Quijada v. Quijada , 246 Ariz. 217 ( 2019 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In re the Matter of
JULIE ANNE QUIJADA, Petitioner/Appellant,
v.
MICHAEL GEORGE QUIJADA, Respondent/Appellee.
No. 1 CA-CV 18-0118
FILED 2-19-2019
Appeal from the Superior Court in Mohave County
No. L8015DO20087271
The Honorable Steven C. Moss, Judge
AFFIRMED
COUNSEL
The Harrian Law Firm, P.L.C., Glendale
By Daniel Seth Riley
Counsel for Petitioner/Appellant
Law Offices of Heather C. Wellborn, P.C., Lake Havasu City
By Heather C. Wellborn
Counsel for Respondent/Appellee
QUIJADA v. QUIJADA
Opinion of the Court
OPINION
Presiding Judge Kenton D. Jones delivered the Opinion of the Court, in
which Vice Chief Judge Peter B. Swann and Judge David D. Weinzweig
joined.
J O N E S, Judge:
¶1 Julie Quijada (Wife) appeals from the family court’s order
denying her request for immediate payment of retirement benefits allocated
to her in the decree of dissolution of her marriage to Michael Quijada
(Husband), relying primarily upon Koelsch v. Koelsch, 148 Ariz. 176 (1986).
Although Koelsch provides guidance on how to equitably divide retirement
benefits at dissolution, it does not authorize a post-judgment alteration to
the spouses’ agreed-upon distribution. Additionally, where the non-
employee-spouse agrees that the community-property portion of
retirement benefits will be paid upon distribution to the employee-spouse
in a consent decree and stipulated domestic relations order (DRO), the
employee-spouse’s decision to work past initial retirement eligibility does
not justify relief from the agreement under Arizona Rule of Family Law
Procedure 85(b)(6).1 We therefore affirm the order denying Wife’s request.
¶2 Husband cross-appeals the order denying his request for an
award of attorneys’ fees pursuant to Arizona Revised Statutes (A.R.S.) § 25-
324(A). Because the court did not abuse its discretion, we affirm the order
denying fees.
FACTS AND PROCEDURAL HISTORY
¶3 In September 2009, the parties’ eleven-year marriage was
dissolved via consent decree.2 In the decree, the parties agreed to divide
the community-property portion of Husband’s pension with the Arizona
1 Although this rule was numbered 85(C) at the time of these
proceedings, the text of the rule remained unchanged with the 2019
amendments. For ease of reference, we cite the current version of the rules.
2 We view the evidence “in the light most favorable to supporting the
decision below.” Rinegar v. Rinegar, 231 Ariz. 85, 90, ¶ 20 (App. 2012)
(quoting Johnson v. Johnson, 131 Ariz. 38, 44 (1981)).
2
QUIJADA v. QUIJADA
Opinion of the Court
Public Safety Retirement System (APSRS) pursuant to a separate DRO. The
DRO, which was signed by both parties and entered the same day as the
decree, awarded Wife “as sole and separate property a pro-rata share of
[Husband]’s pension [p]ayable directly by the System at the same time and
in the same manner payments are made to [Husband].” By its terms, the
DRO may be amended “only for the purpose of establishing or maintaining
its acceptance to [APSRS] and to supervise the payment of retirement
benefits as provided in the Order.” Neither party appealed from entry of
the decree or DRO.
¶4 Although Husband became eligible to retire in late 2014, he
continues to work and contribute to APSRS and plans to do so through at
least 2024. In October 2016, Wife petitioned to “enforce” the division of
retirement benefits, arguing Husband’s decision to delay his retirement
impermissibly “blocked [her] from accessing her sole and separate
property” and that she was entitled to immediate and direct compensation
for that deprivation. After a three-day evidentiary hearing, the family court
denied Wife’s request and ordered the parties to bear their own attorneys’
fees and costs. Both parties timely appealed, and we have jurisdiction
pursuant to A.R.S. §§ 12-120.21(A)(1) and -2101(A)(2).
DISCUSSION
I. Modification of Decree
¶5 The interpretation of an existing decree or court order
presents a question of law reviewed de novo. See Cohen v. Frey, 215 Ariz. 62,
66, ¶ 10 (App. 2007) (citing Danielson v. Evans, 201 Ariz. 401, 406, ¶ 13 (App.
2001)). Here, the DRO states that Wife will receive her share of the pension
paid “by the System at the same time and in the same manner payments are
made to [Husband].” And, the DRO can be modified only to facilitate these
terms. Wife nonetheless argues that an employee-spouse who chooses to
work past initial retirement eligibility is required, as a matter of equity, to
indemnify the non-employee-spouse for the loss of his or her share of
otherwise-available retirement benefits. Wife’s contention, which
essentially calls for a de facto modification of the otherwise unambiguous
decree and DRO, is inconsistent with Arizona law.
¶6 When the division of assets is based upon an agreement of the
parties, “entry of the decree shall thereafter preclude the modification of
the terms of the decree and the property settlement agreement, if any, set
forth or incorporated by reference.” A.R.S. § 25-317(F). Although a spouse
may challenge the method and mechanism by which retirement benefits are
3
QUIJADA v. QUIJADA
Opinion of the Court
valued and divided on appeal, see A.R.S. § 25-325(A) (“A decree of
dissolution of marriage . . . is final when entered, subject to the right of
appeal.”), neither party did so here. Accordingly, the terms of the decree
and DRO are not subject to post-judgment modification unless the court is
satisfied relief is warranted pursuant to Arizona Rule of Family Law
Procedure 85(b).3 See A.R.S. § 25-327(A) (“The provisions as to property
disposition may not be revoked or modified, unless the court finds the
existence of conditions that justify the reopening of a judgment under the
laws of this state.”); Breitbart-Napp v. Napp, 216 Ariz. 74, 80, ¶ 17 (App. 2007)
(holding a property settlement agreement is subject to relief under the civil
counterpart to Rule 85); Schmidt, 158 Ariz. at 498 (same).
¶7 Rule 85(b)(6) permits relief from a final judgment if the
moving party shows special circumstances justifying relief.4 We review the
denial of a motion to set aside a decree for an abuse of discretion. Clark v.
Kreamer, 243 Ariz. 272, 275, ¶ 10 (App. 2017) (citing Alvarado v. Thomson, 240
Ariz. 12, 14, ¶ 11 (App. 2016)).
¶8 Although the family court here was sympathetic to Wife’s
situation, it found Wife had agreed to the valuation method at the time of
dissolution and presented no authority to support her demand for
immediate payment from Husband. The order thus tacitly found no
circumstances that would justify reopening the decree and DRO. See Great
W. Bank v. LJC Dev., L.L.C., 238 Ariz. 470, 479, ¶ 31 n.9 (App. 2015) (“[W]e
presume the trial court made all findings necessary to sustain the judgment
if they are ‘reasonably supported by the evidence, and not in conflict with
3 Although Wife did not reference Rule 85(b) in her filings, a party
need not file a specific motion to invoke the rule. See Schmidt v. Schmidt, 158
Ariz. 496, 498 (App. 1988).
4 Rule 85(b) provides six circumstances under which relief from a
judgment may be warranted. A motion alleging any of the first three
grounds must be filed within six months after the judgment is entered and
would be time-barred here. See Ariz. R. Fam. Law P. 85(b)(1)-(3), (c)(1).
There is no basis to believe the judgment is void, see Ariz. R. Fam. Law P.
85(b)(4), and an order dividing property has no prospective application that
would invoke the fifth ground, see Ariz. R. Fam. Law P. 85(b)(5); Birt v. Birt,
208 Ariz. 546, 549, ¶ 19 (App. 2004) (citing DeWeerth v. Baldinger, 38 F.3d
1266, 1276 (2d Cir. 1994)). Thus, Wife’s request can only fall under Rule
85(b)(6).
4
QUIJADA v. QUIJADA
Opinion of the Court
the court’s express findings.’”) (quoting Coronado Co. v. Jacome’s Dep’t Store,
Inc., 129 Ariz. 137, 139 (App. 1981)).
¶9 Wife relies upon Koelsch to argue relief from the decree is
justified. In Koelsch, our supreme court considered “how and when a non-
employee[-]spouse’s community property interest in an employee[-
]spouse’s matured retirement benefit plan is to be paid when the employee
wants to continue working, thus delaying receipt of the retirement
benefits.” 148 Ariz. at 180. While it is true that Koelsch largely disapproved
of an arrangement that would grant the employee-spouse sole discretion to
determine when the non-employee-spouse received his or her share of
community property retirement benefits, the issue there arose on direct
appeal from a decree of dissolution entered following a contested hearing.
Id. at 178-79, 183. Thus, Koelsch addressed only whether the family court’s
original division of community property, entered over the non-employee-
spouse’s objection, was equitable. See A.R.S. § 25-318(A) (directing the
court to “divide the community, joint tenancy and other property held in
common equitably, though not necessarily in kind”). It does not apply to a
post-judgment modification. The other cases Wife relies upon likewise
address the propriety of the original, contested division of community
property and do not authorize the court to modify a property allocation
made in a consent decree from which no appeal is taken and over which the
court did not retain jurisdiction. See Boncoskey v. Boncoskey, 216 Ariz. 448
(App. 2007); Luciano v. Luciano, 164 Cal. Rptr. 93 (Dist. Ct. App. 1980);
Gemma v. Gemma, 778 P.2d 429 (Nev. 1989).
¶10 When spouses settle their property rights by agreement, “if
the settlement is fair and equitable, free from fraud and undue influence,
the court normally will approve it.” Wick v. Wick, 107 Ariz. 382, 385 (1971)
(quoting Smith v. Smith, 71 Ariz. 315, 318 (1951)). Here, Wife agreed she
would receive her portion of the retirement benefits upon their distribution
to Husband. She could have insisted upon a different valuation or
distribution method at the time of dissolution — perhaps one whereby she
received a Koelsch-type offset payment in the event Husband elected not to
retire when first eligible, or one specifying the family court would retain
jurisdiction to determine proper division upon maturation. See, e.g.,
Johnson, 131 Ariz. at 41; Danielson, 201 Ariz. at 404-05, ¶ 8. She did not do
so even though these options had been approved of in Arizona’s appellate
courts decades earlier. See Koelsch, 148 Ariz. at 180-82, 185 (detailing the
benefits and drawbacks of several methods of valuing retirement benefits
under various scenarios before “urg[ing] the parties and the trial court to
be as creative and flexible as possible,” within the bounds of the law, to
balance the rights and expectations of the parties). But the existence of other
5
QUIJADA v. QUIJADA
Opinion of the Court
possibilities does not invalidate the parties’ agreement or render it
inequitable. Indeed, Wife waived any argument otherwise when she failed
to timely appeal the decree. See Porter v. Estate of Pigg, 175 Ariz. 194, 197
(App. 1993) (holding that legal error in a dissolution decree did not affect
its validity “but only made it subject to correction by a timely appeal”)
(citing Auman v. Auman, 134 Ariz. 40, 42 (1982)).
¶11 Finally, as to the substance of Wife’s equity argument, she
fails to prove the terms of the decree or DRO are unfair. Indeed, the decree
reflects that Husband assumed the entirety of the parties’ debt and received
very few assets at the time of the divorce. These circumstances suggest
Husband’s retention of control over the retirement benefits was indeed a
bargained-for exchange and not the product of misconduct that might
otherwise justify equitable relief. See, e.g., Bates v. Bates, 1 Ariz. App. 165,
169 (1965) (noting equitable relief from a dissolution decree may be justified
by conduct that “has prevented a fair submission of the controversy”).
¶12 The family court’s decision not to modify the decree is
consistent with the specific language of the DRO and the “compelling
policy interest favoring the finality of property settlements.” De Gryse v. De
Gryse, 135 Ariz. 335, 338 (1983) (citations omitted). Wife did not prove post-
judgment modification of the prior orders was justified, and we find no
abuse of discretion.
II. Request for Attorneys’ Fees
¶13 In his cross-appeal, Husband argues the family court erred in
denying his request for an award of attorneys’ fees and costs in contesting
Wife’s motion. Section 25-324(A) permits an award of fees if appropriate
“after considering the financial resources of both parties and the
reasonableness of the positions each party has taken throughout the
proceedings.” See also Ariz. R. Fam. Law P. 69(c) (authorizing an award of
the costs and expenses incurred defending a challenge to the validity of an
agreement upon consideration of A.R.S. § 25-324 factors). We review the
denial of a request for fees under A.R.S. § 25-324 for an abuse of discretion.
Murray v. Murray, 239 Ariz. 174, 179, ¶ 20 (App. 2016) (citing Magee v. Magee,
206 Ariz. 589, 590, ¶ 6 (App. 2004)). In doing so, we defer to the court’s
factual findings so long as there is competent evidence to support them. See
Vincent v. Nelson, 238 Ariz. 150, 155, ¶¶ 17-18 (App. 2015) (citing Hurd v.
Hurd, 223 Ariz. 48, 52, ¶¶ 16, 19 (App. 2009), and Goats v. A. J. Bayless Mkts.,
Inc., 14 Ariz. App. 166, 169 (1971)).
6
QUIJADA v. QUIJADA
Opinion of the Court
¶14 Before denying the fee request, the family court found “there
was considerable merit to [Wife]’s position, even if [Husband] is the
prevailing party, and that [Husband] is in the superior economic position
(especially as it relates to the DRO and his pension benefits).” The court
further noted it did “not desire to deter similarly situated litigants from
pursuing their meritorious, even if ultimately unsuccessful, claims.”
¶15 Husband argues the reasonableness finding is inconsistent
with the family court’s prior questioning regarding the basis of Wife’s
disclosure requests. But “[a]ppeals lie from findings of fact, conclusions of
law, and judgments, not from ruminations of the trial judge.” United Cal.
Bank v. Prudential Ins. Co. of Am., 140 Ariz. 238, 308 (App. 1983). Moreover,
the court’s uncertainty regarding the procedural posture of Wife’s request
does not contradict its finding that she acted reasonably in pursuing a claim
otherwise available to her under Rule 85(b). Nor does an award of fees in
a domestic relations matter turn upon a party’s success or failure. See
Cummings v. Cummings, 182 Ariz. 383, 388 (App. 1994) (declining to award
attorneys’ fees to the prevailing party where the parties had equal financial
resources and the non-prevailing party presented a novel legal question).
¶16 Husband also argues the family court erred in concluding he
was in the superior economic position because Wife works as a licensed
aesthetician and shares her living expenses. Reasonable evidence
nonetheless supports the court’s resolution of the parties’ relative financial
resources based upon the evidence that Husband earns approximately
twice Wife’s monthly wage.
¶17 Finally, we note that the fee-shifting provisions of A.R.S. § 25-
324 are intended to “insure that the poorer party has the proper means to
litigate the action, not to punish litigants.” Garrett v. Garrett, 140 Ariz. 564,
569-70 (App. 1983) (citing Countryman v. Countryman, 135 Ariz. 110, 111
(1983)). Husband makes no suggestion that he lacks the means to defend
Wife’s claims. Moreover, the family court specifically considered this
purpose. On this record, we find no abuse of discretion.
CONCLUSION
¶18 The family court’s orders are affirmed.
¶19 Husband requests his attorneys’ fees and costs incurred on
appeal pursuant to A.R.S. §§ 12-341 and 25-324(A). In our discretion, we
7
QUIJADA v. QUIJADA
Opinion of the Court
deny his request for fees. However, as the prevailing party, Husband is
awarded his costs incurred on appeal upon compliance with ARCAP 21(b).
AMY M. WOOD • Clerk of the Court
FILED: AA
8