Community Property Earnings Not Reachable To Satisfy Spouse’s Separate Premarital Debt

On Behalf of | Jun 16, 2015 | Blog

Robertson Court Determines that a Husband’s Community Property Earnings are Not Reachable to Satisfy Wife’s Separate Premarital Debt – By Jane Joyce, Paralegal

In January of 2013 SPQR Venture, Inc., an Arizona Corporation, represented by Scottsdale Attorney and Councilwoman Lisa Borowsky, filed lawsuit in the Maricopa County Superior Court against Andrea and Bradley Robertson, husband and wife, represented by Phoenix Attorney Steven Feola, to garnish the wage income of Bradley in order to satisfy a premarital judgment debt against Andrea while simultaneously accusing them of fraudulently hiding assets.

Formerly known as Andrea Weck, Andrea and her previous husband Michael Weck saw considerable financial troubles, evinced by the number of lawsuits they incurred during the mid-2000’s.

Several judgments were entered against the couple and by the end of the decade they had divorced and Andrea was remarried to Bradley Robertson.

SQPR, not being the original Plaintiff to the action, became the Judgment Creditor by virtue of a transfer. They filed civil suit CV2014-0341 against the Robertsons to collect on over $545,133.84 from Bradley’s income since Andrea did not have any income to report.

The trial court granted the Robertson’s Motion for Summary Judgment and SPQR appealed the decision.

On May 12, 2015 the Arizona Court of Appeals, Division One, handed down an opinion affirming the trial court’s ruling.

The basis for this decision is as follows:

The Robertson’s collectively had 5 children including a special needs daughter requiring a full time caretaker.

Andrea was a stay at home mother performing the full time caregiver services to their special needs daughter.

Bradley was the sole provider of household income.

SPQR argued that because Andrea’s contribution to the community was non-monetary, but provided value that could be quantified, a portion of Bradley’s income equivalent to the value Andrea provided, was therefore collectable. The court rejected this notion.

The court cited Hines v. Hines to discredit this creative approach. The Hines court found that Arizona Revised Statutes 25-215(B) – the statute whose interpretation was in dispute – clearly precludes assignment of non-debtor spouse’s income or wages to satisfy a separate premarital debt of the other spouse.

In short Andrea could only be liable to the extent of her own contribution to the community property which would have been her separate property if single.

Essentially the new spouse cannot be held liable for the old spouse! Or more accurately, the new community cannot be liable for another community by virtue of a member of the community having previously been a part of the other.

The Plaintiff attempted to push the square through the round hole but ultimately it just wouldn’t go. Monetary contributions to the community (marriage) are not liable for the debts against a previous community (marriage) except to the extent any of those contributions would be the individual’s property.

For example had Andrea contributed to the community property $100,000.00 cash which was her separate property as a single woman before the marriage, then SPQR would’ve been able to collect upwards of $100,000.00 from the Robertson’s. Or had she earned $100,000.00 while married to Bradley, that amount also would have been collectable.

As to the claim of fraud, the court found Bradley could not be fraudulently transferring his income in violation of Arizona Law, because he himself was not the Judgment Debtor, only Andrea was, and he could transfer the funds as he saw fit

The lines of collection were nearly blurred beyond recognition but the court wisely decided to preserve the current structure instead.