Nitsch v. Klavuhn
1 CA-CV 20-0622-FC
| Ariz. Ct. App. | Jul 27, 2021Background
- Michelle Nitsch filed for legal separation in 2016 after ~15 years of marriage; matter converted to dissolution.
- Both parties had retirement accounts predating the marriage and each asserted they could trace premarital (separate) funds.
- The superior court found neither party sufficiently traced premarital funds and appointed a special master to divide the community portion of the retirement accounts.
- The special master found Husband made contributions after termination of the marital community and recommended crediting Husband for those contributions “by stipulation” but stated no gains or losses would be attributable to them.
- Neither party objected to the special master’s report; the court adopted the report but reserved jurisdiction to enter a QDRO. Husband’s proposed QDRO credited him for post-petition contributions adjusted for gains/losses; the court entered that QDRO over Wife’s objection.
- Wife appealed, arguing waiver/jurisdictional error and that gains on Husband’s post-petition contributions were community property or otherwise awarded to her by the special master’s report.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Waiver / jurisdiction to modify special master report | Husband waived any claim to gains by not objecting to the special master’s report | The report and minute-entry adopting it were not final; court retained jurisdiction to enter QDRO so no waiver | No waiver; special master report and minute entry were not final and court properly entered QDRO under reserved jurisdiction |
| Characterization of post-petition contributions and investment gains | Gains on retirement account increases are community property or were effectively awarded to Wife by the special master’s “stipulation” language | Contributions after service of petition (and gains on them) are Husband’s separate property under A.R.S. §25-213(B); no evidence community caused the gains | Court held post-petition contributions and their gains are Husband’s separate property and properly credited to him in the QDRO |
| Effect of special master language and stipulation | The special master’s statement that parties stipulated precludes awarding gains to Husband | No competent evidence of any stipulation; special master exceeded authority if it attempted to divest Husband of separate property | Court found no actual stipulation in the record; it was not bound by the special master’s contrary statement and correctly awarded Husband gains |
Key Cases Cited
- Boncoskey v. Boncoskey, 216 Ariz. 448 (App. 2007) (order adopting special master not final when court contemplates later QDRO entry)
- Choy Lan Yee v. Yee, 251 Ariz. 71 (App. 2021) (appealability limits for post-decree family-court orders)
- Proffit v. Proffit, 105 Ariz. 222 (1969) (divorce court cannot compel divestiture of title to separate property)
- Weaver v. Weaver, 131 Ariz. 586 (1982) (court’s authority limited to assigning separate property to each spouse)
- Cockrill v. Cockrill, 124 Ariz. 50 (1979) (increases attributable to separate property remain separate unless community effort caused them)
- Schickner v. Schickner, 237 Ariz. 194 (App. 2015) (standards of review for property characterization and division)