Collier v. Johnson ( 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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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 Matter of:
DAVID B. COLLIER, Petitioner/Appellant,
v.
JENNIFER L. JOHNSON, Respondent/Appellee.
No. 1 CA-CV 22-0551 FC
FILED 10-19-2023
Appeal from the Superior Court in Maricopa County
No. FC2021-003078
The Honorable Glenn A. Allen, Judge
AFFIRMED IN PART, VACATED AND REMANDED IN PART
COUNSEL
Duenas Eden Cravatta, PLC, Phoenix
By Dorian L. Eden
Counsel for Petitioner/Appellant
Berkshire Law Office, PLLC, Tempe
By Kristi Reardon, Keith Berkshire
Counsel for Respondent/Appellee
COLLIER v. JOHNSON
Decision of the Court
MEMORANDUM DECISION
Presiding Judge James B. Morse Jr. delivered the decision of the Court, in
which Judge Cynthia J. Bailey and Judge Brian Y. Furuya joined.
M O R S E, Judge:
¶1 David Collier ("Husband") appeals from a Decree of
Dissolution ("Decree"). We remand for new child support calculations,
dismiss Husband's challenge to the attorney fees and costs issue for lack of
jurisdiction, and affirm all other rulings.
FACTS AND PROCEDURAL BACKGROUND
¶2 Husband and Jennifer Johnson Collier ("Wife") married in
November 2016 and subsequently had one child together. Husband
petitioned for dissolution of marriage in 2021, Wife accepted service on July
14, and the superior court held an evidentiary hearing in 2022.
¶3 Before the marriage, Husband had nearly $160,000 in a
checking account ending in x0861 ("x0861"). Husband also held a Thrift
Saving Plan ("TSP") loan with an outstanding balance of approximately
$32,000. Wife brought several rental properties into the marriage.
¶4 During the first six months of the marriage, Husband had six
or seven payroll deductions totaling over $5,000 to repay the TSP loan.
Husband also began depositing his paychecks into x0861. By July 11, 2017,
Husband had deposited over $65,000 into x0861 and withdrawn over
$58,000. On July 11, Husband wrote a check for roughly $27,000 from x0861
to pay off the remainder of his TSP loan.
¶5 By August 8, 2017, Husband had deposited about $75,000 into
x0861 and withdrawn over $92,000. On August 8 Husband withdrew
$125,000 from x0861 and deposited it into a Certificate of Deposit ("CD") at
Ally Bank. This money remained in various CDs until Husband transferred
the principal plus interest back to x0861 in February 2020. Two months
later, Husband created a new bank account ending in x5308 ("x5308") and
transferred $135,000 from x0861.
¶6 During the marriage, Wife opened two bank accounts ending
in x0252 ("x0252") and x9073-0700 ("x9073"). She opened x0252 to hold child
support payments from a previous marriage. In November 2020, Wife
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withdrew $100,000 from x9073 to pay down the mortgage on her separate
property.
¶7 Both parties concede their joint account ending in x3086
("x3086") was community property, but Husband disputes whether a
$25,000 retention bonus received by Husband on January 30, 2021, and
deposited into x3086 should be characterized as community or separate
property.
¶8 On April 26, 2021, Husband deposited $14,000 into x0861. At
the evidentiary hearing, Husband contended this was a gift from his
mother.
¶9 On July 12, 2021, Husband opened a checking account ending
in x3713 ("x3713") and transferred over $72,000 into that account from
x3086. Eleven days later, he transferred approximately the same amount
back to x3086. At the end of July, Husband deposited a paycheck worth
almost $12,000 into x3713.
¶10 At the evidentiary hearing, Husband argued that the
retention bonus, x3713, x0861, and x5308 should be his separate property
because he properly traced the funds. Husband also contended he used
separate funds to repay the TSP loan and Wife should not be reimbursed
for that expense.
¶11 The superior court equally divided x0861, x5308, x3086, and
x9073 from the day of service and divided x3713 from August 20. Husband
was ordered to reimburse the community for the repayment of the TSP
loan. The superior court credited Husband with two other minor children,
determined Husband had 71% of the income for child support purposes,
and permitted him to claim the child on his tax returns half the time. The
superior court credited both Husband and Wife with childcare and health
care costs.
¶12 The superior court also ordered Husband to pay Wife's
attorney fees and costs and directed Wife to submit an application for them.
The superior court delayed its decision on the amount of attorney fees and
costs but certified its ruling on the Decree as a final, appealable order
pursuant to Arizona Rule of Family Law Procedure ("Rule") 78(b).
Following Wife's application, the superior court entered a separate final
order in January 2023 awarding Wife $12,233 in attorney fees and costs.
¶13 Husband timely appealed the Decree, and we have
jurisdiction under A.R.S. § 12-2101(A)(1). See Bollermann v. Nowlis, 234 Ariz.
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340, 342, ¶ 12 (2014) (stating that decrees that include Rule 78(b) language
are appealable even if attorney fees are unresolved). Husband did not
amend or submit a new notice of appeal after the superior court entered its
final order on attorney fees and costs.
DISCUSSION
¶14 Husband argues that the superior court erred in its
characterization and division of funds within x0861, x5308, x3713, x3086,
and x9073. Husband also contends the superior court erred in calculating
child support and awarding Wife attorney fees. We address each in turn,
reviewing the court's division of property for an abuse of discretion but
reviewing its characterization of the property de novo. Helland v. Helland,
236 Ariz. 197, 199, ¶ 8 (App. 2014). When, as here, neither party requested
findings of fact or conclusions of law, see Ariz. R. Fam. Law P. 82(a), we
presume that the superior court "found every fact necessary to support the
judgment" and will affirm if any reasonable construction of the evidence
justifies the decision, Neal v. Neal, 116 Ariz. 590, 592 (1977) (citation
omitted).
I. Accounts.
A. Ally CD.
¶15 Husband brought x0861 into the marriage as separate
property. See A.R.S. § 25-213(A). Separate property can be transmuted into
community property by agreement, gift, or commingling. In re Marriage of
Cupp, 152 Ariz. 161, 164 (App. 1986). The superior court found that both
x0861 and x5308 were commingled, and Husband failed to meet his burden
of showing that the funds were his separate property. Husband argues his
separate funds in x0861 were not commingled and were traceable because
more community funds were deposited than paid out.
¶16 An account brought into the marriage by one spouse may
persist as separate property if the community funds deposited into it are
"negligible." Noble v. Noble, 26 Ariz. App. 89, 95–96 (App. 1976). When
separate and community property are commingled, there is a presumption
the entire fund is community property "unless the separate property can be
explicitly traced." Cooper v. Cooper, 130 Ariz. 257, 259 (1981) (quoting Porter
v. Porter, 67 Ariz. 273, 281 (1948)). The party making the assertion bears the
burden to prove that fact by clear and satisfactory evidence. Id. at 259–60.
¶17 At the time Husband transferred $125,000 from x0861 to the
Ally CD, about $75,000 of community funds had been deposited and over
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$92,000 withdrawn from x0861. This includes over $50,000 in checks,
$24,000 in credit card payments, and $4,000 in cash withdrawals. Apart
from the TSP check, Husband failed to explicitly trace any of the
withdrawals from x0861 and Husband cannot show that over $51,000 in
withdrawals were used for separate or community expenses.
¶18 At the evidentiary hearing, Husband argued a "last-in-first-
out" approach should be applied, wherein the last funds deposited are
presumed to be the first funds expended. Even if Arizona utilized a "last-
in-first-out" approach, because Husband failed to provide evidence that the
withdrawals were for community expenses, he did not establish that the
funds remaining in x0861 were separate property.
¶19 On August 8, there was over $143,000 in x0861. The roughly
$75,000 of deposited community funds constitutes a non-negligible 52% of
the account's total value. The superior court did not err in finding Husband
failed to meet his burden of proving that the funds in x0861 retained a
separate identity. Thus, the money that flowed from x0861 through the CD
accounts to x5308 were also community funds.
¶20 Husband also argues that the superior court treated x0252
differently than his accounts. The superior court evenly divided the
$4,643.72 of community funds deposited in x0252. The remainder of the
money in x0252 were traceable child support payments from a separate
marriage and were thus Wife's separate property. We affirm the
classification of x0861 and x5308 as community property and the equal
division of the accounts.
B. TSP Loan.
¶21 Husband also argues the check used to repay his TSP loan
was separate property, and the only community property used to repay the
loan were six or seven payroll deductions. The superior court found that
community money was used to repay the TSP loan and Wife should be
reimbursed for half of the expense.
¶22 Here, Husband failed to trace these funds and meet his
burden of proving that x0861 was his separate property. Cooper, 130 Ariz.
at 259–60. By July 11, 2017, over $65,000 of community funds had been
deposited, and over $58,000 had been withdrawn. Further, the deposits
constituted a non-negligible 39% of x0861's total value. "[W]e are
constrained by the presumption that the Superior Court 'found every fact
necessary to support the judgment, and such presumptive findings must be
sustained if the evidence on any reasonable construction justified it.'" Neal,
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116 Ariz. at 592 (quoting Porter, 67 Ariz. at 282). The record supports the
superior court's implicit conclusion that Husband failed to meet his burden.
See Cooper, 130 Ariz. at 259–60 ("Finally, the burden is upon the person
claiming that the commingled funds, or any portion of them, are separate
to prove that fact and the amount by clear and satisfactory evidence."). We
affirm the reimbursement order.
C. Gift.
¶23 Husband argues the $14,000 deposit into x0861 in April 2021
was a gift from his mother. Property acquired via gift during marriage is
considered separate property. A.R.S. § 25-213(A). Determining whether a
gift has been made is a question of fact which we review under a clearly
erroneous standard. Chirekos v. Chirekos, 24 Ariz. App. 223, 227 (1975).
"Property acquired by either spouse during marriage is presumed to be
community property, and the spouse seeking to overcome the presumption
has the burden of establishing a separate character of the property by clear
and convincing evidence." Brebaugh v. Deane, 211 Ariz. 95, 97–98, ¶ 6 (App.
2005) (quoting Thomas v. Thomas, 142 Ariz. 386, 392 (App. 1984)); see A.R.S.
§ 25-211(A).
¶24 At the evidentiary hearing, Husband provided two signed
but unnotarized letters from his brother and sister stating the money was a
gift. He also presented bank statements exhibiting a withdrawal of $14,000
from his mother's account. Husband argues there was less than $6,400 of
community funds in x0861 on April 26, and because around $2,300 was
deposited and $2,200 was withdrawn after that date, the $14,000 retained
its separate character. Husband provided bank statements showing the
withdrawals from x0861. While a portion of the withdrawals are
discernable as several hundred dollars of grocery and gas expenses, he did
not provide information on whether the remaining withdrawals were
community or separate expenses.
¶25 It is unclear from the Decree whether the superior court
decided the $14,000 was not a gift or that it was a gift but lost its separate
character once deposited into x0861. Because Husband did not request
findings of fact under Rule 82(a), we presume the court considered all the
evidence necessary to sustain its rulings and if there is "reasonable evidence
to support such finding, we must sustain the judgment." Bender v. Bender,
123 Ariz. 90, 92 (App. 1979). We affirm the division of the $14,000 because
reasonable evidence supports the superior court's implicit finding that
there either was no gift, or any gift deposited into x0861 was commingled
and Husband provided insufficient tracing evidence to overcome that
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presumption. See Cooper, 130 Ariz. at 257, 259 (noting a presumption that
funds in a joint account are commingled absent proper tracing).
D. x9037.
¶26 Husband argues that the superior court erred in ordering
x9073 be divided equally without regard to Wife's use of $100,000 of
community property to pay down a separate debt. At the evidentiary
hearing, Husband argued that x9073 should be divided equally because
Wife took out $100,000 of community funds for payment on her separate
property, and the superior court agreed. Husband also signed a Rule 69
agreement that the superior court adopted. The agreement stated that
Husband would receive no equalization payments associated with that
property. Husband waived this argument when he agreed to the Rule 69
agreement and failed to raise it before the superior court. See Englert v.
Carondelet Health Network, 199 Ariz. 21, 26, ¶ 13 (App. 2000) (noting that
issues first raised on appeal are waived).
E. x3713.
¶27 Husband argues the superior court erred in using August 20,
2021, as the date of valuation for x3713 as it consisted of his separate
property and the account should not have been divided. Wife contends that
42% of Husband's July paycheck was community property, and the
superior court erred in using the August 20 date.
¶28 Because Husband's paychecks are considered community
property until the date of service, the superior court did not err. See A.R.S.
§ 25-211. The record reflects that the 13 days before service constituted
property earned during the marriage. And even if Wife is correct that
nearly $5,000 (or 42%) of Husband's paycheck was community property,
she did not cross appeal, and we affirm. See Steiner v. Steiner, 179 Ariz. 606,
613 (App. 1994) (stating that, absent a cross appeal, we lack jurisdiction to
address errors identified by appellee).
F. Retention Bonus.
¶29 Husband argues his retention bonus was his separate
property, and the superior court erred in dividing x3086 without giving him
credit for the bonus. Husband's retention bonus was a prepaid bonus that
accrued at a rate of 1/365 per day. If Husband separated from his
employment early, he would be required to repay the unearned amount.
At service, that amount exceeded $10,000. Husband argues that because
the bonus accrued daily and he would have been responsible for repaying
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the unearned amount, it should have been allocated as separate property.
He also contends that it is inequitable for the parties to share the bonus
because he alone paid income tax on it.
¶30 The characterization of property as community or separate is
a question of law that we review de novo. Schickner v. Schickner, 237 Ariz.
194, 199, ¶ 22 (App. 2015). Property acquired during marriage is presumed
to be community property, and Husband bears the burden of rebutting this
presumption by clear and convincing evidence. A.R.S. § 25-211(A);
Brebaugh, 211 Ariz. at 97–98, ¶ 6. Husband had to show the bonus was
intended to "induce future employment" as opposed to compensate
Husband for efforts during the marriage. Brebaugh, 211 Ariz. at 118, ¶ 25.
In determining the employer's intent, we consider whether the employer
"expressly stated" the purpose of the benefit. Id. If the employer intended
to compensate the employee for past or current service, the benefit is
community property. Id.
¶31 At the evidentiary hearing, Husband submitted sufficient
evidence to establish he was given a retention bonus for 2021. Wife
conceded at oral argument that the portion of the bonus that had not yet
accrued at the time of separation was separate property. However, the
record supports the superior court's conclusion that the bonus lost its
separate character. See Cooper, 130 Ariz. at 259 (noting there is a
presumption that commingled property is community property absent
explicit tracing).
¶32 Between receiving the bonus and service being accepted by
Wife, Husband commingled the money in x3086 and the funds lost their
separate character. Id. Husband made no attempt to trace this money and
only provided two of the six monthly statements before service. We
presume the superior court found every necessary fact to support its
judgment, and the record contains sufficient evidence that Husband failed
to meet his burden of explicitly tracing the funds in x3086. Id.; Neal, 116
Ariz. at 592.
¶33 Husband does not argue, and nothing in the record suggests,
Husband became obligated to repay any portion of the bonus. So, we need
not decide whether such an obligation would have been a community
obligation. Further, whether Husband paid income tax on the bonus has
no bearing on its division. Thus, we affirm the superior court's division of
x3086.
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II. Child Support.
¶34 Both parties agree that in the Decree, the superior court made
several errors in the Child Support Worksheet ("Worksheet"). The parties
dispute whether Wife's separate real property's depreciation should have
been factored into her income.
¶35 Child support awards are reviewed for an abuse of discretion.
Sherman v. Sherman, 241 Ariz. 110, 112, ¶ 9 (App. 2016). We view the
evidence in the record "in the light most favorable to upholding the trial
court's decision" and will affirm unless the record is "devoid of competent
evidence to support the decision." Little v. Little, 193 Ariz. 518, 520, ¶ 5
(1999) (quoting Fought v. Fought, 94 Ariz. 187, 188 (1963)). However, we
review de novo a trial court's interpretation of the Arizona Child Support
Guidelines ("Guidelines"). Hetherington v. Hetherington, 220 Ariz. 16, 21,
¶ 21 (App. 2008). What constitutes "gross income" is a question that
requires us to interpret the Guidelines, and thus, is a question of law subject
to de novo review. Patterson v. Patterson, 226 Ariz. 356, 358, ¶ 4 (App. 2011).
A. Clerical Error.
¶36 Husband and Wife agree the superior court made the
following clerical errors in the Worksheet: (1) the Worksheet credited
Husband with two other minor children when it should have only credited
him for one; (2) the Worksheet credited Husband $440 per month and Wife
with $54.71 per month for medical insurance when only Husband should
have been credited $6.06 per month; (3) the superior court equally divided
the child tax credit when Husband has 71% of the income and should be
entitled to it three out of every four years; and (4) the Worksheet credited
both parties with childcare expenses when only Wife incurs these expenses.
The superior court found the childcare expense to be $800, which Husband
disputes.
¶37 The record supports the parties' concessions. We remand to
the superior court to correct these errors and make a new child support
calculation.
¶38 The parties dispute whether the superior court erred in
attributing monthly childcare costs. The superior court heard competing
testimony on the matter and found the childcare costs to be $800 a month.
We do not reweigh contradictory evidence or substitute our judgment for
that of the superior court. Great W. Bank v. LJC Dev., LLC, 238 Ariz. 470, 478,
¶ 22 (App. 2015).
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B. Depreciation.
¶39 Husband also argues the superior court erred in determining
Wife's income because it included the value of the depreciation for her
rental properties and provided no explanation for this.
¶40 Because neither party requested findings of fact or
conclusions of law under Rule 82, we presume that the family court "found
every fact necessary to support the judgment" and will affirm if any
reasonable construction of the evidence justifies the decision. Neal, 116
Ariz. at 592. In determining if a parent should be permitted to deduct
depreciation from their income, a superior court should examine every
circumstance, including the nature of the depreciated property, the
importance of the property, and all other relevant circumstances. Baker v.
Baker, 183 Ariz. 70, 72 (App. 1995).
¶41 We reject Husband's contention that the superior court did
not enter enough findings to infer whether depreciation impacted Wife's
income. At the evidentiary hearing, the superior court heard competing
testimony regarding depreciation before adopting Wife's proposed income.
We will not reweigh conflicting evidence on appeal and will not substitute
our discretion for that of the superior court. Hurd v. Hurd, 223 Ariz. 48, 52,
¶ 16 (App. 2009); Cook v. Losnegard, 228 Ariz. 202, 205, ¶ 11 (App. 2011).
Thus, we affirm Wife's income as stated in the Worksheet.
III. Attorney Fees.
¶42 In his opening brief Husband claims the superior court erred
by awarding Wife attorney fees. The superior court entered judgment in
July 2022. The Decree ordered Husband to pay Wife's attorney fees and
would award the amount in a later order. Pursuant to Rule 78(b) the
superior court found there was "no just reason for delay" which made the
Decree immediately appealable. Husband timely appealed the July 2022
Decree, and we have jurisdiction over the Decree. See Natale v. Natale, 234
Ariz. 507, 509, ¶ 5 (App. 2014) ("[A] family court ruling is not final and
appealable until all of the claims pending before the court have been
resolved" or until the court has issued a "certification of finality" under Rule
78(b)). Several months later, the superior court entered an order awarding
Wife $12,233 in fees and costs. Wife argues that we lack jurisdiction to
consider the superior court's award of attorney fees because Husband did
not file an amended or new notice of appeal. At oral argument, Husband
conceded that we do not have jurisdiction. Therefore, we dismiss his
challenge to the superior court's award of attorney fees.
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CONCLUSION
¶43 For the foregoing reasons, we affirm in part and remand in
part the judgment of the superior court. Husband requests his attorney fees
and costs on appeal pursuant to ARCAP 21, and Wife requests hers
pursuant A.R.S. § 25-324 and ARCAP 21. In the exercise of our discretion,
we decline to award attorney fees. But as the prevailing party, we award
Wife her costs on appeal upon compliance with ARCAP 21.
AMY M. WOOD • Clerk of the Court
FILED: AA
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