## Facts

- Robert E. Cockrill, Sr. and Rose Cockrill married June 15, 1974, and divorced April 5, 1977.
- At marriage, Robert owned a farming operation, Cockrill Farms, as his separate property.
- During the marriage, the farm’s net worth increased by about $79,000 (after credits).
- The trial court found the increase was primarily due to Robert’s efforts during marriage and treated the entire increase as community property.
- Robert contended the increase was attributable primarily to the farm’s inherent qualities as separate property and should remain separate.

## Issues

1. When separate property increases in value during marriage and community labor contributes, which spouse bears the burden of proving whether the increase is separate or community?
2. Must the increase be characterized under an “all-or-none” approach, or must it be apportioned between the separate estate and the community when both capital and labor contribute?

## Decision

- The Arizona Supreme Court reversed the trial court’s judgment and remanded.
- The spouse asserting that an increase in value of separate property remains separate bears the burden to prove, by clear and convincing evidence, that the increase is attributable to the property’s inherent qualities rather than community labor.
- The court rejected the “all or none” rule and held that increases attributable to both separate capital and community labor must be apportioned between the separate estate and the community.
- On remand, the trial court was directed to apportion the farm’s increase in value using an equitable method; no single formula is mandatory.

## Legal Principles

- Property acquired during marriage is presumed community property; the presumption is overcome only by clear and convincing evidence.
- Earnings during marriage are strongly presumed community in nature, rebuttable only by clear and convincing evidence.
- When separate property appreciates during marriage, and the appreciation results from both (a) the inherent value of the separate property and (b) community labor, the appreciation must be apportioned between the separate and community estates.
- The spouse claiming the appreciation is separate must prove it is attributable to the inherent value of the separate property and not to community labor.
- Trial courts have discretion to select an equitable apportionment method; the choice is reviewed for abuse of discretion.

## Conclusion

The court required apportionment of increases in separate property value attributable to both community labor and separate capital, placed the burden on the spouse claiming the increase is separate, reversed the all-community award, and remanded for an equitable allocation.


Cockrill v. Cockrill, 124 Ariz. 50, 601 P.2d 1334 (Ariz. 1979)