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DeAvila v. DeAvila

Court of Appeals of Utah

August 10, 2017

Cristy DeAvila, Appellant,
Pericles DeAvila, Appellee.

         Second District Court, Farmington Department The Honorable Michael G. Allphin No. 144700136

          Ben W. Lieberman, Attorney for Appellant.

          Stacy J. McNeill, Eric B. Vogeler, and Jenna Hatch, Attorneys for Appellee.

          Judge Jill M. Pohlman authored this Opinion, in which Judges Gregory K. Orme and J. Frederic Voros Jr. concurred. [1]


          POHLMAN, JUDGE.

         ¶1 Cristy DeAvila, now known as Cristy Brown, appeals the trial court's division of marital assets under a decree of divorce. We affirm.


         ¶2 Brown and Pericles DeAvila married in 2004, separated in 2013, and divorced in 2015. At a one-day bench trial, the parties disputed, among other things, the division of two assets relevant to this appeal, namely, the insurance proceeds stemming from the destruction of a vehicle (the Lexus) and the stock from DeAvila's company (the Sector 10 stock).

         ¶3 At trial, Brown took the position that the Lexus was her separate property and that she should retain all of the insurance proceeds. Brown had listed the Lexus in her name on her financial declaration, and she testified that DeAvila bought the Lexus and gave it to her as a gift for her birthday. According to Brown, DeAvila had a vehicle "through [his] business, " and Brown had paid the insurance on that vehicle. When the business vehicle was totaled, DeAvila used proceeds from the insurance to buy the Lexus. Brown further testified that the Lexus was "destroyed" during the parties' separation and that she believed DeAvila was responsible for the damage because she "saw him driving by [her] house" within fifteen minutes of hearing "loud bashes" in her garage. After this incident, which totaled the Lexus, Brown received an insurance check for $17, 371. Because, in her view, DeAvila "intentionally destroyed" the Lexus, Brown alternatively asserted that even if the Lexus was deemed to be marital property, DeAvila was "not entitled to the benefit of the insurance proceeds under the collateral source rule."

         ¶4 DeAvila asserted that the parties were "jointly listed as owners" of the Lexus. He testified that he purchased the Lexus, believed he was an owner, and titled it in his name. DeAvila provided supporting evidence, including the 2009 bill of sale and the sales contract for the Lexus, which named DeAvila as the buyer. He also provided an exhibit with the application for original title, identifying himself as the primary owner and Brown as the secondary owner, but the record does not contain a copy of the original certificate of title.

         ¶5 DeAvila further asserted that shortly after the Lexus was damaged, Brown re-titled the Lexus "exclusively in her name." In support, he provided a corrected certificate of title, dated after the Lexus was damaged, which listed only Brown as an owner. In his trial brief, he stated that he was "being prosecuted for charges associated with damage done" to the Lexus, and at trial he invoked the Fifth Amendment to the United States Constitution, refusing to answer questions about whether he damaged the car. Nonetheless, DeAvila claimed that Brown should pay him one-half of the insurance proceeds as his marital share.

         ¶6 With regard to the Sector 10 stock, Brown asserted that Sector 10 was a publicly traded company whose stock was traded "'over the counter'" and testified that the stock's market price as of the day of trial was five cents per share.[2] She testified that she held Sector 10 stock in her name, amounting to at least 400, 000 shares. Brown urged the trial court to award DeAvila "his separate assets, including all shares in the Sector 10 [entities], " stating that "[w]hatever shares . . . are out there . . . he should be awarded those shares." She further urged the court to value the Sector 10 stock at the market price of five cents per share.

         ¶7 DeAvila, for his part, alleged in his trial brief that he had transferred to Brown "at least 11 million shares of Sector 10 stock, " which were worth ten cents per share in 2008, totaling $1.1 million. He further alleged that Brown had dissipated that asset, and he sought a judgment for his half of the value of that stock. At trial, he testified that the current Sector 10 stock price was "[f]ive to seven cents" per share. But DeAvila also testified that the company had no value and was "going to basically file [for] bankruptcy" due to the fact that attorneys who were handling litigation on its behalf on a contingency fee basis had recently "dropped" the case. In closing argument, he encouraged the court to value the shares at five cents per share.

         ¶8 During his testimony, DeAvila referred to the company's Form 10-K that Sector 10 had filed with the Securities and Exchange Commission approximately one month before trial. The 10-K stated that Sector 10's common stock had "an average market value of $.05 per share" and indicated that the stock traded on the Pink Sheets.[3] The 10-K also disclosed pending litigation matters and resulting uncertainties, and showed that ...

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