Opinion
No. 1 CA-CV 18-0500 FC
06-06-2019
In re the Matter of: ERIC GEORGE BJOTVEDT, Petitioner/Appellee, v. AIYSHA SHAZI BJOTVEDT, Respondent/Appellant.
APPEARANCES Dickinson Wright, PLLC, Phoenix By Leonce A. Richard, III; Brian H. Merdinger Counsel for Respondent/Appellant Eric George Bjotvedt, Phoenix Petitioner/Appellee Pro Se
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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. FC2016-050531
The Honorable Jennifer C. Ryan-Touhill, Judge AFFIRMED IN PART, REMANDED IN PART APPEARANCES Dickinson Wright, PLLC, Phoenix
By Leonce A. Richard, III; Brian H. Merdinger
Counsel for Respondent/Appellant Eric George Bjotvedt, Phoenix
Petitioner/Appellee Pro Se
MEMORANDUM DECISION
Judge James P. Beene delivered the decision of the Court, in which Presiding Judge David D. Weinzweig and Judge Kent E. Cattani joined. BEENE, Judge:
¶1 Aiysha Shazi Bjotvedt ("Wife") appeals the superior court's decree dissolving her marriage to Eric George Bjotvedt ("Husband"), including the court's denial of her motion for new trial on selected issues. For the following reasons, we affirm the court's decree, but remand for the court to 1) determine Wife's spousal maintenance amount and duration, considering the relevant factors of Arizona Revised Statutes ("A.R.S.") section 25-319(B); 2) divide personal property based on its value; and 3) divide rental income from the Prescott property generated after April 2018.
FACTS AND PROCEDURAL HISTORY
¶2 In September 2016, Husband filed for divorce after 21 years of marriage. The parties have three children, only one of whom was a minor at the time of filing. Wife was 56 years old when Husband filed the petition. She had worked as a full-time school psychologist from 1995 to 2001, but had been a stay-at-home parent since then. Husband worked as an attorney in private practice beginning in 1999 and, during the most recent four years, he earned a gross annual income of approximately $255,000.
¶3 The parties' community holdings included four real properties: 1) a marital home located in Cave Creek, which was sold in October 2017; 2) a rental home in Prescott; 3) a vacation home located in Kennebunkport, Maine, in which Wife and their minor son have resided since May 2016; and 4) an empty lot in Scottsdale. The parties also owe debt to various creditors, including approximately $190,000 in state and federal taxes, $55,000 for a law school loan, $34,000 in medical bills, $113,000 to The Vivian Berwald Trust, and $394,000 in mortgage loans.
¶4 Wife requested spousal maintenance of $5,000 per month for a period of five years followed by $3,000 per month for an indefinite period. In support of her request, Wife filed an Affidavit of Financial Information ("AFI") on December 15, 2016, listing almost $10,000 in total monthly expenses and no income.
¶5 On August 16, 2017, the court set trial for December 5, 2017, and ordered both parties to complete discovery at least 15 days before trial. The court further ordered both parties to file joint or separate pretrial statements with a current AFI no later than five days before trial. The December 2017 trial date was continued to April 10, 2018, as agreed to by the parties. On November 20, 2017, Husband filed a motion to compel discovery and requested that sanctions be imposed against Wife, but the superior court denied his motion. On April 6, 2018, Wife filed her pretrial statement, listing among her exhibits her original AFI dated December 15, 2016. On April 9, 2018, Husband moved the court to preclude Wife's evidence for untimely disclosure. The court did not initially rule on this motion, but denied it after trial was complete. During trial, which took place on April 10 and 12, 2018, Wife testified as to her income, expenses, and search for employment, but no AFI was admitted in evidence.
Pursuant to Arizona Rule of Family Law Procedure 76 ("Rule"), "[t]he parties shall each file with the joint or separate pretrial statement(s) . . . a comprehensive statement of income and expenses substantially similar to Form 2, Affidavit of Financial Information." Ariz. R. Fam. Law P. 76(C)(2)(a) (2016). Because Rule 76 was renumbered and amended as Rule 65 effective January 1, 2019, and because material revisions have been made to this Rule, we cite to the version effective at the time Husband filed his petition. See In re Alexander, 232 Ariz. 1, 3, ¶ 1, n.1 (2013).
¶6 After trial, the superior court divided the community property and debt and found Wife was eligible to receive spousal maintenance, but subsequently denied her claim as a sanction for violating its earlier disclosure orders and Arizona Rule of Family Law Procedure 76 ("Rule"). In May 2018, Wife filed a motion for new trial on selected issues, which the court denied. This timely appeal followed. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A)(1).
DISCUSSION
¶7 Wife argues the superior court erred by: 1) denying her spousal maintenance request as a sanction; 2) ordering the sale of the parties' Maine real property contrary to the parties' agreement; 3) awarding Husband a 2015 Nissan Altima as his separate property; 4) dividing the parties' personal property inequitably; and 5) failing to expressly address the division of rental income from the Prescott real property.
¶8 We review the denial of a motion for new trial for an abuse of discretion. Dawson v. Withycombe, 216 Ariz. 84, 95, ¶ 25 (App. 2007). "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." State ex rel. Dep't of Econ. Sec. v. Burton, 205 Ariz. 27, 30, ¶ 14 (App. 2003). We defer to the superior court's determination of witness credibility and the weight given to conflicting evidence. Gutierrez v. Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998).
A. The Superior Court Abused Its Discretion by Failing to Consider A.R.S. § 25-319(B) Factors and by Sanctioning Wife for a Disclosure Violation when No Prejudice Resulted.
¶9 Wife argues the superior court erred when it denied her request for spousal maintenance 1) before hearing the evidence, 2) "on the technical ground that she violated the trial court's orders and the [Rules of Family Law Procedure]," and 3) without addressing any of § 25-319(B) factors.
¶10 "A person is eligible to receive spousal maintenance if he or she meets any one of the four eligibility criteria under A.R.S. § 25-319(A)." Sherman v. Sherman, 241 Ariz. 110, 114, ¶ 17 (App. 2016). "Once eligibility is established, the court must consider all relevant factors to determine the appropriate amount and duration of maintenance . . . ." Id. (citing A.R.S. § 25-319(B) (emphasis added)); see also Helland v. Helland, 236 Ariz. 197, 203, ¶ 28 (App. 2014) ("If the superior court determines a spouse is entitled to an award of spousal maintenance, it must then consider the thirteen factors set forth in A.R.S. § 25-319(B) to determine the amount and duration of the award.") (emphasis added). When employing discretionary sanctions, the court's sanction must be "just," meaning it "bear[s] some relationship to the violation." Taliaferro v. Taliaferro, 188 Ariz. 333, 341 (App. 1996).
¶11 We review the superior court's ruling on spousal maintenance and sanctions for an abuse of discretion. Boyle v. Boyle, 231 Ariz. 63, 65, ¶ 8 (App. 2012); Zimmerman v. Shakman, 204 Ariz. 231, 235, ¶ 10 (App. 2003). The superior court abuses its discretion when it "commits an error of law . . . in the process of reaching [a] discretionary conclusion," Twin City Fire Ins. Co. v. Burke, 204 Ariz. 251, 254, ¶ 10 (2003) (quotation omitted), as well as when it neglects to apply a relevant § 25-319(B) factor in assessing a spousal maintenance award, Rainwater v. Rainwater, 177 Ariz. 500, 502 (App. 1993); see also Elliott v. Elliott, 165 Ariz. 128, 131 n.1 (App. 1990) (concluding that § 25-319(B) does not require a court to make a specific finding regarding each factor listed before awarding spousal maintenance; the section only requires the court to consider "the factors in question").
¶12 Here, the superior court found that Wife qualified for an award of spousal maintenance under § 25-319(A) because she "contributed to [Husband's] educational opportunities." Thus, the court was required to consider § 25-319(B) factors relevant to Wife's circumstances. See A.R.S. § 25-319(A)-(B); Sherman, 241 Ariz. at 114, ¶ 17. Instead of analyzing the relevant § 25-319(B) factors based on the evidence received at trial, the court's order proceeded by denying the award "[b]ased upon [Wife's] failure to comply" with court orders and Rule 76, by failing to "complete full disclosure . . . [,] respond to Father's efforts to meet and confer, . . . file an updated AFI, . . . [and] provide the Court with evidence necessary to support [her] claim for maintenance."
Rule 76 states that
[i]f a party . . . fails to obey a scheduling or pretrial order, or any provision of this rule, . . . the court upon motion or its own initiative, shall, except upon a showing of good cause, make such orders with regard to such conduct as are just, including . . . an order refusing to allow the disobedient party to support or oppose designated claims or defenses or prohibiting that party from introducing designated matters in evidence[,] . . . an order . . . dismissing the action or proceeding or any party thereof, or rendering a judgment . . . .Ariz. R. Fam. Law P. 76(D)(1)-(2) (2016). See
¶13 At trial, however, Wife testified about her current income and expenses, utilizing and confirming the content of the AFI she filed with the court in December 2016. Because her living and financial situation had not changed since 2016, Husband was on notice regarding Wife's income and expenses and could effectively cross-examine her during trial. Thus, Wife's violation of the court order to submit her current AFI did not prejudice Husband at trial. See State v. Patterson, 230 Ariz. 270, 276, ¶ 24 (2012) (finding no basis for sanctions when defendant "has not explained how the State's late disclosure prejudiced him, and no prejudice [was] evident from the record"). Moreover, the court did not limit Wife's trial presentation based on her pre-trial disclosure misconduct and assessed no sanction until its final order. An absolute denial of Wife's claim for spousal maintenance bears no relationship to her disclosure violation; we find this result to be unjust and an abuse of the court's discretion. See Taliaferro, 188 Ariz. at 341; see also Ariz. R. Fam. Law P. 76(D)(1)-(2).
¶14 Moreover, once it found that Wife was eligible to receive spousal maintenance and that Husband suffered no prejudice from her disclosure violation, the court was required to address and make specific findings regarding § 25-319(B) factors relevant to her claim. See Sherman, 241 Ariz. at 114, ¶ 17; Burton, 205 Ariz. at 30, ¶ 14. By failing to follow the statutory mandate, the court committed an error of law in abuse of its discretion. See A.R.S. § 25-319; Rainwater, 177 Ariz. at 502. We, therefore, reverse the superior court's order denying Wife spousal maintenance and remand for the court to consider the factors set forth in § 25-319(B) and determine the amount and duration of the award.
Wife's argument that the court decided the issue before trial is, thus, moot. See Arpaio v. Maricopa Cty. Bd. of Supervisors, 225 Ariz. 358, 361, ¶ 7 (App. 2010) ("A case becomes moot when an event occurs which would cause the outcome of the appeal to have no practical effect on the parties.") (quotation omitted).
B. The Court Did Not Err in Ordering the Maine Property Be Sold.
¶15 Wife argues the court abused its discretion by ordering the parties' Maine home be sold, asserting the home had been the primary residence of Wife and the minor son during the last two years, and a fair and equitable division of the parties' assets could have been accomplished without sale of the property and consistent with the parties' agreement at trial.
¶16 In a marital-dissolution proceeding, the superior court must divide the community property "equitably, though not necessarily in kind." A.R.S. § 25-318(A); see also A.R.S. § 25-318(B) (considering all debts and obligations in dividing property); Schickner v. Schickner, 237 Ariz. 194, 198, ¶ 14 (App. 2015); In re Marriage of Inboden, 223 Ariz. 542, 545, ¶ 13 (App. 2010) (defining "equitable" as a "concept of fairness dependent upon the facts of particular cases") (quoting Toth v. Toth, 190 Ariz. 218, 221 (1997)); In re Marriage of Flower, 223 Ariz. 531, 537, ¶ 24 (App. 2010) (in dividing property, the superior court should "take into consideration the overall marital estate") (emphasis added). In partitioning the community property, the superior court has broad discretionary powers, including "the power to order a sale of community property when it will facilitate the equitable division of the property," as long as the final division "result[s] in a substantially equal distribution which neither rewards nor punishes either party." Lee v. Lee, 133 Ariz. 118, 121 (App. 1982) (citation omitted).
¶17 Wife argues the parties agreed that Wife can remain living in the Maine property in exchange for Husband keeping the Prescott property. Their pre-trial statements reflected this agreement, but Husband testified the agreement was conditional on division of other properties and debt. In particular, Husband agreed to leave the Maine property to Wife in exchange for the Prescott property, the Scottsdale lot, and all debt.
¶18 We find the court did not abuse its discretion in ordering the sale of the Maine property because the parties could not agree on the value and equities of the Maine and Prescott properties and did not submit any professional appraisal. The court "equally split the net proceeds" between Wife and Husband. See Lee, 133 Ariz. at 121 (finding no abuse of discretion when the superior court ordered to sell real property in light of the conflicting appraisers' testimony about the property's most profitable disposition, although partitioning the property equally in kind was possible); Flower, 223 Ariz. at 537, ¶ 24; Schickner, 237 Ariz. at 198, ¶ 14; Breitbart-Napp v. Napp, 216 Ariz. 74, 79, ¶ 14 (App. 2004) (finding "the court is not bound by [the parties'] agreement and can, if [the court] believes the agreement to be unfair or inequitable, reject or modify the agreement).
Our ruling does not preclude either party from purchasing the real properties from the marital estate. --------
C. The 2015 Nissan Altima Was Husband's Sole and Separate Property.
¶19 Wife argues the court erred by characterizing the 2015 Nissan Altima as Husband's sole and separate property, awarding Wife "no offset" for the vehicle, because Husband presented no credible evidence to meet his heightened burden of proof to overcome the presumption that the vehicle was purchased with community property.
¶20 "In a proceeding for dissolution of the marriage . . . the court shall assign each spouse's sole and separate property to such spouse." A.R.S. § 25-318(A). "The characterization of property as separate or community is a question of law we review de novo." Schickner, 237 Ariz. at 199, ¶ 22. "Because property acquired during marriage is presumed to be community property, the spouse seeking to overcome the presumption has the burden of establishing the separate character of the property by clear and convincing evidence." Id. (citation omitted).
¶21 In December 2014, Husband purchased the Nissan from funds he individually borrowed a month earlier from his grandmother's trust. The court admitted a Personal Loan Agreement between Husband and The Vivian Berwald Trust, bank statements, an updated AFI, and other documents that evidenced the transaction. The loan agreement stated that the borrower is liable for repayment of the loan as an individual. Husband testified regarding this personal loan from the family trust and its repayment. Wife testified the loans from The Vivian Berwald Trust were not community loans.
¶22 Husband met his burden and provided clear and convincing evidence that the 2015 Nissan Altima is his sole and separate property.
D. The Court Erred in Dividing the Parties' Personal Property.
¶23 Wife argues the superior court erred by dividing personal property based on who possessed it because the home in Maine did not contain high-value furniture like the Cave Creek residence.
¶24 As previously stated, the superior court must divide community property "equitably, though not necessarily in kind[.]" A.R.S. § 25-318(A). As a general principle, "all marital joint property should be divided substantially equally unless sound reason exists to divide the property otherwise." Schickner, 237 Ariz. at 198, ¶ 14 (quotation omitted).
¶25 The court justified its ruling based on the fact that "the parties have lived separate and apart for two years[, t]he court received no evidence of any effort made by the parties to exchange lists of personal property items, seek delivery of those items, seek offset or division of items, or otherwise resolve this issue until immediately prior to trial." Although Wife's list of items of personal property, containing no valuations, was admitted at trial, the court abused its discretion when it based its decision on who possessed the property at the time of the division and not on the value of the assets. See Lee, 133 Ariz. at 121. We, thus, remand and direct the superior court to equitably divide the personal property solely on the basis of the value of the assets to be proven by the parties at the remand hearing.
E. The Division of Income from the Rental Property in Prescott Is Incomplete.
¶26 Wife argues the superior court should clarify its order that rental income derived from the Prescott home must be equally divided until sold.
¶27 The court previously ordered the parties to sell the Prescott real property and to distribute to Wife any rental income in the interim. See Schickner, 237 Ariz. at 199, ¶ 22 (finding the community is generally "entitled to the profits and gains attributable to community assets"). The Prescott home has not yet sold and continues to generate rental income. We remand to the superior court to divide the Prescott real property rental income generated after the court's April 2018 decree until the property is sold.
F. Attorneys' Fees and Costs on Appeal.
¶28 Because neither party requests that we award attorneys' fees incurred on appeal, we award none. Wife, however, is entitled to recover her costs on appeal pursuant to § 12-342 upon compliance with Arizona Rules of Civil Appellate Procedure 21.
CONCLUSION
¶29 For the reasons stated above, we affirm the superior court's decree of dissolution and remand for the court to 1) make specific findings regarding the factors set forth in § 25-319(B) in determining the amount and duration of the spousal maintenance award; 2) divide personal property based on its value, rather than on who possessed it; and 3) divide the Prescott real property rental income generated after the court's April 2018 decree and until the property is sold.
Alexander, 232 Ariz. at 3, ¶ 1, n.1.