Rubens v. Rubens ( 2019 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
ROBERT RUBENS, Petitioner/Appellant/Cross-Appellee,
v.
KIMBERLY RUBENS, Respondent/Appellee/Cross-Appellant.
No. 1 CA-CV 18-0361
FILED 12-19-2019
Appeal from the Superior Court in Maricopa County
No. FN2015-094833
The Honorable Stephen M. Hopkins, Judge
AFFIRMED IN PART; VACATED IN PART; REMANDED
COUNSEL
Rubin & Ansel, P.L.L.C., Scottsdale
By Yvette D. Ansel
Counsel for Petitioner/Appellant/Cross-Appellee
Mandel Young, P.L.C., Phoenix
By Taylor C. Young
Counsel for Respondent/Appellee/Cross-Appellant
RUBENS v. RUBENS
Decision of the Court
MEMORANDUM DECISION
Judge Kenton D. Jones delivered the decision of the Court, in which
Presiding Judge Maria Elena Cruz and Vice Chief Judge Kent E. Cattani
joined.
J O N E S, Judge:
¶1 Robert Rubens (Husband) appeals the family court’s
apportionment of marital assets and debts and award of spousal
maintenance in its decree dissolving his marriage to Kimberly Rubens
(Wife). Wife cross-appeals from the court’s decision to adopt a property
valuation prepared by an expert who was not available for cross-
examination.1 For the following reasons, we affirm in part, vacate in part,
and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
¶2 Husband and Wife were married in 2002.2 During the
marriage, the couple purchased and maintained multiple properties,
accumulated significant assets, and opened a wine bar (the business).
¶3 Husband filed for divorce in December 2015. The couple
entered into a Rule 69 agreement in June 2016 that required Husband to pay
Wife temporary spousal maintenance in the amount of $3,000 per month.
The parties also agreed Husband was responsible to pay the mortgage and
utilities for their main residence in Chandler (the Chandler residence). Wife
was responsible to pay for the Chandler residence’s pool loan and a Home
Depot loan. Finally, the parties agreed they would maintain the business
together, with equal access to the business itself and its financial
information. In a separate Rule 69 agreement, the parties agreed to share
1 Wife filed a motion to strike Husband’s reply brief, or, in the
alternative, a motion for leave to file a sur-reply. In our discretion, we deny
both requests.
2 We view the facts in the light most favorable to sustaining the family
court’s orders. Lehn v. Al-Thanayyan, 246 Ariz. 277, 283, ¶ 14 (App. 2019)
(citing Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13 (App. 2007)).
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equally in certain restricted stock units (RSUs) and an anticipated 2016 tax
refund.3
¶4 The family court held a three-day evidentiary hearing on the
remaining issues in September 2017. Prior to trial, Wife requested findings
of facts and conclusions of law pursuant to Arizona Rule of Family Law
Procedure 82(a). In December, the court entered a decree of dissolution (the
Decree) dividing the remainder of the marital assets and debts and
awarding Wife spousal maintenance of $8,000 per month for seven years.
In response to multiple motions to amend and for reconsideration, the court
issued an order amending, clarifying, and affirming various issues.
Husband timely appealed, Wife timely cross-appealed, and we have
jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) §§ 12-
120.21(A)(1),4 -2101(A)(1), and (A)(2). See In re Marriage of Dorman, 198 Ariz.
298, 300-01, ¶¶ 3-4 (App. 2000) (explaining when resolution of a post-
judgment motion results in an appealable “special order made after final
judgment”).
DISCUSSION
I. Property and Debts
¶5 When dividing community property at dissolution, the
family court must divide the property and debts “equitably, though not
necessarily in kind.” A.R.S. § 25-318(A). The court has broad discretion
when apportioning community property between parties at dissolution,
and we will not disturb its allocation absent an abuse of discretion.
Boncoskey, 216 Ariz. at 451, ¶ 13 (citations omitted). The court abuses its
discretion if it “commits an error of law in the process of exercising its
discretion.” Id. (quoting Kohler v. Kohler, 211 Ariz. 106, 107, ¶ 2 (App. 2005)).
We will sustain the ruling if it is reasonably supported by the evidence, id.,
bearing in mind that the court, as the fact-finder, is in the best position to
weigh the evidence and judge the credibility of the parties. See In re Gen.
Adjudication of All Rights to Use Water in Gila River Sys. & Source, 198 Ariz.
330, 340, ¶ 25 (2000) (“The trial court, not this court, weighs the evidence
and resolves any conflicting facts, expert opinions, and inferences
3 Although the dissolution proceedings were initiated in 2015 and the
couple had lived separately for all of 2016, the parties agreed to file jointly
in 2016, resulting in an anticipated refund of approximately $100,000.
4 Absent material changes from the relevant date, we cite the current
version of rules and statutes.
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therefrom.”). But, where, as here, a party requests findings of fact and
conclusions of law, “[i]t must be clear from the findings how the court
actually did arrive at its conclusions.” Kelsey v. Kelsey, 186 Ariz. 49, 51 (App.
1996) (citing Elliot v. Elliot, 165 Ariz. 128, 135 (App. 1990)).
A. Credit/Offset Payments Pending Dissolution
¶6 Husband first argues the family court abused its discretion
when it declined to give him credit for payments he made toward
community property and spousal maintenance during the pendency of the
divorce. Husband cites to Bobrow v. Bobrow, 241 Ariz. 592 (App. 2017), for
the proposition that Wife was obligated to prove the payments for
community expenses were meant to be a gift and, absent that proof, he was
entitled to reimbursement for his payments. We disagree.
¶7 In Bobrow, the parties had entered into a premarital agreement
in which the husband would not be required to pay spousal maintenance
once a petition for divorce had been served. Id. at 596. The husband
therefore had no obligation to make payments to or on behalf of the wife
but chose to do so in order to keep the marital residence from falling into
foreclosure. Id. Under those circumstances, the husband was entitled to
reimbursement. Id.
¶8 Here, however, Husband agreed to pay certain community
debts and spousal maintenance during the pendency of the proceedings.
Wife also made payments toward community debts during this time and
funded the business in excess of what was required by the Rule 69
agreement. Meanwhile, Husband paid less than half the amount of spousal
maintenance ultimately awarded by the family court and was found in
contempt for failing to contribute to the business as agreed. The court also
determined certain expenses were improperly sought by Husband,
including those related to Colorado properties which Wife had no access to
during the proceedings. On this record, we cannot say the court abused its
discretion by declining to credit Husband for his pre-decree payments.
B. Allocation of Business Debt
¶9 Husband next argues the family court erred by allocating half
of the business debt to him because he did not know about, and did not
consent to, additional debt incurred after the petition for dissolution was
filed and “was never afforded equal management and control over [the
business].” Husband’s claims are not supported by the record.
¶10 Here, the parties agreed that:
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With respect to the business . . . Husband shall be entitled to
receive information regarding the business’s income and
expenses on a “real time” basis (no less than monthly) from
Wife. Husband may communicate directly with the
bookkeeper for the business if he has questions or if Wife does
not timely supply the information.
Each party shall contribute $5,000.00 per month toward the
business’s operating expenses, unless notified that the
business has turned a profit in the prior month, no later than
the first of each month. This contribution shall be without
prejudice to either party on any business-related issue. Each
party understands that additional moneys are expected to be
requested or required.
...
Wife shall ensure that the business consultant . . . has been
instructed to provide his recommendations to both parties.
With respect to the construction lien against the business,
Husband shall be authorized and responsible to handle the
strategic decisions and negotiations for the resolution of the
lien. The parties’ business attorney is in possession of all
relevant information.
The agreement thus affords Husband equal access to and control over the
business. Indeed, Husband contacted the business consultant for
information at least one time in 2017. The agreement anticipates additional
monies, beyond the $5,000 monthly payments, would be necessary to
maintain the business. Yet, Husband did not make the monthly payments.
¶11 Husband also argues he should not be responsible for the debt
incurred after service of the petition because it did not benefit the
community. We again disagree. “Generally, all debts incurred during
marriage are presumed to be community obligations unless there is clear
and convincing evidence to the contrary.” Cardinal & Stachel, P.C. v. Curtiss,
225 Ariz. 381, 383, ¶ 6 (App. 2010) (quoting Schlaefer v. Fin. Mgmt. Serv., Inc.,
196 Ariz. 336, 339, ¶ 10 (App. 2000)). “[A]ll that is required is that some
benefit was intended for the community[;] . . . no actual pecuniary benefit
need be received.” Id. at 384, ¶ 10 (internal quotation and citation omitted).
Although the community asset — the business — was not profitable,
Husband does not present clear and convincing evidence that the debt
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incurred to maintain a community asset at the same level it performed
during the marriage was not intended to benefit the community.
¶12 On this record, we cannot say the family court abused its
discretion in rejecting Husband’s claims that he did not have access to the
business or that allocation of a portion of the business debt to him was
inequitable.
C. Schedule for Payment of Business Debt
¶13 Husband argues the family court abused its discretion when
it amended the Decree to require the business debts be paid in accordance
with the schedule included in Wife’s response to Husband’s motion for
reconsideration. Husband first argues the court erred because Wife’s
schedule is inconsistent with the Decree in that some of the debts identified
therein were not included on a list of business debts submitted to the court
at the evidentiary hearing.
¶14 The Decree states: “debt to the shareholders and all external
debt that exists as of the date of this Decree shall be paid via sale of the
Chandler residence.” The emphasis in the language of the Decree indicates
the family court considered and recognized that additional debt may have
been incurred between the September evidentiary hearing and entry of the
Decree in December. Thus, the court correctly contemplated that some
post-hearing debt would be incurred prior to entry of the Decree.
¶15 Husband also asserts Wife’s schedule contradicted the Decree
because line items 2500 through 2800 were not included within the Decree.
On this point, the Decree defines the debt to “include current liabilities
(accounts 2210-2350) but shall be exclusive of payroll (2100) and shall
include shareholder notes payable (account 2400).” Although line items
2500 through 2800 were not specifically included in the family court’s
description, nor were they specifically excluded. Accordingly, Husband
has not established a contradiction or abuse of discretion in the decision to
include line items 2500 through 2800 as payables in the order amending the
Decree.
D. Allocation of Financial Accounts
¶16 Husband next argues the family court erred in its division of
the parties’ financial accounts. The court awarded certain accounts to
Husband with an equalization payment to Wife of $16,787.47. Husband
argues the total value of the accounts was $9,200.70, and Wife should have
been awarded only $4,600.35. However, Husband’s calculation recognizes
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some of the amounts identified in the Decree but omits others. In her
answering brief, Wife attempts to explain the court’s order by referring to
amounts not referenced in the Decree. Still, she does not reach the same
calculation. Because the basis for the equalization payment is unclear, we
reverse the court’s division of the financial accounts and remand for further
proceedings. See Kelsey, 186 Ariz. at 51 (“If the trial court’s basis for a
conclusion is unclear, this Court may not affirm simply because we find
some possible basis for that conclusion in the record.”) (citing Elliott, 165
Ariz. at 135).
E. Allocation of 2016 Tax Refund
¶17 Husband argues the trial court erred in amending the Decree
that originally awarded him the entirety of the 2016 tax refund, to allocate
the refund equally between the parties. See supra ¶ 3. Husband concedes
that the parties had previously agreed to split the refund equally but argues
the initial ruling was intended to serve as an equalization for expenses
incurred during the pendency of the divorce. The record does not support
this assertion. The Decree originally stated: “Husband shall be solely
entitled to any tax refunds and will be solely responsible for any tax liability
in connection with 2016 taxes.” If the family court was not certain whether
the 2016 taxes would result in a refund or liability, it could not have
intended the refund to serve as a credit. Husband fails to show any abuse
of discretion here.
II. Spousal Maintenance
¶18 Husband next argues the family court erred in setting the
amount of spousal maintenance. We review the award of spousal
maintenance for an abuse of discretion. Cullum v. Cullum, 215 Ariz. 352,
354, ¶ 9 (App. 2007) (citing Gutierrez v. Gutierrez, 193 Ariz. 343, 348, ¶ 14
(App. 1998)).
¶19 Husband first argues the family court erred in concluding he
had the ability to meet his needs while paying $8,000 in monthly spousal
maintenance to Wife. See A.R.S. § 25-319(B)(4) (directing consideration of
“[t]he ability of the spouse from whom maintenance is sought to meet that
spouse’s needs while meeting those of the spouse seeking maintenance”).
Citing an unpublished memorandum decision, Husband suggests the court
is required to review his net income and expenses when evaluating this
factor, and then suggests the court failed to consider this evidence because
his financial disclosure reflects monthly expenses in excess of his net
income. Husband’s trial testimony, however, reflects he shares the
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expenses listed on the financial disclosure with his girlfriend. Additionally,
many of the expenses relate only to his girlfriend’s children. On this record,
Husband has not established an abuse of discretion in the consideration of
Husband’s financial needs.
¶20 Husband next argues the family court failed to consider
Wife’s historic income when determining she “would need to obtain some
type of degree or certification to realistically obtain anything other than a
minimum wage job.” See A.R.S. § 25-319(B)(5) (directing consideration of
“[t]he comparative financial resources of the spouses, including their
comparative earning abilities in the labor market”). Substantial evidence
supports the court’s finding. Although the record reflects Wife had earned
significantly more than minimum wage periodically between 2007 and
2015, she testified she had been compensated far above her “experience and
skill set.” Additionally, some of that income resulted from the purchase
and sale of jointly owned real estate. Finally, Husband is a medical doctor,
while Wife’s highest level of education is a high school equivalency
diploma. We find no error.
¶21 Finally, Husband argues the family court erred by failing to
take into account the value of the assets Wife was awarded in the Decree
before setting the award of spousal maintenance. See A.R.S. § 25-319(B)(9)
(directing consideration of “[t]he financial resources of the party seeking
maintenance, including marital property apportioned to that spouse, and
that spouse’s ability to meet that spouse’s own needs independently”).
Husband specifically contends the court failed to consider Wife’s interest in
RSUs. Although the court did not make a specific finding as to this asset, it
did find that “both parties have received significant assets as part of the
divorce. But, [W]ife has also received a community business that has
historically hemorrhaged money.” The finding is supported by the record
and indicates the court considered the nature and extent of Wife’s financial
resources, including the property she received in the Decree, before
exercising its discretion to set an amount of maintenance. The spousal
maintenance order is affirmed.
III. Valuation of Red Cliff Property
¶22 Wife cross-appeals the family court’s order valuing real
property in Colorado (the Red Cliff property) at $442,000, arguing the only
evidence supporting this value was “an expert report where there was no
expert to testify.” She argues her due process rights were violated because
the expert was not available to lay foundation for the basis of his opinions
and was not available to be cross-examined. When the objection was raised
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at trial, the court found Husband laid sufficient foundation to admit the
report into evidence through his own testimony and that Wife had had
sufficient opportunity to question its author, either via deposition or by
subpoenaing him for trial, had she so desired. We review an evidentiary
ruling for a clear abuse of discretion and will reverse only if the ruling is
erroneous or unfairly prejudicial. Larsen v. Decker, 196 Ariz. 239, 241, ¶ 6
(App. 2000).
¶23 Husband does not have the qualifications in real estate or
property valuation necessary to lay the foundation for the expert opinion
on the value of the Red Cliff property. The family court erred in admitting
the report based on his testimony.
¶24 Regarding prejudice, the record reflects that Husband
testified the property was worth $500,000. Wife testified consistently with
a second valuation report that the property was worth $555,000. Because
the properly admitted evidence suggests the Red Cliff property was worth
significantly more than the valuation in the report that was erroneously
admitted, Wife was prejudiced by the family court’s consideration of it. On
remand, the court should determine the value of the Red Cliff property
based upon evidence properly admitted.
CONCLUSION
¶25 The family court’s orders dividing the parties’ financial
accounts and setting a value for the Red Cliff property are vacated. The
case is remanded to address the value of the financial accounts and the
value of the Red Cliff property, and for equitable distribution of those
assets. The court retains discretion to determine whether additional
evidence or briefing is necessary to decide the issues. The remaining orders
regarding the allocation of property and debt and spousal maintenance are
affirmed.
¶26 Wife requests an award of attorneys’ fees and costs incurred
on appeal pursuant to A.R.S. § 25-324(A). In our discretion, we decline the
request. We further find that neither party is entitled to costs pursuant to
A.R.S. § 12-341.
AMY M. WOOD • Clerk of the Court
FILED: AA
9