Labarge v. Abdullahi ( 2023 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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 Marriage of:
MARY LABARGE, Petitioner/Appellant,
v.
IBRAHIM ABDULLAHI, Respondent/Appellee.
No. 1 CA-CV 22-0379 FC
FILED 1-12-2023
Appeal from the Superior Court in Maricopa County
No. FN2020-096514
The Honorable David E. McDowell, Judge
AFFIRMED IN PART; VACATED IN PART, AND REMANDED
COUNSEL
The Hogle Firm PLC, Mesa
By Nathan Hogle
Counsel for Petitioner/Appellant
Berkshire Law Office PLLC, Tempe
By Keith Berkshire, Alexandra Sandlin
Counsel for Respondent/Appellee
LABARGE v. ABDULLAHI
Decision of the Court
MEMORANDUM DECISION
Judge Cynthia J. Bailey delivered the decision of the Court, in which
Presiding Judge Samuel A. Thumma and Vice Chief Judge David B. Gass
joined.
B A I L E Y, Judge:
¶1 Mary LaBarge (“Wife”) appeals from the superior court’s
decree dissolving her marriage to Ibrahim Abdullahi (“Husband”) and
order denying her motion to alter or amend the decree. Wife argues the
court erred in (1) not crediting the marital community with an equitable
lien for the down payment on a property (the “Cave Creek Property”)
owned separately by Husband; (2) denying her the opportunity to further
investigate Husband’s bank accounts and financial information; (3) finding
she had not shown that Husband committed marital waste; and (4) denying
her request for a longer duration of spousal maintenance. For reasons that
follow, we vacate the court’s equitable lien on the community’s interest in
the Cave Creek Property and remand for reconsideration of that issue
consistent with this decision. In all other respects, we affirm the court’s
decree and order.
FACTS AND PROCEDURAL HISTORY
¶2 The parties married in May 2000 and have no minor children
from the marriage. Wife petitioned for dissolution in August 2020.
¶3 In January 2022, the superior court held a trial on the petition,
and each party testified and presented evidence. After taking the matter
under advisement, the court issued a decree of dissolution certified as
appealable under Arizona Rule of Family Law Procedure (“ARFLP”) 78(b)
in February 2022.
¶4 Wife timely moved to alter or amend the decree, see ARFLP
83, and after responsive briefing, the court denied the motion. However,
the court did clarify some of its rulings in the order.
¶5 We have jurisdiction over Wife’s timely appeal under Arizona
Revised Statutes (“A.R.S.”) section 12-2101(A)(1) and (2).
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DISCUSSION
I. The Equitable Lien on the Cave Creek Property
¶6 Wife argues the superior court erred in calculating the marital
community’s equitable lien on the Cave Creek Property because the court
mischaracterized the funds used for the down payment on the property as
Husband’s sole and separate property. She contends Husband bore the
burden of proving by clear and convincing evidence that the funds used for
the down payment came from his separate property and that he did not
meet his burden.
¶7 We review de novo the court’s characterization of property.
Schickner v. Schickner, 237 Ariz. 194, 199, ¶ 22 (App. 2015). “Property takes
its character as separate or community at the time of acquisition and retains
that character throughout the marriage.” Id. (quoting Bell–Kilbourn v. Bell–
Kilbourn, 216 Ariz. 521, 523, ¶ 5 (App. 2007)). “Because property acquired
during marriage is presumed to be community property, the spouse
seeking to overcome the presumption has the burden of establishing the
separate character of the property by clear and convincing evidence.” Id.(citing Brebaugh v. Deane, 211 Ariz. 95, 98, ¶ 6 (App. 2005)).
¶8 Absent fraud or mistake, a signed disclaimer deed rebuts the
community property presumption. See generally Bell–Kilbourn, 216 Ariz. at
523-24, ¶¶ 7, 11. However, even if a disclaimer deed is valid and the house
is one spouse’s separate property, the community may be entitled to a share
of any equity in the house attributable to the community’s expenditure of
funds. See Honnas v. Honnas, 133 Ariz. 39, 40 (1982); Bell–Kilbourn, 216 Ariz.
at 524, ¶ 12. The purpose of an equitable lien is to reimburse the non-
owning spouse for a portion of the community’s contributions to the equity
of the owning spouse’s separate property. Valento v. Valento, 225 Ariz. 477,
481-82, ¶¶ 12-13 (App. 2010).
¶9 Here, the court found that the Cave Creek Property was
acquired during the marriage, which would presumptively make it
community property. At trial, however, Husband presented both a
warranty deed stating the property was his sole and separate property and
a disclaimer deed signed by Wife in which she affirmed the property was
Husband’s sole and separate property and the down payment on the
property had been paid with Husband’s separate funds. The court found
that Husband had rebutted the presumption that the property was
community property and further found that although Wife claimed the
down payment was made with community funds, she had failed to produce
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Decision of the Court
sufficient evidence to rebut the statement in the disclaimer deed. The court
did find that an equitable community lien existed on the property, however,
based on the use of community funds to pay the mortgage, but did not
include the down payment in the equitable lien.
¶10 Later, in denying Wife’s motion to alter or amend the decree,
the court also explained that Wife “failed to produce sufficient evidence to
[rebut the disclaimer deed and] establish that the down payment . . . was
made with community funds. In fact, her testimony was that she was
unable to determine the source of funds used for the down payment.”
¶11 The superior court was correct in its characterization of Wife’s
testimony and the burden of proof. Once Husband presented, and the court
admitted, the disclaimer deed, the court could reasonably determine that
Husband met his burden of proof on the source of the funds for the down
payment, and the burden shifted back to Wife to establish that the down
payment was made with community funds. And Wife testified that,
although she was certain the down payment was made with community
funds, she could not pinpoint the source of the funds, ostensibly because
Husband had not disclosed that information.
¶12 The court erred, however, in failing to also consider
Husband’s testimony that the funds for the down payment came from
proceeds from a lawsuit settlement against a prior employer during the
parties’ marriage and from withdrawals from his employee stock purchase
plan, all of which—based on Husband’s testimony—were presumptively
community funds.
¶13 Husband relies on Hefner v. Hefner, 248 Ariz. 54, 57-58, ¶¶ 7,
10 (App. 2019), to argue that proceeds from personal injuries are
presumptively separate. Although that may be true, Wife testified that
Husband’s lawsuit involved an employment discrimination claim. Notably,
Husband did not testify that the lawsuit involved personal injuries of the
nature addressed in Hefner or Jurek v. Jurek, 124 Ariz. 596 (1980), on which
Hefner relied. As such, Wife’s testimony stands as undisputed, and the
superior court did not find her testimony not credible.
¶14 Although the parties’ testimony does not invalidate or defeat
the title transfer effected by the disclaimer deed, it eliminates any factual
dispute as to the character of the property used to purchase the Cave Creek
Property. See Kadiyala v. Vemulapalli, 1 CA-CV 17-0111 FC, 2019 WL 311713,
at *3, ¶ 13 (App. Jan. 24, 2019) (mem. decision). The valid disclaimer deed
established that the Cave Creek Property is Husband’s sole and separate
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property, but it does not trump the facts (including Husband’s admissions)
adduced at trial for calculating an equitable lien. Cf. id. (citing Wick v. Wick,
107 Ariz. 382, 385 (1971) (holding that the court has an obligation to fairly
and equitably allocate community property and is “not foreclosed from
doing so by the parties’ separation and property settlement agreement”)).
Accordingly, the superior court erred by failing to include the community
funds used for the down payment when calculating the community’s
equitable lien.
¶15 On remand, in determining the community’s equitable lien
value, the court must include the down payment to the extent it reduced
the principal. To hold otherwise would deny Wife her interest in the
community funds and provide Husband a windfall. See Wick, 107 Ariz. at
385.
II. Wife’s Opportunity to Further Investigate
¶16 Wife also argues the superior court abused its discretion by
not granting her motion to compel in full. She argues the court “refused”
her requests that Husband fully identify all his bank accounts (Non-
Uniform Interrogatory No. 1) and that he disclose all documents showing
the source of the funds used to purchase the Cave Creek Property (Request
for Production No. 2). Based on our resolution of the community lien on
the Cave Creek Property, we need only address this issue as it relates to
Wife’s waste claim.
¶17 We review the superior court’s rulings on discovery-related
issues for an abuse of discretion. Twin City Fire Ins. Co. v. Burke, 204 Ariz.
251, 253, ¶ 10 (2003). “We will not interfere in matters within [the court’s]
discretion unless we are persuaded that the exercise of such discretion
resulted in a miscarriage of justice or deprived one of the litigants of a fair
trial.” O’Rielly Motor Co. v. Rich, 3 Ariz. App. 21, 27 (1966). In general,
“[t]rial judges are better able than appellate courts to decide if a disclosure
violation has occurred in the context of a given case and the practical effect
of any non-disclosure.” Solimeno v. Yonan, 224 Ariz. 74, 77, ¶ 9 (App. 2010).
¶18 In March 2021, more than ten months before trial, Wife moved
to compel discovery. See ARFLP 65(a). After briefing, the superior court
ordered Husband to fully respond to Wife’s Request for Production No. 1
and Non-Uniform Interrogatory Nos. 2 and 4 by June 2021. In August 2021,
Wife moved to continue trial, which was set for August 24, because
Husband had purportedly not fully complied with the court’s order, and
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Wife stated she planned to file a motion for sanctions. See ARFLP 65(b).
The court continued trial to January 2022.
¶19 Wife moved for sanctions in late September 2021. Husband
objected, and in November 2021, the court issued further orders related to
discovery. The court noted that Wife had received some of the bank records
she had requested and ordered her to subpoena—at Husband’s expense—
the bank records she asserted were missing from Husband’s disclosure and
discovery responses. The court also ordered Husband to fully answer
Wife’s Non-Uniform Interrogatory No. 4 no later than November 24, 2021.
Finally, the court ordered that
on November 30, 2021, if there are any outstanding discovery
request[s] which are due more than 15 days, the propounding
party shall file with the Court a Notice of Outstanding
[D]iscovery, which shall consist of no more than 4 pages and
shall LIST the items missing and identify when the request
was propounded and when the Rule 9 conference occurred to
secure compliance with the discovery request. . . .
....
[Wife]’s request for a hearing to address this discovery
issue is denied at this time. If discovery abuses occur, [Wife]
can re-urge [her] request for a hearing.
Neither party made such a filing by November 30, 2021.
¶20 After trial and entry of the decree, in her motion to alter or
amend the decree, Wife raised the issue of Husband’s disclosure, arguing
the superior court had refused her request to conduct discovery. The court
characterized her argument as “simply wrong,” noting that her “recourse
if she believed that discovery and disclosures were not complete was to
seek redress from the Court (which it gave her three separate times) prior
to Trial and not after a decision is rendered.”
¶21 We find no abuse of the superior court’s discretion. Even
assuming this issue is not waived, see Medlin v. Medlin, 194 Ariz. 306, 308,
¶ 6 (App. 1999), the record reflects that the court ruled on each of Wife’s
discovery motions—albeit apparently not always to Wife’s complete
satisfaction—and allowed her to conduct financial discovery throughout
the case. And at no time after the court addressed Wife’s motion for
sanctions did Wife raise the of lack of disclosure or discovery responses
issues with the court before entry of the decree. Although the court
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specifically ordered the parties to file a notice if there was still missing
discovery or disclosure, neither party did so. Further, although advised
that she could do so, Wife did not re-urge her request for a discovery-
related hearing, and in her pretrial statement filed eleven days before trial,
Wife represented that “[t]he parties have completed disclosure and
discovery.” Wife also did not request a second continuance before trial
began to pursue additional disclosure or discovery, and even at trial, Wife
made no request for a continuance and simply moved forward with trial.
¶22 It was Wife’s responsibility to bring the alleged deficient
disclosure and discovery issues to the superior court’s attention, and to ask
for a pretrial continuance if she believed more discovery was necessary.
Wife failed to do so, and she did not raise the issue until her post-trial
motion to alter or amend the decree. Wife has shown no reversible error.
See Link v. Pima Cnty., 193 Ariz. 336, 338, ¶ 3 (App. 1998). Accordingly, the
superior court did not abuse its discretion when it ruled on Wife’s
discovery-related motions and motion to alter or amend the decree.
III. Marital Waste
¶23 Wife next argues the superior court erred in concluding she
did not establish that Husband committed marital waste.
¶24 We review the superior court’s conclusion for an abuse of
discretion, while viewing the evidence in the light most favorable to
sustaining the court’s findings and determining whether the evidence
reasonably supports those findings. Gutierrez v. Gutierrez, 193 Ariz. 343,
346, ¶ 5 (App. 1998). The superior court is in the best position to assess
witness credibility, resolve conflicts in evidence, and assign the weight to
give conflicting testimony. See id. at 347, ¶ 13; Vincent v. Nelson, 238 Ariz.
150, 155, ¶ 18 (App. 2015).
¶25 Marital waste refers to one spouse’s ability to recover against
the other for “excessive or abnormal expenditures, destruction,
concealment or fraudulent disposition of community” property. A.R.S.
§ 25-318(C); see, e.g., Martin v. Martin, 156 Ariz. 452, 454-58 (1988). A spouse
alleging excessive or abnormal expenditures by the other spouse bears the
burden of making a prima facie showing of waste. Gutierrez, 193 Ariz. at
346, ¶ 7. It is then the spending spouse’s burden to rebut the waste
showing. Id. at 346-47, ¶ 7.
¶26 Wife presented evidence that during the 20-year marriage,
Husband sent more than $102,000 in community funds to his family in
Nigeria, and she argued at trial that Husband had committed marital waste.
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Decision of the Court
Husband denied the waste allegation, adding Wife was aware he had sent
money to his family to pay for his elderly (and since deceased) parents’
medical and other bills and had encouraged him to do so. Although Wife
maintained the community did not benefit from these expenditures,
Husband testified it did, by translating to a greater satisfaction between the
parties in the marriage.
¶27 The superior court denied Wife’s waste claim, finding that
although Husband had transferred an average of around $15,000 per year
to his family for several years, he was earning $150,000 to $170,000 per year
and the couple had a combined annual gross income of $225,000 to $245,000
during that time. The court found that the funds transfer to Husband’s
family in Nigeria “was not an excessive or abnormal expenditure when
considering the income of the couple” and that “no evidence of destruction
of community assets” had been presented. The court also concluded that
although the parties had introduced conflicting evidence of whether Wife
was aware of the transfers,1 insufficient evidence had been presented for
the court to find concealment or fraudulent disposition of the assets.
¶28 In denying Wife’s motion to alter or amend the decree, the
court clarified that it had determined Wife had not met her burden of
making a prima facie case that waste existed, and it explained it had
reached its determination after assessing credibility and weighing
conflicting evidence.
¶29 Wife has shown no abuse of the superior court’s discretion.
The court found that Wife failed to establish that Husband’s expenditures
were excessive or abnormal, see id. at 346, ¶ 7, and reasonable evidence in
the record—which reflects that Husband regularly sent money to extended
family over the years and that such payments were a normal community
expense for the couple, not marital waste—supports that finding.
Accordingly, we affirm the denial of Wife’s community waste claim.
IV. Spousal Maintenance
¶30 The superior court awarded Wife $1000 in monthly spousal
maintenance for one year. Wife does not dispute the monthly amount but
argues the court abused its discretion in limiting the duration to one year.
¶31 Subsection (A) of A.R.S. § 25-319 governs the award of
spousal maintenance, and subsection (B) provides factors the court may
1 Wife testified she knew Husband was sending money to Nigeria, but
she did not “know who he was sending money to, and how much.”
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consider when determining the amount. The aim of spousal maintenance
“is to achieve independence for both parties and to require an effort toward
independence by the party requesting maintenance.” Schroeder v. Schroeder,
161 Ariz. 316, 321, (1989); accord Rainwater v. Rainwater, 177 Ariz. 500, 503
(App. 1993) (recognizing that, whenever possible, an order for spousal
maintenance “should promote a transition toward financial
independence”).
¶32 We review an award of spousal maintenance for an abuse of
discretion, Kelsey v. Kelsey, 186 Ariz. 49, 53 (App. 1996), and will uphold it
“if there is any reasonable evidence to support the judgment,” Thomas v.
Thomas, 142 Ariz. 386, 390 (App. 1984). We view the evidence in the light
most favorable to the non-appealing party, In re Marriage of Pownall, 197
Ariz. 577, 583-84, ¶ 31 (App. 2000), and will not substitute our opinion for
that of the superior court, Deatherage v. Deatherage, 140 Ariz. 317, 319 (App.
1984).
¶33 In the decree, the superior court properly considered the
factors under § 25-319(B) in determining the amount and duration of
spousal maintenance awarded to Wife. Wife argues, however, that the
court’s award effectively orders her to “forgo social security” and return to
work. Even if Wife did not waive this argument by failing to raise it until
her motion to alter or amend the decree, see Medlin, 194 Ariz. at 308, ¶ 6, she
has shown no abuse of discretion. As the superior court correctly found,
federal law allows a recipient to work and receive social security benefits at
the same time. See SSA Pub. 05-10069 (amended Apr. 2022),
https://www.ssa.gov/pubs/EN-05-10069.pdf, at 1. And although a
recipient who is younger than full retirement age and earns more than
certain amounts may have her benefits temporarily reduced, the amount
that the benefits are reduced isn’t truly lost because the benefit amount will
increase at full retirement age to account for benefits withheld due to earlier
earnings. Id. Further, once a recipient reaches full retirement age, she can
keep working and receive the full amount of her social security benefit. Id.
Therefore, the court’s spousal maintenance award does not require Wife to
forgo social security benefits.
¶34 And we agree with the superior court that Wife’s reliance on
Howell v. Howell, 137 S. Ct. 1400, 1402 (2017), is unavailing. A state court
“cannot ‘vest’ that which (under governing federal law) [it] lack[s] the
authority to give,” id. at 1405, and Howell does not require a state court to
make spousal maintenance payments perpetual if the recipient also receives
federal benefits. Accordingly, the superior court did not abuse its
discretion in its spousal maintenance award to Wife.
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V. Attorneys’ Fees on Appeal
¶35 Wife has not requested attorneys’ fees on appeal, and none
are awarded to her. Husband requests attorneys’ fees on appeal under
A.R.S. § 25-324. Wife did not take unreasonable positions on appeal,
however, and in the exercise of our discretion, we deny Husband’s request
for attorneys’ fees. We award taxable costs to Wife upon compliance with
Rule 21, ARCAP.
CONCLUSION
¶36 For the foregoing reasons, we vacate the court’s equitable lien
calculation on the Cave Creek Property and remand for reconsideration
consistent with this decision. We otherwise affirm the decree and order
denying Wife’s motion to alter or amend the decree.
AMY M. WOOD • Clerk of the Court
FILED: AA
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