Hovda v. Hovda ( 2020 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
MARK M. HOVDA, Petitioner/Appellant,
v.
REBEKAH M. HOVDA, Respondent/Appellee.
No. 1 CA-CV 20-0033 FC
FILED 10-27-2020
Appeal from the Superior Court in Maricopa County
No. FN 2008-004298
The Honorable Margaret LaBianca, Judge
AFFIRMED
COUNSEL
John R. Zarzynski, Phoenix
Counsel for Petitioner/Appellant
The Cavanagh Law Firm PA, Phoenix
By Helen R. Davis, Nicholas J. Brown
Counsel for Respondent/Appellee
HOVDA v. HOVDA
Decision of the Court
MEMORANDUM DECISION
Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge Jennifer M. Perkins and Judge David B. Gass joined.
B R O W N, Judge:
¶1 Mark Hovda (“Husband”) appeals the superior court’s orders
(1) denying his petition to terminate or modify his spousal maintenance
obligation to Rebekah Hovda (“Wife”), and (2) awarding her attorneys’
fees. For the following reasons, we affirm.
BACKGROUND
¶2 We view the evidence in the light most favorable to
upholding the superior court’s ruling on spousal maintenance. Boyle v.
Boyle, 231 Ariz. 63, 65, ¶ 8 (App. 2012). After 31 years of marriage, the
parties divorced in November 2009. The consent decree and accompanying
property settlement agreement required Husband to pay Wife $3,500 in
monthly spousal maintenance for an “indefinite duration” but the
obligation “remain[ed] modifiable under A.R.S. §§ 25-319(B) and 25-
327(A).”
¶3 At the time the decree was entered, Husband was self-
employed, earning about $245,000 annually. The next year, Husband
moved to Wisconsin and later took a position as regional manager at
Quality Liquid Feeds (“QLF”). In January 2018, he transitioned from
commission-based income to a $132,500 yearly salary at QLF. In addition
to his salary, QLF pays Husband other sums, which he contends are
“reimbursements” for work-related expenses. From January to July 2019,
these payments averaged $4,492 per month.
¶4 In February 2018—just one month after Husband changed his
compensation scheme—Husband petitioned to terminate or modify
spousal maintenance, alleging his decreased income was a “substantial and
continuing change of circumstances” since the 2009 decree. After an
evidentiary hearing, the superior court denied Husband’s petition for
“fail[ing] to demonstrate a substantial and continuing change in
circumstances warranting modification.” The court found that Husband’s
income decreased from $245,000 at the time of dissolution to $132,500 in
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January 2018. It also found, however, that Husband failed to present
sufficient evidence showing the purported monthly “reimbursements”
from QLF aligned with “any actual out-of-pocket expenses he ha[d]
incurred,” and thus the court declined to limit Husband’s income to his
$132,500 salary. The court also determined that any change in Husband’s
income did not render him financially unable to pay his current spousal
maintenance obligation. The court awarded attorneys’ fees to Wife under
A.R.S. § 25-324. Husband timely appealed.
DISCUSSION
¶5 We review for abuse of discretion the superior court’s
decisions as to whether (1) there has been a change in circumstances
sufficient to modify a spousal maintenance award, and (2) to award
attorneys’ fees under A.R.S. § 25-324. See Linton v. Linton, 17 Ariz. App. 560,
563 (App. 1972) (modification); Mangan v. Mangan, 227 Ariz. 346, 352, ¶ 26
(App. 2011) (fees). An abuse of discretion “occurs if the record is devoid of
competent evidence to support the decision.” Amadore v. Lifgren, 245 Ariz.
509, 513, ¶ 5 (App. 2018). The burden of proving the changed circumstances
falls on the party seeking modification. Id. We review the superior court’s
factual findings for clear error. Kelsey v. Kelsey, 186 Ariz. 49, 51 (App. 1996).
A. Change in Circumstances
¶6 Husband argues the superior court abused its discretion by
denying his petition because the evidence does not support numerous
findings. A spousal maintenance award “may be modified or terminated
only on a showing of changed circumstances that are substantial and
continuing.” A.R.S. § 25-327(A). “The mere fact of reduction of income in
and of itself is not a sufficient basis to justify modification of the decree.”
Linton, 17 Ariz. App. at 564. The payor-spouse must also show an inability
to pay the current spousal maintenance obligation. Id. Facts known or
events foreseeable to the parties at the time of dissolution cannot serve as a
basis for a change in circumstances. Id. at 563.
1. Decrease in Income
¶7 Husband argues the superior court erred by refusing to limit
his income to $132,500. The court’s ruling stated in part:
[T]he Court finds [Husband] receives approximately
$4,492.00 per month from his employer. [Husband] testified
that the $4,492.00 per month is reimbursement for work
expenses including meals with clients. However, other than
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his testimony, [Husband] provided no evidence that the
reimbursements align with any actual out-of-pocket expenses
he has incurred.[] Also unexplained by [Husband] is the
source of $35,000 deposited into his bank account in April
2019.[] For these reasons, the Court declines to conclude that
[Husband’s] income is limited to his annual salary of
$132,500.
(Footnotes omitted.) According to Husband, evidence does not support
attributing $4,492 per month in additional income to him because he
established these payments were reimbursements for work-related
expenses. We disagree.
¶8 Husband testified the payments were reimbursements paid to
him by QLF for various expenses, including travel, hotels, airfare, rental
cars, fuel, and client lunches, and that they did not reduce his personal
living expenses. But the superior court “is not bound to accept as true the
uncontradicted testimony of an interested party.” Aries v. Palmer Johnson,
Inc., 153 Ariz. 250, 261 (App. 1987). And the court did not explicitly
attribute the entire $4,492 to Husband’s income. Instead, the court said it
would not limit his income to his $132,500 salary because Husband failed to
offer evidence beyond his own testimony that the purported
reimbursements “align[ed] with any actual out-of-pocket expenses he has
incurred.”
¶9 Husband contends nonetheless that his bank statements show
he made payments on his credit card on certain dates and QLF paid him a
similar amount on or nearly on the same day. These bank statements show
the date, a general description, the transacting party, and the amount. But
they do not show any specific expenses or indicate QLF’s payments were
for reimbursements; the description merely states “Qlty Liquid Feed Qlf
Vendor.” Beyond his self-interested testimony, Husband offered no
evidence showing what work-related expenses he incurred, or that QLF
was only reimbursing him for work-related expenses. Given the lack of
corroborating evidence, the superior court was not required to blindly
accept Husband’s testimony, and it did not err in declining to find these
payments were only for reimbursed work expenses.
¶10 Husband also argues the court “unfairly” used a higher
$4,492 monthly average, calculated based on the most recent six months,
rather than the full two-year period of tracked payments, which would
have produced a lower monthly average of $2,643. Despite Husband’s
conclusory contention of “unfair[ness],” the court did not err by using the
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more recent date range to calculate QLF’s average monthly payments to
Husband. See Arturo D. v. Dep’t of Child Safety, 249 Ariz. 20, 25, ¶ 16 (App.
2020) (“We defer to the [superior] court’s ability to weigh and analyze the
evidence.”).
¶11 Next, Husband argues “[t]he evidence clearly established” he
presented uncontradicted testimony that QLF reimbursed his rent and the
court should have excluded it from his income. At trial, Husband testified
he rents a house in Casa Grande, where he lives while working in Arizona,
and that QLF reimburses him $960 in monthly rent.
¶12 In its ruling, the superior court explained that although
Husband’s bank statements indicate he a made “some monthly payments
of about $1,000” for an Arizona residence that could have been the lodging
Father referenced in his testimony, the record was not clear on that point.
Again, Husband fails to point to any evidence, other than his own
testimony, showing that QLF specifically reimbursed him for his Arizona
rent. The court was not required to accept this testimony, and we defer to
the court’s factual finding. See Aries, 153 Ariz. at 261.
¶13 In addition, Husband argues the superior court erred when it
considered a $35,000 deposit into Husband’s bank account in April 2019 as
another reason not to limit his income to $132,500. In making this
determination, the court stated: “Also unexplained by [Husband] is the
source of $35,000 deposited into his bank account in April 2019.” Husband
contends he explained it when he testified he and his family cashed in a
shared account. Nonetheless, the court was free to reject his explanation.
Gutierrez v. Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998) (“We will defer to
the trial court’s determination of witnesses’ credibility . . . .”).
¶14 In sum, the superior court’s refusal to limit Husband’s income
to $132,500 was not clear error. See Cummings v. Cummings, 182 Ariz. 383,
386 (App. 1994) (superior court may count regular gifts as income); cf. Strait
v. Strait, 223 Ariz. 500, 502, ¶ 8 (App. 2010) (gross income for child-support
purposes includes not just gross income on tax returns, but also cash-like
benefits received which are “available for expenditures”).
2. Ability to Pay
¶15 Husband also argues the superior court erred by finding he
was able to pay the current spousal maintenance obligation. A payor-
spouse must show an inability to pay to warrant modifying spousal
maintenance. See Linton, 17 Ariz. App. at 564.
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¶16 Here, the court could have reasonably concluded that because
of QLF’s additional payments to Husband, coupled with evidence
regarding Husband’s spending habits, he failed to prove an inability to pay.
The record supports the court’s findings that Husband spends $1,000 a
month on food and household supplies and donates thousands per year to
charities, because he admitted this at trial. Husband and his current wife’s
2018 joint tax return shows that his household donated about $19,000 to
charity, but he offered no evidence other than his affidavit and testimony
of what he personally donated—he testified in one instance, $5,000 per year,
and in another instance, less than $500 per month.
¶17 Although Husband argues the superior court erred when it
opined that his monthly food expenses of $1,020 seemed “very high” for
one person, Husband agreed at trial he was “spending over $1,000 a month
on food and household supplies.” To the extent a factual dispute existed as
to whether the $1,000 food expense included only Husband or both him and
his current wife, the court had discretion to resolve it. See Gutierrez, 193
Ariz. at 347.
¶18 Husband also attempts to factually distinguish Linton, 17
Ariz. App. 560, but the factual differences between this case and Linton are
irrelevant to the superior court’s decision. Unlike the circumstances in
Linton, see id. at 562–64, the court in this case did not rely on how long
Husband waited to petition for modification, conclude he voluntarily
reduced his income, or suggest Husband only speculated about an expected
decrease in income. Despite any factual differences, Linton’s legal
requirements to modify spousal maintenance remain the same, and
Husband fell short of proving those requirements. See id. The record
supports the superior court’s finding that Husband was able to pay.
B. Wife’s Circumstances
¶19 Husband next argues the superior court erred by failing to
consider Wife’s circumstances in its ruling denying modification. The
criteria in determining whether to modify spousal maintenance “are the
same as the criteria considered in making a determination as to the
reasonableness of an award for support and maintenance at the time of the
original decree,” including the payee-spouse’s financial conditions, needs,
and ability to produce a sufficient income for him- or herself, and the payor-
spouse’s ability to provide support. Id. at 562 (citation omitted); see also
A.R.S. § 25-319(B) (listing factors).
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¶20 Although the superior court did not explicitly consider Wife’s
circumstances in its ruling, “we will affirm the trial court if its ruling was
correct for any reason.” In re Marriage of Gibbs, 227 Ariz. 403, 409, ¶ 16 (App.
2011). Here, the record supports the court’s ruling denying modification.
As for Wife’s financial condition and needs, Wife testified her expenses
have risen significantly in the past year and her insurance premiums have
more than doubled since 2010. Her monthly expenses were $5,060 and her
monthly income from employment was $980. She also testified her home
and car need repairs, that she could not afford to hire help to remove snow
last winter, and that she “tr[ies] to live very frugally.” Husband argues
Wife’s assets awarded to her at dissolution had increased in value and thus
improved her financial situation, but Wife testified that without spousal
maintenance, she would “not be able to financially support [herself]” and
she would deplete her assets after only three years.
¶21 As for Wife’s ability to produce sufficient income for herself,
Wife worked part-time at the time the decree was entered, as well as at the
time of the 2019 evidentiary hearing. She also suffers from a medical
condition that hampers her daily activities, which would make full-time
employment difficult. Finally, as for Husband’s ability to support Wife, we
have already concluded he failed to show an inability to pay in light of his
spending habits and charitable contributions. See supra at ¶¶ 16–17.
Because Wife’s circumstances supported the superior court’s ruling, no
error occurred.
¶22 Husband seems to suggest the superior court erred by failing
to analyze each of the statutory factors relating to spousal maintenance set
forth in A.R.S. § 25-319. Both Husband and Wife made timely requests for
findings of fact and conclusions of law; however, we conclude Husband
waived any challenge to the adequacy of the court’s findings on this basis
because he did not file a post-judgment motion raising the issue. See Elliott
v. Elliott, 165 Ariz. 128, 134 (App. 1990) (holding that a “litigant must object
to inadequate findings of fact and conclusions of law at the trial court level
so that the court will have an opportunity to correct them. . . . Failure to do
so constitutes waiver.”).
¶23 In conclusion, the court did not abuse its discretion in denying
Husband’s petition to terminate or modify spousal maintenance because he
failed to meet his burden of showing a substantial and continuing change
in circumstances.
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C. Attorneys’ Fees
¶24 Husband argues the superior court abused its discretion by
awarding Wife $42,700 in attorneys’ fees under A.R.S. § 25-324. The court
awarded fees because a substantial disparity of financial resources existed
between the parties and Husband acted unreasonably during litigation.
Because Husband did not object to Wife’s fee application in the superior
court, he has waived this issue on appeal. See Trantor v. Fredrikson, 179 Ariz.
299, 300–01 (1994). We therefore affirm the court’s award of attorneys’ fees.
CONCLUSION
¶25 For the foregoing reasons, we affirm the superior court’s
denial of Husband’s motion to terminate or modify spousal maintenance
and its award of attorneys’ fees. Wife has requested attorneys’ fees incurred
in this appeal pursuant to A.R.S. § 25-324(A). In our discretion, and subject
to her compliance with ARCAP 21, we award Wife a portion of her
reasonable attorneys’ fees, recognizing that she has already been awarded
$10,000 for fees incurred “in furtherance of this appeal” as noted in the
superior court’s stipulated order. We also award taxable costs to Wife upon
compliance with ARCAP 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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