Arizona Court rules on multiple tort claims alleging wrongdoing by married parties. 

In Berk, Wife made claims against Husband for "Consipracy to Commit False Imprisonment", "Intentional Infliction of Emotional Stress", "Libel", "Slander", "Invasion of Privacy", and "Loss of Consortium".

Apparently the underlying situation involved Husband's attempt to conduct an intervention for Wife' benefit,which subsequentlyeding up in his having the Wife committed to a mental health facility for observation, and his alleged discussions with various individuals in the Phoenix Arizona "Jewish Community" about Wife.

The court, in ruling on competing summary judgment motions, found that Husband's attempts to lure Wife into an intervention was not actionable as a consipracy to commit false imprisonment because she was never physically restrained by contact, and that "words, actions and body language" alone was not enouph to make a claim.  Neither was the intervention and subsequent action by Husband to take Wife to a psychiatric facilitiy actionalbe as an intentional infliction of emotional distress because it was not "outrageous" or "intended to cause emotional distress".

Similarly, the Husband's filing of an Application for Involuntary Evaluation and Application for Emergency Admission was found not defamatory and libelous because, in part, documents containing reference to Wife were filed in litigation proceedings are entitled were thus entitled to "absolute privilege". And, eventhough it was alleged that Husband talked to "about 30 people about Munchausen's Proxy (MBP), without publication, no slander action could be brought.  And again, because of lack of proof of any publication, allegations that "falsely represented [Wife's] mental state to friends, colleagues and the Jewish community" was not actionable as an invasion of privacy.

Finally, no loss of consortium claim existed even though Wife was found to be separated from the parties' children during her stay at the psychiatric care facility.

There were more claims from Husband against Wife as well as claims against a third-party, which are set out in the full text of the opinion, Berk v. Berk.

Here is a topic that is often considered the absolute worst, orders of protection in Arizona family law cases where kids are involved.

First, a disclaimer: Some Orders of Protection have validity, and some actually work. There are people who seriously need to be protected from abusive or threatening individuals, and are at imminent risk of harm. Obtaining an Order of Protection does work if the person that you are attempting to restrain has some remnant of respect for the law, or fear of repercussion -- like arrest or imprisonment -- if he or she violates the order. And of course, an Order of Protection can assist responding police offcers in assessing and then directing what should be done temporarily while at the scene.

But improperly obtained Orders of Protection are a whole different story, and unfortunately are just as frequently the norm, and they hurt everyone.

In meritorious cases, family court judges can become so focused on the underlying motives for the requests for Orders of Protection that at-risk people may be denied the protection they need, sometimes with horrific consequences. It happens.

On the other hand, there are many instances when bogus Orders of Protections are obtained for use in manipulating other issues within a divorce or family law dispute.  For instance, a respondent is cut off from the kids, suddenly and indefinitely -- with little or no physical, telephone, written or even electronic contact -- while the case gets adjourned ad nauseum, based on allegations he or she never even had a chance to contest in court prior to the issuance of the Order of Protection.

As for the kids in these cases -- usually they are confused by the abrupt disappearance of one parent. If they are lucky, they won't get poisoned too much by the petitioner or his/her friends and relatives. However, there is a good chance they will.  To make matters worse, therapists often get involved and join the gang of total strangers (judges, law guardians, child protective services, forensic evaluators, etc. etc.) now intruding on the family without much investigation or information being obtained first.

Also, the petitioner, who thinks he or she has just scored big-time in the impending custody battle, may be completely oblivious to a bunch of problems that can result.  For instance, he or she may not have noticed the damage just caused his/her family - which no custody award in his/her favor will ever erase. And he or she runs the risk that a very patient respondent -- one who's prepared to ride the waves of mostly negative rulings for a while, and who's hired a good lawyer - will eventually expose the phony claims. If the respondent has a fair amount of facts in his/her favor, s/he may even prove it's the petitioner who's really harming the family. Boom. Custody unexpectedly awarded to the respondent.

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.

As 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.

Facts

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.

Finding

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 . . .

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.