Heard-Vaughn v. Vaughn

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
DIANA D HEARD-VAUGHN,
Petitioner/Appellant,
v.
KAREEM A VAUGHN,
Respondent/Appellee.
No. 1 CA-CV 17-0044 FC
FILED 12-26-2017
Appeal from the Superior Court in Maricopa County
No. FC2014-070758
The Honorable Kathleen H. Mead, Judge
AFFIRMED IN PART; REVERSED IN PART; REMANDED
COUNSEL
Diana D. Heard-Vaughn, Surprise
Petitioner/Appellant
Paul Tutnick, Attorney at Law, Sedona
By Paul Tutnick
Counsel for Respondent/Appellee
HEARD-VAUGHN v. VAUGHN
Decision of the Court
MEMORANDUM DECISION
Judge Diane M. Johnsen delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined.
J O H N S E N, Judge:
¶1 In this dissolution action brought by Diana D. Heard-Vaughn
("Wife") against Kareem A. Vaughn ("Husband"), Wife appeals from the
superior court's equitable division of a car, Wife's medical practice and
various debts, and also its denial of retroactive child support. For reasons
that follow, we affirm the court's division of the medical practice and the
debts, but reverse its division of the car and its denial of retroactive child
support.
FACTS AND PROCEDURAL BACKGROUND
¶2 In January 2014, Wife filed a petition to dissolve her eight-
year marriage to Husband, requesting, among other things, that the court
award her child support for their two young children and fairly divide
community property and debts, specifically requesting the equitable
division of the marital home and her medical practice. After an evidentiary
hearing, the court entered a decree in November 2016 dissolving the
marriage, dividing assets and debts, ordering Husband to pay prospective
child support and denying retroactive child support.
¶3 Wife timely appealed (1) the court's division of equity in a car
she drove during the marriage; (2) its equal division of the community
interest in her medical practice and community debts; and (3) its denial of
retroactive child support. We have jurisdiction over her appeal pursuant
to Article 6, Section 9 of the Arizona Constitution and Arizona Revised
Statutes ("A.R.S.") section 12-2101(B) (2017).1
1 Absent material revision after the relevant date, we cite the current
version of a statute.
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HEARD-VAUGHN v. VAUGHN
Decision of the Court
DISCUSSION
A. The Car.
¶4 The superior court equally divided the equity in a car driven
by Wife, awarding Wife the car and ordering her to pay Husband $5,000 as
his share of the community's interest in the car. The court found:
[Wife] drives [a car] that had a loan on it at the time of service.
The parties agreed in court that the value of the vehicle, less
the amount owed, at the time of service was $10,000.00.
[Wife] has since paid off the loan. There is no dispute that the
vehicle is a community asset.
¶5 We review the superior court's division of community
property for abuse of discretion but review its characterization of property
de novo. In re Marriage of Pownall, 197 Ariz. 577, 581, ¶ 15 (App. 2000). We
will affirm the court's factual findings unless they are clearly erroneous.
Kocher v. Dep't of Revenue of Ariz., 206 Ariz. 480, 482, ¶ 9 (App. 2003). "A
finding of fact is not clearly erroneous if substantial evidence supports it."
Id.
¶6 In general, any equity in a car that the parties acquired pre-
petition is community property, subject to equitable division in a
dissolution proceeding. See A.R.S. §§ 25-211(A) (2017), -318(A) (2017).
Equity that Wife acquired in the car post-petition, however, is not
community property. See § 25-211(A)(2) (property acquired after service of
dissolution petition is not community property when petition results in
dissolution).
¶7 The superior court erred by finding that the parties owned the
car at the time of the petition. Wife testified that the car was leased at the
time she filed the petition, with several $750 lease payments remaining.
Wife further testified that after she filed the petition, she made the
remaining lease payments and then paid $19,000 to purchase the car.
¶8 This evidence, which husband did not contest, demonstrates
that the parties did not own the vehicle together and therefore there was no
community interest in the car at the time of the petition subject to division
in the decree. Although a leasehold interest may have value in some
circumstances, see Mobil Oil Corp. v. Phoenix Cent. Christian Church, 138 Ariz.
397, 399 (App. 1983), Husband did not make that argument in the superior
court and does not do so on appeal.
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HEARD-VAUGHN v. VAUGHN
Decision of the Court
B. Division of Debts and the Medical Practice.
¶9 In April 2013, Wife purchased a medical practice for $330,000,
paying $62,000 down and financing the balance by giving the seller a
$240,000 note and allowing the seller to keep certain accounts receivable.
Relying on an appraisal valuing the practice at $360,000 near the time of the
petition, and finding $158,260 still owing on the note, the superior court
awarded Husband $100,870 as his one-half share of the community interest
in the medical practice. The court also ruled Wife and Husband equally
responsible for all community debts.
¶10 Wife does not dispute that her medical practice was
community property and that debts incurred during the marriage are
community debts, and does not dispute the amounts of either.2 Wife,
however, challenges the superior court's equal division of both the medical
practice and parties' debts, arguing the court should have awarded her
more of the equity in her medical practice because, as a practical matter,
Husband lacks the will and the resources to fulfill his responsibility to pay
half the community debt.
¶11 "In effecting a fair and equitable distribution the trial court is
given a broad discretionary power and it is only where there is a manifest
abuse of that discretion will an appellate court interfere." Wick v. Wick, 107
Ariz. 382, 385 (1971). Because the nature of community property implies
equal ownership, "all marital joint property should be divided substantially
equally" in a dissolution proceeding "unless sound reason exists to divide
the property otherwise." Toth v. Toth, 190 Ariz. 218, 221 (1997).
¶12 While a different allocation of the medical practice and debts
might have been permissible, the superior court did not abuse its discretion
in deciding to equally split the value of the medical practice and the debts.
Wife admitted that she, like husband, has a long history of not paying debts,
and the parties' lack of documentation on many financial issues left the
court without certainty about what exactly was owed, making calculating
an offset problematic. We conclude that the court did not err in dividing
the medical practice and community debts.
2 At trial, Wife argued that some of the down payment on the medical
practice did not come from community funds: She claimed she borrowed
$22,000 for the down payment from her father. She offered no
documentation for that contention, which the court rejected. She does not
challenge that part of the court's ruling on appeal.
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HEARD-VAUGHN v. VAUGHN
Decision of the Court
C. Child Support.
¶13 The superior court awarded Wife $660 per month in child
support but denied Wife's request for retroactive payments, stating that
because
temporary child support was not requested during the
litigation and [Husband's] testimony, that the parties had
verbally agreed not to seek child support as [Husband] paid
the [marital] debt during the litigation, is credible.
On appeal, Wife argues she is entitled to retroactive child support and the
court erred in finding that she waived her right to that support based on
Husband's testimony that she had orally agreed to waive it.
¶14 The relevant statute provides:
If child support has not been ordered by a child support order
and if the court deems child support appropriate, the court
shall direct, using a retroactive application of the child
support guidelines to the date of filing a dissolution of
marriage, legal separation, maintenance or child support
proceeding, the amount that the parents shall pay for the past
support of the child and the manner in which payment shall
be paid, taking into account any amount of temporary or
voluntary support that has been paid.
A.R.S. § 25-320(B) (2017). This provision requires the court to order
retroactive child support from the date of the dissolution filing if the court
awards current child support and has not previously ordered support.
Simpson v. Simpson, 224 Ariz. 224, 225-26, ¶ 7 (App. 2010). Additionally, the
court may order a party to pay up to three years' of retroactive child support
for time the parties were living apart before the dissolution filing. A.R.S. §
25-320(C). "A retroactive application of the child support guidelines
requires the court to apply the guidelines to circumstances as they existed
during the time for which past child support is being ordered." Simpson,
224 Ariz. at 226, ¶ 9. A party need not specifically request retroactive child
support. Id. at 226, ¶ 10.
¶15 Although a party may waive his or her right to retroactive
child support through an express stipulation, see id., such a waiver must be
established by clear and compelling evidence of a voluntary, intentional
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HEARD-VAUGHN v. VAUGHN
Decision of the Court
abandonment of the right. See Ray v. Mangum, 163 Ariz. 329, 332 (1989).
Accordingly, a party arguing waiver must offer more than his or her belief
that the right to support was waived. "Where conflicting testimony exists
and the parties' unspoken assumptions and intentions conflict, one party's
belief cannot provide clear and convincing evidence of the parties[']
agreement." Id. at 333. In such a case, "[m]uch more is needed to meet the
waiver clear and compelling evidence standard, such as a waiver in writing
or an admission by the custodial parent of an intent to waive child support
arrearages." Id. (citations omitted).
¶16 The record here does not contain clear and convincing
evidence that Wife waived her right to retroactive child support. Husband
acknowledges that the only evidence of waiver was his own testimony that
he and Wife had agreed orally that he would make payments on a
particular marital debt in lieu of paying child support until child support
"was worked out in court." Wife denied any conversation about such an
agreement, and argues that in any event, Husband did not make payments
on the referenced debt. Even though the superior court found Husband's
disputed testimony credible, that testimony, by itself, is not clear and
convincing evidence establishing waiver.
¶17 Because Husband's disputed testimony is insufficient to
establish that Wife waived her right to retroactive child support, and Wife
was not required to request retroactive child support, the superior court
erred in failing to award child support as of the date of the petition.
CONCLUSION
¶18 We reverse the superior court's award of $5,000 to Husband
relating to the car but otherwise affirm the court's equitable division of the
parties' community debts and Wife's medical practice. Further, we reverse
the court's denial of retroactive post-petition child support, and remand the
matter to the superior court for proceedings consistent with this decision.
AMY M. WOOD • Clerk of the Court
FILED: AA
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