Kostadinova v. Stephens

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
SLAVA KOSTADINOVA, Petitioner,
v.
BRYAN M. STEPHENS, Respondent/Appellee.
KRISTIN ROEBUCK-BETHELL, Appellant.
No. 1 CA-CV 17-0099 FC
FILED 3-15-2018
Appeal from the Superior Court in Maricopa County
No. FC2013-090643
The Honorable Stephen M. Hopkins, Judge
AFFIRMED
COUNSEL
Horne Slaton, PLLC, Scottsdale
By Sandra L. Slaton
Counsel for Appellant
Ryan Rapp & Underwood, P.L.C., Phoenix
By Terrie S. Rendler
Counsel for Respondent/Appellee
KOSTADINOVA v. STEPHENS
Decision of the Court
MEMORANDUM DECISION
Judge Paul J. McMurdie delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Jennifer B. Campbell
joined.
M c M U R D I E, Judge:
¶1 Attorney Kristin Roebuck-Bethell (“Counsel”) appeals the
superior court’s award of attorney’s fees and costs to Bryan M. Stephens
(“Father”) as a sanction for having unreasonably defended against Father’s
request to have his address protected from disclosure. For the following
reasons, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Several months after Slava Kostadinova (“Mother”) filed her
petition for paternity in March 2013, the parties reached a temporary
agreement under Arizona Rule of Family Law Procedure 69. The parties
agreed, inter alia, to joint legal decision-making, initial parenting time, and
to exchange their infant child at a police station. No residential addresses
were revealed in the agreement, although Father agreed to “exercise his
parenting time primarily at his residence.” The parties agreed to
communicate exclusively by email, except for texting each other’s cell
phones in case of an emergency.
¶3 After the temporary agreement was entered, Mother accused
Father of sexual misconduct in Texas involving his ex-wife and
step-daughter. Mother alleged the incident was investigated by the Texas
Department of Family and Protective Services (“DFPS”). A search of DFPS’s
records revealed no evidence that Father had been investigated, charged,
or arrested for any such abuse in Texas. Father’s ex-wife submitted a letter,
and later an affidavit, stating that Father had never abused her or her
daughter. Mother then alleged Father had been arrested in Sweden for
touching an under-aged girl. However, no evidence supporting the
allegation was found through a record-search by Swedish authorities.
Mother hired a private investigator, who reported no criminal records for
Father other than speeding tickets. In a Comprehensive Family Assessment
report filed with the court in July 2015, Dr. Korsten determined Mother’s
2
KOSTADINOVA v. STEPHENS
Decision of the Court
allegations were unfounded. 1 Mother did not provide any evidence
supporting her allegations, and would not change her position when
presented with substantial evidence refuting them.
¶4 In the spring of 2014, Father relocated his residence. Father
did not disclose his new address to Mother allegedly for safety concerns for
his new family. After protracted mediation, the parties reached a global
Rule 69 settlement agreement in 2015, which provided: “Each parent shall
notify the other of a changed address and/or phone number, within ten (10)
days of such change.” On March 4, 2016, the court appointed parenting
coordinator, Dr. Weinstock, recommended “both parents share information
as to where [their child] will be staying overnight during each parent’s
standard parenting time.”
¶5 On May 26, 2016, Counsel sent an email to Father’s counsel,
in which she requested Father provide his new address to Mother. The next
day, Father’s counsel filed a motion arguing that the disclosure of Father’s
home address should abide resolution in an upcoming trial. On June 20,
2016, the superior court ordered Father to disclose his address or file a
request for protected address under Arizona Rule of Family Law
Procedure 7. On June 21, 2016, the court granted Father’s Motion for Partial
Summary Judgment, finding the parties’ settlement agreement valid and
binding as of December 28, 2015 (“2015 Settlement Agreement”). The court
ordered that Mother could file an objection to Father’s request for an award
of attorney’s fees and costs based on the unreasonableness of Mother’s
position by July 15, 2016. 2 On July 6, 2016, Father filed for a protected
1 In her report, Dr. Korsten stated: “Ms. Kostadinova has made serious
allegations against Mr. Stephens that in conjunction suggest she has
intentionally misled the Court to increase the cost of litigation or persuade
the Court to give a legal decision-making or parenting time preference to
her . . . . If the Court has concerns that Ms. Kostadinova continues to make
allegations to punish Mr. Stephens, it may be necessary for Mr. Stephens to
be identified as the final decision-maker.”
2 In his motion for partial summary judgment, Father requested an
award of attorney’s fees based on Mother’s unsupported assertions to Dr.
Weinstock and Dr. Korsten that Father was investigated for sexual
misconduct involving his step-daughter after Mother possessed substantial
evidence refuting her accusations. Father also argued Mother unreasonably
failed to initiate equal parenting time and refused to discuss her position
after December 2015.
3
KOSTADINOVA v. STEPHENS
Decision of the Court
address under Rule 7, stating he feared Mother would reveal his address to
his former business associates, who would harm him or his new family. In
Mother’s response to the motion (“Response”), filed on July 25, 2016,
Counsel argued Mother was entitled to know Father’s address and would
keep Father’s address confidential. Mother did not dispute that Father’s
business associates would potentially harm Father or his family if his
address was disclosed to them. Counsel stated, “Mother has done nothing
vindictive in this case.” (Emphasis added.) On August 5, 2016, the court
found “Mother acted unreasonably in the litigation from December 28,
2015,” because she “continued to try to impose additional terms after a
binding contract was reached between the parties,” and awarded Father his
reasonable attorney’s fees and costs. On August 10, 2016, the superior court
granted Father’s request for a protected address and suggested Father file
a memorandum on sanctioning Counsel for the Response pursuant to
Arizona Rule of Family Law Procedure 31 (“August Order”). After the
parties briefed the issue, the court sanctioned Counsel and found her
positions “objectively unreasonable” on September 28, 2016 (“September
Order”).
¶6 Counsel moved for a new trial, which the court denied. The
court then entered a judgment for attorney’s fees and costs against Counsel
in the total amount of $5737. Counsel timely appealed. We have jurisdiction
pursuant to Arizona Revised Statutes (“A.R.S.”) sections 12-120.21(A)(1)
and -2101(A)(1).
DISCUSSION
¶7 Counsel argues the superior court erred by (1) failing to make
specific findings regarding elements necessary to sanction Counsel
pursuant to Arizona Rule of Family Law Procedure 31 (“Rule 31”); (2)
sanctioning Counsel without holding a requested evidentiary hearing; and
(3) awarding sanctions unrelated to Counsel’s Response.
¶8 We review the superior court’s rulings on a motion for
sanctions for abuse of discretion, Cal X-Tra v. W.V.S.V. Holdings, L.L.C., 229
Ariz. 377, 410, ¶ 113 (App. 2012), and “[t]he question is not whether the
judges of this court would have made an original like ruling, but whether a
judicial mind, in view of the law and circumstances, could have made the
ruling without exceeding the bounds of reason,” Marquez v. Ortega, 231
Ariz. 437, 441, ¶ 14 (App. 2013) (alteration in original) (quotation omitted).
We are bound by the superior court’s findings of fact, “unless they are
clearly erroneous or unsupported by any credible evidence.” Lund v.
Donahoe, 227 Ariz. 572, 578–79, ¶ 19 (App. 2011).
4
KOSTADINOVA v. STEPHENS
Decision of the Court
¶9 Because Rule 31 is substantially similar to Arizona Rule of
Civil Procedure 11 (“Rule 11”), the legal precedents interpreting Rule 11
apply to our analysis under Rule 31. See In re Marriage of Dougall, 234 Ariz.
2, 6, ¶ 9, n.5 (App. 2013) (“Wherever the language in [the Arizona Rules of
Family Law Procedure] is substantially the same as the language in other
statewide rules, the case law interpreting that language will apply to these
rules.”) (alteration in original) (quoting Ariz. R. Fam. Law P. 1 cmt.); see also
Ariz. R. Fam. Law P. 31 cmt. (Rule 31 is “based on Rule 11, Arizona Rules
of Civil Procedure”).
¶10 The purpose of Rule 11, and by extension Rule 31, is “to
discourage wasteful, costly litigation battles by mandatory sanctions where
the position of the lawyer will not support a sound basis in law or fact
justifying the position asserted.” Wells Fargo Credit Corp. v. Smith, 166 Ariz.
489, 497 (App. 1990) (emphasis added). 3 When imposing sanctions, a
superior court applies an objective reasonableness standard, Cal X-Tra, 229
Ariz. at 410, ¶ 113, of “what a professional, competent attorney would do
in similar circumstances,” Linder v. Brown & Herrick, 189 Ariz. 398, 407 (App.
1997).
A. The Superior Court’s Findings under Rule 31 Were Sufficiently
Specific.
¶11 Counsel argues the superior court abused its discretion by
failing to make specific findings regarding elements necessary to sanction
Counsel under Rule 31.
¶12 Regarding factual contentions, Rule 31 requires a document
certified by counsel be “well grounded in fact,” while Rule 11 requires it to
have “evidentiary support.” See Ariz. R. Fam. Law P. 31(A); Ariz. R. Civ. P.
3 Rule 31 authorizes a court to “impose upon the person who signed
[a pleading, motion or other paper in violation of this rule] . . . an
appropriate sanction, which may include an order to pay to the other party
or parties the amount of the reasonable expenses incurred because of the
filing of the pleading, including a reasonable attorney’s fee.” Ariz. R. Fam.
Law P. 31(A). Sanctions are appropriate when the signor “knows or should
have known, by a reasonable investigation of fact and of law, that [a motion
or pleading] is insubstantial, frivolous, groundless or otherwise
unjustified.” James, Cooke & Hobson, Inc. v. Lake Havasu Plumbing & Fire Prot.,
177 Ariz. 316, 319 (App. 1993); see Ariz. R. Civ. P. 11; Ariz. R. Fam. Law
P. 31.
5
KOSTADINOVA v. STEPHENS
Decision of the Court
11(b)(3). Although we recognize these two propositions may have different
meanings in some situations, we find the requirements substantially similar
for the purposes of our decision and will apply legal precedent interpreting
either rule. See In re Marriage of Dougall, 234 Ariz. at 6, ¶ 9, n.5. Both rules
equally authorize the court to sanction counsel for certifying a document
interposed “for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation.” Ariz. R.
Fam. Law P. 31(A); Ariz. R. Civ. P. 11(b)(1).
¶13 “The trial court must make specific findings to justify its
conclusion that a party’s claims or defenses are frivolous.” Smith, 166 Ariz.
at 497 (quoting State v. Richey, 160 Ariz. 564, 565 (1989)). The reasonableness
of a factual inquiry depends on the totality of the circumstances, which may
change as the case progresses. See Boone v. Superior Court, 145 Ariz. 235, 241
(1985); Wright v. Hills, 161 Ariz. 583, 590 (App. 1989) (“An attorney is
obligated to review and examine his [or her] position as facts of the case are
developed, and . . . he [or she] may be obligated to reevaluate his [or her]
earlier certification under Rule 11.”), overruled on other grounds as recognized
by James, Cooke & Hobson, Inc., 177 Ariz. 316.
¶14 The superior court provided several reasons for imposing
Rule 31 sanctions for Counsel’s Response. First, the court explained
Counsel failed to provide any evidence, or even argue, that Father’s former
business associates would not harm Father or his family if they were to learn
Father’s address. The court not only found Father satisfied the Arizona Rule
of Family Law Procedure 7 standard (a party reasonably believes a physical
or emotional harm may result from the address’s disclosure), 4 but also that
4 Rule 7 specifies: “Any person filing an initial or post-judgment
petition, motion or response, whose address is not known to the other party
and who reasonably believes that physical or emotional harm may result to
the person or a minor child if the person’s address is not protected from
disclosure, may request the court to designate that party’s address as
protected . . . .” Ariz. R. Fam. Law P. 7(A) (emphasis added). We agree with
the superior court that Rule 7 imposes a very minimal standard for
obtaining a protected address. Moreover, the issue of whether Father’s Rule
7 request for protected address was properly granted is not before us, as it
was not appealed.
6
KOSTADINOVA v. STEPHENS
Decision of the Court
Counsel listed these associates as witnesses against Father’s character. 5
Counsel’s statement that Mother promised not to disclose Father’s address
to anyone was not credible given Mother’s previously taken positions and
allegations. The court found Counsel violated the objective standard of a
competent attorney by failing to conduct a “reasonable inquiry into the
basis” for her Response. See Wolfinger v. Cheche, 206 Ariz. 504, 510, ¶ 29
(App. 2003). Moreover, Counsel represented to the court “Mother has done
nothing vindictive in this case,” which, on this record, was a groundless,
unjustified, and specious position. See James, Cooke & Hobson, Inc., 177 Ariz.
at 319; see also Ariz. R. Fam. Law P. 31.
¶15 Second, the court explained the parties reached a detailed and
specific settlement agreement in 2015, without making the disclosure of
Father’s address “an essential item.” Mother presented no other reason why
the parties’ agreement could not be fulfilled without her knowing Father’s
address. The court found “entirely pretextual” Mother’s claim that she was
entitled to know Father’s address because it was in the best interests of their
child. Moreover, the settlement agreement did not specifically address
whether an address could be protected from public disclosure under Rule 7.
The court found Mother’s need to know the address mooted by the parties’
settlement agreement, and therefore Counsel’s position, objectively
unreasonable. The Response caused “unnecessary delay or needless
increase in the cost of litigation.” See Ariz. R. Fam. Law P. 31; see also Boone,
145 Ariz. at 241; James, Cooke & Hobson, Inc., 177 Ariz. at 319.
¶16 To further support the imposition of sanctions, the court
found: (1) Mother’s attack was personal; (2) she used an inflammatory and
old police report; and (3) Mother’s filing for a bankruptcy discharge soon
after Father requested Mother pay his attorney’s fees for prevailing on his
motion for partial summary judgment should have prompted Counsel to
act with even greater diligence and pursue only meritorious and reasonable
5 Counsel complained Father’s counsel misrepresented that Father’s
former business associates were called to testify about Father’s character.
But Mother did, in fact, list Father’s business associates as character
witnesses. Counsel’s representations were made for an improper purpose.
See Ariz. R. Fam. Law P. 31; see also James, Cooke & Hobson, Inc., 177 Ariz. at
319.
7
KOSTADINOVA v. STEPHENS
Decision of the Court
legal positions. 6 See Lund, 227 Ariz. at 578–79, ¶ 19 (the superior court’s
findings are binding on appeal unless clearly erroneous or unsupported by
credible evidence).
¶17 The court did not fail to make specific findings. See Smith, 166
Ariz. at 497. The court’s concerns went beyond the fact that Counsel filed a
response. The concern was that the content of her Response failed to
comport with Rule 31. Considering the history of this case, we cannot say
the court abused its discretion by sanctioning Counsel. See Marquez, 231
Ariz. at 441, ¶ 14 (“We do not substitute our discretion for that of the trial
court.”); see also Heuisler v. Phoenix Newspapers, Inc., 168 Ariz. 278, 284 (App.
1991) (facts are viewed in the light most favorable to sustaining the
sanctions imposed).
B. Counsel’s Due Process Rights Do Not Extend to a Mandatory
Evidentiary Hearing on Sanctions.
¶18 Counsel argues the superior court erred by sanctioning her
pursuant to Rule 31 without first holding an evidentiary hearing, which she
requested, and by making sua sponte findings unsupported by the record.
¶19 “[T]he imposition of sanctions should be preceded by some
form of notice and opportunity to be heard on the propriety of imposing
the sanctions.” Lund, 227 Ariz. at 582, ¶ 37 (alteration in original) (quoting
Precision Components, Inc. v. Harrison, Harper, Christian & Dichter, P.C., 179
6 Counsel argues on appeal the superior court improperly ruled
Counsel “should have known [on July 25] that the Court would find [on
August 5] Mother’s conduct to be unreasonable[,]” when the court granted
Father’s request for attorney’s fees based on Mother’s unreasonable
positions taken after December 28, 2015. However, the court’s finding
seems to illuminate its concern with Mother’s timing of her bankruptcy, but
even if we disregard this finding entirely, the court had a reasonable basis
for sanctioning Counsel’s conduct on the record as it existed on July 25. See
Villa De Jardines Ass’n v. Flagstar Bank, FSB, 227 Ariz. 91, 99, ¶ 25 (App.
2011); see also Boone, 145 Ariz. at 241 (“[C]ounsel is required only to make
an investigation [of facts and law] which is reasonable under the
circumstances that exist at the time of filing the pleading.”); Taliaferro v.
Taliaferro, 188 Ariz. 333, 341 (App. 1996) (the sanctions authorized “are
discretionary,” but are to be “’appropriate’ . . . , which means that they are
to bear some relationship . . . to the expenses directly caused by the
sanctionable conduct”).
8
KOSTADINOVA v. STEPHENS
Decision of the Court
Ariz. 552, 555 (App. 1993)). In assessing the necessity for a hearing on
sanctions, the superior court evaluates: “1) the circumstances in general; 2)
the type and severity of the sanctions under consideration; and 3) the
judge’s participation in the proceedings, knowledge of the facts, and need
for further inquiry.” Id. (quotation omitted). “In all cases . . . the accused
must be given an opportunity to respond, either orally or in writing, to
justify his or her actions.” Id. (quotation omitted); see also Robinson v.
Higuera, 157 Ariz. 622, 624 (App. 1988) (“[d]ue process does not require that
a hearing be held in every case,” even where “sanctions of dismissal or
entry of default judgment” are entered); Montgomery Ward & Co., Inc. v.
Superior Court, 176 Ariz. 619, 622 (App. 1993) (“The heavier the sanction
contemplated, the more deliberate the process that is due and the more
thorough the findings that should be made.”).
¶20 In its August Order, the court invited Father’s counsel to file
“a legal memorandum addressing whether Mother and/or her counsel
should be sanctioned pursuant to Rule 31 . . . based upon the filing of the
Response.” Father filed a memorandum in support of sanctions, to which
Mother responded in detail and submitted exhibits. Therefore, Counsel was
given notice and an opportunity to be heard.
¶21 In its September order, the court considered both legal
memoranda, and, having “reviewed the entire Court file with respect to this
matter,” denied Mother’s request for an evidentiary hearing. See Lund, 227
Ariz. at 582, ¶ 37. Because Rule 31 does not mandate that a hearing be
conducted, the total amount of $5737 was not an excessive sanction, and the
court was familiar with the case, we find Counsel was afforded due process.
The court did not abuse its discretion by denying her request for an
evidentiary hearing. See Marquez, 231 Ariz. at 444, ¶ 26.
C. The Amount of Sanctions Was Not Excessive.
¶22 Counsel argues the superior court abused its discretion by
expanding the sanction for attorney’s fees “not directly related to the
sanctionable conduct” and for fees incurred before Father’s request for a
protected address.
¶23 “When an attorney signs a pleading in violation of [Rule 31],
some form of sanction is required.” In re $15,379 in U.S. Currency, 241 Ariz.
462, 470, ¶ 19 (App. 2016); see also Smith, 166 Ariz. at 497 (Rule 11 sanctions
are “mandatory”). Rule 31 authorizes “an appropriate sanction . . . incurred
because of the filing of the pleading,” Ariz. R. Fam. Law P. 31(A), which
should “bear some relationship to the expenses directly caused by the
9
KOSTADINOVA v. STEPHENS
Decision of the Court
sanctionable conduct,” Taliaferro, 188 Ariz. at 341. We will affirm the
superior court’s discretionary award of attorney’s fees “if there is any
reasonable basis for it.” Villa De Jardines Ass’n v. Flagstar Bank, FSB, 227 Ariz.
91, 99, ¶ 25 (App. 2011).
¶24 The court sanctioned Counsel in the total amount of $5737.
Counsel argues that from the $5737 awarded to Father, the amount of $1087
should be subtracted because this amount was incurred before Counsel filed
the sanctioned Response, and was, thus, not “incurred because of the filing”
of the Response. See Ariz. R. Fam. Law P. 31(A). The $1087, however, related
to Father’s effort to keep his address protected, initiated by Counsel’s email
inquiry in May 2016. The court ruled the issue was mooted by the parties’
December 2015 settlement agreement, and was an issue that “did not need
to be litigated.” The parties initially agreed to exchange their child for
parenting time at a police station. The December 2015 settlement agreement
did not indicate the arrangement to exchange the child at a location other
than their homes was not functioning, and Mother did not know Father’s
address at least since early 2014. It was not until May 2016 that Mother
requested to know Father’s address. The court acted within its discretion
by determining the $5737 was the “appropriate sanction . . . which may
include . . . expenses incurred because of the filing of the pleading . . . .” See
Ariz. R. Fam. Law P. 31(A) (emphasis added). We will not substitute our
discretion for that of the superior court’s, see Marquez, 231 Ariz. at 441, ¶ 14,
as the court’s sanction bears sufficient relationship to the sanctionable
conduct, see Taliaferro, 188 Ariz. at 341.
¶25 Because the superior court’s sanction in the amount of $5737
is supported by the record, see Villa De Jardines Ass’n, 227 Ariz. at 99, ¶ 25,
the court did not abuse its discretion and we affirm the sanction in its
entirety.
D. Attorney’s Fees on Appeal.
¶26 Father requests we award him reasonable attorney’s fees and
costs incurred in defending this appeal pursuant to A.R.S. §§ 25-324, 12-349,
and Arizona Rule of Civil Appellate Procedure 25. In our discretion, we
award Father his reasonable attorney’s fees and costs upon compliance
with Arizona Rule of Civil Appellate Procedure 21.
10
KOSTADINOVA v. STEPHENS
Decision of the Court
CONCLUSION
¶27 For the stated reasons, we affirm.
AMY M. WOOD • Clerk of the Court
FILED: AA
11