Ross v. Negron-Ross
2017 NMCA 61
| N.M. Ct. App. | 2017Background
- Husband (pre-marital owner) purchased the Spring Creek residence in 2004; it remained his sole and separate property at marriage but declined in market value during the marriage and had mortgages totaling $559,131 at trial.
- Wife worked in Husband’s dental practice during the marriage; the district court found she embezzled $48,341 from the practice and breached her fiduciary duty; Husband was reimbursed by insurance for that loss.
- Parties married in 2010, separated in 2012, and the district court entered a final decree in October 2013 awarding Husband the Spring Creek residence and finding no community lien on it.
- Wife appealed three rulings: (1) no community lien on the Spring Creek residence despite community mortgage payments, (2) finding of breach/embezzlement, and (3) award that each party pay their own attorney fees.
- The Court of Appeals addressed whether community contributions to principal create a lien when a separate property residence depreciates in value, and whether the district court’s other factual and discretionary rulings were supported.
Issues
| Issue | Ross's Argument (Plaintiff/Appellee) | Negron-Ross's Argument (Defendant/Appellant) | Held |
|---|---|---|---|
| Whether community is entitled to a lien on Husband’s separate residence when community funds paid mortgage principal but property depreciated | No community lien is necessary; district court’s denial equitable given other factors (e.g., depletion of Husband’s investments, Wife’s misconduct) | Community contributions to principal created a community interest/lien even though property value fell | Court reverses: community is entitled to a lien; adopts Valento formula for calculation and remands for apportionment |
| Whether district court erred finding Wife breached fiduciary duty and embezzled funds from dental practice | Finding was erroneous / not supported by evidence | Substantial evidence (exhibits, expert testimony, credibility findings) supports district court | Affirmed: finding of breach/embezzlement supported by substantial evidence |
| Whether Wife should have received attorney fees (i.e., whether district court erred in each party paying own fees) | Wife argued fees should be awarded given disparity and other factors | District court balanced factors and ordered each pay own fees; Husband prevailed on some issues, both have significant assets | Affirmed: no abuse of discretion in requiring each party to pay own fees |
Key Cases Cited
- Valento v. Valento, 240 P.3d 1239 (Ariz. Ct. App. 2010) (adopted formula allocating community lien when separate property depreciates but positive equity remains)
- Jurado v. Jurado, 892 P.2d 969 (N.M. Ct. App. 1995) (community entitled to lien for community contributions that enhanced separate property)
- Trego v. Scott, 961 P.2d 168 (N.M. Ct. App. 1998) (apportionment required when separate property is enhanced by community funds)
- Portillo v. Shappie, 636 P.2d 878 (N.M. 1981) (definitions and treatment of separate and community property)
- Styka v. Styka, 972 P.2d 16 (N.M. Ct. App. 1999) (standards for appellate review of legal questions)