Nirenstein Garnice Soderquist PLC Sponsors MCBA Race Judicata

September 30, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Arizona Family Law Lawyer Attorney

All of us at NGS wish Rachel R. James, Esq., a divorce and family law lawyer with Nirenstein Garnice Soderquist PLC, well in her serving as the Chair of the Race Judicata Event sponsored by Maricopa County Bar Association (MCBA) this coming Sunday, October 3, 2010.

More on Valento v Valento

September 24, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Arizona Real Estate LawyersAs mentioned yesterday in this blog, The Arizona Court of Appeals recently rendered a decision addressing a very common problem that many Arizonans are facing - a severe downturn in the real estate market.  The case, Valento v Valento, and the facts concerning the matter follow.


During the marriage, Husband and Wife (both realtors) acquired multiple properties, including the marital residence.  During the marriage, Husband signed a disclaimer deed recognizing that the marital residence was Wife's sole and separate property.

After trial, it was determined that an equitable lien of $200,000 attached to the marital residence.

Husband appealed because he did not agree with the trial court's determination as to the value of the lien imposed upon the marital residence, Wife cross-appealed arguing that no equitable lien should have existed. 

Disclaimer Deed; Sole and Separate Property?

Wife's position was that she purchased the marital residence in 2005 for $1.2M, and that she made a down-payment of $560K from her separate funds and mortgaged the remaining $650K.  She testified that during the marriage, both parties paid down the principle balance with approximately $200K of community funds.  According to Wife, the outstanding mortgage balance at trial was approximately $400K.

Husband however claimed that the lot upon which the marital residence was located was purchased for $384K, which was subject to the disclaimer deed, but that community funds were used to build the home and improve the property. Husband's position was that the property increased in value during the marriage, and stressed that the disclaimer deed he signed only dealt with any "past and present" interest, but not any future interest in the property.

Neither party submitted documentary evidence to support their positions.  (The Court of Appeals was not pleased with this, pointing out that it was particularly unusual since both parties were experienced realtors.)  As a result, the trial court refused to treat the land purchase and construction as separate transactions, and adopted Wife's position that the marital residence and its property was her sole and separate property.  The Court of Appeals agreed finding that the language contained in the disclaimer deed "defined the character of the interest in the entire property, including the house".

Valuation of Marital Residence.

At trial, Husband submitted a year-old appraisal that valued the property at $1.65M.  However, he admitted that since the time of the appraisal the real estate market had declined approximately 30%.  Husband suggested that the value should be fixed at the appraisal amount, plus the value of subsequent improvements less 30%.  According to his theory, the improvements were worth $100K and fair market value of the property was $1.225M -- approximately $15K more than the combined value of the mortgage and down payment.

Wife claimed the property was worth $800K based on comps, and as such, at trial market forces reduced the value by approximately $320K.  (Remember, we did say the Arizona real estate market was "severly" depressed!

With that said, the trial court made no determination as to the value of the property after trial.  It did however, conclude that there was a community lien based solely upon the reduction of principle from the contribution of community funds.  On appeal, Husband contended that the trial court undervalued the community lien; Wife contended that no lien could exist because the property did not appreciate during the marriage.


The Court of Appeals did not agree with Wife that there should be no equitable lien because the property decreased in value during the marriage.  The Court of Appeals also found that it was improper for the trial court not to have determined the value of the property at trial so that the value of the community lien could not be made.

The Court then reaffirmed the use of the Barnett formula when separate property depreciates but positive equity remains because "community contributions toward principle have increased equity dollar-for-dollar, and the presence of positive equity means that the owner-spouse can actually realize the benefit conferred by the community".  Further, the Court explained "[i]f the community contributions were not recognized in the form of a lien, the owner-spouse would receive a windfall from the community".  As a result, the Court rejected Wife's position that a decline in the market value automatically eliminates the community's interest in sole and separate property.

The Court also saw "no reason to deprive the community of the entire value of its contributions when separate property depreciates to the point that the owner-spouse has negative equity -- to the extent that the owner-spouse has received existing value from the community, the community's contributions must be recognized.  And, the Court indicated it would be illogical to hold that the community should receive the full benefit of its contributions to principal when a portion of the equity it created can no longer be realized."  As a result, the Court held that when equity is negative, the community lien can be valued as follows C - [C/B x D]; where D equals the depreciation in value of the property during marriage; B equals the value of the property on the date of marriage; and C equals community contributions to principal or market value.

To be continued . . .








Ruling re: Equitable Lien & Downturn in Real Estate Market

September 23, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Arizona Appellate Court issues new ruling -- case of first impression, i.e., to what extent can a marital community claim an equitable lien against a spouse’s sole and separate property when community funds have contributed to the equity in the property and declining market conditions have nonetheless reduced the property’s overall value?

The Court of Appeals held that community contributions to sole and separate property create equitable lien rights even in a declining market, and define below the method by which the value of the lien should be calculated.

Click here for the Opinion.  Further analysis to follow in subsequent blog entry.

Divorce Insurance: Get Unhitched, Get a Payout

September 20, 2010 by Alexander D. Nirenstein  
Filed under Family Court

WedLock is a new type of casualty insurance that gives the unhappily married policyholder a payout after he or she is unhitched. It costs about $16 a month for every $1,250 of coverage. But to discourage people from signing up just prior to their divorce, policyholders must ante up for four years before the policy will pay out. It adds a premium of $250 per unit for every year the marriage survives beyond four. So if a policyholder who bought 10 units got divorced after 10 years, he or she would have handed over $19,188 and would receive a payout of $27,500. It's probably not worth getting divorced for, but the lump sum might salve some wounds, whether through lawyers, vacations or subscriptions to the Rhapsody Book Club.

The idea bubbled up, as so many do, from the bottom of a financial pit. After John Logan watched his wealth follow his marriage down the drain, the Kernersville, N.C., entrepreneur figured there must be a market for those who want to hedge their marital bets. He won't reveal how many policies he's sold since the Aug. 5 launch of But he's surprised at how much insurance his customers are buying: some of the premiums are more than $1,000 a month.
(Comment on this story.)

Not everybody thinks divorce insurance is prudent. "The best insurance against a painful, financially devastating divorce is to find a way to be happy in your marriage," says relationship coach Mimi Daniel. "Divorce insurance implies from the beginning that divorce is already an option."

On the other hand, unless you're Elin Nordegren, few things are as impoverishing as ending a marriage. Logan, who is recently engaged and, yes, is buying policies for himself and his betrothed, expects WedLock will become part of prenuptial agreements or be purchased for a bride or groom by relatives concerned about their loved one's choice of loved one. "Mom or Dad could buy this for their son or daughter without them knowing about it," he suggests. But the bride or groom has to be the beneficiary. Sorry, scheming mother-in-law, no windfall for you.

This article originally appeared in the Sept. 13, 2010, issue of TIME magazine.

Divorcing Spouses Quit Facebook

September 19, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Divorce is becoming the newest frontier in the social media privacy battle as an increasing number of couples craft informal non-disclosure agreements for Facebook and Twitter -- prescribing how much can be shared with friends and strangers alike and dictating the rules of non-engagement for couples who conduct most of their lives in public.

To read more, check out Kathryn Blaze Carlson's article in the National Post · Friday, Sept. 17, 2010.


New Arizona Family Court Administrative Order

September 3, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Arizona Rule of Family Law Procedure 43(d)(6) now authorizes the Court, upon filing of a Family Court petition, to limit access to all court documents, records and evidence related to the petition for forty-five (45) days.

As a result, a new Administrative Order, No. 2010-092 has been issued which states: "all court documents, records and evidence in any Family Court action commenced with a Family Court case number not in existence before July 1, 2010 will be unavailable to the general public and will be accessible only by judicial officers, court and clerk’s office personnel, case parties and their associated attorneys of record, and law enforcement in the exercise of their official duties until forty-five (45) days have passed since filing the petition."

For further information on Arizona divorce and family law matters, contact Nirenstein Garnice Soderquist, PLC.

Tiger Woods Divorce Finally Done.

August 23, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Tiger Woods is now officially divorced.  The Decree of Divorce has been published.  No particulars yet about specific divorce settlement terms.

For information on Arizona divorce, contact one of our lawyers at NGS.

Veterans Disability Protection Act of 2010 (VDPA)

July 9, 2010 by Rachel R. James  
Filed under Family Court

The Veterans Disability Protection Act of 2010 (VDPA) seeks to protect disabled veterans in the courtroom. Disabled veterans who were injured in combat or in the line of duty receive disability compensation from the government. See article.

This compensation is supposed to be protected by federal laws, but civil court judges tend to attach the compensation to divorce lawsuits anyway. For example, sometimes when a disabled veteran gets divorced, the judge considers the disability compensation as “income” and, therefore, it becomes a divisible marital asset. They wrongfully calculate the disability compensation into a divorce settlement. 

The author of the article states that this action has led some veterans to become homeless or to commit suicide. The VDPA seeks to prevent the court from being able to take the disability compensation away from the veteran – as this would be unfair and cruel. This Act declares that all of the disability compensation will go to the disabled veteran and no one else. The court would not be able to attach the compensation to any other kind of “income” in these cases. The passage of the VDPA would “affect every man or woman injured in the line of duty while serving in the U.S. military, past, present, and future, and guarantee the total protection of their earned benefits – with no strings attached.”

Judge Orders Couple to Split Custody of Dog

July 9, 2010 by Alexander D. Nirenstein  
Filed under Family Court

Call it the The Maryland Canine Custody Case.

As they headed toward divorce, Gayle and Craig Myers had only one bone of contention: Who would have the right to keep Lucky, their 16-pound gray-black Lhasa apso.

Under Maryland law, family pets — unlike, say, children — are treated as jointly owned marital property and sold if the divorcing couple cannot agree on who gets to keep them. The parties then split the proceeds of the sale.  The same principle applies in Arizona.

However, the standard resolution did not result in this Maryland case.  The judge, presiding over the limited-divorce proceeding by special assignment, decided on his own last month that Gayle and Craig, who have no children, would split custody of Lucky. The dog will alternate spending six months with each party.

The Maryland ruling indicated that "it was very clear that both of them love this dog equally," and that "the only fair thing to do was to give each one an equal chance to share in the love of the dog."

Could this be the start of a trend toward pet-custody rulings?  Not likely, however more and more bar organizations are creating sections for "pet law".  The State Bar of Arizona has one.

Had either side objected to his unusual resolution, the Judge said, he would have applied the law and might have ordered the dog put in the care of a trustee, sold and the proceeds divided.

Animal-law activists have praised the ruling saying the Judge recognized that dogs and other pets are "family members" and not mere property. Attorneys for Gayle hailed what they characterized as McKee's humane compromise in not requiring the divorcing couple to part with their beloved pet.

Financial Support in Military Cases

June 29, 2010 by Rachel R. James  
Filed under Family Court

Michael S. Archer and CPT Tricia L. Birdsell provide a detailed analysis regarding the pitfalls civilian attorneys can encounter in cases involving military support issues. 

Military support  issues arise frequently in Arizona due to the presence of Luke Airforce Base, as well as other military installations in the Southwest.  If you or your spouse are in the military, each branch of service requires certain support obligations upon separation for both dependents and spouses.  This article details the steps one must take in each branch of the military to obtain support, how to calculate the support obligation, as well as how a waiver of the obligation can be obtained by the military spouse.

The correct action to take in making a Nonsupport Complaint depends entirely upon which branch of service the military spouse, or dependent’s father/mother, are in, as well as the type of income earned by the military spouse.  If the correct action is taken by a spouse seeking  financial support, the non-military spouse may be able to obtain support through the military that they otherwise may not be entitled to receive in an Arizona Superior Court case.  Further, depending upon the branch of the military you are in, the military spouse should discuss with an attorney whether temporary support orders should be sought in an Arizona Superior Court case if the military support obligation is higher than the potential non-military support obligation. 

In Arizona, if you are a military spouse, you should discuss with an attorney the pros and cons of providing the other party with spousal maintenance as if you do so, there may be a way you can still earn a Basic Housing Allowance once you are no longer married depending upon your branch of service and other factors. 

In addition, the article provides a detailed explanation of the calculation of income for a military spouse, including review of an LES Earning Statements, Base Pay, Basic  Allowance for Housing, Basic Allowance for Subsistence and Special Duty and Incentive Pays.  The analysis of a LES Earning Statement may yield a much higher income than that detailed on a tax return for a military spouse.   Calculating the correct monthly income for a military spouse could mean the difference between a high support obligation and minimal or no support.

Remember, if you or your spouse are in the military, your case is likely to be more complicated so make sure to speak to an attorney with experience in this area.  You can contact me at

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