U.S. on a fiancé visa; Wife had not successfully dissolved a prior Philippine marriage and later admitted that prior marriage remained undissolved.
- In November 2015 Husband (sole signatory) obtained a $78,600 loan secured by his separately titled house and purchased a condominium titled as community property.
- Husband initially filed for dissolution, later moved to dismiss after asserting Wife’s prior marriage made their marriage void; the court dismissed the dissolution and Husband then petitioned for annulment.
- At trial the superior court held the marriage was void ab initio, concluded community rights were void, treated the condo as tenants in common, ordered Wife to refinance or sell the condo, and directed sale proceeds first be applied to Husband’s loan; Wife reimbursed Husband and the condo sale proceeds were distributed accordingly.
- Wife appealed the property and debt disposition; the Court of Appeals vacated the property/debt orders and remanded, holding community property and debts acquired during a marriage that is later annulled remain community and must be allocated under community-distribution principles.
Issues
| Issue | Plaintiff's Argument (Hammett [Wife]) | Defendant's Argument (Hammett [Husband]) | Held |
|---|---|---|---|
| Whether an annulment cancels community-property status of assets/debt acquired during the marriage | Annulment voids community; court may distribute property but not treat debts as community obligations | A marriage that results in an annulment nevertheless creates community property and debt that must be divided | Annulment does not change community status; court must allocate assets and debts under community distribution rules (A.R.S. § 25-318 principles) |
| Whether Husband’s loan (solely signed, secured by his separate house) is separate or community debt | Loan is Husband’s separate debt because he alone signed and used separate real property as security; joinder rule applies to real-property encumbrances | Debt incurred during marriage is presumptively community; joinder exception for real-property transactions doesn’t apply because loan didn’t encumber a community interest in the condo | Loan is a community debt to be considered in equitable distribution; the joinder exception is inapplicable here |
| Enforceability of parties’ pretrial Rule 69 agreement that allocated assets/debts to each spouse | Agreement is binding and was accepted by the court; enforce it | Agreement was accepted by the court | The court accepted the agreement based on an incorrect legal premise (that no community existed); such acceptance cannot stand absent novation, so property/debt orders based on it are vacated |
| Remedy and effect on post-judgment enforcement (sale, reimbursements, fees) | Seek vacatur of all enforcement orders entered after appeal; undo reimbursements and fees | Respondent defended enforcement actions and distribution | Court cannot unwind the condo sale but vacated disposition orders, reimbursements, contributions, and attorney-fee awards; remand for equitable redistribution; Wife entitled to costs on appeal |
Key Cases Cited
- Weaver v. Weaver, 131 Ariz. 586 (1982) (statutory jurisdiction principles govern division of marital property)
- Cadwell v. Cadwell, 126 Ariz. 460 (App. 1980) (assets and obligations are reciprocally related; debts must be allocated for equitable disposition)
- In re Marriage of Pownall, 197 Ariz. 577 (App. 2000) (property characterization reviewed de novo)
- In re Marriage of Flower, 223 Ariz. 531 (App. 2010) (division of assets and liabilities reviewed for abuse of discretion)
- Johnson v. Johnson, 131 Ariz. 38 (1981) (community-obligation presumption applies even when separate property secures loans)
- Vance-Koepnick v. Koepnick, 197 Ariz. 162 (App. 1999) (statutory exceptions to community-debt presumption analyzed)
- Cross v. Cross, 94 Ariz. 28 (1963) (prior statement that no valid marriage yields no marital property rights; superseded by later statutes)
- Bobrow v. Bobrow, 241 Ariz. 592 (App. 2017) (post-petition maintenance of community assets from separate funds to be accounted for in equitable distribution)
- Buckholtz v. Buckholtz, 246 Ariz. 126 (App. 2019) (court must assess whether a party had full knowledge of separate-property rights when entering agreements)
- State v. Jackson, 208 Ariz. 56 (App. 2004) (abuse of discretion when court misapplies law)