SUPREME COURT OF ARIZONA
En Banc
WALTER A. DRESSLER, ) Arizona Supreme Court
) No. CV-05-0119-PR
Plaintiff-Appellant, )
) Court of Appeals
v. ) Division One
) No. 1 CA-CV 03-0785
DONA MORRISON fka DONA M. )
DRESSLER, a single woman, ) Maricopa County
individually and as trustee, ) Superior Court
DONA DRESSLER REAL ESTATE TRUST, ) No. CV 03-012110
)
Defendant-Appellee. )
) O P I N I O N
__________________________________)
Appeal from the Superior Court of Maricopa County
The Honorable Peter C. Reinstein
REVERSED IN PART AND REMANDED
_______________________________________________________________
Memorandum Decision of the Court of Appeals, Division One
Filed March 8, 2005
VACATED IN PART
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GILBERT B. WEINER, P.C. Phoenix
By Gilbert B. Weiner
Attorney for Walter A. Dressler
CATES, HANSON, SARGEANT & RAKESTRAW, P.L.C. Phoenix
By Leslie Rakestraw
Dwane M. Cates
Michael R. Karber
Attorneys for Dona Morrison
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M c G R E G O R, Chief Justice
¶1 Walter A. Dressler brought this action against Dona
Morrison, his former wife, to recover his share of community
property that he alleged she fraudulently induced him to
transfer to her separate property trust. The trial court
dismissed Dressler’s action pursuant to Arizona Rule of Civil
Procedure 12(b), 1 holding that Dressler should have filed a Rule
60(c) 2 motion in the dissolution proceedings. The court of
appeals affirmed, concluding that the domestic relations court
provided the proper forum for resolving Dressler’s claim. We
hold that a party who claims to be a tenant in common with a
former spouse may bring a separate civil action to obtain relief
when a dissolution decree fails to mention or does not dispose
of real property.
I.
¶2 Because the trial court dismissed Dressler’s action
pursuant to a Rule 12(b) motion, we assume the facts alleged in
the complaint are true. Mohave Disposal, Inc. v. City of
Kingman, 186 Ariz. 343, 346, 922 P.2d 308, 311 (1996).
¶3 According to the complaint, Dressler and Morrison were
married on January 20, 1980, in Jamaica. Dressler is originally
from Germany and has an eight-year grammar school education and
1
Unless otherwise indicated, citations in this opinion to
“Rule ___” refer to the Arizona Rules of Civil Procedure.
2
Rule 60(c) allows a court to relieve a party from final
judgment for the following reasons: (1) mistake, (2) newly
discovered evidence, (3) fraud or misrepresentation, (4) void
judgment, (5) satisfied, released, or discharged judgment, or
2
a three-year trade school education. Morrison was born in the
United States and has an undergraduate and a graduate degree.
¶4 Throughout the course of the marriage, Morrison
managed and controlled the marital finances and business
interests. In 1993, Dressler and Morrison, as husband and wife,
purchased real property in Westerville, Ohio, located at 892
Tradewind Drive. Two years later, the couple purchased real
property at 1034 Crosshaven Court in Westerville. The two
Westerville properties (the Properties) constituted a
considerable portion of the parties’ net worth.
¶5 At Morrison’s suggestion, the couple employed attorney
Scott A. Smith to prepare estate planning trusts for them. In
December 1998, Smith prepared two trusts, known as the Walter A.
Dressler Living Trust and the Dona M. Dressler Living Trust.
The Properties were conveyed to these trusts through four
recorded deeds. In April 1999, Morrison moved to Fountain
Hills, Arizona, and Dressler followed in August. They continued
to maintain title in the Properties through the trusts while
residing in Arizona.
¶6 Some time later, Morrison informed Dressler that,
because of insurance coverage issues, he needed to sign two
deeds involving the Properties. Dressler, noting that his
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(6) any other reason justifying relief from the operation of the
judgment.
3
estate planning lawyer had prepared the deeds, signed them.
These two deeds conveyed the Properties to a new entity, the
Dona Morrison Real Estate Trust, a revocable trust in which
Morrison is the sole beneficiary and trustee and her nephew,
Duncan Pelly, is the sole remainder beneficiary.
¶7 Morrison recorded the deeds in Franklin County, Ohio
on June 22, 2000. Two months later, she filed for dissolution
of marriage in Arizona. Dressler accepted service of process
but took no further action. Morrison filed a notice of default
against Dressler on October 23, 2000, and the court entered a
decree of dissolution on December 7, 2000.
¶8 Under the terms of the decree, the court awarded
Morrison and Dressler their sole and separate property and
awarded the marital residence to Morrison. Because the
residence was community property, the court awarded Dressler
half the total equity of the residence in a lump sum payment of
$76,813.00. As both parties recognize, although the decree
specifically referred to the Walter A. Dressler Living Trust and
to the Dona M. Dressler Living Trust, it made no mention of the
Dona Morrison Real Estate Trust, to which Morrison allegedly
transferred the Properties. 3 The decree also failed to mention
3
The decree did award Morrison, as her sole and separate
property, retirement accounts held in her name, an automobile,
and gifts from her grandmother, including a dining room suite,
silver, china, sofa, and chairs. The decree awarded Dressler,
4
or describe the Properties, as required by Arizona Revised
Statutes (A.R.S.) § 25-318.D (Supp. 2005) (stating that “[t]he
decree or judgment shall specifically describe by legal
description any real property affected and shall specifically
describe any other property affected”). 4
¶9 In June 2003, Dressler filed this civil action against
Morrison, the Dona Morrison Real Estate Trust, and Duncan Pelly
alleging fraud, constructive fraud, unjust enrichment,
constructive trust, negligent misrepresentation, and fraudulent
transfer. Dressler later amended his complaint to add counts
for breach of fiduciary duty, quiet title, and sale in lieu of
partition. In response, Morrison moved to dismiss the complaint
pursuant to Rule 12(b). The trial court granted the motion to
dismiss, stating that Dressler’s claims regarding the Properties
“would have been appropriate for a Rule 60(c) . . . Motion filed
in the dissolution proceedings” and that “[i]f [Dressler] wishes
to modify or overturn the above decree, [he] should file the
appropriate motion pursuant to Rule 60(c).”
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as his sole and separate property, retirement accounts held in
his name and an automobile.
4
The decree did provide a legal description for the
community residence.
5
¶10 Dressler appealed the trial court’s decision. 5 The
court of appeals affirmed the trial court’s dismissal of
Dressler’s complaint in a memorandum decision. We granted
review to determine whether a party may bring a separate civil
action for relief, rather than file a Rule 60(c) motion, when
the party alleges ownership in real property not disposed of in
a dissolution decree. 6 We exercise jurisdiction pursuant to
Article 6, Section 5.3 of the Arizona Constitution.
II.
¶11 We review an order granting a motion to dismiss for
abuse of discretion, Franzi v. Superior Court, 139 Ariz. 556,
561, 679 P.2d 1043, 1048 (1984), and review issues of law,
including issues of statutory interpretation, de novo, State ex
rel. Dep’t of Econ. Sec. v. Hayden, 210 Ariz. 522, 523 ¶ 7, 115
P.3d 116, 117 (2005). We will “uphold dismissal only if the
plaintiff[] would not be entitled to relief under any facts
susceptible of proof in the statement of the claim.” Mohave
Disposal, Inc., 186 Ariz. at 346, 922 P.2d at 311.
5
Dressler later filed a Rule 60(c) motion in the dissolution
proceedings, DR2000-095386. That action has been stayed pending
resolution of this appeal.
6
Although the trial court judgment and the court of appeals’
decision affirming that judgment applied to all of Dressler’s
claims, his petition for review in this Court challenged only
the holding that his claim pertaining to community property not
addressed in the decree must be brought through a Rule 60(c)
motion. Accordingly, we resolve only that issue.
6
A.
¶12 Section 25-318.B (2000 & Supp. 2005) states that
“[t]he community, joint tenancy and other property held in
common for which no provision is made in the decree shall be
from the date of the decree held by the parties as tenants in
common, each possessed of an undivided one-half interest.”
Dressler argues that because the dissolution decree did not
address the Properties, he and Morrison became tenants in common
in the property under the terms of section 25-318.B.
Accordingly, he asserts that he should be permitted to bring a
separate civil action, not to reopen or alter the terms of the
dissolution decree, but rather to establish his rights as a co-
tenant in property he alleges belonged to the marital community.
¶13 Arizona case law supports Dressler’s position.
Earlier decisions from Arizona’s appellate courts have applied
section 25-318.B or its statutory predecessor and allowed a
party to bring a civil action to determine ownership rights in
real property alleged to belong to a former marital community
but not awarded in the dissolution action. For example, in
Dawson v. McNaney, this Court allowed a divorced wife to proceed
in a separate action against her former husband to recover a
one-half interest in certain real and personal property that was
not disposed of in a prior divorce decree. 71 Ariz. 79, 83, 223
P.2d 907, 909 (1950). Applying Arizona Code § 27-805 (1939),
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the statutory predecessor to A.R.S. § 25-318.B, we held that
because “no property or property rights were mentioned in the
divorce proceedings and judgment,” the former spouses held the
property as tenants in common. Id. Consequently, we allowed
the plaintiff to bring a separate civil action against her
former husband. Id.
¶14 Similarly, in Bates v. Bates, the plaintiff filed a
lawsuit against her former husband, claiming that he had
concealed community property at the time of the couple’s divorce
and that she was entitled to a one-half interest in the property
as a tenant in common. 1 Ariz. App. 165, 166-67, 400 P.2d 593,
594-95 (1965). The trial court dismissed the case as “a
collateral attack on the original judgment.” Id. at 167, 400
P.2d at 595. Although the court of appeals did not decide the
tenancy in common issue, the court cited section 25-318.D
(corresponding to current subsection B) as a basis for
permitting the plaintiff to impeach a valid divorce decree for
extrinsic fraud and to establish her share in undistributed
community property. Id. at 169-70, 400 P.2d at 597-98. The
court also held that the action was not barred by the doctrine
of claim preclusion. Id. at 170, 400 P.2d at 598. Importantly,
as the court noted, the plaintiff’s action did not attack the
finality of the dissolution decree itself. Id. at 168, 400 P.2d
at 596; see also Carpenter v. Carpenter, 150 Ariz. 62, 65, 722
8
P.2d 230, 233 (1986) (reviewing action brought by former wife
for her community property interest in retirement benefits not
disposed of by divorce decree or separate property settlement);
Rothman v. Rumbeck, 54 Ariz. 443, 444-46, 96 P.2d 755, 755-56
(1939) (plaintiff proceeded in a separate civil action against
her former husband’s estate for premiums paid by the community
during coverture on a life insurance policy) (applying Arizona
Revised Code § 2182 (1928)); Fischer v. Sommer, 160 Ariz. 530,
532-33, 774 P.2d 834, 836-37 (App. 1989) (noting that this Court
has never “state[d] or impl[ied] that Rule 60(c) is the sole
method by which a spouse can seek post-decree contribution for
an unallocated community debt” and permitting a separate action
to require contribution to payment of a community debt
discovered after entry of decree). Applying these decisions,
then, a party can bring a separate action to determine ownership
in what he characterizes as community property not disposed of
in the decree, at least when the separate action does not attack
the finality of the decree.
B.
¶15 Morrison suggests that, regardless of our prior
decisions, the doctrine of claim preclusion, or res judicata,
should prohibit Dressler from bringing this action because his
claims should have been resolved in the dissolution proceeding.
Under the doctrine of claim preclusion, a final judgment on the
9
merits in a prior suit involving the same parties or their
privies bars a second suit based on the same claim. Chaney
Bldg. Co. v. City of Tucson, 148 Ariz. 571, 573, 716 P.2d 28, 30
(1986). We conclude that prior decisions of this Court and the
court of appeals correctly held that the doctrine of claim
preclusion does not apply to bar actions such as Dressler’s.
¶16 The
T purpose of section 25-318 is “to provide a
standard for the [equitable] disposition of community and common
property in [] dissolution proceeding[s].” Martin v. Martin,
156 Ariz. 452, 457, 752 P.2d 1038, 1043 (1988). Consistent with
this intent, the legislature enacted section 25-318.B to ensure
the equitable division of community property “for which no
provision [was] made in the [dissolution] decree.” The
legislature thus specifically contemplated that, contrary to
general principles of claim preclusion, dissolution decrees
might not provide for the disposition of all community property.
The legislature also specified a remedy for that circumstance:
Former spouses will hold the property as tenants in common. The
remedy provided by statute would have little force if a party
were foreclosed from bringing an action based on claim
preclusion. Moreover, bringing a separate action to enforce
section 25-318.B does not impair the finality of the dissolution
decree: All the terms of that decree remain valid and
enforceable. If Dressler prevails in his action based on co-
10
tenancy, that result will be entirely consistent with the
decree.
¶17 Other jurisdictions similarly have concluded that the
doctrine of claim preclusion does not bar a subsequent claim
that involves property rights not adjudicated in a dissolution
decree. See, e.g., Tarien v. Katz, 15 P.2d 493, 495 (Cal. 1932)
(holding that when a final divorce decree failed to dispose of
community property, a former spouse’s right to that property can
be determined in a subsequent action, not barred by claim
preclusion); Yeo v. Yeo, 581 S.W.2d 734, 736 (Tex. Civ. App.
1979) (holding that a “partition of community property not
disposed of in the prior divorce decree is not barred by the
doctrine of res judicata”). In accord with these and prior
Arizona decisions, we hold that the doctrine of claim preclusion
does not bar Dressler’s co-tenancy action. 7
C.
¶18 Because the trial court dismissed Dressler’s action
pursuant to Rule 12(b), Dressler has yet to establish the facts
necessary to prevail on his claim that the Properties, which the
dissolution decree did not address, were, indeed, community
7
In his petition for review, Dressler also asked us to
consider and define the circumstances under which the provisions
of Rule 60(c) prohibit an independent post-decree action between
former spouses and mandate a reopening of the dissolution
proceeding. Given our resolution of the first issue presented,
we need not address this issue.
11
property and that he and Morrison hold them as tenants in
common. See A.R.S. § 25-318.B. The trial court also has not
yet considered the various defenses asserted by Morrison. We
therefore remand this matter to permit the trial court to
resolve those issues related to Dressler’s co-tenancy claim.
III.
¶19 For the foregoing reasons, we vacate that portion of
the court of appeals’ memorandum decision that required Dressler
to bring his co-tenancy claim as a Rule 60(c) motion, reverse in
part the judgment of the superior court, and remand to the
superior court for further proceedings consistent with this
opinion.
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Ruth V. McGregor
Chief Justice
CONCURRING:
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Rebecca White Berch, Vice Chief Justice
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Michael D. Ryan, Justice
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Andrew D. Hurwitz, Justice
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W. Scott Bales, Justice
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