Opinion
No. 1 CA-CV 13-0003
02-18-2014
In re the Marriage of: KARI K. STONEHOUSE, Petitioner/Appellee, v. BARRY STONEHOUSE, Respondent/Appellant.
David Alan Dick and Associates, Chandler By David Alan Dick Counsel for Petitioner/Appellee Barry Stonehouse, Mesa Respondent/Appellant
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZ. R. SUP. CT. 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. FC2011-094556
The Honorable John R. Hannah, Judge
AFFIRMED
COUNSEL
David Alan Dick and Associates, Chandler
By David Alan Dick
Counsel for Petitioner/Appellee
Barry Stonehouse, Mesa
Respondent/Appellant
MEMORANDUM DECISION
Judge Maurice Portley delivered the decision of the Court, in which Presiding Judge Donn Kessler and Judge Patricia K. Norris joined. PORTLEY, Judge:
¶1 Barry Stonehouse ("Husband") appeals from a default decree of dissolution of his marriage to Kari Stonehouse ("Wife"). For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Husband and Wife married on June 16, 1990, and Wife filed for dissolution in September 2011. Wife is employed in a public school district and Husband is the president of a business that he co-owns.
¶3 After a temporary orders hearing, the family court issued an order directing Husband to pay $8000 for attorneys' fees and litigation expenses to Wife's attorney within thirty days. The court also ordered Husband to pay $4500 per month in temporary spousal maintenance. Wife's attorney subsequently notified the court that Husband had not paid the $8000. The court set a resolution management conference and stated that if Husband did not pay the $8000 by the conference date, Husband would be required to show good cause why the court should not impose sanctions, including default. Husband did not pay. After the conference at which both Husband and Wife testified, the court ordered a default judgment to be entered against Husband.
The notification was made on the last page of an affidavit for attorneys' fees concerning a sanction award.
¶4 Thereafter, the court held a default hearing and entered a default decree of dissolution. The decree divided the parties' property, directed Husband to pay Wife $3500 per month in spousal maintenance, awarded Wife a $19,000 judgment against Husband for spousal maintenance arrears under the temporary orders, and ordered Husband to pay $8500 for attorneys' fees and costs. Husband timely appealed.
The decree provides that the temporary orders remain enforceable apart from the decree. See Ariz. R. Fam. L.P. 47(m) ("Temporary orders become ineffective and unenforceable . . . following entry of a final decree . . . unless that final decree . . . provides otherwise.").
JURISDICTION
¶5 A default judgment is generally not appealable and relief from such a judgment must be sought through a motion to set aside, the result of which is appealable. Kline v. Kline, 221 Ariz. 564, 568, ¶ 11, 212 P.3d 902, 906 (App. 2009). However, a default judgment entered as a sanction is appealable. See Sears Roebuck & Co. v. Walker, 127 Ariz. 432, 435-36, 621 P.2d 938, 941-42 (App. 1980). Because the court entered the default decree as a sanction, Husband was not required to file a motion to set aside the decree before filing a notice of appeal. Therefore, this court has jurisdiction over the appeal pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1) (West 2014).
DISCUSSION
I. Default
¶6 Husband argues that the court erred by entering a default judgment based on his failure to pay attorneys' fees because the court's explanation did not support its reasoning. We review the family court's sanction of a default judgment for an abuse of discretion. Seidman v. Seidman, 222 Ariz. 408, 411, ¶ 18, 215 P.3d 382, 385 (App. 2009).
The court entered a default judgment pursuant to Arizona Rule of Family Law Procedure 71(A), which provides authority for a default sanction based on a party's failure to comply with the Rules of Family Law Procedure. Although Husband did not violate the Rules of Family Law Procedure and instead failed to comply with a court order, the court has inherent authority to enter a default judgment based on a party's failure to comply with a court order. See Green v. Lisa Frank, Inc., 221 Ariz. 138, 149, ¶¶ 29, 41, 211 P.3d 16, 27 (App. 2009) (noting authority in Ariz. R. Civ. P. 41(b)); see also Ariz. R. Fam. L.P. 46(B)(2). Husband does not challenge the court's authority to enter default.
¶7 Before entering a default judgment as a sanction, the court must hold an evidentiary hearing and make "findings as to (1) whether the fault for the violation lies with the client or counsel; (2) whether the violation was committed willfully or in bad faith; and (3) whether the egregiousness of the violation warrants" a default judgment or a lesser sanction. Id. at ¶¶ 19-20.
¶8 At the temporary orders hearing, Wife testified that she had no money to pay her attorney or hire a forensic accountant. The court determined that the parties had widely disparate financial resources, and that a forensic accountant was reasonably necessary under the circumstances. It consequently directed Husband to pay $8000 to be used solely for attorneys' fees and litigation costs. A few months later, Wife's attorney notified the court about Husband's failure to comply with the order. In August 2012, the court warned Husband about the possibility of sanctions, including default, if Husband did not pay the $8000 by the resolution management conference in September.
From 2000 through 2008, Husband averaged income of $400,000 per year. Wife earned approximately $1000 per month. At that time, Husband had not disclosed his most recent tax returns, but testified that he draws $10,000 per month from his business.
¶9 At the resolution management conference, Husband testified that he had not paid the $8000 because he did not have the money, he would pay, but he had not seen a billing statement from Wife's attorney, and Wife told him she did not want to hire a forensic accountant. The court noted Husband's inconsistent explanations about why he did not comply with the court's order and found Husband's testimony not credible. The court stated that Husband's conduct throughout the proceedings showed a purpose of "grinding [Wife] down to get the result that he wants" and his failure to pay hindered Wife's ability to defend her side of the case. Consequently, the court determined default was appropriate and a lesser sanction would be unfair.
¶10 The court's findings are sufficient to justify default. Therefore, the court did not abuse its discretion by ordering such sanction.
II. Temporary Orders
¶11 Husband challenges the amount of temporary spousal maintenance awarded. He also argues the temporary orders hearing was unfair.
¶12 The evidence at the temporary orders hearing showed Husband averaged income of $400,000 per year from 2000 through 2008. Husband testified that his most recent income was $10,000 in monthly draws from his business. Nevertheless, his affidavit of financial information showed expenses of over $16,000 per month, which the court noted included expenses likely paid through his business. Additionally, the business income statements showed more than one million dollars in gross income from 2009 through 2011. Wife, on the other hand, earned approximately $1000 per month and was unable to afford her monthly expenses. Based on the evidence presented, the court did not abuse its discretion in determining the amount of temporary spousal maintenance. See Cullum v. Cullum, 215 Ariz. 352, 354, ¶ 9, 160 P.3d 231, 233 (App. 2007) (noting that there is not an abuse of discretion when reasonable evidence supports the judgment). Further, the record reflects that Husband did not ask the court to take into account any alleged overpayment in determining the final maintenance award or in dividing the parties' property. See Maximov v. Maximov, 220 Ariz. 299, 301, ¶¶ 7-8, 205 P.3d 1146, 1148 (App. 2009) (noting that the family court may modify a temporary order nunc pro tunc in a final decree). Accordingly, we find no error.
Husband submitted his 2009 and 2010 tax returns after the temporary orders hearing, however, those documents are not part of the record. According to the family court, the tax returns showed "consulting income" of $90,000 in 2009 and $120,000 in 2010.
Although the court entered a default decree, it allowed Husband's attorney to cross-examine Wife at the default hearing. See infra ¶ 19.
III. Bias
¶13 Husband argues Judge John Hannah was biased against him and misused his power and authority. This argument was not raised in the family court and is therefore waived. See State v. Everhart, 169 Ariz. 404, 408, 819 P.2d 990, 994 (App. 1991).
¶14 Even if we consider this argument, a judge is presumed to be free of bias and prejudice. State v. Ramsey, 211 Ariz. 529, 541, ¶ 38, 124 P.3d 756, 768 (App. 2005). To overcome this presumption, a party must prove bias or prejudice by a preponderance of the evidence. State v. Hurley, 197 Ariz. 400, 404-05, ¶ 24, 4 P.3d 455, 459-60 (App. 2000). Adverse judicial rulings "almost never constitute a valid basis for a bias or partiality motion." Liteky v. United States, 510 U.S. 540, 555 (1994); see Smith v. Smith, 115 Ariz. 299, 303, 564 P.2d 1266, 1270 (App. 1977) ("[T]he bias and prejudice necessary to disqualify a judge must arise from an extra-judicial source and not from what the judge has done in his participation in the case."). All of Husband's bias arguments arise from Judge Hannah's comments in the temporary orders hearing and the rulings thereon. Those are not enough to overcome the presumption that Judge Hannah was not biased. See State v. Henry, 189 Ariz. 542, 546, 944 P.2d 57, 61 (1997).
IV. Credibility
¶15 Husband asserts many of the court's rulings were based on false testimony by Wife and her attorney. However, this court does not reweigh evidence or witness credibility on appeal. See Hurd v. Hurd, 223 Ariz. 48, 52, ¶ 16, 219 P.3d 258, 262 (App. 2009).
Most of the rulings Husband challenges pertain to the temporary orders, which he cannot challenge in this appeal. See supra ¶¶ 11-12.
¶16 At the temporary orders hearing, Wife testified that Husband had been providing her between $1200 and $2000 per month since they separated. On cross-examination, Wife denied that Husband had been paying her more than those amounts. Although there were apparently bank statements showing larger money transfers from Husband to Wife, those statements were not admitted as exhibits and are not part of the record on appeal. Therefore, there is no evidence before this court that Wife was untruthful about the amount of money she received from Husband.
The bank statements admitted at the default hearing are only for the year 2012. The temporary orders hearing occurred in 2011.
¶17 Husband contends Wife misrepresented her income on her affidavit of financial information because she did not claim any money Husband provided her and consequently, the temporary child support order was based on false information. In the temporary orders, the court found Wife would owe Husband "not more than $76 per month" in child support. However, because Husband withdrew his request for child support, the court did not issue a child support order. Therefore, there is no purported error to be corrected in this appeal.
Husband argues Wife was untruthful about her affidavit of financial information because she first testified that she prepared it and then testified her attorney prepared it. Regardless of whether Wife or her attorney prepared the affidavit, Wife testified the affidavit of financial information accurately reflected her financial situation.
V. Default Hearing
¶18 Husband contends the default hearing was unfair because the court did not allow his attorney to ask questions and because Wife changed her testimony several times. The record reflects Husband's attorney cross-examined Wife at the default hearing. Additionally, the testimony Husband challenges concerns the portion of Husband's business that Husband offered Wife in settlement negotiations. Without reweighing witness credibility, the record does not reflect that Wife changed her testimony, but was instead confused by the questioning concerning Husband's settlement offers.
Wife testified Husband offered her only thirteen percent of his business, not fifty percent. According to Husband, thirteen percent represents his one-half interest in the business. Wife testified that she would prefer a dollar amount instead of a portion of the business, and that she previously accepted one of Husband's offers, but Husband never followed through.
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¶19 The business was valued at $1,290,303 and Husband's twenty-five percent interest was valued at $322,575. In the decree, the court awarded the business to Husband, and directed a property equalization payment of $188,550, which included one half of the business value along with other personal property items. We find no error.
VI. Attorneys' Fees
¶20 Wife requests attorneys' fees on appeal, but fails to cite a basis for the award. Accordingly, we deny the request. See Country Mut. Ins. Co. v. Fonk, 198 Ariz. 167, 172, ¶ 25, 7 P.3d 973, 978 (App. 2000) and Arizona Rule of Civil Appellate Procedure 21(c).
CONCLUSION
¶21 For the foregoing reasons, we affirm.