Digital Systems Engineering, Inc. v. Moreno – 4/18/2017

May 2, 2017

Arizona Court of Appeals Division One holds that when a married couple divorces and then remarries, a judgment against one spouse’s undivided one-half interest in the first marital community does not permit the judgment holder to garnish that spouse’s wages after entering into the second marriage.

An employer brought suit against a former employee and her husband for fraud.  After a bench trial, the superior court entered judgment against the wife and found that the husband was not individually liable, so entered judgment against his undivided one-half interest in the marital community but not his sole and separate property.  After the judgment was entered, the husband and wife divorced, then remarried each other.  In an attempt to collect on the judgment, the employer served a writ of garnishment on the husband’s employer.  The husband and wife objected to the writ, arguing that the prior judgment was limited to the husband’s interest in the first marital community, and that the divorce and subsequent remarriage created a new marital community untouched by the judgment against the husband.  The superior court denied the objection and affirmed the writ of garnishment.  The husband and wife appealed.

The Court of Appeals reversed and vacated the writ of garnishment.  It first determined that the divorce and remarriage were not mere tactics to avoid the judgment, then held that the judgment applied only to the marital community that existed when the judgment was entered.  The divorce and remarriage did not resume the old marital community, but began a new one.  The Court further held that the divorce and remarriage would not prevent collection against assets owned by the former marital community, but prevents the garnishment of wages owned by the new marital community.

Judge Thompson delivered the unanimous opinion, in which Judges Howe and Winthrop concurred