Opinion
No. 1 CA-CV13-0212
12-02-2014
In re the Marriage of: DALE ARTHUR FLTZHENRY, Petitioner/Appellant, v. MARGARET KULERSKL Respondent/Appellee.
COUNSEL R.D. Smith Law, Scottsdale By Roger D. Smith Counsel for Petitioner/Appellant James Scott Walker, P.C., Phoenix By James Scott Walker Counsel for Respondent/Appellee
NOTICE: NOT FOR PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED. Appeal from the Superior Court in Maricopa County
No. FN2012-050333
The Honorable Douglas Gerlach, Judge
REVERSED AND REMANDED
COUNSEL R.D. Smith Law, Scottsdale
By Roger D. Smith
Counsel for Petitioner/Appellant
James Scott Walker, P.C., Phoenix
By James Scott Walker
Counsel for Respondent/Appellee
MEMORANDUM DECISION
Judge Jon W. Thompson delivered the Decision of the Court, in which Presiding Judge Andrew W. Gould and Judge Peter B. Swann joined. THOMPSON, Judge:
¶1 Dale Arthur Fitzhenry (husband) appeals from the judgment in this dissolution matter. Husband asserts that the family court erred when it proceeded to judgment solely on the basis of wife's pretrial requests and assertions, without taking evidence or allowing cross-examination, and committed errors of law in the issuing of the judgment for Margaret Kulerski (wife) and in denying his motion for new trial and in awarding wife attorneys' fees. Finding the family court did err and finding a new trial necessary, we reverse the judgment and remand for a new trial.
FACTS AND PROCEDURAL HISTORY
¶2 Husband and wife were married in 2005. At the time of the marriage, husband was 53 years old and wife was 39 years old. In April 2012, husband filed a petition for dissolution of marriage, representing himself; there were no children at issue. Wife filed a verified response through counsel.
¶3 Early on, the family court issued a fourteen-page minute entry outlining pretrial procedures and requirements, including disclosure and discovery, completion of a new affidavit of financial Information, and the mandatory pretrial memorandum. There were numerous warnings to the parties regarding what might occur if one failed to comply with the outlined requirements. Generally, those warnings boiled down to being precluded from presenting some or all of "your" own evidence, being fined, being found not credible, and either being deemed to agree with the other party's request or having waived those issues.
The minute entry said of the Affidavit of Financial Information:
Between 15-90 days before the trial date, you must file a complete, accurate, current Affidavit of Financial Information, even if you previously filed one or more such Affidavits. In addition, at the same time, you must provide a copy of that Affidavit and all attachments specified in the Affidavit to the other party and to the Judge assigned to this case. The form to be used can be found on the Internet at this Court's website. If you fail to comply with this requirement, the trial may have to be rescheduled, or if not, and you are requesting an award of attorney's fees, your request may be denied. Note: This requirement may be ignored if neither party seeks an award of child support, spousal maintenance, or attorney's fees.
Those warnings said, variously, as to the Prehearing Memorandum:
Th[e] Memorandum should specify in detail what you want the Court to do and explain why that is reasonable. What follows is a suggested outline for that Memorandum.
CAUTION: If you use a template, preprinted form, or some other form based on something used in another case for the preparation of your memorandum, instead of following the outline below, you may overlook one or more requirements that could result in you being precluded from presenting some of your evidence.
...
If you are requesting, or opposing a request for, an award of spousal maintenance, your memorandum should state whether you think spousal maintenance should be awarded, and if so, in what amount and for what length of time. In addition, your memorandum must discuss each factor listed in A.R.S. § 25-319 that you think is relevant and why you think that factor supports your position. A.R.S. § 25-319 can be found on the Internet or in the reference section of local public libraries. A memorandum that simply states a number without any discussion of the factors listed in section 25-319 will result in the presumption that you agree with the opposing party's position regarding spousal maintenance. [See also "Critical Note to Parties" below]
...
If there is disagreement about the division of any debts, your memorandum must identify each such debt (by stating the name of the creditor, the amount owed, and the reason the debt was incurred), state how you want it to be divided, and explain why that makes sense. Failing to explain how you want any debt allocated will result in the presumption that you agree with what the opposing party has requested. [See also "Critical Note to Parties" below] [Emphasis in original.]
¶4 One section stated:
CRITICAL NOTE TO PARTIES: If there is any issue about which you want the Court to make a ruling, and your Prehearing Memorandum does not provide the explanation for that issue that is described above, or if you fail to submit a Prehearing Memorandum altogether, unless you have a very compelling excuse for that failure, you may be deemed to have waived that issue. See Leathers v. Leathers, 216 Ariz. 374, 378, ¶ 19, 166 P.3d 929, 933 (App. 2007). That means that you will not be permitted to present any evidence or argument about any issue unless it is identified in your Prehearing Memorandum and explained in detail in the manner described above. The submission of a comprehensive Prehearing Memorandum in the format described above is a requirement and not a suggestion. (Emphasis added).Another section, entitled "What Happens When A Party Does Not Comply with These Requirements," read:
If you do not appear for the hearing on the date and at the time stated above, or if you do not comply with one or more of the requirements listed above, and you cannot provide a
reasonable excuse, you may be penalized. Penalties may include one or more of the following: you may not be allowed to present some or all of your evidence; you may be fined in some way (the most common "fine" requires one party to reimburse some of the other party's expenses), the hearing may proceed as if you have consented to what the other party has requested (i.e., proceeding by default); or the hearing may be postponed. See Ariz. Rs. Fam. L. P. 71(A); Maricopa Cty. Sup. Ct. R. 6.2(e). (Emphasis added).
¶5 In the meantime, husband and wife attended a settlement conference wherein the personal property, the vehicles, certain stocks and real property and debts were divided by stipulation or stipulated to as separate property., Remaining at issue after the settlement conference were the resolution of spousal maintenance, division of certain royalties and stocks, the Gainey Ranch Golf Club membership and substantial debt including various credit card debts in the amount of $33,500, wife's medical bills, and approximately $2.6 million dollars owed to the Internal Revenue Service (I.R.S.).
Wife, at this time, filed a Resolution Management Statement, through her attorney, seeking $3,500 a month in spousal maintenance for four years, asserting husband made in excess of $100,000 a year as the sole proprietor of two investment/consulting/brokerage companies. She asserted that she was unemployed had a "small amount of savings left, her medical malpractice personal injury proceeds . . . [and] has recently found out that she has serious health issues that will prevent her from gaining employment adequate to be self-sufficient." She further asserted that "[h]usband has failed to produce or identify any of the numerous assets that he has in various stocks and monetary savings that he has in the United States and Canada."
For example, the Gainey Ranch home was confirmed as wife's separate property.
¶6 Wife filed an affidavit of financial information listing her monthly expenses as $6,624. Wife filed her pretrial statement in which she sought $6,000 a month in spousal maintenance pursuant to Arizona Revised Statutes (A.R.S.) § 25-319 (2012), the division of the stocks agreed to in the settlement agreement (to the extent such stock existed), and the division of debts of which some were community but for which she specified over $2 million was husband's separate tax liability from before their marriage. Wife asked for attorneys' fees pursuant to A.R.S. § 25-324 (2012), pointing not only to their financial disparity but to husband's failure to fully disclose pertinent financial information, including tax returns, and failure to comply with the request for production or to complete the interrogatories. In wife's pretrial statement the parties were the only witnesses listed; she listed thirty-six exhibits, however none of the exhibits were attached or otherwise included.
In this unverified pretrial statement, wife asserted that she lacked sufficient property to provide for her reasonable needs and was unable to be self-sufficient through appropriate employment. Although previously employed as a cosmetics salesperson in upscale department stores such as Saks Fifth Avenue and Nordstrom, wife has never earned more than $45,000 working full time. Wife asserted she worked part-time during the marriage at husband's behest, that she has limited college credits, and is unemployed. Wife disclosed that she was recently diagnosed with multiple sclerosis. She asserted that husband was a self-employed financial consultant/broker and that in his deposition he testified that he earned between $150,000 and $200,000 per year during the course of the marriage. Wife further asserted that, during the marriage, she and husband kept separate bank accounts and filed separate tax returns. She indicated that her Gainey Ranch home, with a monthly mortgage of $4,000, was in the process of being sold via short sale with little or no equity in it.
¶7 Husband filed neither the financial affidavit nor the pretrial statement. He did not disclose exhibits or witnesses or undertake to meet any of the pretrial deadlines outlined in the minute entry of August 1, 2012. At no time did husband contact the court for assistance or clarification or move for a continuance.
¶8 Trial commenced on December 11, 2012. At the outset, the family court questioned husband regarding his failure to file the pretrial statement and reminded him of the court's prior verbal and written warnings that failure to dispute an issue in writing as outlined by the court could result in the family court treating the issues as not being disputed. The family court reminded husband of the line in the minute entry that:
The failure to provide a memorandum means that you will not be permitted to present any evidence or argument about the issue. The submission of the pretrial memorandum is a requirement and not a suggestion.The family court asked husband why he hadn't filed his pretrial statement. Husband replied, "I don't have any money. I don't even have money for a lawyer." Husband explained:
I've exhausted all my funds. I'm presently not even employed. I don't have any upcoming contracts. I'm having to declare bankruptcy. I owe over $3,000,000 in I.R.S. debts of which Ms. Kulerski's—from 2005 to present is also responsible for some of the I.R.S. debt.The family court concluded:
I haven't heard a good reason why I should not follow the law. . . . I made it as clear as I possibly could . . . people with less than a grade school education come into this courtroom and represent themselves and do a fine job, and they understand what they need to do. And it wasn't done in this case, and that law says if you don't do it, you are treated as having conceded. I'm going to grant the request for spousal maintenance. I'm going to grant the request for the property distribution that appears on page 6 of the pretrial memorandum submitted on behalf of [wife]. I'm going to grant the request for the allocation of community debt as proposed on page 7. The waste claim is withdrawn, and Mr. Walker may submit an application for attorney's fees. Mr. Fitzhenry if you wish to oppose that application, you will be allowed the time permitted by the rules.
¶9 No testimony was taken and no exhibits were introduced by wife. No cross-examination of wife or investigation into her assertions was allowed. The family court entered a signed minute entry that stated:
At the hearing, and as explained on the record at that time, there were no additional issues that required the presentation of any evidence because no issue remained that, as a matter of law, was genuinely disputed. Beyond that, the Court has considered the petition, all the other court filings relevant to the petition, and all other relevant matters in the record of the hearing, including, where appropriate, matters in the file maintained by the Clerk of the Court.The family court awarded wife $6,000 a month in spousal maintenance for a period of five years, stating "Husband did not oppose that request, and the Court was presented with no evidence suggesting that Wife failed to meet the standards appearing in A.R.S. § 25-319." The family court divided all remaining financial accounts or the value of each as of the time of separation as community property, awarding one-half to wife, along with an undivided one-half ownership interest in Source Capitol Group and Macquarie Private Wealth Corporation. The family court split the community credit card debt, assigning each spouse one-half liability. The family court dismissed wife's claim for medical expenses because she failed to list an amount in her pretrial statement. As to the I.R.S. debt, husband was assigned liability for the entire amount "it not being possible to determine what percentage, if any, was incurred after the marriage and what community property Husband used to deal with those amounts, which consist substantially of debt he brought into the marriage." (Emphasis added).
¶10 Husband engaged an attorney and filed a timely motion for a new trial/ motion to amend the judgment. Husband attached to his motion exhibits to support his claim that wife had, likewise, failed to exactly follow the pretrial order, the first page of his tax returns showing the adjusted gross income for 2007 ($35,662), 2008 ($96,363), and 2011 (-$19,174) and a deposition excerpt that discussed both wife's prior work income and his current tax levy.
¶11 Wife, in her response to the motion for new trial, filed most if not all of her proposed exhibits for trial including the levy letter from the I.R.S., her income information, and limited excerpts from husband's deposition regarding his income. The family court denied the motion for a new trial on the basis that a pro per petitioner is held to the same standards as those represented by counsel, that any allegations of irregularities in the proceedings were unsupported by a transcript and rejected husband's contention that it should have sua sponte granted a continuance until husband could be better prepared. The trial awarded wife $9,000 in attorneys' fees. Husband timely appealed.
DISCUSSION
¶12 What we must consider is whether, when husband provided virtually no information, the family court erred when it proceeded to judgment solely on the basis of wife's pretrial requests and assertions, without taking evidence or allowing cross-examination, and then whether the family court erred when it affirmed that judgment on a motion for new trial after the submission of supporting documentation. We find the family court did err in both instances.
The Failure to File a Pretrial Statement
¶13 First, we agree with the longstanding principle that "[o]ne who represents [him]self in civil litigation is given the same consideration as one who has been represented by counsel [and] is held to the same familiarity with court procedures and the same notice of statutes, rules, and legal principles as is expected of a lawyer." Higgins v. Higgins, 194 Ariz. 266, 270, ¶ 12, 981 P.2d 134, 138 (App. 1999); see also Copper State Bank v. Saggio, 139 Ariz. 438, 441, 679 P.2d 84, 87 (App. 1983). We review the family court's determination as to sanctions for an abuse of discretion, Woodworth v. Woodworth, 202 Ariz. 179, 184, ¶ 30, 42 P.3d 610, 615 (App. 2002), but review the interpretation of procedural rules de novo. McEvoy v. Aerotek, Inc., 201 Ariz. 300, 304, ¶ 17, 34 P.3d 979, 983 (App. 2001).
¶14 The family court found that by failing to file his pretrial statement, husband had essentially admitted wife's assertions. To this end, the family court cited Leathers v. Leathers, 216 Ariz. 374, 378, ¶ 19, 166 P.3d 929, 933 (App. 2007), for the proposition that the failure by one party to submit a pretrial statement or to address a specific issue allowed the court to deem that the party had conceded that issue. We disagree with the family court's conclusion.
The family court did not consider lesser sanctions before moving to the most drastic. As this court said in Estate of Lewis v. Lewis, 229 Ariz. 316, 323-24, ¶¶ 18-19, 275 P.3d 615, 622-623 (App. 2012), where the trial court defaulted an objector for failing to attend a pretrial conference:
In general, a trial court has broad power to impose such sanctions. [] But when a court imposes severe sanctions such as dismissal, striking a pleading, or entering a default judgment, "its discretion 'is more limited than when it employs lesser sanctions.' " ... Drastic sanctions running counter to that policy therefore are disfavored and must be based on a determination of willfulness or bad faith by the party being sanctioned. . . (Internal citations omitted).
¶15 In Leathers, this court was asked to review whether a domestic relations judgment that granted wife life insurance to secure her spousal maintenance award was error in light of the fact that neither party listed life insurance as a contested issue in their joint pretrial statement. 216 Ariz. at 378, ¶¶ 17-19, 166 P.3d at 933, citing Carlton v. Emhardt, 138 Ariz. 353, 355, 674 P.2d 907, 909 (App. 1983). Although we found waiver in Leathers, both Leathers and Carlton presented a different scenario than is found here. In each of those cases the parties agreed in writing in their pretrial statements that a certain issue was not in dispute. In Carlton it was a matter of personal jurisdiction and in Leathers it was a matter of life insurance. 138 Ariz. at 355, 674 P.2d at 909; 216 Ariz. at 378, ¶ 19, 166 P.3d at 933. Neither of those cases involved a failure to comply with the pretrial statement requirements. It is only in the case where the parties stipulate to a specific fact or legal framework, such as jurisdiction, that the pleadings are deemed amended and the pretrial statement may be deemed a conclusive waiver.
¶16 We do not suggest that failure to comply with pretrial requirements is consequence-free. In appropriate circumstances, the court may preclude the noncompliant party from introducing certain evidence or impose other sanctions. A party may be bound by the content of his pretrial statement. And failure to raise a claim or defense in a pretrial statement may constitute waiver of the claim or defense at trial. But when one party identifies an issue for trial, her opponent's silence does not eliminate that party's burden of proof or the opponent's right of cross-examination. On retrial, husband should be allowed the opportunity to submit a pretrial statement. If he fails to comply, he may be subject to the sanctions provided for in the rules.
The Family Court's Sanction Was an Abuse of Discretion
¶17 While the family court's minute entry warned of default as a sanction for non-compliance, the sanction imposed was more draconian than mere default and not justified under the circumstances. The pretrial minute entry had numerous warnings which for the most part are contained in the section, entitled "What Happens When A Party Does Not Comply with These Requirements." That reads:
Penalties may include one or more of the following: you may not be allowed to present some or all of your evidence; you
may be fined in some way (the most common "fine" requires one party to reimburse some of the other party's expenses), the hearing may proceed as if you have consented to what the other party has requested (i.e., proceeding by default); or the hearing may be postponed. See Ariz. Rs. Fam. L. P. 71(A); Maricopa Cty. Sup. Ct. R. 6.2(e). (Emphasis added).
¶18 Arizona Rule of Family Law Procedure 71(A), Sanctions, reads, in pertinent part:
If a party or attorney fails to comply with these rules, upon motion of a party or on the court's own initiative, the court shall, except upon a showing of good cause, make such orders with regard to such conduct as are just, including, among others, an order refusing to allow the disobedient party to support or oppose a designated claim or defense, prohibiting a party from introducing designated matters in evidence, staying further proceedings until an order entered by the court is obeyed, dismissing a claim, reassignment of the case to a deferred position on the active calendar, assignment to the inactive calendar, finding of contempt of court, or rendering a default judgment against the disobedient party.The family court imposed the strongest sanction, which its minute entry advised was equivalent to a default. But the family court did not, then, proceed as if it were a default situation.
¶19 The consequences of default are set forth in Rule 44. Rule 44 of the family law rules specifies two types of judgments: those for default without a hearing where the claim is for a sum certain and those that require a hearing to determine damages.
¶20 Here, there was no sum certain. Wife's responsive pleading to the petition for divorce, in fact, contained no dollar amounts at all. She asked for an unspecified award of spousal maintenance, an equitable award of the assets and liabilities of the community property, an order for waste against husband and for reasonable attorneys' fees and costs. Because wife claimed no sum certain the family court should have provided a hearing that complied with Rule 44(B)(2) "to determine the relief to be granted" and "establish the truth of any statement by evidence," and to allow husband to participate. See id. ("Once a defaulted respondent has made a motion under the provisions of the rule, the trial court shall allow respondent to participate in the hearing to determine what, if any, is the appropriate relief to be awarded petitioner pursuant to the Petition, or to establish the truth of any statement.").
¶21 The right of confrontation, which includes the right to cross-examine witnesses, is a fundamental right. See, e.g., Pointer v. State of Texas, 380 U.S. 400, 403-404 (1965); State ex rel Collins v. Superior Court, 132 Ariz. 180, 187, 644 P.2d 1266, 1273 (1982); Jones v. Industrial Comm'n, 1 Ariz.App. 218, 221, 401 P.2d 172, 175 (1965). If the family court had merely prevented husband from introducing his own evidence or propounding his own theories, we would likely not have found error. Here, however, the family court fundamentally erred in denying husband the right to cross-examine wife and question her evidence and husband was, undoubtedly, denied a fair trial. See State v. Henderson, 210 Ariz. 561, 567-68, ¶¶ 20, 23-24, 115 P.3d 601, 607-08 (2005); see also County of Sacramento v. Lewis, 523 U.S. 833, 845-46 (1998) (fundamental fairness is violated when citizens are denied procedural due process).
¶22 The family court went beyond the mere exclusion of husband's evidence to the acceptance of wife's unproven assertions. The family court did not require wife to put on evidence or examine her claims for validity or credibility as the default hearing rules require, despite the parties' filings that show certain issues such as spousal maintenance and the distribution of debts were still in dispute.
A. Spousal Maintenance
¶23 We review an award of spousal maintenance under an abuse of discretion standard. See In re Marriage of Berger, 140 Ariz. 156, 167, 680 P.2d 1217, 1228 (App. 1983) (citation omitted). We view the evidence in the family court in the light most favorable to sustaining wife's spousal maintenance award and will affirm if there is any reasonable evidence to support it. See Thomas v. Thomas, 142 Ariz. 386, 390, 690 P.2d 105, 109 (App. 1984). An abuse of discretion is "an exercise of discretion [that] is manifestly unreasonable, exercised on untenable grounds or for untenable reasons." State v. Woody, 173 Ariz. 561, 563, 845 P.2d 487, 489 (App. 1992).
¶24 The family court awarded wife $6,000 per month in spousal maintenance for a period of five years, stating "Husband did not oppose that request, and the Court was presented with no evidence suggesting that Wife failed to meet the standards appearing in A.R.S. § 25-319." The court stated that it had reviewed all filings and concluded that spousal maintenance, among the other rulings, was warranted. We disagree and reverse the award finding the record insufficient to establish that wife was entitled to maintenance or, if so, in what amount or duration.
¶25 Default judgment on the spousal maintenance was error. Based on our review of the record, at the time of the trial, the family court knew that spousal maintenance was a disputed issue. That fact is clear both from the pretrial settlement conference and from wife's own pretrial statement. We conclude that while the family court might have been able to discern wife's side of the spousal maintenance argument, such as her health, lifestyle, and ability to sufficiently support herself, from her verified financial statement and other filings, it should have lent a careful eye to wife's claims as they related to husband. The record at the time of trial was silent as to the state of husband's health although he was in his early sixties or as to how long he was expected to work or his expenses other than the massive outstanding tax levy. But, most importantly, the record is nearly devoid of evidence related to husband's income.
Rule 44(G) provides that in family law cases "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled ... even if the party has not requested such relief in the party's pleadings, except that awards of spousal maintenance ... must be specifically pled for such relief to be granted through a default judgment." And as noted in Kline v. Kline, 221 Ariz. 564, 569, 212 P.3d 902, 907 (App. 2009) "[b]y its terms, ARFLP 44(G) prescribes a more rigorous notice requirement regarding claims for spousal maintenance than other family law claims." Wife did not sufficiently specifically plead to satisfy the spousal maintenance requirements.
Husband advised the trial court at the trial that he was not working, had no contracts and was filing bankruptcy.
¶26 As wife did not testify, there are only two filings that might shed light on husband's income. The first, as described above, was wife's Resolution Management Statement where she sought $3,500 a month in spousal maintenance for four years and asserted that husband made in excess of $100,000 a year as the sole proprietor of two investment companies. The second document was her pretrial statement which again indicated that husband was self-employed and asserted that in his deposition he testified that he earned between $150,000 and $200,000 per year during the course of the marriage. No copy of that deposition was submitted.
¶27 The family court abused its discretion in failing to examine wife's bald assertions that husband's income was in the $150,000-200,000 range given that: (1) he was self-employed, (2) wife admitted that they filed separate tax returns and (3) that number was in contrast to her earlier sworn statement that he made $100,000 a year. The gross income of a small business or proprietorship is not the owner's income. See Baker v. Baker, 183 Ariz. 70, 71, 900 P.2d 764, 765 (App. 1995) (examining what constitutes income for the purposes of child support). The family court must, necessarily, take into consideration the ordinary and necessary expenses required to produce that self-employment income, but in this case failed to do so. See id.
¶28 Nor did the family court consider any variability in husband's self-employment income. See Leathers, 216 Ariz. at 377, ¶ 13, 166 P.3d at 932 ("Husband does not have the type of job that allows for simply multiplying an hourly wage over forty hours a week for fifty-two weeks each year. The trial court must take the expected lags between jobs and the variability of husband's income into consideration."). Whether wife's testimony alone, as she was apparently unfamiliar with husband's tax filings, will be sufficient to aid in that process is unclear to us.
¶29 What is clear, however, is that in response to the motion for new trial both husband and wife submitted exhibits that do not support the family court's acceptance of wife's numbers. The parties' combined submissions included just ten pages of husband's deposition testimony and the above mentioned tax returns for 2007 ($35,662), 2008 ($96,363), and 2011 (-$19,174). The deposition testimony submitted is far from conclusive as to husband's take home income. The most illuminating pages of husband's deposition are pages 37, 53, and 82. Page 53 does show a gross business income of $150,000-200,000 until his "income dropped off the map" approximately eighteen months before the marriage ended. This is apparently the number wife is basing her claims on. But that number was unexamined and the best-case scenario for wife. Page 37 and 82 of husband's deposition, respectively, show a gross income of $7,500-14,250 a month. Page 82 indicates that husband claimed business expenses of $92,000 from his gross business income in 2011. In light of this evidence, we reverse the award of spousal maintenance for a new determination that includes these considerations.
Likewise, there is no indication that the family court considered the debt to the I.R.S. in calculating husband's available income or resources.
While we normally defer to a family court's credibility determination and are cognizant that the family court may have thought husband had a credibility problem given that husband failed to submit the required financial disclosures or respond to wife's request for financial information and given his substantial problems with the I.R.S., the family court here failed to take evidence to make such a credibility determination.
B. I.R.S. Debt
¶30 We next examine the family court's award of the entire I.R.S. debt to husband. The I.R.S. debt clearly remained a disputed item between the parties at the time of trial. Both the pretrial settlement conference agreement and wife's own pretrial statement indicate that. Wife, herself, indicated in her pretrial statement that part of that debt was husband's separate pre-marital debt and some was community debt. Yet, rather than examining wife or taking evidence as to the disputed I.R.S. debt the family court found it was impossible to divvy it up. This was an abuse of discretion as was the denial of the latter motion for reconsideration.
The court said "it not being possible to determine what percentage, if any, was incurred after the marriage and what community property Husband used to deal with those amounts, which consist substantially of debt he brought into the marriage."
¶31 The family court is independently charged with evaluating witness credibility and sincerity, weighing the evidence, assessing all the tangible and intangible factors, and making the necessary findings and conclusions. The court has an obligation to equitably divide clearly identified separate property, community property and debts. See A.R.S. § 25-211 (2012). Section 25-211 states the presumption that "[a]ll property acquired by either husband or wife during the marriage" is community property. Section 25-215 discusses separate and community debt and the liability for each.
¶32 Wife, by her own admission, knew that a portion of the I.R.S. debt was community debt, thus awarding it in full to husband without any fact-finding was error. The family court, thus, awarded wife more than she requested and unfairly penalized husband. See Leathers, 216 Ariz. at 377, ¶ 13, 166 P.3d at 932 (error to attribute to husband more income than even wife asserted). This error is more fully illustrated upon examination of the I.R.S. document attached to wife's motion for new trial response, which shows federal tax liability for years in which the parties were married from 2005-2007.
We do not consider the tax implications or any assignation of error the I.R.S. might make related to partners that are married filing separately. Further, the record does not include any indication of a pre- or post-nuptial agreement regarding community income, thus the statutory presumptions apply to our analysis.
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C. Attorneys' Fees Below
¶33 Husband asserts that the family court abused its discretion in ordering him to pay wife's attorneys' fees and costs in the amount of $9,000. Because we reverse and remand, the fee award is reversed.
D. Attorneys' Fees on Appeal
¶34 Both husband and wife request attorneys' fees and costs on appeal pursuant to A.R.S. § 25-324 and Rule 21 of the Arizona Rules of Civil Appellate Procedure. Section 25-324 requires us to examine both the financial resources and the reasonableness of the positions of each party. After doing so, we find that the parties should bear their own fees and costs on appeal.
CONCLUSION
¶35 For the foregoing reasons, the family court judgment is reversed and this matter is remanded for a new trial.