Opinion
No. 1 CA-CV 15-0438 FC
11-29-2016
In re the Marriage of: JANE INGRID DELEEUW, Petitioner/Appellee, v. FRANKLYN RUSSELL MEAD, JR., Respondent/Appellant.
COUNSEL Jane Ingrid DeLeeuw, Dallas, TX Petitioner/Appellee Lorona Mead, PLC, Phoenix By Jess A. Lorona 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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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. FN2010-091477
The Honorable Holly A. Bartee, Judge Pro Tempore
The Honorable Bethany G. Hicks, Retired Judge
AFFIRMED
COUNSEL Jane Ingrid DeLeeuw, Dallas, TX
Petitioner/Appellee Lorona Mead, PLC, Phoenix
By Jess A. Lorona
Counsel for Respondent/Appellant
MEMORANDUM DECISION
Judge Peter B. Swann delivered the decision of the court, in which Presiding Judge Andrew W. Gould and Judge Patricia A. Orozco joined. SWANN, Judge:
¶1 Franklyn Russell Mead, Jr., appeals the denial of his petition to reduce his spousal maintenance obligation to Jane Ingrid DeLeeuw. He argues that a significant increase in his tax liability, coupled with DeLeeuw's completion of law school and passage of the Texas bar exam, constitute substantial and continuing changed circumstances warranting modification under A.R.S. § 25-327(A). We affirm.
FACTS AND PROCEDURAL HISTORY
¶2 In June 2010, the parties signed a spousal maintenance agreement, which the superior court incorporated into a consent decree. The decree awarded DeLeeuw spousal maintenance of $2,000 per month for 180 months. The parties agree that the maintenance obligation was not made nonmodifiable under A.R.S. § 25-319(C).
¶3 During the marriage, DeLeeuw attained a real estate license and a paralegal degree. She worked as a real estate agent but was never employed as a paralegal. Upon dissolution, DeLeeuw moved to Texas, obtained a law degree, and was admitted to the Texas bar.
¶4 At the time of dissolution, Mead was assistant dean and an adjunct professor at Thomas Jefferson School of Law in San Diego, California, and maintained a legal practice in Phoenix, Arizona. Around the time the dissolution decree was entered, he left the law school to work full time at his Arizona law practice. To supplement his reduced income, Mead took early disbursements from his IRA in 2011 and 2012.
The circumstances of his departure do not affect our analysis, because his income is now higher than it was before his departure.
¶5 Mead did not pay his federal income taxes in 2011 or 2012 and entered an installment agreement with the IRS to repay almost $34,000 in outstanding tax debt. The agreement also required him to remain current on his taxes, as is expected from all citizens. To avoid violating the agreement, Mead paid his 2013 taxes with credit cards.
¶6 In July 2014, Mead filed a petition to modify his spousal maintenance obligation. After an evidentiary hearing, the superior court denied the petition.
DISCUSSION
¶7 A person seeking to modify spousal maintenance must demonstrate "changed circumstances that are substantial and continuing." A.R.S. § 25-327(A). Mead argues that the circumstances have changed because (1) his change in employment and tax burden increased his financial obligations; and (2) DeLeeuw attained a law degree that increased her earning potential. I. CHANGE OF EMPLOYMENT AND TAX DEBT
¶8 Mead argues that the court placed too much emphasis on his current income (which he concedes is higher than pre-decree levels) without considering his tax debt. We disagree. First, the fact that his income has resumed its previous level reveals that his change of circumstances was not "continuing" as is required to modify spousal maintenance. Evidence of Mead's income each year since dissolution reveals no abuse of discretion. In 2010, the year of dissolution, Mead earned $150,000. In 2011 and 2012, his regular income dropped significantly. To compensate, Mead took early distributions from an IRA. We see no reason to distinguish his legal-practice income from the IRA disbursements. Thus, Mead's annual income was approximately $156,000 in 2011, $111,000 in 2012, $133,000 in 2013, and $159,000 in 2014. Though his income declined in 2012 and 2013, it has since risen above the $150,000 he earned at dissolution. The temporary reduction in income was not a substantial and continuing change in circumstances.
¶9 Second, tax debt is not a "change in circumstances" warranting relief from a maintenance obligation. Rather, Mead's tax debt is the predictable effect of failing to pay taxes on his income when due. We are aware of no authority that allows an obligor to claim a material change in circumstances when he elects to become delinquent on taxes. And when a taxpayer voluntarily reduces his income, we generally will not recognize a change in circumstances. See Pullen v. Pullen, 223 Ariz. 293, 297, ¶¶ 14, 17 (App. 2009) ("[T]he reasoning of the court in Little, to apply an intermediate balancing test, equally applies in the spousal maintenance context. . . . [E]ven an employment change made in good faith may be unreasonable in light of the maintenance obligation."); see also Little v. Little, 193 Ariz. 518 (1999). II. DELEEUW'S LAW DEGREE
¶10 Mead next asserts that the superior court gave insufficient weight to DeLeeuw's law degree, because she has "dramatically increased her earning capacity," which substantially changes the circumstances. We will not speculate about future income in determining the current rights of the parties and will address those changes if and when they occur. Chaney v. Chaney, 145 Ariz. 23, 27 (App. 1985). Unless Mead can show that DeLeeuw deliberately accepted lower compensation than she was capable of earning, we will only consider her current income. See MacMillan v. Schwartz, 226 Ariz. 584, 587, 589, ¶¶ 5, 18-21 (App. 2011) (upholding a maintenance modification when the receiving spouse set up a deferred compensation plan that reduced her salary below the threshold that would trigger a reduction of the maintenance amount).
¶11 In support of his argument, Mead relies on Hornbaker v. Hornbaker, 25 Ariz. App. 577 (1976). His reliance is misplaced. In Hornbaker, we reversed the trial court's denial of spousal modification because the receiving spouse (1) had only one of three children still dependent on her, (2) attained a tenured, full-time teaching position, (3) owned her home free and clear, and (4) was in good health with no outstanding medical bills or charge accounts. Id. at 578-79. We further noted that the parties knew before dissolution that the receiving spouse would probably become a teacher after attaining her degree, but they could not have known that she would be debt free and find a stable, full-time position. Id. at 578.
¶12 DeLeeuw has no dependent children, but she is otherwise in the opposite position of the spouse in Hornbaker. She has not attained full-time employment, only a temporary contract in a nonlegal job. She pays rent and does not own a home. She suffers from a chronic health condition. And she has almost $67,000 in law school tuition debt. Moreover, the parties could have anticipated that DeLeeuw would work after dissolution. During the marriage, she earned between $18,000 and $70,000 a year as a real estate agent. Though she was unemployed at dissolution, her current income of approximately $51,000 is not a substantial and continuing change from her pre-dissolution income. Knowing her work history, the parties could have included a clause in their spousal maintenance agreement concerning future employment, but they did not do so. See MacMillan, 226 Ariz. at 588, ¶ 12. The superior court did not abuse its discretion by finding that DeLeeuw's law degree and bar admission were not a substantial and continuing change of circumstance.
We address the superior court's ruling based on the facts presented at the hearing. We will not consider evidence presented for the first time on appeal regarding DeLeeuw's employment since that ruling. --------
CONCLUSION
¶13 For the foregoing reasons, we affirm.