Opinion
No. 1 CA-CV 18-0329 FC
06-06-2019
In re the Matter of: GINA MARIE WILLIS, Petitioner/Appellee, v. JOHN HENRY WILLIS, III, Respondent/Appellant.
APPEARANCES Gina Marie Willis, Goodyear Petitioner/Appellee John Henry Willis, III, Phoenix 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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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. FC2017-007628
The Honorable Dewain D. Fox, Judge
AFFIRMED
APPEARANCES Gina Marie Willis, Goodyear
Petitioner/Appellee John Henry Willis, III, Phoenix
Respondent/Appellant
MEMORANDUM DECISION
Judge Diane M. Johnsen delivered the decision of the Court, in which Presiding Judge Lawrence F. Winthrop and Judge Kent E. Cattani joined. JOHNSEN, Judge:
¶1 John Henry Willis III ("Husband") appeals from rulings concerning the sale of the marital residence and marital waste in the dissolution of his marriage to Gina Marie Willis ("Wife"). For the following reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Wife petitioned for dissolution in July 2017 after 19 years of marriage. Husband moved for appointment of a special master to sell the marital residence. A trustee's sale had been set for the home, which had equity of $100,000. The superior court denied Husband's motion without prejudice to an agreement to appoint a special master.
¶3 After Husband moved for temporary orders concerning, among other things, the use and sale of the home, Wife responded by asking the court to appoint a master to sell the home. The superior court then appointed a Special Real Estate Commissioner (the "SREC") and ordered him to list the home for sale.
¶4 Husband moved to vacate the SREC's appointment, alleging he and Wife already had entered a contract (the "First Contract") to sell the home to a company called Opendoor. Husband contended the First Contract was a binding agreement under Arizona Rule of Family Law Procedure 69. Husband then filed a motion to enforce the First Contract, arguing that the SREC had improperly canceled the First Contract. After a status conference at which the SREC told the court that Opendoor canceled the First Contract, the superior court found the First Contract "is no longer in existence" and denied Husband's motion to enforce that agreement. The court ruled authorizing the SREC to sign any contract for sale of the home on behalf of the parties if either party failed to respond to the SREC's request for signature.
¶5 The SREC negotiated a new contract with Opendoor, which increased the sale price by $2,000 and included a $7,500 commission payable to the SREC (the "Second Contract"). The sale was subject to an inspection, and if the inspection revealed deficiencies, Opendoor could ask for a repair credit, but the SREC stated he would negotiate to minimize any such credit. Husband objected to the Second Contract, again arguing that the parties had agreed to the First Contract pursuant to Rule 69, and asserting that the SREC had canceled that agreement for his personal gain. After an evidentiary hearing, the court approved the Second Contract, finding it was "fair and reasonable under the circumstances" and was "the best option available to preserve any of the marital community's equity in the property."
¶6 Husband also argued Wife caused marital waste by failing to make the community's monthly loan payments on their home and by misusing money her employer gave her to repay her student loans. Additionally, Husband argued Wife wasted approximately $4,800 by incurring insufficient-funds bank fees.
¶7 The superior court found against Husband on his allegation that Wife committed marital waste by failing to make payments due on the marital residence. It also found Wife's student loans of $23,000 were a community debt and that there was no credible evidence that Wife used the funds her employer gave her for non-community purposes. The court agreed with Husband, however, that Wife committed marital waste by mismanaging bank accounts containing community assets that resulted in $4,800 in insufficient-funds fees, and it awarded Husband a $2,400 equalization payment on that basis.
¶8 Husband timely appealed. We have jurisdiction pursuant to Article 6, Section 9, of the Arizona Constitution, and Arizona Revised Statutes ("A.R.S.") sections 12-120.21(A)(1) (2019) and -2101(A)(1) (2019).
Notwithstanding references in Husband's brief to this court's special action jurisdiction, the issues he raises are properly before us under A.R.S. § 12-2102(A) (2019), which states that upon an appeal from a final judgment, the court of appeals can review any "intermediate orders involving the merits of the action and necessarily affecting the judgment."
Absent material revision after the relevant date, we cite the current version of a statute or rule.
DISCUSSION
A. The Superior Court Did Not Err under Rule 69 in Finding the First Contract was Terminated.
¶9 Husband argues the parties entered a binding Rule 69 Agreement by executing the First Contract before the SREC was appointed. As noted, the superior court found that the First Contract was no longer in existence before the court authorized the SREC to negotiate another contract. We defer to the court's findings of fact unless they are clearly erroneous. See Alvarado v. Thomson, 240 Ariz. 12, 14, ¶ 11 (App. 2016).
¶10 Rule 69 addresses the validity and enforceability of "[a]n agreement between the parties" to a dissolution action. Ariz. R. Fam. Law P. 69. The rule, however, says nothing about the validity and enforceability of an agreement that parties to such an action might enter with a third party. There was conflicting evidence about how the First Contract came to be canceled. In the proceedings in the superior court, Husband contended at various times that the SREC canceled the contract. Opendoor sent Husband an email noting that it terminated the contract after receiving a communication from the SREC, and the SREC testified Opendoor canceled the contract.
¶11 To the extent there was a factual dispute as to the cause of the cancelation of the First Contract, the superior court was in the best position to resolve that dispute. In denying Husband's motion to enforce the First Contract under Rule 69, the superior court impliedly concluded that Wife had not canceled the First Contract. The SREC's testimony and the email from Opendoor support the conclusion that Opendoor canceled the contract; in any event, the court did not clearly err by impliedly concluding that Wife did not do so.
Husband also argues on appeal that the SREC tortiously interfered with the First Contract by canceling it. The SREC is not a party to this action and, so far as our record reveals, Husband has not filed a claim against the SREC. --------
B. The Superior Court Did Not Abuse Its Discretion in Its Rulings Concerning Marital Waste.
¶12 In a dissolution proceeding, the superior court may consider any excessive or abnormal expenditures, destruction, concealment or fraudulent disposition of community property when determining the equitable division of that property. A.R.S. § 25-318(C) (2019). The party alleging marital waste has the burden of making a prima facie showing of waste. Gutierrez v. Gutierrez, 193 Ariz. 343, 346-47, ¶ 7 (App. 1998). "It is then the burden of the spending spouse to go forward with evidence to rebut the showing of waste because all of the evidence relative to the expenditures is generally within the knowledge, possession, and control of the spending spouse." Id. We review a court's determination of marital waste for an abuse of discretion. See Kline v. Kline, 221 Ariz. 564, 573, ¶ 35 (App. 2009). The court abuses its discretion only where it "exceed[s] the bounds of reason," Toy v. Katz, 192 Ariz. 73, 83 (App. 1997), or in exercising its discretion, commits an error of law, Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13 (App. 2007).
1. Student loan reimbursement.
¶13 Wife admitted she received funds from her employer intended to be applied toward her student loans but did not use the money to pay down the loans. But Wife alleged that there was no waste because she used the money to pay other community debts and living expenses, including groceries, credit card debt, mortgage payments and household needs.
¶14 Husband argued Wife spent the money on designer handbags, jewelry and vacations. Husband claimed Wife had more than 30 designer handbags and valued her handbag collection at $30,000, a claim Wife characterized as "impossible." Wife testified she only had nine designer handbags, costing $250-$350 each, and other non-designer handbags, which cost $20-$40 each. Husband also valued Wife's jewelry collection at $20,000. Wife again testified that Husband's claim was "impossible."
¶15 The superior court found that Wife deposited the money from her employer into her checking account and used it for community purposes. The court stated that although it did not "condone the use of the student loan benefit for expenses other than the intended purpose, there is no credible evidence that the benefit was used for a non-community purpose."
¶16 We defer to the superior court's determination of witnesses' credibility and the weight to give conflicting evidence. Gutierrez, 193 Ariz. at 347, ¶ 13. Given the conflicting testimony, the court did not abuse its discretion in determining Wife used the loan reimbursement funds for community purposes.
2. Mortgage payments.
¶17 Husband contended that Wife failed to make mortgage payments on the marital residence and, instead, wasted money on vacations. Wife testified that the mortgage loan was in her name alone and that she continually had struggled to pay the mortgage and manage other expenses. Wife testified she had to borrow from her 401K account to bring the mortgage current to avoid foreclosure in 2015. There is no credible evidence that Wife wasted community funds rather than using them to make mortgage payments. Therefore, the court did not abuse its discretion in rejecting Husband's claim of marital waste with respect to the missed mortgage payments.
CONCLUSION
¶18 For the foregoing reasons, we affirm.