Helland v. Helland
236 Ariz. 197
| Ariz. Ct. App. | 2014Background
- Married in 1989; Husband (anesthesiologist) became disabled in 2000 and began receiving monthly payments under an "own-occupation" disability insurance policy purchased by the marital community in 1995 (payments continued and increased annually; ~$14,985/month at trial).
- After disability, Husband retrained in pain management and the parties operated a medical practice in Show Low, Arizona; Wife managed the business.
- The parties sold the practice and building to a third-party physician for $750,000 in March 2011. In July 2011 Husband’s medical license was revoked due to unrelated criminal activity.
- Wife filed for dissolution in November 2010; after a three-day trial the superior court: (1) ruled disability benefits received after service of the petition are Husband’s separate property, (2) rejected Wife’s claim that Husband’s criminal acts wasted community assets (no credit/adjustment), and (3) awarded Wife spousal maintenance of $5,000/month for seven years.
- Both parties appealed issues; the Court of Appeals affirmed the superior court on all contested points.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Characterization of post-petition disability benefits | Policy bought with community funds; Wife argues benefits remain community property and she should share in proceeds | Benefits received after termination of the community compensate Husband’s post-dissolution loss of earning capacity and thus are his separate property | Affirmed: disability payments after service of petition are Husband’s sole and separate property (community did not acquire a right to future contingent disability payments) |
| Waste of community asset (medical practice) | Husband’s criminal acts caused license revocation and devalued the practice; Wife seeks compensation/credit for alleged diminished sale value | Sale to third-party for $750,000 reflected marketability; Wife failed to make a prima facie showing that criminal acts caused a reduced sale price | Affirmed: court did not abuse discretion rejecting waste claim; evidence supported sale price as best market indicator |
| Spousal maintenance—entitlement | Wife unable to be self-sufficient due to PTSD, age, and limited employment prospects; assets awarded are insufficiently liquid | Husband argued Wife is employable and received adequate assets in division | Affirmed: substantial evidence Wife qualifies under A.R.S. §25-319(A); award of $5,000/month for 7 years is supported by record (amount and duration reasonable to promote transition to independence) |
Key Cases Cited
- Hatcher v. Hatcher, 188 Ariz. 154 (App. 1996) (disability insurance primarily compensates for lost earning capacity; post-dissolution disability proceeds are separate property)
- In re Marriage of Kosko, 125 Ariz. 517 (App. 1980) (disability benefits are separate property of disabled spouse after dissolution)
- Jurek v. Jurek, 124 Ariz. 596 (Ariz. 1980) (compensation for personal injuries belongs to injured spouse as separate property)
- Flowers v. Flowers, 118 Ariz. 577 (App. 1978) (older decision treating certain disability retirement benefits as community property; Court of Appeals declined to follow its dicta here)
- Bugh v. Bugh, 125 Ariz. 190 (App. 1980) (worker’s compensation awards paid after dissolution are the worker’s separate property)
- Van Loan v. Van Loan, 116 Ariz. 272 (App. 1977) (pensions as deferred compensation vesting upon performance; distinguished from contingent disability benefits)
- Cullum v. Cullum, 215 Ariz. 352 (App. 2007) (standard of review for spousal maintenance; court may award maintenance if any statutory factor in §25-319(A) is met)