Opinion
2 CA-CV 2023-0052-FC 2 CA-CV 2022-0112-FC
01-26-2024
IN RE THE MARRIAGE OF HOWARD MARK HACK, Petitioner/Appellee, and SABINA ROSENBLATT HACK, Respondent/Appellant.
Solyn Law PLLC, Tucson By Melissa Solyn Counsel for Petitioner/Appellee R D Smith Law P.C., Scottsdale By Roger D. Smith Counsel for Respondent/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Pima County No. D20193317 The Honorable Deborah Pratte, Judge Pro Tempore
Solyn Law PLLC, Tucson By Melissa Solyn Counsel for Petitioner/Appellee
R D Smith Law P.C., Scottsdale By Roger D. Smith Counsel for Respondent/Appellant
Judge Kelly authored the decision of the Court, in which Presiding Judge Brearcliffe and Judge Eckerstrom concurred.
MEMORANDUM DECISION
KELLY, JUDGE
¶1 Sabina Hack appeals from provisions of the superior court's decree dissolving her marriage to Howard Hack. She argues the court erred in determining the parties had not modified their settlement agreement pursuant to Rule 69, Ariz. R. Fam. Law P., and in entering its order regarding property tax and mortgage interest payments related to their residence. She additionally appeals the court's post-decree order appointing a trustee. For the following reasons, we affirm.
Factual and Procedural Background
¶2 "We view the evidence in the light most favorable to upholding the trial court's determination." In re Marriage of Rojas, 255 Ariz. 277, ¶ 2 (App. 2023) (quoting In re Marriage of Downing, 228 Ariz. 298, ¶ 2 (App. 2011)). Sabina and Howard Hack were married in 1995. During their marriage, they had three children and purchased a home located in Malibu, California. In 2019, Howard filed for dissolution of marriage in Arizona.In September 2021, after nearly two years of litigation, the parties entered a Rule 69 settlement agreement following mediation, wherein they resolved all issues apart from attorney fees. They agreed that Howard would establish a Uniform Transfers to Minors Act (UTMA) custodial trust account for their son, E.H., "with a mutually agreed upon Trustee." Regarding their Malibu residence, they agreed that:
Sabina moved to dismiss for lack of jurisdiction. The superior court denied the motion, finding Arizona had jurisdiction to proceed with the dissolution and California had jurisdiction over the issues of legal decisionmaking, parenting time, and child custody or support.
Wife shall list the Malibu residence for sale by March 1, 2022 or 60 days after the entry of the child support order in the California lawsuit, whichever occurs first. The parties shall agree on a listing agent and, in the event they cannot agree, each shall select a realtor to act as a cosales agents .... Until the Malibu residence is
sold, Wife shall assume, pay, and shall indemnify and hold Husband harmless from all recurring expenses and routine maintenance associated with the Malibu residence including, but not limited to, the mortgage. Wife is responsible for the pro rata property taxes commencing October 1, 2021, and the property insurance commencing September 22, 2021 ....
¶3 After entering into the agreement, the parties jointly requested that the superior court vacate their trial and set a management conference regarding the attorney fees. However, the court did not approve, accept, or adopt this agreement at the management conference, and instead ordered each party to submit a draft decree to the other for review, after which time Howard was granted leave to lodge the final decree. The parties were unable to agree on a trustee for the UTMA account or the allocation of the net proceeds from the sale of the Malibu residence.
¶4 In May 2022, Howard filed a notice of lodging of decree. Sabina objected to the lodged decree, arguing that the parties had subsequently modified their settlement agreement via email by agreeing to appoint their daughter, Y.H., as trustee. She also argued she was entitled to reimbursement for her payments on the Malibu residence. In a minute entry order, the superior court informed the parties that it would review their filings and issue its ruling thereafter. In July, the court dissolved the parties' marriage by decree, which included provisions from the settlement agreement and from both Howard and Sabina's form decrees. The court also ordered that if the parties could not mutually agree on a trustee for the UTMA account by August 5, they were to submit the names of three proposed trustees to the court, which would then make the appointment.
¶5 The parties were unable to agree on a trustee, and each filed position statements with the superior court by the August deadline. Sabina again argued that Y.H. should be appointed trustee pursuant to an email Howard had sent her in October 2021, which she claimed formed a valid, binding modification to their earlier Rule 69 agreement. Howard's filing, in compliance with the court's order, proposed three other family members who could be appointed to serve as the sole trustee or as a co-trustee with Y.H.
¶6 Before the superior court ruled on the issue and appointed a trustee, Sabina filed a notice of appeal. The court then determined that it no longer had jurisdiction to appoint the trustee until the appeal was either suspended or concluded. Howard filed a motion to suspend the appeal and remand with this court, requesting the case be remanded to the superior court for a finding on the trustee matter. He alternatively filed a motion to dismiss the appeal for lack of jurisdiction. This court denied both motions, ordering that the superior court retained jurisdiction to enter a postjudgment order effectuating or enforcing the decree.
¶7 Howard then filed a motion for the superior court to enforce the decree and issue a ruling on the trustee matter. In January 2023, the court granted his motion and appointed one of his proposed family members, K.L., as trustee. Sabina filed a motion for reconsideration, requesting the court deny Howard's motion and refrain from appointing a trustee while this appeal was pending. The court denied Sabina's motion and affirmed its January order.
¶8 In February, Sabina filed a second notice of appeal, additionally appealing the court's post-decree order and denial of her motion for reconsideration. This court granted Howard's unopposed motion to consolidate the appeals. We have jurisdiction pursuant to article VI, § 9 of the Arizona Constitution and A.R.S. §§ 12-2101(A) and 12-120.21(A).
Discussion
¶9 On appeal, Sabina argues the superior court erred in finding that the parties had not modified their Rule 69 settlement agreement, in entering a post-decree order appointing a trustee other than Y.H., and in "making findings regarding the property tax and mortgage obligations that were contrary to the evidence and/or not supported by any evidence at all." We reject Sabina's arguments and affirm the dissolution decree and post-decree order.
Modification of the Settlement Agreement
¶10 The superior court's ruling as to whether the parties modified their Rule 69 settlement agreement is a mixed question of law and fact that we review de novo. See Buckholtz v. Buckholtz, 246 Ariz. 126, ¶ 10 (App. 2019); see also Marriage of Rojas, 255 Ariz. 277, ¶ 11 (issues relating to the validity, enforceability, and interpretation of contract reviewed de novo).
¶11 Sabina contends that Howard's email from October 2021 formed a binding, contractual modification to their existing Rule 69 settlement agreement. On October 7, Howard emailed Sabina:
I am agreeable to putting [E.H.'s] minor account into a special needs trust with [Y.H.] being the sole trustee in conjunction with stipulating the
house will be listed now (this week) on mls with [the listing agent].
The record does not reflect that Sabina ever responded to this email or listed the house for sale the week of October 7. Then, on October 11, Howard sent another email, stating in relevant part:
If we can get this mls listing signed today with [the listing agent], . . . as we agreed previously, we can make the changes to the minor account being transferred into the Special Needs Trust with [Y.H.] as the sole trustee.
Again, there is no record that Sabina responded to this email, or that she listed the Malibu residence for sale on a date certain. In her objection to the proposed decree, however, she attached Howard's emails to argue that the parties had reached a contractual agreement as to who would be named as trustee. In his reply to her objection, Howard argued that "the only binding agreement regarding choice of trustee is the R.69 Agreement."
¶12 After reviewing the parties' arguments and the evidence before it, the superior court entered the dissolution decree. The parties did not request separate findings of fact and conclusions of law, and the court therefore did not separately address Sabina's argument that the above emails modified their settlement agreement. Instead, it found that the parties had "reached a binding settlement agreement" in September 2021 and included new terms for the appointment of the trustee, thereby implicitly rejecting her position. The new provision stated: "If the parties have not agreed upon the trustee for this trust, as they were obligated to do pursuant to the AFLR 69 agreement they entered into, by August 5, 2022, each party shall submit to the Court three names of proposed trustees and the parties' reasons for their nominations .... The Court will then make the decision and will notify the parties by In-Chambers Ruling."
A "decree is 'an independent resolution by the court of the issues before it and rightfully is regarded in that context and not according to the negotiated intent of the parties.'" Cohen v. Frey, 215 Ariz. 62, ¶ 10 (App. 2007) (quoting In re Marriage of Zale, 193 Ariz. 246, ¶ 11 (1999)).
¶13 On appeal, Sabina contends that Howard's emails constituted an offer under Arizona contract law, which she accepted by listing the Malibu residence for sale before the required date. Parties may modify their written agreements, Ancell v. Union Station Assocs., Inc., 166 Ariz. 457, 460 (App. 1990), and settlement agreements are governed by general contract law principles, Muchesko v. Muchesko, 191 Ariz. 265, 268 (App. 1997). Those principles require "an offer, acceptance, consideration, a sufficiently specific statement of the parties' obligations, and mutual assent." Buckholtz, 246 Ariz. 126, ¶ 10 (quoting Muchesko, 191 Ariz. at 268). Mutual assent is based on the parties' "objective manifestations of assent," Hill-Shafer P'ship v. Chilson Fam. Trust, 165 Ariz. 469, 474 (1990), and only reasonable misunderstandings are grounds for lack of mutual assent, Buckholtz, 246 Ariz. 126, ¶ 11. "[A]cceptance is '. . . a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.'" Muchesko, 191 Ariz. at 269 (quoting K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 139 Ariz. 209, 212 (App. 1983)).
¶14 Howard argues that, at the time he wrote these emails, the parties had agreed to create two additional special needs trusts in their California matter. He further contends that the October 2021 emails do not specify to which of the three trusts he was referring, and that the parties did not resolve the trustee-provision dispute.
¶15 Sabina argues that Howard conceded below that the emails constituted an offer, and she contends she accepted that offer by signing the listing agreement. However, the record is devoid of any evidence that she accepted the alleged offer by either responding to Howard's emails or by listing the Malibu residence for sale on October 11 with the specified listing agent. Therefore, even if we were to conclude that Howard's emails constituted a valid contractual offer regarding appointment of the trustee for the Arizona trust, Sabina has failed to demonstrate that she accepted the offer in the manner required. See Muchesko, 191 Ariz. at 269.
Sabina also argues on appeal that the parties' "[m]odification" was binding under A.R.S. § 25-317, and the superior court therefore erred in appointing the trustee pursuant to the procedure it set forth in the dissolution decree. Because Sabina has failed to demonstrate that the parties did in fact modify their agreement through Howard's emails, we need not address this argument further.
¶16 In the alternative, Sabina claims that Howard should be estopped from disputing that they modified the settlement agreement. Promissory estoppel, which is distinct from a contract law claim, Double AA Builders, Ltd. v. Grand State Const., LLC, 210 Ariz. 503, ¶ 45 (App. 2005), renders a promise enforceable when the promisor can reasonably foresee that it would cause the promisee to rely, and the promisee actually relies to his detriment, Sholes v. Fernando, 228 Ariz. 455, ¶ 14 (App. 2011). The party asserting promissory estoppel must show a "substantial and material change of position . . . for the worse." Weiner v. Romley, 94 Ariz. 40, 45 (1963). Sabina argues that Howards promise to appoint Y.H. as trustee induced her to give up "her right to refrain from" selling the Malibu residence for several months with her choice of listing agent. However, pursuant to the settlement agreement, Sabina was required to list the Malibu residence for sale at the earlier of March 1, 2022 or sixty days after the parties entered their child support order in California. Further, the agreement required the parties to mutually agree on a listing agent. Sabina claims that she suffered the detriment of "not having her own agent involved in negotiating the sale of the house" and the detriment of "listing the house six (6) weeks prior to the date provided in the original Agreement." However, the house was not sold until March 25, 2022, and Sabina fails to articulate how these factors "substantially and materially worsened" her position. Donges v. USAA Fed. Sav. Bank, 391 F.Supp.3d 907, 916 (D. Ariz. 2019). Therefore, she is not entitled to relief under promissory estoppel. See Leal v. Allstate Ins. Co., 199 Ariz. 250, ¶ 23 (plaintiff not entitled to relief where plaintiff fails to demonstrate that reliance on the defendant's promise was to their detriment).
The parties dispute the date in which they entered the child support order for their California matter.
Jurisdiction to Appoint a Trustee
¶17 Sabina next argues that the superior court lacked jurisdiction to enter its post-decree order appointing K.L. as trustee while her appeal was pending with this court. "Consistent with the general power of any court to enforce and give effect to its judgments, a court similarly retains the power to enforce its decrees through enforcement actions." Marriage of Rojas, 255 Ariz. 277, ¶ 9; see Ariz. R. Fam. Law P. 89(a) (permitting sua sponte post-decree order to enforce its terms, when judgment requires a party to "perform any . . . act and the party fails to comply"). The filing of a notice of appeal will not divest the superior court of jurisdiction "'to take such action as might be necessary to enforce its previously entered judgment.'" Henderson v. Henderson, 241 Ariz. 580, ¶ 27 (App. 2017) (quoting Castillo v. Indus. Comm'n., 21 Ariz.App. 465, 467 (App. 1974)).
¶18 The decree was final notwithstanding the post-decree implementation procedure for selection of a trustee. See Ariz. R. Fam. Law P. 78(c) ("A judgment as to all claims, issues, and parties is not appealable unless the judgment recites that no further matters remain pending ...."); see also A.R.S. § 25-325(A). That the decree established a process for selecting a trustee does not negate its finality nor the propriety of the Rule 78(c) certification as final. The superior court entered the decree with Rule 78(c) finality language, providing that if the parties could not agree on a trustee, the court would appoint one. The parties, unable to agree, submitted position statements. Pursuant to its jurisdiction "to enter a postjudgement order effectuating or enforcing the [d]ecree," the court appointed K.L. as trustee. This order was an enforcement mechanism for a decree previously entered, over which the court maintained jurisdiction. It therefore did not err in appointing K.L. as trustee. See Henderson, 241 Ariz. 580, ¶ 28.
Property Taxes and Mortgage Interest
¶19 Sabina lastly argues that the superior court abused its discretion by entering a decree that denied her request for reimbursement, and alternatively required her to make property tax and mortgage payments on the Malibu residence. We will not interfere with the court's distribution of marital property absent an abuse of discretion. Hutki v. Hutki, 244 Ariz. 39, ¶ 14 (App. 2018). Such abuse occurs only if no competent evidence supports its decision, or if it commits an error of law in reaching a discretionary conclusion. Hurd v. Hurd, 223 Ariz. 48, ¶ 19 (App. 2009).
¶20 In its July 2022 decree, the superior court ordered that Sabina was responsible for all recurring expenses and routine maintenance associated with the Malibu residence until its sale, including the mortgage, as well as pro rata property taxes commencing October 1, 2021. This language was taken directly from the parties' Rule 69 agreement, and the house was sold on March 25, 2022. As a result, the court determined that Sabina "shall pay and hold [Howard] harmless from" any and all property taxes due from October 1, 2021 through the date of closing, which, at the time the decree was entered, included $10,120.61 in property taxes assessed from January 1, 2022 through March 25, 2022, and mortgage interest in the amount of $5,206.75 through March 25, 2022. Sabina asserts this was not supported by evidence in the record, and therefore an abuse of discretion.
¶21 However, Sabina misconstrues the decree. She asks us to "vacate the provisions in the Decree that award Husband judgments against Wife for property taxes and mortgage interest." She argues that, at the time the decree was entered, she had already paid these obligations - and had in fact overpaid - thereby entitling her to reimbursement from Howard. She seems to construe the dissolution decree as a rejection of her calculations and a denial of her claim for reimbursement. However, the decree did no such thing; it merely set forth the terms of the parties' own settlement agreement. It provided, in accordance with that agreement, that Sabina-and not Howard-was responsible for payment of the property taxes and mortgage interest. It did not, as Sabina contends, make factual findings as to the amounts she had already paid, perform a calculation as to whether she had overpaid, and conclude that she was not entitled to reimbursement from Howard. Sabina's request for reimbursement is a matter for the family court to enforce, and she must first seek relief there. See Ariz. R. Fam. Law P. 91(b); see also A.R.S. § 25-317(E) ("Terms of the agreement set forth or incorporated by reference in the decree are enforceable by all remedies available for enforcement of a judgment, including contempt.").
¶22 Sabina additionally argues the superior court erred by entering the decree without first holding an evidentiary hearing. However, an evidentiary hearing is not required when the record contains sufficient evidence to allow a court to independently determine the fairness of the agreement. Hutki v. Hutki, 244 Ariz. 39, ¶ 29. Here, the court found the terms of the decree fair and equitable, and a reflection of the parties' Rule 69 agreement. The court determined this was "a fair, equitable and just disposition of the joint, common and community property, assets and debts of the parties . . . pursuant to a binding settlement agreement." See A.R.S. § 25-318; see also In re Marriage of Berger, 140 Ariz. 156, 168 (App. 1983) ("trial court has wide discretion" to distribute community property). The court did not abuse its discretion in setting forth the parties' obligations regarding the property taxes and mortgage interest. See Cook v. Losnegard, 228 Ariz. 202, ¶ 11 (App. 2011) (we will not substitute our discretion for that of the superior court judge).
Attorney Fees
¶23 Both parties request an award of attorney fees on appeal under A.R.S. § 25-324. In the exercise of our discretion, and because he is the prevailing party, we grant Howard his reasonable attorney fees on appeal pursuant to §§ 25-324, 12-341, and 12-341.01, as well as his taxable costs upon compliance with Rule 21, Ariz. R. Civ. App. P.
Disposition
¶24 We affirm the superior court's dissolution decree. We additionally affirm the court's post-decree order appointing K.L. as trustee of the UTMA trust.