Opinion
No. 1 CA-CV 15-0062 FC
11-17-2015
In re the Marriage of: JAMI GERMAINE HATCH, Petitioner/Appellee, v. JESSE HILAIRE, Respondent/Appellant.
COUNSEL Evans, Dove & Nelson, PLC, Mesa By H. Lee Dove Counsel for Petitioner/Appellee Underwood Law Office, Phoenix By Sonya E. Underwood Counsel for Respondent/Appellant
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
No. FC2013-095205
The Honorable Boyd W. Dunn, Judge, Retired
AFFIRMED
COUNSEL Evans, Dove & Nelson, PLC, Mesa
By H. Lee Dove
Counsel for Petitioner/Appellee
Underwood Law Office, Phoenix
By Sonya E. Underwood
Counsel for Respondent/Appellant
MEMORANDUM DECISION
Presiding Judge Donn Kessler delivered the decision of the Court, in which Judge Andrew W. Gould and Chief Judge Michael J. Brown joined. KESSLER, Judge:
¶1 Jesse Hilaire ("Father") appeals from the trial court's decree regarding apportionment of property, child support, spousal maintenance, calculation of arrearages, and attorneys' fees. Both parties request attorneys' fees and costs pursuant to Arizona Rule of Civil Appellate Procedure ("ARCAP") 21, and Arizona Revised Statutes ("A.R.S.") sections 12-349 (Supp. 2015) and 25-324(B) (Supp. 2015). For the reasons stated below, we affirm the decree and award reasonable attorneys' fees and costs to Jami Germaine Hatch ("Mother").
FACTUAL AND PROCEDURAL HISTORY
¶2 Father and Mother married in 2009. They have two minor children. Father was gainfully employed throughout the marriage, and Mother was a stay-at-home parent and primary caretaker of the children.
¶3 The parties separated in September 2012, and Mother filed for dissolution in September 2013. Mother requested child support, spousal support, and attorneys' fees.
¶4 The trial court issued temporary orders requiring Father to pay family support in the amount of $1000 per month effective January 1, 2014. In the ten months between January 1, 2014 and the trial date of October 23, 2014, Father failed to pay Mother $1000 per month. Father paid Mother a total of $1500 between January and May 2014, and no evidence was presented at trial regarding payments between May 2014 and the trial date.
On appeal, Father submitted an Affidavit of Direct Payments documenting payments made from August 2013 to December 2014. We will not consider documents not introduced into evidence in the trial court. Crook v. Anderson, 115 Ariz. 402, 403-04 (App. 1977).
¶5 The trial court issued the Decree of Dissolution on December 17, 2014 ("Decree"). In relevant part, the Decree ordered Father to pay $271.87 per month in child support, $400.00 per month for eighteen months in spousal maintenance, and $12,495.25 in arrearages of spousal maintenance and child support for the period of October 1, 2013 through December 31, 2014. At trial, Father had requested reimbursement for the marital vehicle, claiming he had been wrongfully removed from the vehicle's title after Mother moved out. The trial court found that Father's claims were unsubstantiated by the evidence and that the parties had previously divided and received items of personal property acquired during their marriage. Finally, the trial court granted Mother's requests for attorneys' fees and costs, finding that a substantial disparity of financial resources existed between the parties and that Father had considerably more resources available to contribute toward Mother's attorneys' fees and costs.
¶6 Father timely appealed. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1) (Supp. 2015).
Unless amended in pertinent part after the underlying events, we cite to the current version of any Arizona statutes.
DISCUSSION
¶7 Awards of child support, spousal maintenance, apportionment of community property, and attorneys' fees will not be disturbed on appeal absent an abuse of discretion. Gutierrez v. Gutierrez, 193 Ariz. 343, 346, ¶ 5 (App. 1998); In re Marriage of Berger, 140 Ariz. 156, 167 (App. 1983). "An abuse of discretion exists when the record, viewed in the light most favorable to upholding the trial court's decision, is 'devoid of competent evidence to support' the decision." Little v. Little, 193 Ariz. 518, 520, ¶ 5 (1999) (quoting Fought v. Fought, 94 Ariz. 187, 188 (1963)). "We defer to a trial court's factual findings and will overturn them only if they are clearly erroneous." Danielson v. Evans, 201 Ariz. 401, 406, ¶ 13 (App. 2001). I. Apportionment of Community Property
¶8 Father argues the trial court erred when it failed to equitably divide the value of a vehicle that was community property. Father claims he traded his sole and separate vehicle for a newer vehicle owned by Mother's grandmother. Allegedly, he and the grandmother agreed that Father would pay off the remaining $5000 difference in the vehicles' value in installments. Father asserts he paid $1500 of the remaining $5000, but that the maternal grandmother wrongfully removed his name from the vehicle's title after Mother moved out of the marital home. Father, however, did not produce any evidence indicating the existence or ownership of this vehicle apart from a hand-written list documenting payments and an estimate of the vehicles' value from Kelley Blue Book. Mother argued the vehicle had been repossessed by the grandmother and was titled under her name, and that the trial court accordingly did not have jurisdiction to apportion the vehicle. Neither party provided any additional evidence regarding the vehicle, despite the trial court's request that the parties provide additional argument in writing.
¶9 Because significant doubt regarding ownership of the vehicle existed at trial, and neither party produced additional evidence or argument regarding the vehicle, the trial court did not abuse its discretion in refraining from distributing this alleged community asset. II. Child Support
¶10 Father argues that the trial court failed to properly impute income to Mother for the purposes of child support. He claims that Mother received "recurring gifts" from her family, including free rent, payment for work Mother performed for her parents, payment of the minor children's educational expenses, and use of the marital vehicle. He argues these recurring gifts were substantial, had the effect of reducing her personal expenses, and should therefore have been attributed to her as gross income. Instead, the trial court attributed minimum wage to Mother.
¶11 The Arizona Supreme Court established Child Support Guidelines, see A.R.S. § 25-320 app. §§ 1-29 (Supp. 2015) ("Guidelines"), pursuant to A.R.S. § 25-320(D). State ex rel. Dep't of Econ. Sec. v. Ayala, 185 Ariz. 314, 316 (App. 1996). The Guidelines are not a source of law, but they guide the trial courts in the application of the law embodied in the statutes and recorded cases. In re Marriage of Pacific, 168 Ariz. 460, 463 (App. 1991). Application of the Guidelines is mandatory unless the court makes a written finding that their application would be "inappropriate or unjust." Ayala, 185 Ariz. at 316; Guidelines § 3.
The trial court utilized the June 1, 2011 Guidelines, so we refer to that version of the Guidelines in this decision.
¶12 The first step in applying the Guidelines is determining the gross income of each parent. Milinovich v. Womack, 236 Ariz. 612, 615, ¶ 11 (App. 2015). Gross income for child support calculation is different than for tax purposes, and includes actual money or cash-like benefits the household receives and can spend. Strait v. Strait, 223 Ariz. 500, 502, ¶ 8 (App. 2010). Gross income may include income from recurring gifts, but "[i]ncome from any source which is not continuing or recurring in nature need not necessarily be deemed gross income . . . ." Guidelines § 5(A). "If a parent is unemployed or working below full earning capacity, the court may consider the reasons." Id. at § 5(E). "The court shall presume, in the absence of contrary testimony, that a parent is capable of full-time employment at least at the applicable state or federal adult minimum wage, whichever is higher." A.R.S. § 25-320(N).
¶13 Although the Guidelines are broad enough to encompass free housing, see Patterson v. Patterson, 226 Ariz. 356, 359-60, ¶¶ 7-11 (App. 2011), trial courts have the discretion to decline to attribute income to either parent, Guidelines § 5(E). The Guidelines provide several examples of cases in which it may be inappropriate to attribute income, but they expressly state that a court is not limited to these examples. Id. ("Examples . . . include, but are not limited to, the following . . . .").
¶14 We conclude that the trial court did not abuse its discretion in imputing minimum wage to Mother and not imputing other income to Mother for gifts or her occasional work for her parents. The trial court found that Mother's income was unknown, with the assumption that Mother could earn minimum wage income, and that Mother has had to receive family gifts in order to meet her needs. Mother last worked when she was nineteen years old and was a stay-at-home parent during the marriage. She admitted she had done housework and secretarial work for her mother and father for cash, favors, and "credit," but she stated the work was a short-term, temporary arrangement and that she was no longer working for her parents. In addition, no evidence was presented by Father regarding Mother's income.
¶15 We also conclude the trial court did not abuse its discretion by excluding the children's educational expenses or the marital vehicle from Mother's gross income. The record shows that Mother's mother and grandmother had paid for the children's preschool in the past, but that Mother had started volunteering at the school to eliminate that expense. Finally, as discussed above, Father failed to establish that the marital vehicle was still in Mother's possession, or that the vehicle was titled in either Mother or Father's name. In light of the foregoing, we conclude that the trial court did not abuse its discretion by imputing only minimum wage income to Mother. III. Spousal Maintenance
¶16 Father argues the trial court erred in finding that Mother was entitled to spousal maintenance and in applying the factors of A.R.S. § 25-319(B) (2007) when determining the amount and duration of spousal maintenance.
¶17 When reviewing a spousal maintenance award, we first consider whether the spouse meets the statutory requirements for maintenance in A.R.S. § 25-319(A). Gutierrez, 193 Ariz. at 348, ¶ 15. We then "review the amount and duration of the award to determine whether the trial court properly considered" the pertinent statutory factors. Id. (citation omitted). Trial courts have substantial discretion within this two-step framework. Rainwater v. Rainwater, 177 Ariz. 500, 502 (App. 1993).
A. Entitlement to Spousal Maintenance
¶18 Father argues the trial court's findings were flawed because it failed to apportion the marital vehicle; failed to consider Mother's family gifts and the fact that Mother worked for her parents; and lacked sufficient evidence to conclude that Mother could not support herself because there was no evidence regarding her earning ability or the income she was actually receiving from her parents.
¶19 Pursuant to A.R.S. § 25-319(A), the trial court may award spousal maintenance if it finds the spouse seeking maintenance "[l]acks sufficient property, including property apportioned to the spouse, to provide for that spouse's reasonable needs"; "[i]s unable to be self-sufficient through appropriate employment or is the custodian of a child whose age or condition is such that the custodian should not be required to seek employment outside the home or lacks earning ability in the labor market adequate to be self-sufficient"; "[c]ontributed to the educational opportunities of the other spouse"; or "[h]ad a marriage of long duration and is of an age that may preclude the possibility of gaining employment adequate to be self-sufficient." The court has discretion to grant maintenance "when any one of [the] four factors is present." Cullum v. Cullum, 215 Ariz. 352, 354, ¶ 11 (App. 2007).
¶20 The trial court found that Mother met two conditions for spousal maintenance. First, she lacked sufficient property, including property apportioned to her, to provide for her needs. A.R.S. § 25-319(A)(1). Second, she was unable to be self-sufficient through proper employment. A.R.S. § 25-319(A)(2). The record reasonably supports these conclusions. Mother's only separate property consisted of furniture and other household items; neither party possessed an interest in real property or a retirement, pension, 401K, IRA, or similar account; and Mother is indebted to her family for attorneys' fees and daily expenses. As discussed above, Mother had been unemployed since the age of nineteen, was a stay-at-home parent, and did not have a high school diploma. Finally, no evidence supports Husband's assertion that Mother possessed or owned the marital vehicle, as discussed above. We cannot say the court abused its discretion in light of these facts.
B. A.R.S. § 25-319(B) Factors
¶21 Father raises several issues with regards to the trial court's application of the A.R.S. § 25-319(B) factors. First, he argues that the trial court erred in finding that Mother's income was unknown because Mother admitted she had worked as a receptionist for her Mother and received family gifts and plastic surgery. Second, he argues that the court erred in calculating his income for purposes of spousal maintenance. Third, he argues the trial court failed to account for the parties' lifestyle.
¶22 "The trial court is in the best position to properly calculate an award of spousal maintenance and is given broad discretion in determining what is a reasonable amount." Pullen v. Pullen, 223 Ariz. 293, 298, ¶ 22 (App. 2009). In determining the duration and amount of spousal maintenance, the trial court must consider thirteen factors, including the standard of living during the marriage, the duration of the marriage, each spouse's age, employment history, earning ability, and the financial abilities and resources of each spouse. A.R.S. § 25-319(B). The court may abuse its discretion if it fails to apply one of the applicable factors with respect to which the parties presented evidence. See Elliott v. Elliott, 165 Ariz. 128, 136-37 (App. 1990) (finding trial court had not addressed factors (6) and (7) and remanding for clarification). If inappropriate bases are relied on exclusively to determine spousal maintenance, we will be inclined to reverse the award. See Hardin v. Hardin, 163 Ariz. 501, 503 (App. 1990).
¶23 The trial court made findings regarding all thirteen factors listed in A.R.S. § 25-319(B). We discuss only the trial court's findings regarding factors that Father challenges.
1. Mother's income
¶24 The trial court did not abuse its discretion in finding that Mother's income was unknown. As discussed above, Father did not present evidence regarding Mother's income. Additionally, Mother's testimony established that the gifts were not continuing or recurring in nature, and no evidence regarding Mother's plastic surgery was presented at trial.
2. Father's income
¶25 Father argues that the trial court failed to use his actual income when calculating spousal maintenance. He argues the court erred in (1) including medical, overtime, and other benefits in the calculation of his income; and (2) relying on a letter ("Letter") provided by Father's employer, who is also the Mother's uncle.
a. Inclusion of medical, overtime, and other benefits
¶26 The trial court did not err in including Father's medical, overtime, and other benefits in calculating spousal maintenance. The trial court addressed Father's income under A.R.S. § 25-319(B)(4) and (5), which require the court to assess Father's ability to meet his own needs while meeting those of Mother and to assess the comparative financial resources of the spouses. Medical, overtime, and other benefits are relevant to both of these considerations, as they affect the resources available to Father to meet his needs. Additionally, Father testified that in previous years, he had paid for these medical benefits; if Father's employer did not pay for these benefits, Father would have to pay for them once more, affecting his financial resources.
¶27 The statutory scheme regarding spousal maintenance bolsters our conclusion. Pursuant to A.R.S. § 25-530(A) (Supp. 2015), certain benefits are specifically excluded from the trial court's consideration. The specific exclusion of these benefits indicates that other benefits may be included in the court's determinations regarding spousal maintenance.
"In determining whether to award spousal maintenance or the amount of any award of spousal maintenance to a requesting party, the court shall not consider any federal disability benefits awarded to the other spouse for service-connected disabilities pursuant to 10 United States Code section 1413a or 38 United States Code chapter 11." A.R.S. § 25-530(A).
b. Relying upon the Letter
¶28 When addressing A.R.S. § 25-319(B) factors (4) and (5), the trial court acknowledged that Father earned $23 per hour "as a base income" but used the Letter's calculation of yearly total income as earnings for Father. The parties had agreed to attribute to Father a forty hour work week at the rate of $23.00 per hour, a total of $3986.67 per month or approximately $47,840 per year. The Letter from Father's employer, however, also included information on bonuses and medical insurance benefits, resulting in a total compensation of $50,492.50 in 2012 and $56,834.86 in 2013. Father argues that the trial court erred in relying on the Letter because the court admitted the document over Father's objection and because the court's finding was inconsistent with Mother's pretrial statement.
"5. The comparative financial resources of the spouses, including their comparative earning abilities in the labor market: Father earned $56,834.00 in 2013 and earns as a base income $23.00 per hour on a full-time basis."
¶29 "We will not disturb a trial court's ruling on the admissibility of evidence absent a clear abuse of discretion and resulting prejudice." Jimenez v. Wal-Mart Stores, Inc., 206 Ariz. 424, 427, ¶ 10 (App. 2003). When reviewing the admission of evidence at a bench trial, "we assume, unless it affirmatively appears to the contrary, that the trial judge only considered the competent evidence in arriving at its final judgment." Fuentes v. Fuentes, 209 Ariz. 51, 57, ¶ 29 (App. 2004).
¶30 We find no abuse of discretion in the trial court's consideration of the Letter. Although the Letter might have been hearsay, the Arizona Rules of Evidence have been relaxed for the purposes of Family Court proceedings unless a party files notice with the court prior to a hearing or trial. See Ariz. R. Fam. L.P. 2(B)(1); see also Aksamit v. Krahn, 224 Ariz. 68, 73 n.4, ¶ 19 (App. 2010). While Father also complains that Mother had failed to disclose the Letter, Mother had listed it in her pretrial statement. In any event, we do not find any prejudice to Father in admitting the Letter. At trial, conflicting evidence regarding Father's income was presented. As a result, the parties agreed to attribute to Father a forty hour work week at the rate of $23.00 per hour, a total of $3,986.67 per month or approximately $47,840 per year. Father had previously testified that he received $685 per month in medical benefits, paid for by his employer. If the stipulated income is added to the value of the medical benefits, the resulting total is substantially similar to the numbers provided by the Letter.
Mother uses the income stipulated to by the parties in her Pretrial Statement. Thus, Father's argument that the trial court's finding was inconsistent with Mother's Pretrial Statement is unavailing.
¶31 Additionally, prejudice did not result because use of the Letter's numbers did not result in an excessive spousal maintenance award. Under A.R.S. § 25-319(B) factor (4), the trial court was required to assess the ability of Father to meet his needs while meeting those of Mother. Father's affidavit of financial information reflected that he was already spending more than he earned on a monthly basis. The court was free to disregard or not believe Fathers assertions. Our courts have affirmed spousal maintenance awards based on the totality of the circumstances when the award was less than 25% of the obligor's income. See Sommerfield v. Sommerfield, 121 Ariz. 575, 578-79 (1979). Here, the spousal maintenance award was $400 per month. This amount constitutes 9% of Father's stipulated income. Even if we were to use the monthly income provided by Father in his Affidavit of Financial Information, excluding medical benefits as he requests, the award would only constitute 11% of his monthly income. The award falls well below the 25% mark and, giving deference to the trial court's credibility determinations and weighing of all the statutory factors, the award is not excessive.
¶32 Finally, Father asserts the trial court failed to accurately account for the parties' lifestyle, resulting in an abuse of discretion. We disagree. We presume the court considered relevant evidence in the record to support its decision even if it is not specifically detailed in the Decree. Fuentes, 209 Ariz. at 55-56, ¶ 18. Evidence and testimony regarding the parties' assets and lifestyle was presented, and the trial court addressed the parties' standard of living in the Decree.
¶33 In light of the foregoing, we find no abuse of discretion with regards to the trial court's application of the A.R.S. § 25-319(B) factors. IV. Arrearages
¶34 Father argues the trial court erred because its calculation of arrearages was contrary to the evidence. He claims he should have been credited $6200 towards arrearages, rather than the $2390 credit provided by the court. To arrive at this number, Father asserts he should have received a credit for $1200 for payments made between October 2013 and January 2014; $4000 for payments made between January 2014 and the date of trial; and $1000 for payments Father made to Mother from their joint tax return. However Father only provided evidence of payments totaling $740 between October and December 2013 and $1500 between January and May 2014. He presented no evidence regarding payments between May 2014 and the trial date or the tax return payment. In light of these facts, we cannot find error in the trial court's calculation regarding arrearages. V. Mother's Attorneys' Fees at Trial
¶35 The trial court awarded attorneys' fees to Mother under A.R.S. § 25-324(A), finding a substantial disparity in resources between the parties and that Father acted unreasonably by failing to pay the temporary support ordered by the court and not making a full financial disclosure. Father claims the trial court abused its discretion in awarding Mother her attorneys' fees, arguing that Mother established a pattern of unreasonableness during the proceedings and the court erred in failing to consider Mother's misconduct. We disagree.
Although the trial court did not decide the amount of attorneys' fees and costs to be awarded, it expressly determined that no just reason for delay existed and directed entry of the Decree as a final, appealable order pursuant to Arizona Rule of Family Law Procedure 78(B). The trial court issued an order stating that it would proceed in determining the amount of attorneys' fees upon resolution of this appeal.
¶36 As shown above, the record supports the trial court's determination that a substantial disparity of resources existed. The record also supports the trial court's determination that Father acted unreasonably. Father failed to pay the child support ordered by the court, paying a total of $1500 between January and May 2014. Father also failed to timely disclose a fully completed financial affidavit pursuant to Arizona Rule of Family Law Procedure 49. In addition, Father failed to comply with the trial court's order that he file an Affidavit of Financial Information by January 31, 2014. In light of these factors, the court did not abuse its discretion in finding that Father acted unreasonably, warranting an award of Mother's attorneys' fees pursuant to A.R.S. § 25-324(A). VI. Attorneys' Fees on Appeal
"[W]ithin forty (40) days after the filing of a response to an initial petition, each party shall disclose in writing to every other party the information set forth in this rule. . . . In a case in which child support is an issue, unless good cause is stated for not doing so, the following documents shall be served with the Resolution Statement: (1) a fully completed affidavit substantially similar to Form 2, Affidavit of Financial Information . . . ." Ariz. R. Fam. L.P. 49(C)(1). Father filed his response to the initial petition on October 4, 2013. Father filed his Affidavit of Financial Information on February 3, 2014. --------
¶37 Father requests an award of his reasonable attorneys' fees and costs pursuant to ARCAP 21 and A.R.S. §§ 25-324(B) and 12-349.
¶38 Section 25-324(B) requires an award of reasonable costs and attorneys' fees if a party filed the petition in bad faith; "[t]he petition was not grounded in fact or based on law"; or "[t]he petition was filed for an improper purpose, such as to harass the other party, to cause an unnecessary delay, or to increase the cost of litigation to the other party." We do not find that any of these circumstances apply in this case and decline to award attorneys' fees to Father under § 25-324(B). We similarly decline to award attorneys' fees to Father pursuant to A.R.S. § 12-349(A) because we do not find that Mother meets any of the factors needed to award fees under that statute.
¶39 Mother also requests attorneys' fees on appeal under A.R.S. § 25-324. We have considered the parties' relative financial resources and the reasonableness of their positions pursuant to A.R.S. § 25-324(A). Based on the evidence in the record regarding the disparity in income, which "[w]e shall assume . . . is not stale in the absence of advice to the contrary by timely filed affidavits containing updated information," Countryman v. Countryman, 135 Ariz. 110, 112 (App. 1983), and the reasonableness of the parties' positions on appeal, we award Mother her reasonable attorneys' fees on appeal. We also award her taxable costs on appeal.
CONCLUSION
¶40 For the foregoing reasons, we affirm and grant Mother her reasonable attorneys' fees and taxable costs on appeal upon timely compliance with ARCAP 21.