Sammons v. Keaggy ( 2015 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
BEVERLY SAMMONS, Petitioner/Appellant,
v.
DAVID C. KEAGGY, Respondent/Appellee.
No. 1 CA-CV 14-0475 FC
FILED 10-27-2015
Appeal from the Superior Court in Maricopa County
No. FN2012-002771
The Honorable Kathleen H. Mead, Judge
AFFIRMED IN PART, VACATED IN PART AND REMANDED
COUNSEL
Gillespie, Shields, Durrant & Goldfarb, Phoenix
By DeeAn Gillespie Strub and Mark A. Shields
Counsel for Petitioner/Appellant
Michael E. Hurley Attorney at Law, Phoenix
By Michael E. Hurley
Counsel for Respondent/Appellee
SAMMONS v. KEAGGY
Decision of the Court
MEMORANDUM DECISION
Judge Donn Kessler delivered the decision of the Court, in which Presiding
Judge Lawrence F. Winthrop and Judge Samuel A. Thumma joined.
K E S S L E R, Judge:
¶1 Beverly Sammons (“Wife”) appeals from the family court’s
decree of dissolution ordering David C. Keaggy (“Husband”) to sell the
family business and awarding Wife one-half of the sale proceeds. Wife also
challenges the court’s denial of her request for attorneys’ fees. For the
following reasons, we vacate the portion of the decree permitting Husband
or the parties’ adult son (“Son”) to purchase the business at a discounted
price and remand for further proceedings consistent with this decision.
However, we affirm the denial of Wife’s fee request.
FACTUAL AND PROCEDURAL HISTORY
¶2 In June 2012, Wife filed a petition for dissolution of her forty-
year marriage to Husband. The parties disputed, among other things, the
value of the business they owned equally, David Keaggy & Associates, LLC
(the “Business”), which Husband operates and where Son has worked for
more than seven years. Wife also requested Husband pay her attorneys’
fees based on the disparity in the parties’ financial resources and Husband’s
unreasonable positions leading up to trial.
¶3 At trial, Wife presented the testimony of Mark Hughes, a
certified public accountant who specializes in business valuations, who
opined the Business had a fair value of $240,000. Hughes explained that
this reflects the Business’s value assuming Husband continues to operate it.
Hughes further testified that, if Husband—“the primary integral part of the
[B]usiness”—sells the Business to a third party and continues to assist the
buyer in operating it for a “transition” period of six to twelve months, the
Business would have a value of $190,000.
¶4 Husband testified that Hughes’ valuation is too high, but
offered no contrary valuation opinion. Husband further stated that he is
unwilling to sell the Business if he must work for another six to twelve
months because he wants to retire. Husband explained that he hopes Son
would run the Business, but Son testified he is not willing or able to
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Decision of the Court
purchase it because he “can’t afford it.”1 Alternatively, Husband testified
that he is willing to “dissolve” the Business or let Wife have it, but he does
not want to buy out Wife’s share because “I’m done.”
¶5 In the decree, the family court noted the Business was the
most valuable community asset and determined there were insufficient
community assets existed to award Wife an offset of the Business’s value.
The court therefore ordered the parties to immediately begin the process of
selling the Business with the profits to be divided equally. The court further
ordered that, if Husband or Son decides to buy the Business, either may do
so for a “discounted rate” of $150,000. The court reasoned this price is
appropriate as it “will avoid the costs of sale and the issues involving
transition to a new owner.” The court certified the decree to be final and
appealable in accordance with Arizona Rule of Family Law Procedure
78(B). Wife unsuccessfully moved for a new trial.
¶6 The court also granted Wife’s request for attorneys’ fees,
finding Husband’s financial position to be superior to Wife’s and finding
both parties increased the other’s litigation costs. The court, however, did
not award an amount of fees; instead, it ordered Husband to pay a portion
of Wife’s attorneys’ fees subject to Wife submitting a supporting affidavit,
in proper form, and other documentation. Wife complied, and Husband
objected on the basis Wife used more than $53,000 in community funds to
pay her attorneys along with $9,000 in sole and separate funds. The court
agreed with Husband and denied Wife’s fee request in an unsigned minute
entry. Wife appealed from the decree. After hearing oral argument, this
Court remanded the matter to allow the family court to enter a signed order
corresponding to the denial of Wife’s fee request. The family court issued
a signed order containing Arizona Rule of Family Law Procedure 78(B)
language, and Wife filed an amended notice of appeal. We have
jurisdiction pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-
2101(A)(1) (Supp. 2015).2
1 At his deposition, Son testified he is willing to pay Wife a total of
$50,000 in monthly installments for her half of the Business, and that
Husband would “gift” him the other half. Son admitted this $100,000
valuation “was a wild guess” and not based on any valuation method.
2 We cite the current version of applicable statutes because no
revisions material to this decision have since occurred.
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DISCUSSION
¶7 Wife argues the family court erred in ordering the Business
sold and, particularly, in permitting Husband or Son to purchase it for
$150,000. Instead, Wife contends the court should have awarded the
Business to Husband and imposed a lien on it pursuant to A.R.S. § 25-318(E)
(Supp. 2015)3 to secure payment from Husband to Wife in the amount of
$120,000 to reflect her share in the Business based on its value of $240,000.
Wife also argues the court erred in denying her request for attorneys’ fees.
I. Wife’s Share in the Business
¶8 “The valuation of assets is a factual determination that must
be based on the facts and circumstances of each case.” Kelsey v. Kelsey, 186
Ariz. 49, 51, 918 P.2d 1067, 1069 (App. 1996). This Court reviews a valuation
determination for an abuse of discretion, see State v. Mitchell, 234 Ariz. 410,
413, ¶ 11, 323 P.3d 69, 72 (App. 2014) (“[W]e defer to the trial court’s factual
determinations . . . .”), including whether the record provides substantial
evidence supporting the determination, see Flying Diamond Airpark, L.L.C. v.
Meienberg, 215 Ariz. 44, 50, ¶ 27, 156 P.3d 1149, 1155 (App. 2007) (citation
omitted). At oral argument, both parties agreed that the valuation is taken
from the time of the decree.
¶9 The court’s order permitting Husband or Son to purchase the
Business for $150,000 is not supported by the evidence. The only evidence
of the Business’s value is the expert opinion indicating a value of $240,000
if Husband continues to operate the Business and $190,000 in the event he
sells it to a third party and assists the new owner in running the Business
for six to twelve months. By permitting Husband to purchase the Business
for $150,000, the court effectively authorized a $75,000 equalization
payment to Wife should Husband continue to operate the Business, an
amount well below what Wife is entitled to according to the expert’s
opinion. Additionally, the court did not impose a deadline by which a sale
is to be effectuated or otherwise set out a timeframe for certain steps the
parties must take to do so. According to the record, it appears Husband
continues to operate the Business, but no payments have been made to
Wife. At oral argument, Husband conceded that he does not want to keep
3 In relevant part, the statute states: “The court may impress a lien on
. . . the marital property awarded to either party in order to secure the
payment of . . . [a]ny interest or equity the other party has in or to the
property.” A.R.S. § 25-318(E)(1).
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the business, and Son does not want to buy it. Further, there is no evidence
of record regarding the anticipated “costs of sale.”
¶10 With no evidence supporting a purchase price of $150,000, the
court abused its discretion in permitting Husband (or Son) to “purchase”
the Business for that amount. See Carriker v. Carriker, 151 Ariz. 296, 297, 727
P.2d 349, 350 (App. 1986) (determining valuation of professional
corporation, as community asset, was not supported by evidence where
there was no evidence from which court, using stated method of
calculation, could have arrived at stated valuation). Accordingly, we vacate
that portion of the decree allowing the Business to be sold to Husband or
Son for $150,000. On remand, because Husband conceded that he does not
want to keep the Business, and Son has expressed that he does not want to
buy it, the court shall issue additional orders to ensure compliance with its
directive to sell the Business, and secure payment to Wife of her community
share of the Business’s value, which, according to the record, is currently
$190,000.
II. Denial of Wife’s Request for Attorneys’ Fees
¶11 By statute, the family court has discretion to award a party
reasonable attorneys’ fees in a marriage dissolution case after considering
the parties’ respective financial resources and the reasonableness of the
positions each has taken during the proceedings. A.R.S. § 25-324(A) (Supp.
2015). Here, as noted, the court ordered Husband to pay a portion of Wife’s
fees based on its findings that Husband has substantially more financial
resources than Wife and because both parties unnecessarily increased the
other’s cost of litigation. The court also found both parties had used
community funds to pay their attorneys’ fees. However, when
subsequently presented with the actual amount of community funds Wife
had already expended for her attorneys’ fees (more than $53,000), the court
denied Wife’s fee request for an “additional” award of fees.
¶12 Section 25-324(A) does not authorize a court to deny a fee
request based solely on the use of community funds to pay fees. Indeed,
the statute only restricts a fee award to a reasonable amount. A.R.S. § 25-
324(A). We construe the court’s determination that Wife is not entitled to
an “additional” award of fees as an implied finding that Husband’s
community share of the $53,000 ($26,500) used by Wife to pay her attorneys
was a reasonable amount. See Lee Dev. Co. v. Papp, 166 Ariz. 471, 476, 803
P.2d 464, 469 (App. 1990) (stating this court will imply any additional
finding necessary to sustain a judgment if it is reasonably supported by the
evidence).
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SAMMONS v. KEAGGY
Decision of the Court
¶13 Wife does not specifically argue that the court erred in
implicitly finding Husband’s approximately $26,500 payment of Wife’s
attorneys’ fees was a reasonable sum. Instead, she argues that the parties’
“extreme disparity” in financial resources required the court “to award at
least some fees to Wife.” But the court did award “some fees” to Wife,
namely, Husband’s community share of the $53,000 that she had already
utilized. Further, “a disparity alone does not mandate an award of fees.
‘[T]he reasonableness of the positions each party has taken’ is an additional
consideration under the current statute.” Myrick v. Maloney, 235 Ariz. 491,
494, ¶ 9, 333 P.3d 818, 821 (App. 2014) (alteration in original) (quoting A.R.S.
§ 25-324(A)). Wife concedes that the court found she “needlessly increased
Husband’s [attorneys’] fees due to a dispute . . . over the location of
[Husband’s] Veteran’s Administration funds.” Wife does not contest this
finding. Accordingly, the denial of Wife’s request for an additional fee
award is supported by the record and was not an abuse of discretion.
CONCLUSION
¶14 We vacate the portion of the decree that allows Husband or
Son to purchase the Business for $150,000 and remand for further
proceedings consistent with this decision. We affirm the order denying
Wife’s request for additional attorneys’ fees.
¶15 Wife requests her attorneys’ fees and taxable costs incurred
on appeal pursuant to A.R.S. § 25-324. Husband requests his fees and
taxable costs on appeal pursuant to Arizona Rule of Civil Appellate
Procedure 21 and A.R.S. §§ 12-341 (2003), -342 (2003), and -349 (Supp. 2015).
In the exercise of our discretion, we deny Husband’s request. We grant
Wife’s request for taxable costs and, in exercising our discretion, grant
Wife’s request for reasonable fees on appeal, contingent upon her timely
compliance with ARCAP 21.
:ama
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