Loya v. Loya ( 2016 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In re the Matter of:
INES LOYA,
Petitioner/Appellee,
v.
BARBARA LOYA,
Respondent/Appellant.
No. 1 CA-CV 15-0626 FC
FILED 10-18-2016
Appeal from the Superior Court in Maricopa County
No. FN2014-051124
The Honorable Gerald Porter, Judge (Retired)
The Honorable Joseph C. Kreamer, Judge
VACATED IN PART AND REMANDED
COUNSEL
Rader, Sheldon & Stoutner, PLLC, Phoenix
By Diana I. Rader
Counsel for Petitioner/Appellee
Guajardo, Johnson & Associates, LLC, Phoenix
By T. Anthony Guajardo
Counsel for Respondent/Appellant
LOYA v. LOYA
Decision of the Court
MEMORANDUM DECISION
Presiding Judge Diane M. Johnsen delivered the decision of the Court, in
which Judge Jon W. Thompson and Judge Edward W. Bassett joined.1
J O H N S E N, Judge:
¶1 Barbara Loya ("Wife") appeals the superior court's decree of
dissolution of her marriage to Ines Loya ("Husband"). She argues the court
abused its discretion by declining to allow her to present evidence
supporting her request for an equalization payment from Husband and by
awarding Husband his attorney's fees. For the reasons that follow, we
vacate those portions of the decree and remand for further proceedings.
FACTS AND PROCEDURAL BACKGROUND
¶2 Wife and Husband were married in 2002. In February 2014,
Husband filed a petition for dissolution. After a series of proceedings
detailed below, the superior court set a trial to determine the only two
unresolved issues, Wife's request for an equalization payment based on
Husband's withdrawals from a community bank account, and Husband's
request for attorney's fees. At that trial, however, the court refused to hear
Wife's evidence in support of her contention that Husband had withdrawn
some $31,000 from a community bank account, ruling that Wife had not
served Husband with a pretrial statement that identified that issue for trial.
¶3 The court then entered a decree of dissolution pursuant to
Arizona Rule of Family Law Procedure 81, further ruling "Wife shall pay
100% of Husband's reasonable attorney's fees." After the matter was
assigned to a different superior court judge upon the retirement of the first
judge, the court entered an attorney's fees award of $23,193.78.
1 The Honorable Edward W. Bassett, Judge of the Arizona Superior
Court, has been authorized to sit in this matter pursuant to Article VI,
Section 3 of the Arizona Constitution.
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Decision of the Court
¶4 Wife timely appealed. We have jurisdiction pursuant to
Article 6, Section 9, of the Arizona Constitution, and Arizona Revised
Statutes ("A.R.S.") section 12-2101(A)(1) (2016).2
DISCUSSION
A. Wife's Claim for an Equalization Payment.
¶5 Husband contends the superior court would have caused a
manifest injustice had it allowed Wife to present evidence in support of her
claim to an equalization payment because Wife assertedly failed to timely
provide Husband with a pretrial statement that raised the issue. Under the
circumstances, however, we hold the superior court abused its discretion
when it declined to allow Wife to present evidence on the issue. See Bryan
v. Riddel, 178 Ariz. 472, 476-77 (1994).
¶6 Arizona Rule of Family Law Procedure 76(C) requires parties
in a dissolution proceeding to file a pretrial statement and exchange it with
the opposing party. The pretrial statement must contain "detailed and
concise statements of contested issues of fact and law." Ariz. R. Fam. Law
P. 76(C)(1)(i). If a party fails to comply with this rule, the court "shall, except
upon a showing of good cause, make such orders with regard to such
conduct as are just, including . . . an order refusing to allow the disobedient
party to support or oppose designated claims." Ariz. R. Fam. Law P.
76(D)(1). We review a superior court's decision regarding an alleged
violation of Rule 76 for an abuse of discretion. See Bryan, 178 Ariz. at 477;
Jimenez v. Wal-Mart Stores, Inc., 206 Ariz. 424, 426, ¶ 5 (App. 2003).3
¶7 "The pretrial statement controls the subsequent course of the
litigation," Leathers v. Leathers, 216 Ariz. 374, 378, ¶ 19 (App. 2007)
(quotation omitted), and is intended to avoid unfair surprise at trial, Carlton
v. Emhardt, 138 Ariz. 353, 356 (App. 1983) ("[T]rial by ambush is a tactic no
longer countenanced in Arizona courts."). This and other like procedural
rules, however, are not intended to add to an attorney's arsenal of
2 Absent material revision after the relevant date, we cite a statute's
current version.
3 Rule 76 is based on Arizona Rule of Civil Procedure 16; thus, we
analyze issues arising under that rule as we would an issue under Rule 16.
See Ariz. R. Fam. Law P. 1 cmt. ("Wherever the language in these rules is
substantially the same as the language in other statewide rules, the case law
interpreting that language will apply to these rules.").
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LOYA v. LOYA
Decision of the Court
technicalities. See Allstate Ins. v. O'Toole, 182 Ariz. 284, 288 (1995). Rather,
"[w]henever possible, procedural rules should be interpreted to maximize
the likelihood of a decision on the merits." Id. at 287 (citing Arizona Rule of
Civil Procedure 1 for the proposition that rules should be construed "to
secure 'just' determinations"). Compare Ariz. R. Civ. P. 1 with Ariz. R. Fam.
Law P. 1 ("These rules should be construed and enforced in a manner to
secure the just . . . determination of every action and proceeding.").
¶8 In her resolution management conference statement filed in
October 2014, Wife gave notice that she sought "offset credit and/or
reimbursement for one-half of any community property monies in accounts
that were transferred to [Husband's] name and or family members[']
names," and "one-half of monies [Husband] withdrew from community
funds accrued during marriage." Husband filed no resolution management
conference statement. At the resolution management conference, the court
set a trial for January 2015 to decide, among other things, "equalization of
bank accounts."
¶9 In a pretrial statement filed the day before the January trial
date, Husband acknowledged that Wife's request for equalization would
need to be tried: His statement noted "Equalization of Bank Accounts" as an
"outstanding matter for trial." In her pretrial statement, Wife again stated
that she "seeks offset credit and/or reimbursement for one-half of any
community property monies in accounts that were transferred to
[Husband's] name and or family members['] names." She asserted,
however, that she was not yet prepared to present evidence about
Husband's alleged withdrawals because Husband "has failed to provide
proof of his bank accounts, as ordered."
¶10 By the end of the 33-minute January proceeding, the court had
resolved all issues between the parties except Wife's request for an
equalization payment based on Husband's alleged withdrawals from the
community account. In its minute entry, the court noted, "[t]he remaining
issue is Wife's claim for one-half of $31,000 that Wife asserts Husband
withdrew from a community account." The court set a hearing for February
2015, at which the parties were to exchange financial documents. At the
February proceeding, Wife asked Husband to produce bank statements for
the accounts that formed the basis of her equalization claim. Because
Husband argued he could not access the statements, the court ordered an
evidentiary hearing for March 2015 for the purpose of determining
"whether Husband has the ability to access those records or not."
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LOYA v. LOYA
Decision of the Court
¶11 At the March hearing, Husband again acknowledged Wife's
claim for an equalization payment relating to the accounts. After hearing
that Husband had not yet obtained and produced the account statements
Wife had requested in February, the court ordered Husband to produce the
bank statements: "My expectation is it's his responsibility to produce it, you
need to produce it." The court added, "I just want to make sure father
understands – or husband understands, if come June there's no bank
statement, the inability of – your inability to provide that bank statement, I
will take a negative inference. Not good for husband, in short." Thereafter,
the court issued an order setting trial for June 5, 2015, to decide all
remaining issues, including "[e]qualization of the bank accounts."
¶12 A week before the June trial date, Wife filed a motion to
compel, arguing Husband had yet to produce the bank account statements
the court had ordered him to disclose. She also filed a pretrial statement in
which she identified "BANK ACCOUNT EQUALIZATION" as a contested
issue and reiterated that she had yet to receive the account statements the
court had ordered Husband to produce. Husband did not file a pretrial
statement.
¶13 At trial, Wife asserted Husband had not yet produced the
bank account statements that he had been ordered to produce, and which
were the subject of her motion to compel. The court, however, said it would
not hear any argument about the discovery dispute.4 The court then
pressed the parties to proceed. The court stated, "I want to know what's
left. . . . And it's attorney's fees, what's the equalization of bank accounts?"
At that, Wife's counsel reminded the court Wife was seeking half of what
Husband had withdrawn from the bank account, referring to an account
and referencing an amount of $31,000. After Husband's counsel asserted
she did not "know where this $31,000 comes from," the court ruled Wife
could not raise the issue of Husband's withdrawal from the bank account
because Wife had not identified the issue in her pretrial statement. Wife
directed the court's attention to the pretrial statement she had filed a week
before, which identified equalization as an issue, but Husband's counsel
asserted she had not received a copy of the pretrial statement.5 The court
held the pretrial statement had not been served and ruled the court
4 It was not until during the June trial that Husband disclosed the bank
statements to Wife.
5 Wife maintains she mailed a copy of her pretrial statement to
Husband in a timely manner, and submitted an affidavit and postal receipt
in support of this fact with her unsuccessful motion for reconsideration.
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therefore would not address the issue of the bank accounts: "I think this is
litigation by ambush. That's what I think this is." The court then proceeded
to hear Husband's evidence of asserted unreasonable conduct by Wife
during the litigation, which Husband offered in support of his claim for
attorney's fees.
¶14 On the record presented, the superior court abused its
discretion in violation of Wife's right to due process by refusing at the June
trial to take up the long-delayed issue of whether she was entitled to an
equalization payment due to Husband's withdrawals from the bank
account. Wife had identified the bank account withdrawals as an issue
from the beginning of the dissolution proceeding and at every occasion
thereafter. Moreover, on multiple occasions before the June trial, Husband
acknowledged that the issue of his withdrawals from the bank account
would need to be resolved. Indeed, that was the purpose of the March
proceeding held to resolve Husband's failure to disclose bank account
statements, and the reason the court ordered at that proceeding that
Husband was required to produce the statements before the June trial. On
this record, it is beyond the pale that Husband or his counsel could have
been surprised when Wife sought to offer evidence on the matter at the June
trial.
B. Attorney's Fees.
¶15 Wife further argues the superior court abused its discretion
when it awarded Husband his attorney's fees. The court may award
attorney's fees in dissolution proceedings pursuant to A.R.S. § 25-324 (2016)
after considering the parties' financial resources and the reasonableness of
their positions throughout the proceedings. In light of our analysis above,
we vacate the award of attorney's fees in favor of Husband and remand that
issue for further proceedings. In the event the superior court is called upon
to consider a fee award to either party, it shall ascertain and take into
account, inter alia (1) whether and when Husband complied with the court's
order to disclose bank account statements, and (2) Husband's apparent
assertion at the June 2015 trial that he was unaware that Wife intended to
try the issue of his alleged withdrawals from the bank account.
CONCLUSION
¶16 We vacate the superior court order declining to allow Wife to
present evidence in support of her claim to an equalization payment based
on Husband's withdrawals from the community account and remand that
issue for resolution. We also vacate and remand the portion of the decree
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LOYA v. LOYA
Decision of the Court
awarding all reasonable attorney's fees to Husband, and we decline
Husband's request for an award of attorney's fees on appeal. Wife is
entitled to recover her taxable costs on appeal, upon compliance with
Arizona Rule of Civil Appellate Procedure 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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