Arizona Court of Appeals

Barnett v. Jedynak

Summary

Barnett v. Jedynak was a published opinion where the Arizona Court of Appeals reversed and remanded the family court’s calculation of a community lien interest in one spouse’s separate property to be recalculated to account for premarital appreciation.

Background

In Barnett v. Jedynak, the Court of Appeals reversed and remanded the family court’s calculation of a community lien against a Husband’s separate property. The opinion effectively modified the formula used to calculate a community lien on sole and separate property to account for premarital appreciation to the property.

The parties lived together for several years before they were married. During that time, Husband purchased a home where the parties lived and jointly contributed to its mortgage and expenses. Once married, the parties continued to reside in that home and used community funds to pay the mortgage.

When the parties divorced, the central issue was how to calculate Wife’s interest in the home. Because the home was purchased before the marriage, it was Husband’s sole and separate property. However, because the parties used community funds to pay the mortgage during the marriage, Wife was entitled a community lien against the principal payments made with community funds and a proportionate share of the appreciation that occurred during the marriage.

The trial court ordered the parties to subtract the mortgage balance from the appraised value of the home and to divide the equity evenly.

Husband filed a motion to amend the judgment where he argued that because the property appraised before the marriage, the trial court’s formula incorrectly valued the community lien. The trial court granted his motion and used the following formula:

C / [A + C]  x  [D-B]

A = Down payment made by Husband, plus principal payments made by Husband before marriage, plus the appraised value of the home on the date of marriage, minus the mortgage balance;

B = Value of the home at date of marriage;

C = Community contribution to principal; and

D = Value of the home at date of dissolution

Wife appealed.

Though the Court of Appeals agreed that the trial court erred in its original calculation, it rejected Husband’s calculus. Husband’s formula deprived the community of its interest in principal contributions made during the marriage. Instead, the Court of Appeals modified the Drahos formula as follows:

C + [ (C / B) x A]

A = Appreciation during marriage;

B = Value of the home at date of marriage;

C = Community contribution to principal

Full decision