## Facts

- Roger Garrett (husband) and Veronica Garrett (wife) divorced in Arizona.
- Roger was an attorney who handled matters under contingency-fee contracts.
- At the time of dissolution, Roger had two contingency-fee matters that had not yet produced fees.
- For the first contingency-fee contract, the trial court found Roger had performed essentially all of the legal services during the marriage.
- For the second contingency-fee contract, the trial court found Roger performed the legal services only after the marriage ended, but concluded he could have completed the work during the marriage had he acted more diligently.
- Treating both fees as “earned during marriage,” the trial court classified the interests in both contingent fees as community property and divided them between the spouses.
- Roger appealed the characterization and division, focusing on the second contingency-fee matter.

## Issues

1. Whether an attorney-spouse’s interest in an uncollected, contingent fee is community property to the extent it is attributable to legal services performed during the marriage.
2. Whether a dissolution court may treat a contingent fee as entirely community property when the services producing the fee were performed after dissolution, based on a finding that the attorney could have completed the work before dissolution.

## Decision

- The appellate court upheld the trial court’s treatment of the first contingency-fee matter as a community asset to the extent the fee was attributable to services performed during the marriage.
- The appellate court rejected the trial court’s approach to the second matter insofar as it converted post-dissolution services (and the compensation for those services) into community property based on a “could have finished earlier” rationale.
- The case was remanded for a division consistent with apportioning any contingent-fee recovery between community and separate property based on services performed before versus after dissolution.

## Legal Principles

- In Arizona, compensation earned from a spouse’s labor during marriage is community property, even if payment is delayed or contingent.
- A contingency-fee interest may be divided in dissolution, but only to the extent the fee is attributable to legal services actually performed during the marriage.
- Post-dissolution earnings from a spouse’s labor are that spouse’s separate property, even if the underlying representation began during the marriage.
- A dissolution court may not recharacterize separate property as community property by speculating that the earning spouse should have completed post-dissolution work sooner or during the marriage.
- When a contingent-fee matter spans the date of dissolution, the proper method is apportionment between the community and the lawyer-spouse’s separate property, based on the work performed before and after dissolution.

## Conclusion

In re Marriage of Garrett holds that pending contingency-fee matters can be treated as divisible community assets only for the portion of a later fee recovery that reflects legal work performed during the marriage, and that a court cannot award the community the value of post-dissolution services by reasoning the attorney could have completed the work before the marriage ended; instead, any fee must be apportioned between marital and post-marital efforts.


In re Marriage of Garrett, 683 P.2d 1166 (1983)