December 29, 2016 – Jeffrey Martinez v. Angela Martinez, No. 34,662

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number: ___________
Filing Date: December 29, 2016
NO. 34,662
JEFFREY MARTINEZ,
Petitioner-Appellant/Cross-Appellee,
v.
ANGELA MARTINEZ,
Respondent-Appellee/Cross-Appellant.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Matthew J. Wilson, District Judge
The Zamora Law Firm
D. Diego Zamora
Santa Fe, NM
Wray & Girard PC
Katherine A. Wray
Albuquerque, NM
for Appellant
The Okon Law Firm
Christa M. Okon
Santa Fe, NM
for Appellee

OPINION
SUTIN, Judge.
{1} 	Husband Jeffrey Martinez and Wife Angela Martinez were divorced in May
2011. In the years following the divorce, the parties have engaged in a protracted and
bitter dispute over alleged violations relating to court orders, spousal support, child
support, property division, and attorney fees. Husband appeals (1) a contempt order
entered by the district court in connection with enforcement of a spousal support
award to Wife and awarding attorney fees to Wife, (2) the admission of certain
evidence during the hearing on spousal support, and (3) the denial of Husband’s
request for additional time to file proposed findings of fact and conclusions of law and
a motion to reconsider. Wife cross-appeals a grant of summary judgment denying her
community property interest in settlement proceeds Husband obtained in an insurance
bad faith action that alleged the mishandling of a claim involving community property
insured with community funds.
{2} 	We reverse and remand based on Wife’s cross-appeal and hold that the district
court erred in categorizing the settlement proceeds as Husband’s separate property.
Because our decision regarding the cross-appeal necessarily impacts the parties’
respective finances, we similarly reverse the spousal support award and remand for
further proceedings. Although our reversal obviates the need to address Husband’s

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first and third issues on appeal, we address these arguments regarding certain
discretionary matters for clarity on remand.
BACKGROUND
{3} 	Because our opinion focuses primarily on Wife’s claim that she is entitled to
a share of the settlement proceeds as community property, we limit our recitation of
the facts in this background section to those necessary for narrative clarity and to
address the relevant issues. Additional facts will be discussed throughout as needed.
{4} 	Husband filed for divorce from Wife in April 2010. In the months following
Husband’s filing, the parties made numerous allegations against each other. Husband
alleged, among other averments, that Wife violated the temporary domestic order
(1) when she took Husband’s clothes to Goodwill, (2) when Wife and the parties’ son
allegedly assaulted Husband’s parents, and (3) when Wife and their children broke a
television and left it outside of the marital residence. Wife alleged, among other
averments, that Husband (1) abused her and their children, (2) removed community
property from the marital home while she and the children were not present, and
(3) misconstrued the altercation between their son and Husband’s parents and that, in
fact, their son was defending himself and Wife.
{5} 	During this same tumultuous time frame, in June 2010, Husband’s truck, which
was community property, was destroyed in a fire. Husband made a claim with Allstate

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Insurance Company, which was denied. Thereafter, Husband filed a bad faith claim
against Allstate, see State Employees Credit Union v. Martinez and Martinez v.
Allstate Insurance Co., No. D-101-CV-2011-00694, which ultimately settled on
September 7, 2011.
{6} 	During the course of this case, Wife had numerous attorneys and, at times,
appeared pro se. When appearing pro se, Wife struggled to comply with the Rules of
Evidence and Rules of Civil Procedure, and the district court attempted to explain
concepts and otherwise accommodate Wife when possible. An initial merits hearing
spanned four days, in part to give Wife an opportunity to review documents and
consult with an attorney.
{7} 	After a hearing in May 2011, the district court entered a decree of dissolution
of marriage and entered an order on the distribution of community assets, community
personal property, child support, and spousal support. In the order, filed in June 2011,
the court addressed the marital residence, college fund accounts, certain debts and
offsets, tax refunds, when the parties may respectively claim their minor son as a
dependent, and a retirement account. The court took under advisement the child
support and spousal support issues.
{8} 	In July 2012 Wife filed a motion to impose a constructive trust on insurance
proceeds and to set child and spousal support. In the motion, Wife addressed a

1 In the briefing, Wife refers to her interview as a “statement under oath.” In the
district court, the interview was referred to as an “examination under oath” or a
“statement under oath.”
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$250,000 insurance check from Allstate in settlement of Husband’s bad faith claim
and for damage to his truck. Wife argued that the truck was community property, that
the settlement proceeds were community property, and that one-half of those proceeds
should have been awarded to her. She sought a constructive trust for one-half of the
insurance proceeds, minus attorney fees, and requested that those funds be placed in
the court registry. In her motion, Wife also sought spousal and child support awards
in appropriate amounts and asked that those awards be retroactive.
{9} 	In response to Wife’s motion, Husband argued that Wife “actively conspired
with Allstate and, as a result, her conduct, in part, played a significant part in the
decision by Allstate to wrongfully deny [Husband’s] property damage claim under his
Allstate automobile policy.” Husband accused Wife of committing “deceptive actions
against the community” as evidenced by a letter from Allstate to Wife regarding
Husband’s claim. In the letter, Allstate employee Bruce Zinzer sent Wife a copy of an
inventory submitted by Husband with a note to Wife that stated, “Let me know what
you think.” Husband also asserted that Wife, when interviewed by Allstate’s counsel
regarding Husband’s insurance claim,1 stated that Husband was making a fraudulent
claim for personal property damages. Husband argued that Wife’s conduct was aimed

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at denying the community the benefit of insurance coverage under the Allstate policy,
and thus she should not be rewarded with any interest in the proceeds.
{10} 	Husband’s arguments related to the insurance proceeds dispute rested primarily
on Delph v. Potomac Insurance Co., 1980-NMSC-140, 95 N.M. 257, 620 P.2d 1282.
In Delph, the husband and the wife owned a residence as community property. Id. ¶ 1.
The residence was insured, and both the husband and the wife were named on the
policy. Id. The wife moved out of the residence and sought a dissolution of marriage.
Id. ¶ 2. The wife was granted a divorce and was awarded the residence. Id. However,
prior to entry of the divorce decree, the husband intentionally set fire to the residence.
Id. ¶ 3. The wife sought to recover proceeds under the insurance policy for damages
caused by the fire, but the insurer refused to pay her, contending that “[the] husband’s
arson constituted ‘fraud’ by the ‘insured’ and that the policy coverage was vitiated by
the fraud.” Id. ¶ 4. The wife brought suit against the insurer, the district court granted
summary judgment in favor of the insurer, and the wife appealed. Id. ¶ 5. On appeal,
our Supreme Court considered “whether the intentional burning of a community
residence by one spouse will bar recovery by an innocent spouse under a fire
insurance policy issued to the community.” Id. ¶ 6.
{11} 	In resolving the question on appeal, the Court in Delph first held that the
residence as well as the insurance policy were community property. Id. ¶ 9. The Court,

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however, noted that “New Mexico courts have segregated out the interests of spouses
in community property when it has been necessary to do so in order to avoid
injustice.” Id. ¶ 10. Because the parties’ interests were capable of being segregated,
the Court held that “both logic and justice mandate[d] that the [wife] should be
entitled to recover up to one-half of the policy limits in order to compensate for the
damages resulting from the fire.” Id. ¶ 11. The Court stated that in New Mexico a
“spouse who commits a separate tort is individually liable for damages arising out of
the tort and that the separate (or segregable) assets of the innocent spouse may not be
reached to satisfy the liability arising out of the tort.” Id. ¶ 13. In deciding whether the
husband’s act of arson was a “community” or “separate” tort, the Delph Court
considered “whether the act in which the spouse was engaged at the time of the tort
was one which was of actual or potential benefit to the community.” Id. ¶ 14.
According to the Court, “[i]f it was of benefit, the tort is a ‘community’ tort, and thus
a community debt. If the activity in which the tortfeasor spouse was engaged was of
no benefit to the community, the tort is a ‘separate’ tort and thus a separate debt.” Id.
Ultimately, the Court held that the husband did not engage in an act that could be of
benefit to the community, and thus his responsibility for the fraud was separate. Id.
While the husband’s actions could void his own interest in the policy, his fraud “[did]
not void the policy as to [the wife].” Id.

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{12} 	Husband argued that Delph controlled the issue in this case because Wife’s
alleged scheming with Allstate could not be construed to benefit the community. He
argued that Wife had a bad motive, and her sole purpose in “surreptitiously
communicating” with Allstate was to harm Husband. Husband’s position was that
Wife’s actions voided her interest in the Allstate policy, and thus voided her interest
in the settlement proceeds.
{13} 	In her reply, Wife admitted that she informed Allstate of Husband’s practice of
forging documents, but also asserted that Husband had initially told authorities that
Wife and/or the parties’ sons were responsible for having damaged the truck. She
argued that because neither party was ultimately found to have caused the loss to the
property and because Wife did not commit a tort, Delph did not apply.
{14} 	The district court issued an order on Wife’s motion regarding the settlement
proceeds in November 2012. The court found that the truck was a community asset
but did not have sufficient information regarding whether Wife’s conduct contributed
to Allstate’s decision to deny Husband’s property damage claim. The court continued
taking the matter of spousal support under advisement pending a decision regarding
the Allstate proceeds. At the same time, the court stated that “[a]s a separate issue and
regardless of whether [Wife] has a right to share in the Allstate proceeds, the [c]ourt

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is not foreclosing spousal support, pending testimony of [Wife’s] treating doctors as
to her physical condition and her ability to earn income.”
{15} 	Thereafter, in May 2013, Wife filed a motion for summary judgment on
division of the Allstate settlement funds. Wife set out fifty-four statements of fact.
Among those facts were the following. The truck was bought with community funds,
was insured with community funds, and both Husband and Wife were named insureds.
Bruce Zinzer, the Allstate employee who handled the personal property damage aspect
of the claim, reached out to Wife because she was a named insured. When asked about
Husband’s reputation for honesty, Wife gave her “candid opinion of [Husband’s]
historical lack of truthfulness, based on examples from her life with [Husband].”
Allstate provided Wife with Husband’s inventory of items in the truck, and Wife
informed Allstate that some of the items would not have been in the truck and that
others did not have the value claimed by Husband. When asked by Allstate’s attorney,
Mark Klecan, during an examination under oath about Husband’s reputation for
honesty, Wife answered the question by referencing “police reports and an event
involving [Husband’s] lying to his probation officer.” When asked for any other
examples or instances of Husband’s reputation for honesty or truthfulness, Wife
referenced instances where Husband allegedly stole inventory from his employers.
Although Klecan stated under oath that Wife’s position was the primary reason for the

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delay in payment, Zinzer did not believe that Wife’s input caused the denial of the
claim. Wife also highlighted a number of other errors and omissions by Allstate in
handling the claim, including Allstate’s failure to hire a fire investigator, failure to
independently obtain the police report, and failure to respond to Husband’s attorney’s
letters.
{16} 	Further, Wife denied playing a significant role in Allstate’s denial of the claim
and argued that it would be against public policy to force her to unconditionally
support Husband’s claims in order to be entitled to her share of the proceeds, even
when she suspected Husband’s claim to be fraudulent. She also argued that Allstate
denied the claim because it suspected fraud based on Husband’s actions and that any
bad faith claims handling by Allstate was largely due to Allstate’s failure to adhere to
accepted claims-handling protocols in a timely manner. Lastly, Wife argued that
Delph did not apply because her candor and truthfulness to Allstate is not a deliberate
tort that failed to benefit the community.
{17} 	Husband responded that many of Wife’s “facts” were immaterial because
Zinzer handled the claim related to the property inside of the truck, not the claim
regarding damage to the truck itself. Husband highlighted testimony from Zinzer that
Zinzer believed that Wife was “actively working with [him] to get this claim
denied[.]” Husband, again relying on Delph, argued that the settlement proceeds were

10
not a community asset because Wife’s wrongful conduct was intended to deny the
community a benefit under the Allstate insurance policy.
{18} 	In August 2013 the district court denied Wife’s motion for summary judgment
regarding the settlement proceeds, finding that, but for Wife’s actions, Allstate would
have had a different take on how to address the claim. It held that because of Wife’s
cooperation and statements to Allstate, Allstate chose to deny Husband’s claim that
gave rise to the bad faith action against Allstate. According to the court, a bad faith
claim did not exist before Wife’s participation, and the bad faith claim arose because
of Wife’s willing participation. Shortly afterward, in October 2013, the case was
reassigned to another district court judge who handled the case up to this appeal.
{19} 	Husband filed a motion for summary judgment in February 2014 on the Allstate
settlement proceeds. In support of his motion, Husband stated that the district court
entered an order denying Wife’s motion for summary judgment on division of the
settlement proceeds, and Husband specifically outlined the findings of the court.
Husband again argued that Wife’s bad actions prohibited her from claiming a portion
of the settlement proceeds. Alternatively, Husband argued that the settlement proceeds
were separate property under NMSA 1978, Section 40-3-8(A) (1990). In response,
Wife did not dispute Husband’s material facts but argued that those facts were not
sufficient to give Husband unfettered access to the funds. She incorporated by

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reference her arguments in her motion for summary judgment as to why the funds
should be treated as community property and again disputed the relevance of Delph.
She argued that while she “respectfully disagreed with the [court’s] determination [on
her motion for summary judgment], she did not appeal the determination because the
funds would be the only source available to satisfy a lump sum [spousal support]
award.” She also argued that, even accepting Husband’s contention that the funds
were his separate property by virtue of the court’s ruling on Wife’s motion for
summary judgment as true, the funds could and should be used in granting lump sum
spousal support.
{20} 	During the hearing on spousal support, child support, and the allocation of the
settlement proceeds, before the judge to whom the case was reassigned, Wife’s
attorney indicated that there was no contest as to the nature of the proceeds because
“[the original judge] clearly [set] the money over to [H]usband.” She stated that,
although she thought the prior ruling on the settlement proceeds was “mind-
boggling[,]” she did not appeal it because any lump sum spousal support would “have
to come from somewhere if [it was] to be made at all.” In light of the prior ruling,
Wife did not object to the proceeds being treated as Husband’s separate property
based on the expectation that she would be receiving a lump sum spousal support
payment from the proceeds. The court subsequently granted Husband’s motion for

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summary judgment on the settlement proceeds essentially on the same grounds used
to deny Wife’s motion for summary judgment, adding a handwritten caveat that the
proceeds not be used pending the court’s decision on spousal support.
{21} 	After the court took evidence de novo from the parties on the matter of spousal
support in August 2014, the court, in November 2014, ordered that Husband pay Wife
a lump sum of $42,000 in spousal support, less amounts previously paid, plus $1,000
per month until further order of the court. In December 2014 the district court declined
to stay its order awarding spousal support or to grant an extension for Husband to file
a motion for reconsideration and requested findings of fact and conclusions of law.
In March 2015 the district court entered an order of contempt after granting Wife’s
motion to show cause for Husband’s failure to comply with the court’s order for
spousal support. Also, in March 2015, the court ordered Husband to pay $10,000 in
attorney fees and costs in addition to the attorney fees previously paid by Husband.
This appeal followed.
DISCUSSION
I. 	The Settlement Proceeds
{22} 	As already indicated, we begin by addressing Wife’s cross-appeal because the
designation of the settlement proceeds as separate or community property necessarily
impacts the appropriateness of the district court’s spousal support award, which

13
should be based in part on the parties’ relative assets and needs. See NMSA 1978,
§ 40-4-7(E)(2), (4), (6), (7) (1997) (stating that when determining spousal support, the
court must consider, in relevant part, “the current and future earnings and the earning
capacity of the respective spouses[,]” “the reasonable needs of the respective
spouses[,]” “the amount of the property awarded or confirmed to the respective
spouses,” and “the type and nature of the respective spouses’ assets”).
{23} 	The standard of review in this case is complicated. We note that the orders from
which Wife appeals are related to summary judgment as to the Allstate settlement
proceeds, which we review de novo. See Beggs v. City of Portales, 2009-NMSC-023,
¶ 10, 146 N.M. 372, 210 P.3d 798. In general, we review the district court’s equitable
distribution of assets and liabilities for abuse of discretion. See Arnold v. Arnold,
2003-NMCA-114, ¶ 6, 134 N.M. 381, 77 P.3d 285. However, even when the appellate
courts “review for an abuse of discretion, our review of the application of the law to
the facts is conducted de novo. Accordingly, we may characterize as an abuse of
discretion a discretionary decision that is premised on a misapprehension of the law.”
N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-028, ¶ 7, 127 N.M. 654, 986
P.2d 450 (alteration, internal quotation marks, and citations omitted). Additionally,
while the district court has broad discretion to divide community property, the
threshold question of whether settlement proceeds are community property is a

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question of law that we review de novo. See Arnold, 2003-NMCA-114, ¶ 6 (“[T]he
threshold question of whether [the h]usband’s accumulated vacation leave and sick
leave are community property is a question of law, which we review de novo.”).
{24} 	As we more fully discuss later in this opinion, the district court erred as a matter
of law in misapprehending and misapplying Delph to the facts of this case and in
determining that the settlement proceeds were separate and not community property.
Wife, as a co-insured, responded to Allstate’s investigative questioning. Nothing in
the record, including the court’s findings, shows or permitted a rational, reasonable
inference that in doing so Wife acted with a malicious or otherwise tortious wrongful
intent or motive to deprive the community of a community asset.
A. 	The Parties’ Arguments
{25} 	We focus on Wife’s argument on cross-appeal that as a matter of law her
conduct did not deprive her of her community interest in the settlement proceeds.
{26} 	In arguing that insurance and community property law support her right to share
in the bad faith settlement proceeds, Wife points to case law addressing community
interests in insurance proceeds. See Harris v. Harris, 1972-NMSC-005, ¶¶ 8, 10, 83
N.M. 441, 493 P.2d 407 (holding that “the policy itself, including the right to receive
the sum named therein . . . was community property during coverture” and that
“[d]ecedent[-husband], being the owner of half of the policies, had the right to dispose

15
of his half interest in the proceeds as he pleased”); Hickson v. Herrmann, 1967-
NMSC-083, ¶¶ 8, 18, 77 N.M. 683, 427 P.2d 36 (holding that an insurance policy on
the life of the parties’ minor child bought with community funds during the marriage,
though the husband continued to make payments on the policy after divorce, was
community property and noting that while “[t]he proceeds were not paid during
marriage[,] . . . the right to the proceeds was obtained during marriage[, and that] right
was not changed and was not divided upon the divorce”); In re Miller’s Estate, 1940-
NMSC-021, ¶ 12, 44 N.M. 214, 100 P.2d 908 (holding that “the proceeds of an
insurance policy obtained after marriage and payable to the estate of the husband is
community, because [it was] paid for out of the community funds”); Dydek v. Dydek,
2012-NMCA-088, ¶¶ 42, 59, 62, 288 P.3d 872 (holding that the former wife had a
sufficient interest in the husband’s bad faith claim to justify her request for the court’s
appointment of a receiver but did not address whether a bad faith action was separate
or community property). Wife argues that “insurance law generally holds [that]
insurance proceeds arising from a policy owned by both parties belong to the parties
equally.” She asserts that “because the truck and policy insuring it were both
community assets, any recovery for bad faith claims handling likewise derived from
the breach by Allstate of a contractual duty owed to the community and should
therefore be deemed a community asset.”

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{27} 	Wife then argues that even if her communications to Allstate contributed to
Allstate’s denying payment as to the truck, she is entitled to a community property
share in the settlement funds because community property assets are divisible without
regard to a respective spouse’s fault. She relies on Medina v. Medina, 2006-NMCA-
042, ¶ 13, 139 N.M. 309, 131 P.3d 696, which held that injecting “an element of
moral fault into the rules governing the distribution of community property on divorce
might be inconsistent with New Mexico’s system of no-fault divorce.” Wife also
argues that Husband’s reliance on Delph is misplaced because it is factually distinct
from the present case. Specifically, she argues that the co-insured spouse’s deliberate
act of destruction in Delph is different from her warning Allstate as to Husband’s
dishonesty.
{28} 	In response, Husband contends the settlement funds are his separate property
under Section 40-3-8(A) but that, even if the funds are community property,
community property is subject to equitable division. He also argues that the no-fault
divorce concept is unrelated to community property division. Husband argues that the
cases relied upon by Wife—Harris, 	Hickson, and 	In re Miller’s Estate—are
distinguishable from the present case because they involved life insurance policies
whose proceeds were anticipated by the insurance contract, as opposed to car
insurance. He also argues that Dydek is inapplicable because this Court did not decide

17
whether the bad faith claim in that case was separate or community property, and
because, in this case, Wife actively participated with Allstate to defeat Husband’s
claim. According to Husband, Wife received her community interest in the insurance
policy (i.e., one-half the value of the vehicle), but the settlement proceeds were
separate property because the settlement was finalized after the entry of the divorce
decree.
{29} 	As to his “equitable division” point, Husband argues that should we determine
that the Allstate proceeds are community property, equity must be taken into account,
and we must determine that, based on equitable considerations, Wife is not entitled
to any part of the beneficial resolution of the insurance claim. He relies on Delph and
the equitable underpinnings of Delph to support his assertion that to permit Wife to
benefit from her wrongdoing and receive a share of the settlement funds in any form
of an award in the divorce action would be contrary to and thwarts New Mexico
public policy. He also responds to Wife’s no-fault divorce argument by arguing that
no-fault divorce is unrelated to post-petition spousal behavior. According to Husband,
Wife conflated the “fault” of the parties in the dissolution of the marriage and the
equitable fault the district court assigned to Wife for her post-petition role in defeating
Husband’s insurance claim. Husband acknowledges that pre-divorce-petition behavior

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does not impact the division of community property, but argues that Wife’s post-
petition behavior should be considered in the equitable balance for spousal support.
B. 	Analysis
{30} 	We agree with Wife that the law regarding community property supports her
assertion that the settlement proceeds are community property. In determining whether
Wife is entitled to a portion of the settlement proceeds as community property, it is
useful to begin by establishing that the settlement proceeds are presumptively
community property and that the statutes do not support Husband’s argument that the
proceeds are separate property.
{31} 	“Community property” is defined as “property acquired by either or both
spouses during marriage which is not separate property.” Section 40-3-8(B). “Separate
property” is defined, in relevant part, as “property acquired by either spouse before
marriage or after entry of a decree of dissolution of marriage[.]” Section 40-3-8(A)(1).
In New Mexico, “[p]roperty acquired during marriage by either husband or wife, or
both, is presumed to be community property.” NMSA 1978, § 40-3-12(A) (1973).
“The party asserting that property acquired during marriage is separate bears the
burden of presenting evidence that would rebut the presumption by a preponderance
of the evidence.” Hodges v. Hodges, 1984-NMSC-031, ¶ 6, 101 N.M. 67, 678 P.2d
695.

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{32} 	Husband argues that, regardless of Wife’s involvement in the bad faith claim,
the settlement proceeds are separate property because he actually received the
proceeds approximately four months after the divorce decree was entered, and thus
the 	property 	was 	separate 	under 	Section 	40-3-8(A)(1). 	However, 	Husband’s
characterization of the settlement proceeds as separate property under the statute is
inaccurate under New Mexico law. As highlighted by Wife, insurance proceeds that
are paid as a result of a policy that is community property, where that policy was paid
for with community funds, are community property. See Russell v. Russell, 1990-
NMCA-080, ¶¶ 3, 12, 111 N.M. 23, 801 P.2d 93 (holding that, in the context of the
wife’s personal injury claim and recovery for medical expenses, “the community has
an interest in the proceeds of the policy as well as in any recovery from the
tortfeasor”); see also Harris, 1972-NMSC-005, ¶¶ 6, 9 (holding that “[a]n insurance
policy and rights incident thereto (including a right to the proceeds) is property” and
noting the parties’ agreement that “since the insurance policies were acquired with
community funds, they therefore became community property”); Hickson, 1967-
NMSC-083, ¶¶ 3, 10, 22 (holding that the divorced wife “owned the right to receive
the proceeds of [a policy insuring the life of the parties’ minor child] as community
property” even though the minor child died after the parties were divorced, the
husband was named as the first beneficiary in the policy, and the husband paid the

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premiums from the policy from his separate funds after the divorce); In re Miller’s
Estate, 1940-NMSC-021, ¶ 30 (“The policy of insurance, being acquired subsequent
to marriage was unquestionably community property. It was kept alive by the payment
of the premiums with community funds, and the proceeds resulting from such contract
. . . remain as community property to be distributed as such.”).
{33} 	Allstate’s alleged bad-faith-claim handling occurred while the parties were
married and impacted both parties, who undisputedly had a community interest in the
truck. Thus, the settlement proceeds are presumptively community property. With the
understanding that the settlement proceeds are presumptively community property, we
turn our focus to Husband’s position that, regardless of our interpretation of the
property as community or separate property under the statutes, the settlement proceeds
are nevertheless separate under Delph. Husband argues that, per Delph, Wife is not
entitled to any portion of the settlement proceeds because she did not act to benefit the
community when she told Allstate that Husband was dishonest. We hold that Delph
is distinguishable from the present case and does not form a basis for overcoming
New Mexico’s presumption in favor of community property. And we hold that the
district court erred in denying Wife’s community property interest in the settlement
proceeds.

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{34} 	As indicated earlier in this opinion, in Delph, the husband intentionally set fire
to the property, prior to entry of the divorce decree. 1980-NMSC-140, ¶ 3. The
specific issue presented on appeal was “whether the intentional burning of a
community residence by one spouse will bar recovery by an innocent spouse under
a fire insurance policy issued to the community.” Id. ¶ 6. The Court held that it was
clear that both the residence and the insurance policy were community property. Id.
¶ 9. However, the law in New Mexico also clearly states that “a spouse who commits
a separate tort is individually liable for damages arising out of the tort and that the
separate (or segregable) assets of the innocent spouse may not be reached to satisfy
the liability arising out of the tort.” Id. ¶ 13. Because the husband’s arson could not
be construed to be a benefit to the community, the responsibility for the fraud was
separate rather than community and could not be used to void the entire insurance
policy. Id. ¶ 14.
{35} 	The holding in Delph cannot be used to deny Wife’s community interest in the
settlement proceeds because the circumstances here are entirely different from the
circumstances in Delph. In Delph, the Court considered the impact of an intentional
tort on an innocent spouse. In this case, there was no ruling that Wife committed an
intentional tort, or for that matter, any tort. Although the district court opined in a
hearing that Wife’s actions “may be tantamount to” the tort of interference with

22
contractual relations, there was never an argument or ruling that Wife actually
tortiously interfered with Husband’s contract. In fact, Husband failed to present
evidence or elicit necessary findings that would support a tortious interference with
contract claim, which would require proof in relevant part that “[t]here . . . be some
voluntary conduct on the part of [Wife],” Bynum v. Bynum, 1975-NMCA-005, ¶ 7, 87
N.M. 195, 531 P.2d 618 (internal quotation marks and citation omitted), and that “the
contract interference [was] without justification or privilege[.]” M & M Rental Tools,
Inc. v. Milchem, Inc., 1980-NMCA-072, ¶ 17, 94 N.M. 449, 612 P.2d 241 (internal
quotation marks and citation omitted); see also Lenscrafters, Inc. v. Kehoe, 2012-
NMSC-020, ¶ 40, 282 P.3d 758 (stating that a plaintiff seeking to prove tortious
interference with contract must prove that “the defendant induced the breach without
justification or privilege to do so”). There is also no finding by the district court that
Wife acted “either with an improper motive or by use of improper means[,]” as
required for a tortious interference with contract claim. Ettenson v. Burke, 2001-
NMCA-003, ¶ 14, 130 N.M. 67, 17 P.3d 440. To the contrary, the evidence presented
indicated that, in expressing her opinion as to Husband’s dishonesty, Wife was
responding to questions posed by Allstate about Husband’s credibility and reputation
for honesty and truthfulness. Allstate also sent a copy of Husband’s inventory to Wife,
and she was specifically told to let Allstate know what she thought about the

23
inventory. She was correct to answer those questions as a co-insured and was required
to give her honest and accurate answers as an individual who was duly sworn under
oath. See NMSA 1978, § 30-25-1 (2009) (identifying “perjury” as a fourth degree
felony and consisting of “making a false statement under oath”); 14 Steven Plitt et al.,
Couch on Insurance § 199:3 (3d ed. 2016) (“Most insurance policies, whether they
are liability or indemnity policies, include what is commonly referred to as a
‘cooperation clause.’ In instances where a policy does not include such a clause, one
has been implied in law.” (footnotes omitted)).
{36} 	Additionally, despite Husband’s assertions that Wife’s accusations were false,
there was no evidence or finding by the district court that her responses to Allstate’s
questions were dishonest or inaccurate. There is no evidence in the record that Wife
volunteered information that was harmful to Husband before she was asked to give
information, as a co-insured. There is no evidence from which the district court could
reasonably infer, find, or conclude that Wife did anything more than cooperate, as she
was required to do, or that she gave information beyond the information required in
response to Allstate’s questions in connection with its investigation of possible fraud.
{37} 	Although Husband argued to the district court that Wife “actively conspired
with Allstate[,]” that her conduct was aimed at getting Husband’s claim denied, and
that she had a bad motive, the district court issued no findings as to Wife’s motive.

24
There was nothing in the record, aside from Allstate’s speculation, to affirmatively
establish that Wife conspiratorially, with an improper motive, acted with an intent to
deny a benefit to the community. The district court did find that “but for” Wife’s
actions, Allstate would have had a different take on how to address the claim and that
the bad faith claim arose because of Wife’s input; however, those findings do not, on
their own, prove intentional, tortious conduct. Because there was no evidence or
findings that would indicate that Wife’s conduct was intentional and tortious, unlike
in Delph, Delph is not analogous, does not apply, and cannot be relied upon to deny
Wife her community interest in the settlement proceeds.
{38} 	Husband essentially is asking this Court to look at Delph so broadly that any
time a spouse fails to act for the benefit of the community, that spouse’s interest in the
community property is at risk. But vague notions of wrongful conduct by a spouse
cannot be the test for determining whether a spouse’s interest in community property
should be voided. Delph applies in instances in which a spouse is proved to have
intentionally and tortiously caused damage to community property. We do not
approve of an expansion of Delph which would allow a party to generally allege that
a spouse behaved badly, absent proof of an intentional tort, and then use those
allegations to effectively void the spouse’s interest in community property. To affirm
and approve of such a broad use of Delph would almost certainly, in the oft-quoted

25
words of former New Mexico Governor Bruce King, “open up a whole box of
Pandoras.”
{39} 	Because neither the statutes nor Delph provides a basis under which to deny
Wife’s community interest in the settlement proceeds, Husband has failed to overcome
the presumption in favor of community property. Hodges, 1984-NMSC-031, ¶ 6 (“The
party asserting that property acquired during marriage is separate bears the burden of
presenting evidence that would rebut the presumption by a preponderance of the
evidence.”). We therefore hold that the district court erred in denying Wife’s
community share of the settlement proceeds.
II. 	Remaining Matters Within the District Court’s Discretion
{40} 	Because we reverse and remand on the ground that the settlement proceeds
were improperly determined to be separate property, we choose not to address
Husband’s arguments on appeal regarding spousal support and the district court’s
rejection of a time extension. As indicated earlier, because the settlement proceeds are
community property and not separate property, the relative assets of the parties are
likely to be viewed differently on remand, and the proceeds are likely to be allocated
differently. Thus, the spousal support awarded by the district court will likely need to
be re-evaluated.

26
{41} 	Although we do not address Husband’s arguments regarding spousal support,
for the sake of clarity and guidance on remand, we address Husband’s arguments that
(1) the district court abused its discretion when it allowed additional, de novo
proceedings after Wife failed to offer evidence during the initial merits hearing on
spousal support; (2) the district court abused its discretion when it admitted Dr.
Amer’s testimony and when it relied on that testimony in coming to the conclusion
that Wife could not work; and (3) the district court improperly awarded attorney fees.
The parties agree that we review these points for abuse of discretion. See Riggs v.
Gardikas, 1967-NMSC-120, ¶ 8, 78 N.M. 5, 427 P.2d 890 (stating that the district
court’s decision to not re-open a case and hear additional evidence is reviewed for
abuse of discretion); Roark v. Farmers Grp., Inc., 2007-NMCA-074, ¶ 20, 142 N.M.
59, 162 P.3d 896 (recognizing that the admission of evidence is reviewed for abuse
of discretion); Garcia v. Jeantette, 2004-NMCA-004, ¶ 15, 134 N.M. 776, 82 P.3d
947 (“The decision whether to grant or deny a request for attorney fees rests within
the sound discretion of the district court.”). An abuse of discretion occurs when “the
court’s ruling exceeds the bounds of all reason” or “is arbitrary, fanciful, or
unreasonable.” Clark v. Clark, 2014-NMCA-030, ¶ 8, 320 P.3d 991 (internal
quotation marks and citation omitted).
A. 	Additional Proceedings

27
{42} 	Husband argues that it was error for the district court to permit additional
discovery and take new evidence concerning Wife’s health condition more than a year
after the initial trial on the merits. Husband argues that Wife’s pro se status did not
entitle her to a second chance at offering evidence and argues that the second trial
constituted an abuse of discretion because there had been no change in circumstances
relating to Wife’s health between the first and second trials. Husband also argues that,
after improperly reopening the proceedings, the court arbitrarily refused to consider
the whole record to determine spousal support. Husband highlights statements by the
judge who initially presided over the case regarding Wife’s “signs of malingering to
influence [the] court and to avoid being present at hearings scheduled by [the] court
and for which she had proper notice.” Husband argues that the district court did not
consider “all relevant factors” relating to the reopening of the evidence as outlined in
Sena v. New Mexico State Police, 1995-NMCA-003, ¶ 12, 119 N.M. 471, 892 P.2d
604, including the reasons for Wife’s failure to present or obtain the evidence at trial,
the prejudice to Husband, the delay in the proceedings, the importance of the evidence
to Wife, and whether reasons existed to deny the request for more discovery and
evidence. He argues that the court abused its discretion when it refused to listen to and
incorporate the previous record when Wife was pro se.

28
{43} 	While it is true that pro se parties are held to the same standards as represented
litigants, we conclude there was no abuse of discretion in this case. See Woodhull v.
Meinel, 2009-NMCA-015, ¶ 30, 145 N.M. 533, 202 P.3d 126 (holding that pro se
litigants “will not be treated differently than litigants with counsel”). Here, the district
court neither re-opened a case per Sena, 1995-NMCA-003, ¶ 12, modified an existing
award per Section 40-4-7(B)(2)(a), nor provided a new trial as contemplated under
Rule 1-059 NMRA. Here, the original judge chose not to rule on spousal support and
instead took the matter under advisement. Thus, because spousal support had not been
awarded, the newly assigned judge could revisit the issue. Husband glosses over the
fact that the district court had continuing jurisdiction over support issues, and the court
specifically declined to issue a ruling on support until evidence was presented from
Wife’s treating doctors regarding her physical condition and ability to earn income.
{44} 	Similarly, the district court did not abuse its discretion when it decided to take
new evidence and not listen to the trial that occurred in 2011. “An abuse of discretion
occurs when the ruling is clearly against the logic and effect of the facts and
circumstances of the case. We cannot say the trial court abused its discretion by its
ruling unless we can characterize it as clearly untenable or not justified by reason.”
State v. Layne, 2008-NMCA-103, ¶ 6, 144 N.M. 574, 189 P.3d 707 (internal quotation
marks and citation omitted). In this case, the judge, to whom the case was reassigned,

29
appears to have questioned his ability to determine the veracity of the witnesses based
on a recording and informed the parties that he would review the evidence from the
beginning. Both parties were given the opportunity to present evidence. Husband fails
to show how the court’s decision is clearly untenable or not justified by reason, and
we hold that the court did not abuse its discretion.
B. 	Medical Testimony
{45} 	Husband next argues that the testimony offered by Wife’s treating physician
about her condition and level of disability was admitted without foundation and did
not support a finding that her medical condition caused her inability to earn income.
He argues that “[e]xpert testimony founded upon mere surmise, guess[,] or conjecture
is not substantial to support a finding of fact.” Fitzgerald v. Fitzgerald, 1962-NMSC-
028, ¶ 2, 70 N.M. 11, 369 P.2d 398. He then argues that, in general, “to have adequate
foundation, a medical expert must testify to a reasonable medical probability
regarding causation.” In support of his position, Husband looks to case law regarding
the “reasonable degree of medical probability” standard in negligence and workers’
compensation cases that require plaintiffs to establish a causal connection between the
defendant’s act or omission and the medical harm. See, e.g., Alberts v. Schultz, 1999-
NMSC-015, ¶ 29, 126 N.M. 807, 975 P.2d 1279; Baer v. Regents of the Univ. of Cal.,
1999-NMCA-005, ¶¶ 21-22, 126 N.M. 508, 972 P.2d 9; Medina v. Original

30
Hamburger Stand, 1986-NMCA-107, ¶¶ 1-3, 105 N.M. 78, 728 P.2d 488. Husband
generally acknowledges that lay testimony is acceptable to establish the medical
condition of a spouse in support proceedings, see Russell v. Russell, 1984-NMSC-010,
¶¶ 7, 10, 101 N.M. 648, 687 P.2d 83, but argues that this Court should apply a
reasonable medical probability standard to a medical professional’s testimony when
that professional is offered to establish a causal link between a medical diagnosis or
condition and an inability to work. Importantly, Husband is not disputing the existence
of Wife’s medical conditions or the ability of her treating physician, Dr. Amer, to
testify about those conditions. Rather, Husband focuses on the fact that Dr. Amer did
not say Wife’s medical conditions caused her to be unable to work with a “reasonable
[degree of] medical probability.”
{46} 	Husband’s arguments are unconvincing. Two of Husband’s cited cases focus
on what medical experts must opine in order to establish causation in negligence
cases. Alberts, 1999-NMSC-015, ¶ 29 (“If testimony is introduced to establish
proximate cause, the evidence thus introduced must show to a reasonable degree of
medical probability that the defendant’s negligence caused the loss of the chance of
a better result.”); Baer, 1999-NMCA-005, ¶¶ 21-22 (addressing the standard in
proving proximate cause in a medical negligence case). The third case cited by
Husband interprets a provision of the Workers’ Compensation Act that specifically

31
requires that “where the defendants deny that an alleged disability is a natural and
direct result of the accident, the workman must establish that causal connection as a
medical probability by expert medical testimony.” Medina, 1986-NMCA-107, ¶¶ 1-3
(internal quotation marks and citation omitted).
{47} 	In this case, neither liability based on medical negligence nor benefits under the
Workers’ Compensation Act is at issue. Here, Dr. Amer did not opine as to whether
an injury was caused by a particular act of negligence or an accident that occurred
during employment. Dr. Amer’s testimony about Wife’s functional limitations for the
purposes of a spousal support calculation is notably different from a medical expert
giving an opinion about what caused a patient’s medical decline. We decline to extend
Husband’s proposed negligence standard to instances where the testifying provider
is not opining as to the cause of a party’s injury, but rather is simply describing
limitations associated with a particular patient’s illness and treatment. The district
court did not abuse its discretion when it did not apply the reasonable medical
probability standard as requested by Husband.
{48} 	Furthermore, although Husband argues on appeal that Dr. Amer was testifying
as an expert witness under Rule 11-702 NMRA, the nature of the testimony
highlighted by Husband suggests that in this particular case, and as to his particular
statements about Wife’s disability, Dr. Amer was testifying as a lay witness under

32
Rule 11-701 NMRA. To lay a foundation for the admission of Rule 11-701 testimony,
the witness must be shown to have “first-hand information” that is “rationally
connected to the opinion formed.” Sanchez v. Wiley, 1997-NMCA-105, ¶ 17, 124
N.M. 47, 946 P.2d 650. Here, Wife’s counsel elicited testimony from Dr. Amer that
he was Wife’s treating physician and was familiar with her medical condition, history,
and treatment, such that he had first-hand knowledge of those issues. Dr. Amer was
not tendered as an expert witness, and the district court only allowed him to testify as
to conditions for which he was treating Wife, despite Wife’s attempts to elicit broader
testimony. We hold that Dr. Amer’s testimony was appropriate under Rule 11-701 and
that the “reasonable medical probability” standard that applies to medical experts in
medical negligence and workers’ compensation cases does not apply.
{49} 	Russell, which considered non-expert testimony about a spouse’s medical
situation during support proceedings, is instructive. In Russell, the district court
accepted the wife’s testimony as to her state of health, which included a “recent
history of serious medical problems including toxic shock syndrome, respiratory
failure and cardiac arrest.” 1984-NMSC-010, ¶ 6. Our Supreme Court determined that
allowing the wife’s testimony was not an abuse of discretion because the testimony
constituted appropriate non-expert testimony, and the district court had “ample
opportunity to observe and question the witness and make a determination as to her

33
credibility and knowledge.” Id. ¶¶ 7-10. Here, as in Russell, the testimony offered by
Wife and Dr. Amer regarding Wife’s medical conditions and disability was based on
their perception and was helpful in determining a fact at issue. See Rule 11-701 (A),
(B). While Dr. Amer did testify that he felt Wife was 100 percent disabled and could
not reliably hold down a job, that opinion was based on his knowledge about Wife’s
functional physical limitations.
C. 	Attorney Fees
{50} 	“The decision whether to grant or deny a request for attorney fees rests within
the sound discretion of the district court.” Garcia, 2004-NMCA-004, ¶ 15. “Thus we
review the district court’s ruling on attorney fees only for an abuse of discretion.” Id.
To award fees in a domestic relations proceeding, the court must consider relevant
factors presented by the parties, including: (1) “disparity of the parties’ resources,
including assets and incomes”; (2) “prior settlement offers”; (3) “the total amount of
fees and costs expended by each party, the amount paid from community property
funds, any balances due and any interim advance of funds ordered by the court”; and
(4) “success on the merits.” Rule 1-127 NMRA. “In determining whether to award
attorney fees, a showing of economic disparity, the need of one party, and the ability
of the other to pay, has been characterized as the primary test in New Mexico.”
Quintana v. Eddins, 2002-NMCA-008, ¶ 33, 131 N.M. 435, 38 P.3d 203 (internal

34
quotation marks and citation omitted); see also Alverson v. Harris, 1997-NMCA-024,
¶ 26, 123 N.M. 153, 935 P.2d 1165 (“The most important factor the trial court
considers in deciding whether to award attorney fees is economic disparity between
the parties.” (internal quotation marks and citation omitted)).
{51} 	Husband argues that the district court abused its discretion in awarding attorney
fees to Wife because the court did not consider the factors outlined in Rule 1-127.
Here, there is no doubt that there was a substantial economic disparity. Wife had
minimal assets and income. Although she initially attempted to proceed pro se, she
ultimately incurred over $41,000 in attorney fees. Husband had more income and had
even more income when considering the settlement proceeds. However, given our
holding that the settlement proceeds are community property, the disparity between
the parties’ resources will likely change, and thus the parties’ ability to pay may have
changed. We therefore remand the issue of attorney fees for further consideration. See
Klinksiek v. Klinksiek, 2005-NMCA-008, ¶ 29, 136 N.M. 693, 104 P.3d 559 (“We
have partially affirmed and partially reversed the district court order. Under these
circumstances, while we affirm the award of attorney fees, we hold that it is
appropriate for the district court to reconsider the amount of the attorney fees.”).
CONCLUSION

35
{52} 	The district court’s ruling regarding the insurance settlement proceeds is
reversed, and the matter is remanded for further proceedings in accordance with this
opinion.
{53} 	IT IS SO ORDERED.
__________________________________
JONATHAN B. SUTIN, Judge
WE CONCUR:
_______________________________
MICHAEL E. VIGIL, Chief Judge
_______________________________
LINDA M. VANZI, Judge