Mitchell v. Mitchell

Mitchell v. Mitchell, 152 Ariz. 312, 732 P.2d 203 (App. 1985), vacated in part, 152 Ariz. 317, 732 P.2d 208 (1987).

Issue: Does a court have the authority to transfer a life insurance policy to the other spouse in order to secure a spousal maintenance obligation?

Facts and Procedural History

The trial court awarded Carole Mitchell the ownership of life insurance policies covering her husband’s life. The court also ordered her husband to pay spousal maintenance. The husband appealed, arguing that the community interest in his life insurance policies was limited to their cash value, and that the court could not change the ownership of the policies.

The husband appealed various issues in the decree; this post will only address the life insurance issue. The supreme court later vacated the COA opinion on other grounds but did not address the life insurance issue. See Mitchell v. Mitchell, 152 Ariz. 317, 732 P.2d 208 (1987).

Ruling

The court of appeals held that “[t]he trial court has the authority to assign, encumber or restrict the ownership of a life insurance policy in order to secure the performance of other provisions of the decree.” The trial court did not specifically state its reason for transferring ownership but the court of appeals assumed it was done for a proper purpose—to secure the husband’s spousal maintenance obligation.

The opinion does not cite to a particular statute, but presumably the ruling was based on A.R.S. § 25-318(E), which states:

The court may impress a lien on the separate property of either party or the marital property awarded to either party in order to secure the payment of:

….

An allowance for child support or spousal maintenance, or both.

A.R.S. § 25-318(E)

The court of appeals directed the trial court to consider on remand whether the life insurance policies should revert to the husband after the spousal maintenance obligation terminated.