Opinion
No. 1 CA-CV 11-0333 A
02-27-2012
In re the Matter of: JANEL L. JIOIE, Petitioner/Appellant, v. MICHAEL W. HOSIER, Respondent/Appellee.
The Murray Law Offices, PC By Stanley D. Murray Attorneys for Petitioner/Appellant Sternberg & Singer, LTD By Melvin Sternberg Attorneys for Respondent/Appellee
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
(Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. FN2009-002762
The Honorable Thomas L. LeClaire, Judge
AFFIRMED IN PART, VACATED IN PART AND REMANDED
The Murray Law Offices, PC
By Stanley D. Murray Attorneys for Petitioner/Appellant
Scottsdale
Sternberg & Singer, LTD
By Melvin Sternberg
Attorneys for Respondent/Appellee
Phoenix OROZCO, Judge
¶1 Janel Jioie (Wife) appeals the family court's order granting Michael Hosier (Husband) a spousal maintenance modification and determining Wife received her one-half share of Husband's 401(k) account. Wife also appeals the family court's denial of her motion for new trial. For the following reasons, we affirm the court's findings regarding the division of Husband's 401(k) account, but we vacate the court's order modifying spousal maintenance and remand for an evidentiary hearing on Husband's petition for modification of spousal maintenance.
FACTS AND PROCEDURAL HISTORY
¶2 Husband and Wife were married in 1994. Their marriage was dissolved in December 2009. Relevant to this appeal, the decree of dissolution awarded Wife spousal maintenance in the amount of $1500 per month for forty-eight months. In determining the award, the court specifically found "that Wife is currently disabled and is unable to support herself through employment."
Wife was also awarded real property that offset six months of spousal maintenance payments. Thus, Husband was ordered to pay spousal maintenance for forty-two months.
¶3 The decree also provided for the division of Husband's 401(k) account. The decree appointed a special master for purposes of preparing a qualified domestic relations order (QDRO) and ordered each party to pay one-half the cost of the special master's fee for preparing the QDRO by March 31, 2010. The decree further ordered that "the 401(k) shall be divided in kind as of the date of division."
¶4 On April 1, 2010, the special master filed a request to terminate his appointment because neither Husband nor Wife had paid his fee as ordered in the decree. The family court terminated the appointment on April 28, 2010.
¶5 Wife filed a motion to enforce the divorce decree on April 7, 2010, citing Husband's "non-compliance" with the terms of the decree. Wife asked the court to "revisit" the division of Husband's 401(k) because Husband had liquidated the account and sent Wife a cashier's check in the amount of $3,934.99. Wife believed Husband owed her an additional sum because she would have received more money if a QDRO had been prepared by the special master. On the same day, Wife also filed a petition to enforce spousal maintenance and spousal maintenance arrearages.
¶6 An enforcement hearing regarding Wife's motion and petition was held on July 8, 2010. Husband was not present at the hearing, and a judgment was entered against him for unpaid spousal maintenance. The court ordered Husband to pay $300 per month towards the arrearages, in addition to the $1500 per month spousal maintenance payments, for a total of $1800 per month. The court did not address the division of Husband's 401(k).
¶7 Husband again did not appear at the return hearing on July 20, 2010. A contempt hearing regarding Husband's spousal maintenance arrearages, other court costs, and his failure to appear at this hearing was set for September 8, 2010.
¶8 In a letter (Letter) filed July 27, 2010, Husband wrote that he received notice of the July 8 judgment against him. He acknowledged that he was behind in his spousal maintenance payments; however, he explained that the payments were calculated based on a job at which he made $31 per hour, but he had since taken a job where he had been making $20 per hour until a recent raise increased his pay to $24 per hour. He complained that he was "struggling to make [his] spousal support payments" and was "currently living out of [his] car." He also claimed that he "won't be able to keep [his] car" and therefore "will be unable to even work" if he has to pay $1800 per month.
¶9 Wife did not appear at the September 8, 2010 contempt hearing. In her absence, the court discussed Husband's Letter, which it considered a petition for modification of spousal maintenance, and took testimony from Husband regarding the basis of his request for modification. Husband advised the court that he believed Wife was not disabled as she had claimed during the divorce trial and provided specific examples of physical activities in which Wife allegedly participated. Husband testified that since he had moved to Michigan he was earning less than he did when the decree was entered. The court indicated that it was continuing the case for an evidentiary hearing on the spousal maintenance issue.
The court noted that Wife had called the morning of the contempt hearing to verify she could appear telephonically and that she gave the court a phone number, "which turned out to not be in service." At the next hearing, Wife explained that she was unable to appear telephonically at the September 8 hearing because Husband disconnected her daughter's cell phone, the phone on which the court had attempted to call her. Wife said she waited for the court to call and when she realized the phone had been disconnected, "it was too late."
¶10 Both parties appeared telephonically at the October 13, 2010 evidentiary hearing. Although the hearing was set as an evidentiary hearing on Husband's request for spousal maintenance modification, the hearing began with the court telling Wife, "It's your motion, Ms. Jioie." Wife proceeded to discuss Husband's arrearages and the division of Husband's 401(k).
¶11 During the hearing, Wife complained that although she knew the hearing would be addressing the spousal maintenance issue, she had "no idea" what was discussed at the September 8 hearing and had not received any paperwork or exhibits from Husband. Husband explained that he sent all exhibits and paperwork by certified mail to two different addresses because he did not know where Wife was living. The court found it was Wife's fault that she did not receive the paperwork because Husband sent the paperwork by certified mail to the address Wife provided to the court. Before the modification issue could be addressed, the court adjourned the hearing and rescheduled it for October 28 because Wife's phone was cutting in and out.
¶12 At the start of the October 28, 2010 hearing Wife again complained about lack of notice. She claimed to have "asked several times for a continuance until there is a motion filed." Wife indicated that she still had not seen "whatever [Husband] filed on July 27" because Husband did not send her a copy, so she had "no clue of what [was] even discussed." The court proceeded with the hearing and advised Wife, "[W]e're going to get you a copy of that July 27 letter for you to have." The discussion turned to the issue of Husband's arrearages, and Wife did not have an opportunity to review the Letter before the proceedings continued.
A few days before the hearing, Wife attempted to file an accelerated motion for continuance, but the motion was rejected by the clerk of the superior court because Wife tried to file a copy instead of the original document. In the motion, Wife averred that Husband only sent her the exhibits he intended to use and that without the Letter or knowledge of its contents she would be "in no position to defend her[self] or adequately prepare for said hearing."
¶13 Wife testified she believed that her share of Husband's 401(k) should have been $7,196.22. Husband testified that Wife's figures did not include a deduction for loans the parties had taken out against the account or the interest and penalties which were assessed when the account was divided because Wife did not open an account in her name to facilitate a roll-over of his 401(k) directly to Wife. Husband testified he believed the true value of the 401(k) account was $7831 at the time it was divided, of which he gave Wife one-half. The court found that Husband's 401(k) account had a value of $7,869.97 at the time of distribution and Wife had received one-half of that amount.
¶14 The hearing then turned to the modification issue. The court noted that Husband had been attributed an income of $30 per hour in the divorce decree but had previously testified that he was currently earning less. Husband confirmed that after moving to Michigan his earnings were $20 per hour but he had recently received a raise to $24 per hour. Before allowing Wife an opportunity to testify on the modification issue, the court informed the parties that it was out of time and would review the documents submitted by both parties to see if a modification would be warranted.
¶15 Husband advised the court that he had "two other points" he wanted to address, and the court gave him "one minute" to present his points. Husband alleged that his "Exhibit 2 and her exhibits, I think show that [Wife] can work" and that Wife's financial statement showed she did not need as much money to live on as she had previously stated.
¶16 Wife was given one minute to respond. Wife alleged that Husband was making much more money than he indicated in his testimony. The court then concluded the hearing.
¶17 In a minute entry order filed on January 6, 2011, the court reduced Husband's spousal maintenance obligation by one- third and noted that Wife had received her one-half share of Husband's 401(k) account. In its ruling, the court made numerous findings related to Wife's purported disability based on Husband's testimony at the September 8 hearing and the exhibits he provided at that hearing. Wife filed both a motion for new trial and a motion for reconsideration. The court denied both motions.
¶18 Wife filed this timely appeal. We have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) section 12-2101.A.2 and A.5(a) (2011).
DISCUSSION
Rule 91
¶19 The family court determined Husband's Letter sufficiently presented a claim for modification of maintenance when it stated at the September 8 hearing that it was "considering [the Letter] a Motion to Modify Spousal Maintenance." Wife claims that Husband's Letter did not comply with Rule 91 of the Arizona Rules of Family Law Procedure, and, therefore, because the claim for modification was not properly presented, the family court erred in considering the claim. Because we remand this matter for lack of due process, we assume without deciding that Husbands' Letter complied with Rule 91.
Wife also complains that she was never properly served with the Letter. However, the family court found that any lack of service was Wife's fault because she failed to keep her address updated with the court and Husband had been sending the paperwork to two different addresses by certified mail. In her Reply Brief Wife appears to acknowledge that lack of service is a non-issue.
Due Process
¶20 Wife argues she was denied due process on the modification issue. "Procedural due process requires notice and an opportunity to be heard in a meaningful manner and at a meaningful time." Webb v. State ex rel. Ariz. Bd. of Med. Exam'rs, 202 Ariz. 555, 558, ¶ 9, 48 P.3d 505, 508 (App. 2002). Wife contends she did not have notice of the basis for Husband's request and was not allowed an opportunity for a full and fair hearing because Husband did not present any evidence relating to the modification claim at either the October 13 or October 28 evidentiary hearings and Wife was unaware of Husband's testimony and exhibits from the September 8 hearing and was therefore unable to address Husband's allegations, which the court ultimately relied on in ordering modification.
¶21 Husband argues that Wife did have notice of his modification claim and that under Arizona Rule of Family Law Procedure 76.D the family court could exclude Wife's evidence and arguments opposing modification because Wife failed to file a pretrial statement, as ordered by the court at the September 8 hearing and required by Rule 76.C.1.
When a party fails to file its separate pretrial statement, Rule 76.D allows the court to issue 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."
¶22 Addressing Husband's last argument first, the family court did not indicate that it was sanctioning Wife pursuant to Rule 76.D. We believe that if the court intended to exclude Wife's arguments at the October 28 hearing as punishment for not filing a pretrial statement, it would have said as much in its ruling.
¶23 Husband's other argument that Wife had proper notice because Wife knew in advance that spousal maintenance would be discussed at the October hearings misses the mark. Wife argues she did not have proper notice of the evidence Husband presented in support of his claim for modification, namely his testimony regarding Wife's ability to work, and she therefore did not have a meaningful opportunity to be heard on Husband's allegations.
¶24 Husband's Letter did not mention, as a basis for his modification claim, any alleged changes in Wife's disability status. Accordingly, the Letter itself did not provide Wife with notice of Husband's allegations about her ability to work. Additionally, Husband's testimony about Wife's purported disability was presented only at the September 8 hearing that Wife did not attend. That hearing was set as a contempt hearing regarding Husband's spousal maintenance arrearages and failure to appear; thus, Wife had no reason to believe Husband would be presenting evidence on his modification claim.
¶25 Furthermore, during the October 13 and 28 hearings, the court never advised Wife that it had already taken testimony from Husband regarding Wife's ability to work. Also, the minute entry from the September 8 hearing setting the initial evidentiary hearing on the modification issue did not describe Wife's ability to work as an issue raised or upon which testimony was received. At no point during either October hearing did the court inform Wife of the general nature of Husband's prior testimony or offer Wife an opportunity to rebut his allegations.
¶26 Although Husband pointed out during the October 28 hearing that the previous spousal maintenance award was based partly on Wife's inability to work and he presented an exhibit that he claimed "show[s] that she can work," Wife was never made aware of Husband's extensive prior testimony regarding his claims that Wife participates in activities that prove she is not disabled. Consequently, Wife could not present any evidence on her disability and instead focused her allotted one minute of testimony on Husband's income.
¶27 We find that Wife was denied due process because she was not afforded an opportunity to be heard on the modification issue in any meaningful way. The family court based its decision to modify Husband's spousal maintenance payments in part on Husband's uncontroverted testimony from the September 8 hearing that Wife could work and was not fully disabled and Wife was given no notice of the testimony, despite her requests, or an opportunity to respond. We therefore vacate the family court's ruling as it pertains to modification of spousal maintenance and remand for an evidentiary hearing on that issue.
Because we are remanding for further proceedings on the modification issue, we need not address Wife's contention that Husband failed to prove a substantial and continuing change in circumstances justifying modification. However, to the extent Husband presented evidence of facts and events that existed before the decree was entered in support of his modification claim, that evidence must be disregarded on remand. See Linton v. Linton, 17 Ariz. App. 560, 563, 499 P.2d 174, 177 (1972) (noting that a change in circumstances justifying modification must be a change that occurred after the entry of the original decree). Wife also argued that the court erred in retroactively modifying the spousal maintenance payments. If, on remand, the family court determines Husband is entitled to a modification, the modification can be effective no earlier than the first day of the month following the filing of the petition, in this case August 1, 2010. A.R.S. § 25-327.A (2007).
Husband's 401(k)
¶28 Wife additionally argues the family court erroneously interpreted the provision dividing Husband's 401(k) in the decree of dissolution. We review the family court's interpretation of an existing decree de novo. Cohen v. Frey, 215 Ariz. 62, 66, ¶ 10, 157 P.3d 482, 486 (App. 2007).
¶29 When interpreting a decree, we apply the general rules of construction for written instruments. Lopez v. Lopez, 125 Ariz. 309, 310, 609 P.2d 579, 580 (App. 1980). "The meaning of a decree is to be determined from the language used." Stine v. Stine, 179 Ariz. 385, 388, 880 P.2d 142, 145 (App. 1994). Words and phrases "should be construed according to their natural and legal import." Lopez, 125 Ariz. at 310, 609 P.2d at 580.
¶30 Paragraph D of the decree addresses the division of Husband's 401(k). It reads:
By agreement of the parties,
IT IS ORDERED appointing James Osborn Popp as special master for purposes of preparing a domestic relations order to divide Husband's 401(k).
IT IS FURTHER ORDERED that each party shall be responsible for 50% of the cost of the domestic relations order. Each party shall pay his/her required one-half of Mr. Popp's fee on or before March 31, 2010.
IT IS FURTHER ORDERED that the 401(k) shall be divided in kind as of the date of division.
¶31 Because neither Husband nor Wife paid the special master's fee and, as a result, his appointment was terminated and no QDRO was prepared, the family court relied on the last order dividing the 401(k) "in kind as of the date of division" in determining Wife received her one-half share. We agree with the family court's determination.
¶32 The family court correctly noted that the decree did not actually divide Husband's 401(k) but instead ordered a special master to prepare a QDRO, which in fact was never completed due to both parties' violation of the court order to pay the special master's fee. The court then looked to the order that the 401(k) be divided "in kind as of the date of division." The court determined the date of division was the day Husband liquidated the account, the value on that day was $7,869.97, and Wife received one-half of that amount. Because neither party complied with the order to pay one-half of the special master's fee and the 401(k) funds were divided evenly, as required by the language of the decree, we find the family court's determination appropriate under the circumstances.
Wife argues that she is "justified in seeking . . . an unequal division of the 401k funds, since Husband was in contempt for violating the Decree." However, Wife herself also violated the decree, and the family court has discretion to decline to find one party in contempt when the other party has also violated the court's orders. Herzog v. Reinhardt, 2 Ariz. App. 103, 105, 406 P.2d 738, 740 (1965).
--------
Motion for New Trial
¶33 Finally, Wife argues the family court abused its discretion in not granting her motion for new trial. We need not address this issue, as the issues raised in the motion for new trial were the same issues we have addressed on appeal.
Attorney Fees
¶34 Both parties have requested attorney fees on appeal. At this time we deny both requests. However, on remand the family court may consider awarding attorney fees and costs on appeal in accordance with A.R.S. § 25-324 (Supp. 2011).
CONCLUSION
¶35 We conclude that Wife was not afforded a meaningful opportunity to be heard on Husband's request for modification of spousal maintenance, particularly regarding his claim that she could be working, and we therefore vacate the family court's order as it relates to spousal maintenance modification and remand for a new hearing on that issue. We affirm the family court's findings regarding the division of Husband's 401(k) account.
_________
PATRICIA A. OROZCO, Presiding Judge
CONCURRING:
_________
PHILIP HALL, Judge
_________
JOHN C. GEMMILL, Judge