Constantine v. Constantine

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

In re the Matter of:

CATHRYN CONSTANTINE,
Petitioner/Appellee,

v.

TINO CONSTANTINE,
Respondent/Appellant.

No. 1 CA-CV 25-0552 FC
FILED 06-08-2026

Appeal from the Superior Court in Maricopa County
No. FN2022-001675
The Honorable Michelle Carson, Judge

AFFIRMED

COUNSEL

Genesis Legal Group, Gilbert
By Kevin Jensen
Counsel for Respondent/Appellant

Michael J. Shew, LTD., Phoenix
By Michael J. Shew
Counsel for Petitioner/Appellee
CONSTANTINE v. CONSTANTINE
Decision of the Court

MEMORANDUM DECISION

Judge Andrew J. Becke delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Judge Kent E. Cattani joined.

B E C K E, Judge:

¶1 Tino Constantine (“Husband”) appeals the superior court’s
decree of dissolution of his marriage to Cathryn Constantine (“Wife”). For
the following reasons, we affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Husband and Wife met in 2010 and married in January 2016.
Husband owned several real estate investment properties before the
marriage, and LLCs were created to hold the properties. Three such LLCs
are at issue here: Katina Saffron, LLC (“Katina Saffron”), Tino Menlo, LLC
(“Tino Menlo”), and Kifissia, LLC (“Kifissia”).1 The LLCs did not have
written operating agreements, and both Husband and Wife were listed in
the articles of organization as the members of all three LLCs.

¶3 Katina Saffron was formed before the parties married. In 2015,
Husband purchased property in Mesa (the “Saffron property”) using about
$146,000 of his funds and about $118,000 that Wife contributed from the sale
of a condominium she owned.

¶4 After Husband and Wife (who were not then married)
purchased the Saffron property, they transferred it by quitclaim deed to
Katina Saffron. After the marriage, Katina Saffron sold the Saffron property,
and the proceeds of $481,395.55 were deposited into Katina Saffron’s bank

1 Husband, Wife, and Wife’s father also created Athens, LLC. Wife’s father’s

ownership interest in Athens, LLC was the subject of a prior appeal.
Constantine v. Constantine, 1 CA-CV 23-0379 FC, 2024 WL 3335879 (Ariz.
App. July 9, 2024) (mem. decision). That appeal affirmed that Wife’s father
had a 50% ownership interest in Athens, LLC based on a settlement
agreement between Husband and Wife’s father. Id. at 4, ¶ 18. We left the
division of the other 50% to continued litigation. Id. at ¶ 21. Those actions
do not impact the present appeal, and Husband does not claim error in the
decree’s division of the other 50% of Athens, LLC.

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account. The parties then used $420,029.62 of the proceeds to purchase a
certificate of deposit (“AmTrust CD”).

¶5 Tino Menlo was also formed before the marriage. In 2015,
Husband purchased another property in Mesa (the “Portia property”). The
purchase funds consisted of about $173,000 of Husband’s money and about
$69,000 from a Wells Fargo bank account in both Husband’s and Wife’s
names. Husband then transferred the Portia property to Tino Menlo via
quitclaim deed a few weeks before the marriage.

¶6 Kifissia was formed after the marriage. In May 2016, a few
months after the couple were married, Husband purchased a property (the
“Menlo property”) with proceeds from the sale of another property he
owned prior to the marriage. At that time, Wife signed a disclaimer deed
for the Menlo property, acknowledging that it was Husband’s sole and
separate property. About a year later, a few days after Kifissia was formed
in May 2017, Husband transferred the Menlo property to Kifissia.

¶7 In 2022, Wife petitioned for dissolution of marriage. The LLCs
were joined as parties. Wife moved for pre-decree temporary orders and
requested: (1) equal possession of liquid assets under A.R.S. § 25-315(E); (2)
to enjoin Husband and the LLCs from selling property; and (3) to order
Husband to pay Wife’s attorneys’ fees.

¶8 At a temporary orders hearing, Wife presented evidence
concerning six bank accounts, asserting that Husband made improper post-
petition withdrawals from five of them. The court found that “Wife has
shown by a preponderance of the evidence that 50% of the difference
between what Husband and Wife withdrew from the parties’ various
accounts is $341,183.20.” The court then ordered that Husband deposit that
amount into a restricted joint bank account.2 Wife was able to withdraw
$20,000 as an advance from that account, subject to reallocation if Husband
proved at trial that the funds were his sole and separate property. Husband
and the LLCs were enjoined from selling property without Wife’s consent
or court order, and the question of attorneys’ fees was deferred until trial.

¶9 Trial on Wife’s petition was set for February 2025, with Wife
requesting findings of fact and conclusions of law. See Ariz. R. Fam. Law P.
82(a). Wife’s pretrial statement alleged that Husband refused to give her tax
documents related to the properties, and asked that Husband be ordered to

2 The money was deposited into Wife’s counsel’s IOLTA account.

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“assume, pay, indemnify, and hold Wife harmless” for any tax liability Wife
may incur for years 2022-2024.

¶10 At trial, Wife testified that she and Husband agreed to pool
their resources, purchase investment properties closer to their home, and
place all three properties in both their names to support their retirement.
Before they were married, Wife sold her condominium to support this
endeavor. She said their agreement gave her a 50% ownership interest in
Tino Menlo and Katina Saffron. She also testified that, when she signed the
disclaimer deed for the Menlo Property, Husband told her the arrangement
would be the same for Kifissia.

¶11 Husband testified that Wife was a member of the LLCs only
because he believed an LLC needed more than one member. His stated
purpose in creating the LLCs was to avoid collecting rental sales tax from
his tenants, not because of any agreement with Wife.

¶12 The court found that, based on the evidence received,
including the articles of organization and the parties’ course of conduct,
Husband and Wife had an oral agreement “regarding the percentage of
each member’s interest and distributions to the members.” That agreement,
the court found, was that Husband and Wife each owned a 50% separate
property interest in Katina Saffron and Tino Menlo, and that each owned a
50% community property interest in Kifissia. It found that Husband’s
transfer of the Menlo property to Kifissia was a gift to the community. See
In re Marriage of Flower, 223 Ariz. 531, 535, ¶ 15 (App. 2010) (a gift to the
community is presumed when title to separate property is subsequently
taken in the names of both spouses). Having made that allocation, the
decree allowed Husband to purchase Wife’s interest in the Portia and
Menlo properties within 30 days, otherwise they were to be sold and the
proceeds split 50/50.

¶13 On the equalization payments for the bank accounts, the court
found that $341,183.20 accurately reflected the amount Husband owed
Wife. Accounting for Wife’s $20,000 advance from the restricted account,
the court ordered the release of the remaining amount to Wife.

¶14 The decree also ordered that Husband provide to Wife
documents necessary to prepare her taxes. Husband was then ordered to
“assume, pay, indemnify and hold [Wife] harmless from any additional
taxes, interest, penalties, or assessments, including legal accounting,
and/or audit expenses, associated with any federal and state income tax
returns for the tax periods 2022-2025.”

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¶15 Husband timely appealed. We have jurisdiction pursuant to
A.R.S. §§ 12-120(A)(1) and -2101(A)(1).

DISCUSSION

¶16 Husband raises seven arguments. We address each in turn.

I. The Superior Court Did Not Err in Dividing Tino Menlo.

¶17 Husband argues that the superior court erred in finding that
Tino Menlo is community property. He contends it is separate property,
with Husband and Wife owning their separate but unequal interests in it.
He therefore argues that Tino Menlo was not community property subject
to division in the decree and, accordingly, its assets should be distributed
“according to LLC laws.”

¶18 Contrary to Husband’s argument, the superior court did not
find Tino Menlo to be community property. The decree found that Husband
and Wife “each own a fifty percent (50%) separate property interest in . . .
Tino Menlo, LLC.”

¶19 Husband contends that he must receive his initial
contribution from Tino Menlo’s assets before Wife may receive 50% of the
remaining assets. Husband cites A.R.S. § 29-3707(B)(1), which states that
when winding up a company, after paying back creditors of the LLC,
distributions must first be made to members “owning a transferable interest
that reflects contributions made and not previously returned,” in “an
amount equal to the value of the unreturned contributions.”

¶20 We defer to the superior court’s factual findings if they are
supported by competent evidence, Borja v. Borja, 254 Ariz. 309, 313, ¶ 10
(App. 2022), but we review issues of law de novo, Hall v. Lalli, 194 Ariz. 54,
57, ¶ 5 (1999). We will uphold contractual provisions unless prohibited by
legislation or contrary to public policy. CSA 13-101 Loop, LLC v. Loop 101,
LLC, 236 Ariz. 410, 411–12, ¶ 6 (2014).

¶21 Here, there was no written operating agreement. But the court
found that “the parties had an oral agreement regarding the percentage of
each member’s interest and distributions to the members.” See A.R.S. § 29-
3102(17) (an operating agreement is an agreement “whether or not referred
to as an operating agreement and whether oral, implied, in a record or in
any combination thereof”). When dividing Tino Menlo, the court found
that, based on that oral agreement, Husband and Wife were equal members
with an equal interest in the Portia property.

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¶22 The court’s finding that there was an oral agreement to evenly
divide the ownership of Tino Menlo is supported by evidence, and we do
not reweigh that evidence. Clark v. Kreamer, 243 Ariz. 272, 276, ¶ 14 (App.
2017). Wife testified that she and Husband had an agreement that the Portia
property would be transferred to Tino Menlo after its purchase, and that
she believed she owned a 50% interest in the Portia property due to that
agreement. Husband shows no illegality or violation of public policy where
parties agree to distributions that differ from what is provided by § 29-
3707(B)(1). Cf. A.R.S. § 29-3105(A)(3) (allowing an operating agreement to
govern if it conflicts with the rules provided by statute). The court did not
err in applying the parties’ oral agreement instead of § 29-3707 for winding
up Tino Menlo.

¶23 Husband also argues that the superior court did not have the
authority to order that the Portia property be listed for sale if he failed to
purchase Wife’s interest in 30 days. In support of his contention, Husband
cites to Proffit v. Proffit, 105 Ariz. 222 (1969), and argues that the court may
not divest a party of title to their separate property. See id. at 224. But
Husband did not have title to the Portia property; Tino Menlo owned the
property. Husband was therefore not divested of title.

II. The Superior Court Properly Applied the Gift Presumption to the
Menlo Property Transfer.

¶24 Husband asserts that the superior court erred in determining
that Husband’s transfer of the Menlo property to Kifissia triggered the gift
presumption. Husband argues that transferring property to an LLC owned
by both spouses does not create a presumption of a gift to the community.
We defer to the superior court’s factual findings if they are supported by
competent evidence, Borja, 254 Ariz. at 313, ¶ 10, but we review issues of
law de novo, Hall, 194 Ariz. at 57, ¶ 5.

¶25 A gift to the community is presumed when realty “is held as
separate property by one spouse but title is subsequently taken in the name
of both spouses.” Flower, 223 Ariz. at 535, ¶ 15. Husband argues that
transferring separate property to a jointly owned LLC is dissimilar from
transferring separate property to joint tenancy and therefore the gift
presumption should not apply.

¶26 Although Husband purchased the Menlo property during the
marriage, he acquired it as his sole and separate property and Wife
disclaimed any interest in the Menlo property. Accordingly, it was not
“taken in the name of both spouses.” About a year later, just after

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establishing Kifissia, he transferred the Menlo property to Kifissia. The
court found Kifissia was equally owned by Husband and Wife as
community property. Because there is competent evidence supporting the
court’s conclusions regarding the parties’ oral agreement and course of
conduct, the court was within its discretion to conclude that, when
Husband transferred the Menlo property to Kifissia a year after he
purchased it as his sole and separate property, he intended a gift to the
community. Thus, the court did not err by applying the gift presumption to
Husband’s transfer of the Menlo property to Kifissia. See Osborne v. Osborne,
1 CA-CV 19-0351 FC, 2020 WL 1062041, at *2–3, ¶¶ 7–11 (Ariz. App. Mar. 5,
2020) (mem. decision) (finding that the superior court properly imposed the
gift presumption on a spouse who transferred separate property into a
jointly owned LLC).

¶27 Husband also argues that the court erred by finding that
commingling realty transmutes it into community property. However, that
is not the basis of the superior court’s decree. The court applied the gift
presumption to the transfer of the Menlo property to Kifissia and found that
it was a gift to the community. It did not find that the Menlo property was
commingled such that it became community property.

III. The Traceability of Husband’s Funds Does Not Impact the
Community Property Nature of the AmTrust CD.

¶28 Husband argues the court erred in ruling that the AmTrust
CD was community property because the funds are traceable as Husband’s
separate property. We review the superior court’s characterization of
property as separate or community de novo. Schickner v. Schickner, 237 Ariz.
194, 199, ¶ 22 (App. 2015). When separate property is commingled with
community property, “the entire fund becomes community property
‘unless the separate property can be explicitly traced.’” Kim v. Pak, 258 Ariz.
594, 597, ¶ 9 (App. 2024) (citation omitted).

¶29 The superior court found that the parties had an oral
agreement to each own 50% of Katina Saffron, regardless of initial monetary
contribution. Husband transferred the Saffron property into Katina Saffron
subject to that agreement. Upon the sale of the Saffron property, the sale
proceeds were deposited in Katina Saffron’s bank account and then used to
purchase the AmTrust CD in the name of both Husband and Wife. Whether
the AmTrust CD was community property or the separate property of both
Husband and Wife, the result is the same: each party owned 50% of those
funds. The court did not err in finding that the AmTrust CD was
community property.

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CONSTANTINE v. CONSTANTINE
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¶30 Husband also asserts that the $341,183.20 equalization
payment was too high because it was more than half of the balance of the
AmTrust CD. But the decree found that Husband owed Wife only
$300,742.20 to equalize the AmTrust CD. The rest of the $341,183.20 is
accounted for in other sections of the decree and Husband fails to articulate
how the court’s calculations are incorrect.

IV. The Superior Court Did Not Err in Referring to Findings From a
Temporary Orders Hearing.

¶31 Husband argues that the court improperly relied on findings
from the temporary orders hearing regarding the amount owed to Wife for
equalization. He cites to A.R.S. § 25-316(D)(1), which states that a temporary
order “[d]oes not prejudice the rights of the parties . . . to be adjudicated at
subsequent hearings in the proceedings.”

¶32 But the court made its own findings following trial. It simply
referred to the temporary orders to support that Husband had previously
deposited $341,183.20 into a joint account, and that this amount included
the payment owed for the AmTrust CD. We are unaware of any authority
prohibiting a court from referencing temporary orders in a dissolution
decree.

¶33 Husband then contends that by relying on the temporary
orders, the superior court improperly bifurcated the divorce proceedings.
He argues that the court may not dissolve the marriage and then retain
jurisdiction to divide property at a later date, citing Larchick v. Pollock, 252
Ariz. 364 (App. 2021).

¶34 Husband is correct that the court may not bifurcate
proceedings by retaining jurisdiction after dissolving a marriage to divide
property later, Larchick, 252 Ariz. at 367, ¶¶ 11–13, but he does not show
how that occurred here. The temporary orders did not dissolve the
marriage, they ordered Husband to deposit the monies into an account to
be held until the dissolution trial, where the final determination on property
was made.

V. The Court Did Not Pierce the Corporate Veil.

¶35 Husband argues that there was no evidence to support
piercing the corporate veil of the LLCs. Piercing the corporate veil occurs
when the court allows a creditor to reach corporate assets to repay a
member’s individual debt. See Leo Eisenberg & Co., Inc. v. Payson, 162 Ariz.
529, 534 (1989) (“[T]he doctrine of ‘piercing the corporate veil’ applies only

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to plaintiffs who seek recovery against the personal assets of corporate
shareholders or directors.”); see also Standage v. Standage, 147 Ariz. 473, 476
(App. 1985) (“[A]ssets of a validly formed corporation should be distinct
and protected from the debts of individual shareholders.”), superseded by
statute on other grounds, 1996 Ariz. Legis. Serv. ch. 145, § 9 (S.B. 1216), as
recognized in Myrick v. Maloney, 235 Ariz. 491, 494, ¶ 8 (App. 2014).

¶36 The court here divided community and separate property
between Husband and Wife; it did not give Husband’s LLC assets to Wife
to repay a personal debt. Husband has not shown how the division of the
LLCs in the decree constituted piercing the corporate veil and has thus not
shown error.

VI. Evidence of an Oral Agreement Was Provided.

¶37 Husband argues that there was no evidence to support the
court’s finding that the parties had an agreement to split their LLCs 50/50.
We will defer to the superior court’s factual findings if they are supported
by competent evidence. Borja, 254 Ariz. at 313, ¶ 10. We do not reweigh the
evidence on appeal. Hurd v. Hurd, 223 Ariz. 48, 52, ¶ 16 (App. 2009).

¶38 As noted above, the court heard Wife’s testimony about the
parties’ agreement and course of conduct. Testimony is evidence. See
Maricopa Cnty. Juv. Action No. JV131701, 183 Ariz. 481, 482 n.1 (App. 1995)
(“In a contested hearing, testimony is evidence from a witness who is under
oath and subject to cross-examination.”). Although Husband testified that
they did not have an agreement, we do not reweigh evidence or determine
the credibility of witnesses. Hurd, 223 Ariz. at 52, ¶ 16. The court’s factual
findings about an oral agreement were supported by the record.

¶39 Husband also argues that testimony of an oral agreement
cannot be used to prove a prenuptial or real estate sale agreement. Husband
did not bring these arguments at trial or object to Wife’s testimony on this
basis. This argument, brought for the first time on appeal, is waived. Sobol
v. Marsh, 212 Ariz. 301, 303, ¶ 7 (App. 2006) (“As a general rule, a party
cannot argue on appeal legal issues and arguments that have not been
specifically presented to the trial court.”).

VII. The Parties Agree that No Clarification of the Court’s Tax Order Is
Necessary.

¶40 In his Opening Brief, Husband argued that the court erred in
ordering him to pay Wife’s 2022–2025 taxes. The decree ordered Husband
to turn over tax documents Wife needed to prepare her taxes, but also

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CONSTANTINE v. CONSTANTINE
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ordered that “[Husband] shall assume, pay, indemnify and hold [Wife]
harmless from any additional taxes, interest, penalties, or assessments,
including legal accounting, and/or audit expenses, associated with any
federal and state income tax returns for the tax periods 2022-2025.”

¶41 In her Answering Brief, Wife conceded that she must pay half
of any capital gains taxes for the sale of jointly owned properties during this
time frame. She also clarified that her requested relief was limited to tax
liability for rental income and distributions from the LLCs resulting from
the withholding of tax documents, not for any and all tax liability. At oral
argument, both parties agreed that no further clarification of the superior
court’s order is necessary.

CONCLUSION

¶42 For the foregoing reasons, we affirm. Wife requests attorneys’
fees under ARCAP 21(a) and A.R.S. § 25-324. In the exercise of our
discretion, after considering the reasonableness of the parties’ positions and
their financial resources, we award Wife a portion of her fees. We also
award Wife her costs upon compliance with ARCAP 21. See A.R.S. § 12-342.

¶43 Husband requests attorneys’ fees in his Reply Brief “as a
sanction” on Wife for statements made in her Answering Brief. However,
Husband did not cite a rule or statutory basis to support his request, and
we decline to impose his requested sanction. See Sotomayor v. Sotomayor-
Muñoz, 239 Ariz. 288, 291, ¶ 13 (App. 2016) (denying a request for a sanction
on appeal when there was no statutory basis given and it was not
established that a sanction was appropriate).

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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