Opinion
No. 1 CA-CV 18-0283 FC
10-29-2019
In re the Matter of: LAURA REITH, Petitioner/Appellant, v. JAMES REITH, Respondent/Appellee.
COUNSEL Pangerl Law Firm, PLLC, Phoenix By Regina M. Pangerl Counsel for Petitioner/Appellant James Reith, Phoenix Respondent/Appellee
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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. FC2016-096234
The Honorable Stephen M. Hopkins, Judge AFFIRMED IN PART, REVERSED IN PART, AND REMANDED COUNSEL Pangerl Law Firm, PLLC, Phoenix
By Regina M. Pangerl
Counsel for Petitioner/Appellant James Reith, Phoenix
Respondent/Appellee
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which Presiding Judge Lawrence F. Winthrop and Judge Diane M. Johnsen joined. CATTANI, Judge:
¶1 Laura Reith ("Mother") appeals from the decree dissolving her marriage to James Reith ("Father"). For reasons that follow, we reverse the superior court's decision in several respects—including the spousal maintenance award, the child support order, the allocation of vehicles, and the reimbursement order. We affirm the remaining portions of the decree.
FACTS AND PROCEDURAL BACKGROUND
¶2 In November 2016, Mother petitioned for dissolution after more than 20 years of marriage. The parties reached agreements on several issues, and after a bench trial, the superior court entered a dissolution decree resolving the remaining disputed issues. As relevant here, the court's property division awarded Mother the marital residence, with Father to receive half of the equity (either by Mother refinancing or by selling the residence and dividing the proceeds). The court ordered Mother to pay almost $40,000 in community debts, with Father to reimburse her for half of that amount from his share of the equity in the marital residence. The court also awarded each party one of the two community property vehicles, found that Father's student loan and credit card debts were community obligations, and denied Mother's request to be reimbursed for post-petition timeshare payments. Consistent with the parties' agreement, the superior court equally divided the parties' retirement accounts, including Mother's Arizona State Retirement System ("ASRS") pension. Although the court ordered most retirement accounts to be divided through qualified domestic relations orders ("QDRO"), the court ordered Mother to make direct monthly payments to Father for his share of her ASRS pension beginning in June 2020, when she becomes eligible to retire.
¶3 The court also awarded Father spousal maintenance of $2,000 per month for 30 months, finding both that he could not be self-sufficient through appropriate employment due to a disability and that he lacked sufficient property to provide for his reasonable needs. See A.R.S. § 25-319(A)(1), (2). Finally, the court ordered Father to pay $920.44 per month in child support for the parties' four children beginning the month after entry of the decree. The court denied both parties' requests for attorney's fees.
¶4 Mother moved for a new trial, and the superior court slightly modified the decree's treatment of Mother's ASRS pension but otherwise denied the motion. Mother timely appealed, and we have jurisdiction under A.R.S. § 12-2101(A)(1), (5)(a).
DISCUSSION
¶5 Mother's appeal challenges the superior court's property division, spousal maintenance award, child support order, and attorney's fees decision.
¶6 Father's answering brief raises several challenges to the decree and several post-decree enforcement issues. Additionally, he requests that we appoint an attorney to represent him. But Father did not file a notice of cross-appeal, so his requests for affirmative relief from the decree are not properly before this court. See ARCAP 13(b)(2); Hoffman v. Greenberg, 159 Ariz. 377, 380 (App. 1988). Moreover, Father's post-decree enforcement issues must be raised in superior court and cannot be considered in the first instance on appeal. See Pflum v. Pflum, 135 Ariz. 304, 306-07 (App. 1982). And because there is no constitutional right to appointed counsel in a civil proceeding, we deny Father's request for a court-appointed attorney. See Acolla v. Peralta, 150 Ariz. 35, 38 (App. 1986).
I. Property Division.
¶7 When allocating community property and debts, the superior court has broad discretion to achieve an equitable result. Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13 (App. 2007). We view the evidence in the light most favorable to upholding the court's order, and, absent an abuse of discretion, we will affirm the court's allocation of property and debts. Id.
A. Assets.
1. Vehicles.
¶8 The parties owned two minivans: a Honda Odyssey and a Chrysler Town & Country. The parties agreed that Mother would keep the Honda, but they disputed its value. The evidence at trial showed the Honda had a value of $5,795 with no debt. The parties did not dispute that the Chrysler had debt but no equity, and Father asked to surrender the Chrysler to the bank because he could not afford the payments.
¶9 Despite the parties' agreement regarding possession of the Honda, the superior court awarded Father the "Chrysler Odyssey," which the court found had no equity, and Mother the "Town and Country," which the court found had $5,795 in equity. The court further ordered that Mother pay Father his share of the $5,795 equity in the "Town and Country."
¶10 Because the court erroneously ordered Mother to pay Father for the non-existent equity in the "Town and Country," we reverse the rulings regarding the vehicles and remand for reconsideration. We express no opinion as to which party should ultimately receive which vehicle, provided the debt and equity are properly equalized.
2. ASRS Pension.
¶11 Mother argues that the decree failed to order preparation of a domestic relations order ("DRO") to divide Mother's ASRS pension and failed to order the parties to equally share the fee for preparing a DRO.
¶12 The decree originally ordered Mother to pay Father a specific monthly amount, which eliminated the need for a DRO. See Koelsch v. Koelsch, 148 Ariz. 176, 185 (1986). In ruling on Mother's motion for new trial, however, the court ordered the attorney responsible for preparing the parties' other QDROs to calculate the amount that Father was entitled to receive from Mother's ASRS pension, and ordered the parties to equally share the expense. Although not expressly ordered, the decree implied that if a retirement account required a separate DRO, the agreed attorney would prepare one and the parties would share equally in the cost. With this understanding, we discern no abuse of discretion.
B. Debts.
1. Father's Credit Card Debt.
¶13 Mother argues that the superior court erred by classifying as a community obligation $2,700 in credit card debt, which Mother alleges was incurred by Father to pay the attorney handling his criminal case after he was charged with domestic violence against Mother. Although Mother testified to that effect at trial, she did not provide any documentary evidence in support, and Father disputed that he paid his criminal defense attorney with the credit card. Given this conflicting testimony, the superior court did not abuse its discretion by finding that the credit card debt, incurred during the marriage, was a community obligation. See In re Marriage of Flower, 223 Ariz. 531, 535, ¶ 12 (App. 2010); see also Gutierrez v. Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998). And although Mother's motion for new trial attached a credit card statement showing a charge to an attorney, Mother acknowledged that she had received the statement in Father's disclosure, so the superior court did not err by determining that this was not newly discovered evidence and thus not a basis for a new trial. See Ariz. R. Fam. Law P. 83(A)(4) (2018).
The Arizona Supreme Court significantly revised the Arizona Rules of Family Law Procedure, effective January 1, 2019. See Ariz. R. Fam. Law P., Prefatory Cmt. to the 2019 Amendments. Because the changes are significant, we cite to the version of Rule 83 in place at the time of the superior court proceedings.
2. Initial Responsibility for Debt Payment.
¶14 Mother also contends the superior court abused its discretion by ordering that she pay all community debts (including Father's student loan debts) and by allowing Father to use his half of the equity in the marital residence to pay her back for his share of the debts. But Mother agreed to this process of payment and offset at trial, and we thus affirm this aspect of the decree.
C. Reimbursement for Timeshare Payments.
¶15 Mother paid the community's timeshare loan and maintenance fees ($3,243) after service of the dissolution petition. She requested that Father reimburse her for his share of those payments. The superior court ordered Father to reimburse Mother for all community bills except the timeshare payments. Mother argues that the court erred by failing to reimburse her for the post-petition timeshare payments. We agree.
¶16 Contrary to the court's finding, Mother was not obligated to pay for this expense or provide temporary support to Father after the petition was filed. The marital community terminates upon service of the petition for dissolution, see A.R.S. § 25-211(A)(2), and Mother's voluntary payment of this timeshare expense did not preclude a claim for reimbursement. See Bobrow v. Bobrow, 241 Ariz. 592, 596, ¶¶ 15, 17-19 (App. 2017). Therefore, on remand, the superior should order that Father reimburse Mother for his half of the timeshare loan payment and maintenance fees.
II. Spousal Maintenance.
¶17 Mother challenges the superior court's award of spousal maintenance to Father, both as to eligibility and as to duration and amount. We review spousal maintenance awards for an abuse of discretion, accepting the court's factual findings unless clearly erroneous. Sherman v. Sherman, 241 Ariz. 110, 114, ¶ 17 (App. 2016); Engel v. Landman, 221 Ariz. 504, 510, ¶ 21 (App. 2009).
A. Eligibility.
¶18 Mother contends that, because Father worked full time throughout the marriage and during trial, the superior court abused its discretion by concluding that Father could no longer work and thus qualified for spousal maintenance. As relevant here, the superior court may grant spousal maintenance if the spouse "[l]acks sufficient property, including property apportioned to the spouse, to provide for that spouse's reasonable needs" or if the spouse "[i]s unable to be self-sufficient through appropriate employment." A.R.S. § 25-319(A)(1), (2); see also Boyle v. Boyle, 231 Ariz. 63, 65, ¶ 9 (App. 2012).
¶19 Here, the superior court found not just that Father was unable to work, see A.R.S. § 25-319(A)(2), but also that he lacked sufficient property to provide for his reasonable needs, see A.R.S. § 25-319(A)(1). The record supports the latter finding. The expenses Father included on his affidavit of financial information clearly exceed his regular income, and the decree did not list any significant bank or investment accounts available for additional financial support. The trial evidence showed approximately $90,000 in equity in the marital residence, meaning Father is likely to receive approximately $45,000 less the offsets for his share of the community debts.
¶20 Thus, even assuming Father has income from continuing employment, the evidence also supports the finding that the property allocated to Father will not provide for his reasonable needs. See A.R.S. § 25-319(A)(1). Accordingly, the court did not abuse its discretion by finding that Father qualified for spousal maintenance.
B. Duration and Amount of Award.
1. Father's Income.
¶21 Mother argues that the superior court improperly relied on Father's speculative disability status in determining the amount of the spousal maintenance award. We agree.
¶22 The superior court must base a spousal maintenance award on "the parties' historic and existing circumstances, not on speculative predictions about the future." Sherman, 241 Ariz. at 115, ¶ 19. If a party anticipates a reduced income, the "proper procedure is for the affected party to wait until that future time, and if the expected change occurs, then petition for modification." Chaney v. Chaney, 145 Ariz. 23, 27 (App. 1985) (citing In re Marriage of Rowe, 117 Ariz. 474, 476 (1978)).
¶23 Here, the superior court found that Father was disabled and "will be taking disability through the City of Phoenix, where he will be entitled to two-thirds of his normal salary." See A.R.S. § 25-319(B)(3), (5), (9). The court found that Father could not contribute to the children's future educational costs because once he begins receiving disability payments, he will not be able to return to work. A.R.S. § 25-319(B)(8). Accordingly, the court only attributed to Father a gross monthly income of $1,690.30.
¶24 The court erred by basing its income calculations on Father's anticipated disability status. Despite having several medical issues, Father was still working full time as of the time of trial. He was able to manage his medical appointments with paid time off or leave under the Family Medical Leave Act, and he had not yet applied or qualified for disability. Accordingly, the evidence does not support the court's income calculation premised on a determination that Father is disabled and unable to work.
2. Adoption Subsidy.
¶25 During the marriage, the parties adopted four minor children with special needs and receive a monthly adoption subsidy from the State. Mother argues that the superior court improperly considered the monthly subsidy in determining her ability to meet her own needs while paying spousal maintenance. See A.R.S. § 25-319(B)(4). We agree.
¶26 An adoption subsidy is income attributable to the children and cannot be considered in determining each parent's income. See Hamblen v. Hamblen, 203 Ariz. 342, 345, ¶ 16 (App. 2002). Here, although the superior court did not include Mother's share of the adoption subsidy in calculating her income on the child support worksheet, the court referred to the adoption subsidy in addressing maintenance, which suggests that the court may have improperly considered it. Accordingly, on remand, the superior court should ensure that the adoption subsidy is not considered as part of the spousal maintenance analysis.
3. Student Loans.
¶27 Mother also asserts that the court improperly determined that neither party contributed to the earning ability of the other spouse "other than via [the community's] payment of Mother's student loans." See A.R.S. § 25-319(B)(6). Although she argues that community funds were not used to pay her student loan, there was conflicting evidence regarding whether her loan was "written off" or whether it was paid off through a second mortgage. Given the conflicting testimony, Mother has not established that the superior court abused its discretion by treating both parties' student loans as community obligations. See Flower, 223 Ariz. at 535, ¶ 12. On remand, however, in determining the award of spousal maintenance, the court should consider that the community has now paid Father's student loans (as ordered in the decree), as well as Mother's student loans.
4. Expenses.
¶28 Finally, Mother argues that the court's $2,000 per month spousal maintenance award was premised on consideration of improper expenses submitted by Father and on a failure to consider her expenses. Mother notes in particular that the spousal maintenance award continues for three months after she is obligated to pay Father almost $2,000 from her ASRS pension beginning in June 2020. On remand, the court should reevaluate Father's submitted expenses and consider the anticipated increase in Father's income and the corresponding increase in Mother's obligations once Father receives his share of the retirement payments in June 2020.
In light of our disposition on appeal, we need not address Mother's argument that the court erred in ordering an amount of spousal maintenance that equalized the parties' incomes. --------
III. Child Support Order.
A. Father's Income.
¶29 Mother argues that the superior court improperly relied on Father's speculative disability status in determining Father's child support obligation. As discussed above with regard to spousal maintenance, Father continued to work full time through trial, and the possibility of future disability status remained speculative. Accordingly, the court erred by attributing to Father only $1,690.30 in gross monthly income—based on speculation about Father's future eligibility for disability benefits—rather than his actual monthly income. See A.R.S. § 25-320 app. § 5(A).
B. Retroactivity.
¶30 Mother next asserts that the superior court abused its discretion by ordering Father to pay child support starting March 1, 2018, the month after the decree was entered, which implicitly denied Mother's request to make child support retroactive to the month following the petition, December 1, 2016. We agree.
¶31 The controlling statute mandates an award of child support retroactive to the filing of the dissolution petition:
If child support has not been ordered by a child support order and if the court deems child support appropriate, the court shall direct, using a retroactive application of the child support guidelines to the date of filing a dissolution of marriage, legal separation, maintenance or child support proceeding, the amount that the parents shall pay for the past support of the child and the manner in which payment shall be paid, taking into account any amount of temporary or voluntary support that has been paid. Retroactive child support is enforceable in any manner provided by law.A.R.S. § 25-320(B) (emphasis added); see also Simpson v. Simpson, 224 Ariz. 224, 225, ¶ 7 (App. 2010). Because child support was not previously ordered and the court found child support was appropriate, the court erred by failing to order retroactive child support. Simpson, 224 Ariz. at 225-26, ¶¶ 7-11.
IV. Attorney's Fees.
¶32 Mother contends that the superior court abused its discretion by declining to award her attorney's fees under A.R.S. § 25-324(A). The superior court has broad discretion to deny a fee request even after considering the relevant statutory factors. See Myrick v. Maloney, 235 Ariz. 491, 494, ¶¶ 6, 9 (App. 2014). Here, the court carefully considered those factors and found that both parties acted unreasonably. Because the evidence supports the court's findings, we affirm the denial of attorney's fees.
CONCLUSION
¶33 We reverse the award of spousal maintenance, the child support order, and the order regarding the community vehicles and remand for reconsideration consistent with this decision. On remand, the superior court shall include the timeshare payments in the reimbursement order. In all other respects, we affirm the decree.
¶34 Mother requests an award of attorney's fees and costs on appeal, citing A.R.S. § 25-324. After considering the reasonableness of the parties' positions and their financial resources, in the exercise of our discretion, we deny her request for attorney's fees. We award Mother her costs on appeal under A.R.S. § 12-342 upon compliance with ARCAP 21.