Arizona Community Property Laws | Hildebrand Law, PC

Enforce a Property Settlement Agreement in Arizona

Enforce a Property Settlement Agreement in Arizona

Enforce a Property Settlement Agreement in Arizona

The Arizona community property attorneys at Hildebrand Law, PC want you to understand the laws about how to enforce a property settlement agreement in Arizona. You also need to know the limitations of how you may enforce a property settlement agreement in Arizona.

The Arizona Supreme Court in the case of Proffit v. Proffit determined whether the wife in the case could be held in contempt of court for failing to turn over funds she received as a result of cashing in husband’s sole and separate bonds owned by the husband before the parties’ marriage.

The defendant, Jeanne C. Proffit, was involved in a divorce filed by her husband on May 4, 1966.

Before the marriage, the plaintiff, Delbert Proffit, owned United States Series E Savings Bonds valued at $6300.

The husband reissued those bonds during the parties’ marriage in both he and his wife’s name on March 11, 1966, for the sole purpose of ensuring Jeanne would inherit those bonds in the event of his death.

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Jeanne was ordered by the Arizona trial court to transfer possession of the United States Savings Bonds, as well as certain jewelry, to Delbert.

The court found the bonds were Delbert’s sole and separate property because he owned the bonds before the parties’ marriage and, further found, Delbert had only had them reissued in case of his untimely death and did not intend to transfer those bonds to the community.

The wife returned the rings promptly but admitted to cashing the savings bonds before the separation, without the husband’s consent or permission.

The trial court, therefore, issued an order requiring Jeanne to pay husband back the value of his separate property.

Jeanne failed to paid Husband the $6300 as ordered and, therefore, failed to comply with the court’s order.

Delbert filed a Petition for Contempt to enforce the property settlement agreement against Jeanne for failing to comply with the order to pay him the $6300 and she was subsequently held in contempt of court and was ordered to be incarcerated for her willful and contemptuous failure to comply with the court’s order.

Jeanne filed a timely appeal regarding the authority of the court to hold her in contempt for nonpayment of the $6,300 to enforce the property settlement agreement.

The Arizona Supreme Court held that the trial court had the authority to enter an order for Jeanne to turn over the money she had in her possession from the sale of the bonds as that constituted an order to return the “res” of Delbert’s sole and separate.

The appellate court indicated a trial court does not, according to Arizona Revised Statute Section 25-318, have the authority to order Jeanne to divest herself of her sole and separate property, but it does have authority to order her to return Delbert’s separate property that is in her “possession.”

The Supreme Court, however, held that the trial court was mistaken in holding Jeanne in contempt of court because the issue pertaining to the division of property, as opposed to spousal maintenance or child support, which cannot be enforced by contempt.

Specifically, the Arizona Supreme Court held that Arizona constitutional provisions in Article II, Section 18 barring imprisonment for the collection of a debt.

The court held that case applied and reversed the trial court’s ruling holding Jeanne in contempt of court and ordering her incarceration, citing with authority the prior Arizona Supreme Court case of Stone v. Stidham.

The take away from this case is that an Arizona divorce court may order a party to return the other person’s sole and separate property to enforce the property settlement agreement in Arizona and, further, can order the parties to exchange items of community assets that are in the other’s possession.

The court may also order a party to pay a sum of money to one party to either equalize the division of community property or to award a spouse for the value of his or her sole and separate property sold or transferred by the other spouse.

The court does not, however, have the authority to hold a party in contempt of court for failing to pay a sum of money so ordered.

That leaves the spouse whose separate property was wrongfully disposed of having to rely upon other civil collection remedies, such as writs of execution, attachment, or garnishment if they want to enforce a property settlement agreement in Arizona.

However, the Proffit case appears to apply only to property division orders issued by a judge after a trial. A more recent Arizona Court of Appeals decision in the case of Eans-Snoderly vs. Snoderly held a court may find a person in contempt for not complying with the terms of a written separation agreement.

Contempt of Court for Violating a Property Settlement Agreement

Enforcing a Property Settlement Agreement in Arizona.

The Arizona Court of Appeals in the case of Eans-Snoderly vs. Snoderly addressed whether the court has the authority to hold a a former spouse in contempt for failing to comply with the terms of a property settlement agreement agreed to by the spouses.

In the Snoderly case, the husband agreed to a property settlement agreement that required him to pay the wife $300,000.00 as a property equalization payment relating to a business that was awarded to the husband. The court, however, did not specify a payment plan or payment schedule.

The husband was also ordered to continue operating the company as a “going concern” and to obtain a life insurance policy naming the wife as the beneficiary in such amount necessary to secure the balance of the $300,000.00 property equalization payment due to the wife.

Several years later, the wife filed a petition for contempt because she alleged the husband stopped making payments toward the equalization payment, did not secure the life insurance policy securing the wife’s interest in the equalization payment, and did not continue operating the company as a “going concern” as he had transferred ownership of the company to a third party.

The husband argued the prior decision in the case of Proffit vs. Proffit (discussed above) precluded a court from holding him in contempt for not paying all of the equalization payment. The Arizona Court of Appeals in the Snoderly case disagreed.

The Arizona Court of Appeals in the Snoderly case started its analysis of Arizona Revised Statute Section 25-317(E) that holds that “Terms of the [property settlement] agreement set forth or incorporated by reference in the decree are enforceable by all remedies available for enforcement of a judgment, including contempt.

The court held that the ruling in the Proffit case occurred before the legislature added the language in Arizona Revised Statute Section 25-317(E) specifically authorizing a court to enforce the terms of a property settlement agreement through a contempt proceeding.

However, the court also pointed out that, although a spouse could be held in contempt for not making equalization payments in a property settlement agreement, he or she still may not be incarcerated to remedy the contempt of court finding because the Articles 2 Section 18 of the Arizona Constitution prohibits incarceration for not paying a debt.

So, a spouse may be held in contempt for not complying with the terms of a property settlement agreement. Although such a person held in contempt for not following the terms of a property settlement agreement cannot be thrown in jail, he or she may be subject to other sanctions to obtain compliance for that contempt including the seizure of that spouse’s property, attorney fees, costs, and other coercive sanctions permitted by law as long as the order contains a purge provision.

Enforce Order for Return of Separate Property

Enforcement of Property Settlement Agreement in Arizona.

In another case, the Court of appeals in the Thorn v. Thorn case addressed whether a trial court had the authority to order a spouse to return the separate funds of the other spouse in a divorce decree.

Susan Thorn had signed over to Stuart Thorn about $940,000 of stocks and bonds before the divorce.

Evidence was conflicting about why she did so; he claimed it was a gift, she claimed it was under duress.

The divorce court ordered Stuart to return the portfolio or its equivalent to Susan, and Stuart appealed that order.

The Court of Appeals reviewed this order under the abuse of discretion standard, as the question of whether something is a gift requires a weighing of facts.

The superior court judge found that Susan did not intend the transfer as a gift, citing the “proxy” agreement the couple had likewise signed that gave Susan the right to demand the return of the stocks if she had buyer’s remorse.

The appellate court found that this was not an abuse of discretion.

Order to Return Stocks or their Equivalent Not Money Judgment

Next, the Court reviewed Stuart’s argument that the superior court’s order that he return the stocks and bonds or – if they were no longer in the same form, that he give Susan $940,000, minus the value of any stock already returned.

In Arizona, a divorce court can assign each spouse’s separate property to her, but cannot order one spouse to pay a money judgment to the other for damage to separate property, according to the Arizona Supreme Court decision in Weaver v. Weaver.

The Court of Appeals, however, refused to characterize the lower court order as a money judgment.

Rather, it found that the order required Stuart to return Susan’s separate property, minus the value of any of it that was previously returned. This was, it held, well within the court’s authority.

If you need information about enforcing a property settlement agreement in Arizona, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona community property attorneys have decades of combined experience successfully representing clients in divorce cases in Arizona.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona community property case around today.

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