Arizona Court of Appeals Division One holds that (1) a creditor cannot collect the value of a debtor spouse’s purely nonfinancial contributions to a marital community from the community property earnings of the non-debtor spouse, and that (2) the transfers of a non-debtor spouse do not violate the Uniform Fraudulent Transfers Act.

SPQR Venture, Inc. obtained the interest in collecting a default judgment against Andrea Robertson.  Years after that judgment, Robertson remarried.  Robertson was a stay-at-home mother to five children and made strictly nonfinancial contributions to the marital community.  This included providing full-time care to a child with special needs.  Although Robertson received regular transfers of community property, the bank account was maintained at a level below the statutory minimum for non-wage garnishments. 

SPQR filed the underlying garnishment suit against Robertson and her new husband alleging community liability for her separate premarital debt and also alleging behavior in violation of the Uniform Fraudulent Transfers Act (UFTA) (A.R.S. §§ 44-1001 to –1010).  SPQR alleged that it should be able to collect from the new marital community because of Robertson’s nonmonetary contributions to the marital community (as measured by foregone wages that Robertson previously earned before the marriage).  It also alleged that the intentionally low transfers to the bank account violated the UFTA.  The trial court denied SPQR’s claims, and SPQR appealed.

The Court of Appeals affirmed that the value of non-monetary contributions to a marital community is not collectible by creditors.  A.R.S. § 25-215 provides that “community property is liable for the premarital separate debts . . . but only to the extent of the value of that spouse’s contribution to the community property which would have been such spouse’s separate property if single.”  The Court of Appeals held that the statute and case law interpreting it do not allow collection from the earnings of a non-debtor spouse to satisfy the premarital debt of the debtor spouse when the debtor spouse has no income.  Any nonmonetary contributions to the marital community do not affect that rule.    

Finally, the Court of Appeals affirmed that transfers by a non-debtor spouse are not restricted under the UFTA.  A.R.S. § 44-1004 only applies “if the debtor made the transfer.”  The UFTA does not apply because Robertson’s husband, the non-debtor spouse, made the transfers to the bank account.

Judge Thompson authored the opinion; Presiding Judge Gould and Judge Portley joined.