McClendon v. McClendon ( 2017 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
In re the Matter of:
CHARLES P. MCCLENDON, Petitioner/Appellee,
v.
SHERRI L. MCCLENDON, Respondent/Appellant.
No. 1 CA-CV 17-0049 FC
FILED 12-7-2017
Appeal from the Superior Court in Maricopa County
No. FN2006-002783
The Honorable Katherine M. Cooper, Judge
REVERSED AND REMANDED
COUNSEL
DeSoto Law Firm, Phoenix
By Rita E. DeSoto
Co-Counsel for Petitioner/Appellee
Jones, Skelton & Hochuli, P.L., Phoenix
By Eileen Dennis GilBride (argued)
Co-Counsel for Petitioner/Appellee
Joe M. Romley, P.C., Phoenix
By Joe M. Romley
Counsel for Respondent/Appellant
MCCLENDON v. MCCLENDON
Opinion of the Court
OPINION
Presiding Judge Paul J. McMurdie delivered the opinion of the Court, in
which Judge Peter B. Swann and Judge Patricia A. Orozco joined.1
M c M U R D I E, Judge:
¶1 Sherri L. McClendon (“Wife”) appeals from a superior court
order modifying Charles P. McClendon’s (“Husband”) spousal
maintenance obligation. We reverse and remand for further proceedings,
holding the superior court is to look at the latest court order in effect as the
“decree respecting maintenance” under Arizona Revised Statutes
(“A.R.S.”) section 25-327 when determining if modification of spousal
maintenance is warranted.
FACTS AND PROCEDURAL BACKGROUND
¶2 In 2007, the parties entered a consent decree dissolving their
30-year marriage. Under the consent decree, Husband was to pay Wife
spousal maintenance of $5500 per month until “further agreement of the
parties or Court order.” The parties also agreed that upon Husband’s
retirement from the Arizona State Retirement System (“ASRS”), Wife
would receive her share of the retirement that accrued during the marriage.
¶3 In February 2014, Husband retired from his position as a city
manager and relocated to California to manage another city beginning in
March 2014. In February 2014, Husband petitioned to modify the spousal
maintenance award because Wife had started to receive her share of the
ASRS benefits, and she was now engaged in full-time employment. In
August 2014, the parties entered into a binding Rule 69 agreement.
Pursuant to the parties’ 2014 agreement, reduced to an order that same year,
Husband’s spousal maintenance obligation to Wife was reduced from
$5500 to $4000 per month (the “2014 Order”). Both the consent decree and
2014 order provided indefinite awards of spousal maintenance.
1 The Honorable Patricia A. Orozco, retired Judge of the Court of
Appeals, Division One, has been authorized to sit in this matter pursuant
to Article 6, Section 3, of the Arizona Constitution.
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MCCLENDON v. MCCLENDON
Opinion of the Court
¶4 In 2016, Husband petitioned again to modify his spousal
maintenance obligation. At the evidentiary hearing, Husband testified that
Wife worked full time “a number of years prior to [2014],” as well as during
the period between 2014 and 2016. Wife only worked part-time prior to the
parties’ divorce in 2007. After the 2014 Order, Wife’s hourly wage increased
by $0.89 per hour, resulting in a total monthly wage income of $2900.
Husband further testified that Wife started receiving her share of ASRS
benefits in the amount of approximately $3400 per month before the 2014
Order. Wife’s ASRS distribution and full-time employment was at least part
of the basis for the parties’ agreement to modify Husband’s spousal
maintenance obligation in 2014. Husband’s monthly wages as a city
manager increased from $12,700 in 2007 to almost $20,000 after his
employment in California. Husband also receives $5600 per month in
retirement benefits from ASRS.
¶5 In its 2016 order, the court concluded the relevant time during
which Husband’s request for modification should be assessed was from the
consent decree to present, and not from the 2014 Order to present. The court
made A.R.S. § 25-319 findings and modified the spousal maintenance
award from $4000 per month to $2000 per month. The court further ordered
the decreased payment to terminate in 12 months. This appeal followed and
we have jurisdiction pursuant to A.R.S. section 12-2101(A)(1) and (2).
DISCUSSION
¶6 Wife argues the superior court erred by (1) finding a
substantial and continuing change in circumstances sufficient to modify the
2014 Order; (2) limiting the indeterminate spousal maintenance award to
12 months; and (3) denying her an attorney’s fees award.
A. The Superior Court Erred by Assessing the Change in
Circumstances from the Consent Decree instead of from the 2014
Modification Order.
¶7 Wife argues no substantial and continuing changes existed to
support the modification of the 2014 Order because (1) the proper period
for comparison of the circumstances was from the 2014 Order, and not from
the consent decree; (2) the same circumstances cannot support a successive
modification; and (3) the doctrine of res judicata prevents the same
circumstances from supporting a successive modification.
¶8 We review the superior court’s ruling modifying spousal
maintenance for abuse of discretion. In re Marriage of Priessman, 228 Ariz.
336, 338, ¶ 7 (App. 2011) (citing Van Dyke v. Steinle, 183 Ariz. 268, 273 (App.
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MCCLENDON v. MCCLENDON
Opinion of the Court
1995)). We defer to the court’s factual findings unless they are clearly
erroneous or unsupported by substantial evidence. Bobrow v. Bobrow, 241
Ariz. 592, 595, ¶¶ 11, 20 (App. 2017). We review questions of law, such as
interpretation of statutory authority, de novo. Maximov v. Maximov, 220 Ariz.
299, 300, ¶ 2 (App. 2009).
¶9 Spousal maintenance “may be modified or terminated only on
a showing of changed circumstances that are substantial and continuing.”
A.R.S. § 25-327(A) (emphasis added). “The burden of proving changed
circumstances is on the party seeking modification.” Scott v. Scott, 121 Ariz.
492, 494 (1979) (citing Linton v. Linton, 17 Ariz. App. 560, 563 (1972)). As
§ 25-327 does not designate any specific point in time from which to assess
or compare the changed circumstances, our supreme court has held that
“[t]o be relevant evidence for a modification, a changed circumstance must
occur subsequent to the divorce.” Scott, 121 Ariz. at 494 (citing Hornbaker v.
Hornbaker, 25 Ariz. App. 577, 578 (1976)). 2
2 Section 25-327 was enacted by 1973 Ariz. Sess. Laws, ch. 139, § 2 (1st
Reg. Sess.), and the operative language requiring the showing of substantial
and continuing change in circumstances before modification of “any decree
respecting maintenance” has not been substantially amended.
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MCCLENDON v. MCCLENDON
Opinion of the Court
¶10 Section 25-327(A) 3 governs “the provisions of any decree
respecting maintenance,” except for separation agreements entered under
§ 25-317. (Emphasis added.) We interpret “any decree respecting
maintenance” to include the original award of maintenance as well as any
order modifying the original award. Hence, the latest court order in effect is
the “decree respecting maintenance” from which a substantial and
continuing change should be assessed and from which the burden to prove
such a change arises for the party seeking to modify an order.
¶11 This interpretation is consistent with Scott. In Scott, the court
held modification was not authorized because the husband knew of and
contemplated the claimed changes at the time of the parties’ agreement,
which was incorporated by reference into the divorce decree. See Scott, 121
Ariz. at 494. The court in Scott did not address changes to subsequent
modifications. The reasoning in Scott supports our interpretation of
§ 25-327—that the circumstances existing before any decree or modification
is entered cannot also support a subsequent modification. See Scott, 121
Ariz. at 494−96.
3 Section 25-327(A) reads as follows:
A. Except as otherwise provided in § 25-317, subsections
F and G, the provisions of any decree respecting maintenance
or support may be modified or terminated only on a showing
of changed circumstances that are substantial and continuing
except as to any amount that may have accrued as an
arrearage before the date of notice of the motion or order to
show cause to modify or terminate. The addition of health
insurance coverage as defined in section 25-531 or a change in
the availability of health insurance coverage may constitute a
continuing and substantial change in circumstance. 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. Modifications and terminations are effective on the first
day of the month following notice of the petition for
modification or termination unless the court, for good cause
shown, orders the change to become effective at a different
date but not earlier than the date of filing the petition for
modification or termination.
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MCCLENDON v. MCCLENDON
Opinion of the Court
¶12 In contrast, the superior court concluded here that “the
relevant time period for assessing [the substantial and continuing] change
is the time from dissolution [in 2007] to present, not [from] 2014 [the first
modification] to present.” To support its conclusion, the court relied on
Richards v. Richards, 137 Ariz. 225, 226 (App. 1983) (“The changed
circumstances alleged must be proved by a comparison with the
circumstances existing at dissolution.”) (citing Scott, 121 Ariz. at 494). The
court erred, however, because neither Richards nor Scott specifically
addressed issues related to subsequent orders modifying the original
award. Here, Husband sought to modify the 2014 Order. Husband relied
on the same circumstances that existed before the 2014 Order was entered:
Wife’s full-time employment and payments from Wife’s share of the ASRS
proceeds. Because these changes existed and were the basis for the
modification in 2014, they cannot support a change in circumstances in
2016. See A.R.S. § 25-327(A).
¶13 Husband further argues the 2014 Order was not a “court-
determined” modification under § 25-327(A) because the court relied solely
on the parties’ Rule 69 agreement. Therefore, Husband contends, the court
did not consider “any of the changed circumstances that had occurred
between 2007 and 2014” until the hearing in 2016. We disagree.
¶14 All court orders modifying a spousal maintenance award are
“court-determined,” whether such an order results from an evidentiary
hearing or from the parties’ agreement. In the latter case, the record need
not reflect the parties’ motivations or calculations underlying a Rule 69
agreement, provided the parties enter the agreement voluntarily, and the
agreement was fair and equitable. See Sharp v. Sharp, 179 Ariz. 205, 210
(App. 1994) (the superior court “is obliged to achieve a fair and equitable
distribution of the property and is ‘not foreclosed from doing so by the
parties’ . . . agreement.’”) (quoting Wick v. Wick, 107 Ariz. 382, 385 (1971)).
Here, the court made those findings in 2014, and concluded the agreement
was “enforceable by the Court consistent with the record made by counsel.”
Evidence in the record reasonably supports the superior court’s 2014
findings. See Mitchell v. Mitchell, 152 Ariz. 317, 323 (1987).
¶15 Husband further argues the court properly considered
evidence of Wife’s circumstances as they existed before the 2014 Order
because the 2014 Order “was not a final judgment on the merits.” If the
parties’ agreement is entered in accordance with Rule 69, the superior court
may enter a final judgment. Ariz. R. Fam. Law P. 70(B). A petition to modify
spousal maintenance commences a new proceeding. See Williams v.
Williams, 228 Ariz. 160, 166, ¶ 24 (App. 2011); Ariz. R. Fam. Law P. 3(B)(5).
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MCCLENDON v. MCCLENDON
Opinion of the Court
While a party may petition for modification of spousal maintenance, res
judicata prevents the party “from obtaining a modification . . . based on facts
which could have been raised” in the previous proceeding. See In re
Marriage of Rowe, 117 Ariz. 474, 475 (1978) (husband was precluded from
challenging a default decree’s spousal maintenance award absent a change
of circumstances from the time the default was entered). The superior court
has no authority to modify its original order of spousal maintenance, or any
subsequent modification, unless a party can show a substantial and
continuing change in circumstances under § 25-327. See Preston v. Denkins,
94 Ariz. 214, 219 (1963) (“[T]he inherent power of the court to vacate or
modify its judgment does not extend beyond the point at which the
judgment becomes final, except as authorized by law.”).
¶16 As Husband sought to modify the 2014 Order, he had the
burden to prove changed circumstances arising after the order was entered.
See Scott, 121 Ariz. at 494. On remand, Husband may introduce evidence of
the circumstances existing at the time of the 2014 Order to meet that burden.
See Rowe, 117 Ariz. at 475–76 (without the ability to produce evidence of the
circumstances existing at the time a decree is entered, a party “could never
satisfy the prerequisites needed to modify a support order, as set forth in
A.R.S. § 25-327”). But ultimately, he must convince the court that there has
been a substantial and continuing change from the circumstances at the
time of the 2014 Order warranting relief.
¶17 Because the superior court misapplied the law in assessing
whether Husband had presented a substantial and continuing change in
circumstances, we remand for the court to reconsider the 2016 order.4
B. Wife is Entitled to Reconsideration of Her Request for Attorney’s
Fees.
¶18 Wife contends the superior court should have awarded her
attorney’s fees under A.R.S. § 25–324(A). Because we are remanding the
case to the superior court, we vacate its order denying Wife’s request for an
award of attorney’s fees. Pending the outcome of the proceedings on
4 Because it is not necessary to our ruling, we decline to reach the
parties’ other arguments. See State v. Hardwick, 183 Ariz. 649, 657 (App.
1995) (once the court found grounds for resolution, it declined to reach the
remaining issues).
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MCCLENDON v. MCCLENDON
Opinion of the Court
remand, the court shall reconsider whether an award of fees to either party
is appropriate.
C. Attorney’s Fees on Appeal.
¶19 Both parties seek attorney’s fees on appeal pursuant to A.R.S.
§ 25–324. Upon consideration of the financial resources of the parties and
the reasonableness of the positions taken on appeal, we exercise our
discretion and award Wife her reasonable attorney’s fees incurred on
appeal. As the prevailing party on appeal, we also award costs to Wife upon
her compliance with Arizona Rule of Civil Appellate Procedure 21.
CONCLUSION
¶20 For the forgoing reasons, we reverse the superior court’s 2016
order and remand for further proceedings consistent with this opinion.
AMY M. WOOD • Clerk of the Court
FILED: AA
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