Moyer v. Moyer

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
JUDY KAY MOYER, Petitioner/Appellee/Cross-Appellant,
v.
ROBERT MOYER, Respondent/Appellant/Cross-Appellee.
No. 1 CA-CV 18-0703 FC
FILED 8-11-2020
Appeal from the Superior Court in Maricopa County
No. FN2015-005506
The Honorable Howard D. Sukenic, Judge
AFFIRMED IN PART; REVERSED AND REMANDED IN PART
COUNSEL
The Cavanagh Law Firm PA, Phoenix
By Philip C. Gerard, Helen R. Davis, Nicholas J. Brown
Counsel for Petitioner/Appellee/Cross-Appellant
MOYER v, MOYER
Decision of the Court
Berkshire Law Office PLLC, Tempe
By Keith Berkshire, Kristi A. Reardon
Counsel for Respondent/Appellant/Cross-Appellee
MEMORANDUM DECISION
Judge James B. Morse Jr. delivered the decision of the Court, in which
Presiding Judge David D. Weinzweig and Judge Jennifer M. Perkins joined.
M O R S E, Judge:
¶1 Robert Moyer ("Husband") and Judy Kay Moyer ("Wife")
appeal and cross appeal from several rulings in the decree of dissolution.
For the reasons stated below, we affirm the allocation of stock shares
originally gifted to Wife but reverse the allocation of the shares Husband
purchased during the marriage and remand for reconsideration. We affirm
the orders allocating the bank accounts but reverse the awards of spousal
maintenance and attorneys' fees and remand for reconsideration.
FACTS AND PROCEDURAL BACKGROUND
¶2 Throughout the marriage, Husband worked at Heritage
Bank, a bank his family established in Nebraska. During the parties' 34-
year marriage, Husband's parents gifted several shares of Heritage Group,
Inc. ("HGI") stock to Husband and Wife individually.1 This was part of an
overall estate plan to gift the maximum amount allowed to each of the five
Moyer siblings, spouses, and grandchildren. Then, to ensure that the five
Moyer siblings received an equal amount of their parents' estate and to
protect the stock in the event of divorce, each of the spouses transferred the
shares back to the family trust, CONBA & Co.
¶3 At issue on appeal are four separate stock transfers Wife made
to CONBA & Co. Ultimately, the family trust transferred these shares to
Husband. The superior court awarded 1,111 shares to Wife as her separate
property, finding clear and convincing evidence that Wife's transfer of
those shares to the family trust was not knowing and voluntary because the
1 Initially, the shares were in Aurora First National Company, but
were later converted HGI shares, so we refer to them as HGI shares.
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transfer document was blank when Wife signed them. The court found the
other three transfers were valid.
¶4 The parties also disputed the community or separate
character of another 3,619 shares of HGI stock. Husband claimed he
purchased these shares during the marriage with funds from a separate
property partnership, CBSMS. The superior court found the community
had an interest in a portion of CBSMS and thus found that a corresponding
portion of the 3,619 shares were community property.
¶5 The superior court awarded Wife spousal maintenance in the
amount of $7,000 per month for ten years. The court equally divided a
Heritage Bank account and declined to reimburse Husband for paying the
parties' taxes. The court ordered Wife to reimburse Husband for half of the
funds she withdrew from community bank accounts prior to the petition
being served. The court also awarded attorneys' fees to Wife, finding a
financial disparity. After Husband objected to Wife's fee application, the
court awarded Wife a portion of her total fee request based on the
percentage of Wife's overall success. Then the court awarded Wife
attorneys' fees related to Husband's motion to set aside a portion of the
decree.
¶6 Husband's appeal and Wife's cross appeal were timely, and
we have jurisdiction under A.R.S. § 12-2101(A)(1) and (2).
DISCUSSION
I. The Superior Court Properly Considered and Allocated the HGI
Shares Originally Gifted to Wife.
¶7 Between 1987 and 1990, Husband's parents gifted a total of
3,741 HGI shares to Wife in four separate stock certificates. The parties do
not dispute that these were Wife's separate property. See A.R.S. § 25-213(A)
(separate property includes property acquired by gift during the marriage).
In four separate transactions between 1988 and 1990, Wife assigned these
shares to CONBA & Co., which is the trustee of a Moyer family trust of
which Husband is a beneficiary. In 1992, the trust assigned these shares to
Husband, as reflected in HGI stock certificate 193.
A. The Superior Court Had Statutory Authority to Allocate the
Disputed Shares.
¶8 The superior court found that Wife knowingly and
voluntarily transferred three stock certificates (numbers 125, 137, and 174),
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because she signed the back of the stock certificates which showed what
and to whom Wife was assigning her interest. The court found no fraud,
coercion, or undue influence as to those three assignments. In contrast, the
court found the assignment of 1,111 shares, represented by certificate 109,
was not knowing and voluntary because Wife signed a blank assignment
form and did not know what it purported to transfer.
¶9 Husband disputes the finding that 1,111 shares in certificate
109 remained Wife's separate property and Wife disputes the finding that
the other three transfers were valid. We review the superior court's
allocation of property for an abuse of discretion; however, the classification
of property as separate or community is a question of law that we review
de novo. Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, 523, ¶ 4 (App. 2007).
¶10 Under A.R.S. § 25-318(A), the superior court has authority to
divide community property and assign separate property to the
appropriate spouse. Husband contends the court exceeded its statutory
authority by considering the validity of this thirty-year-old transaction
between Wife and a third party, i.e., the family trust, negotiated by his
brother, Sam Moyer ("Sam"). In ruling on Husband's motion to set aside,
the court rejected this argument, finding it was contrary to the position
Husband took at trial, which was that Wife gifted the shares to him.
Because Husband argued in his joint pretrial statement (and somewhat
obliquely at the close of trial) that Wife's claims against third parties were
not properly before the court, we do not find waiver and will address this
argument. Whether the court has statutory authority to address this
dispute is a question of law we review de novo. See In re Marriage of Thorn,
235 Ariz. 216, 220, ¶ 16 (App. 2014).
¶11 Husband contends that the superior court cannot divest him
of his separate property and can only assign each spouse's separate
property to that spouse, citing Proffit v. Proffit, 105 Ariz. 222, 224 (1969).
Husband correctly states the law; however, in arguing that the court
exceeded its authority, he presumes that all the shares are, in fact, his
separate property. Which spouse owned the shares was the disputed issue
before the court. The court had the inherent ability to determine which
spouse owned the property and to order the return of separate property to
the appropriate spouse. In Thorn, the court affirmed the family court's
determination that a spouse's transfer of stocks and bonds was not a gift.
235 Ariz. at 219-20, ¶¶ 13-15. Implicit in that holding is a determination
that such a finding was within the family court's statutory authority.
Although Husband contends Thorn is distinguishable because it involved a
transaction between the spouses, the dispute over ownership here is also
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between the spouses. We find the court had authority to consider which
spouse owned the disputed HGI shares. See id.
B. The Evidence Supports the Superior Court's
Characterization of the Disputed Shares.
¶12 Husband argues the superior court should not have applied
the heightened standard applicable to transactions between spouses
because Wife assigned her shares to a third-party, not Husband. We
disagree. The "third party" in this transaction was a family trust of which
Husband was a beneficiary. Sam testified that he asked Wife to make this
gift to Husband through Husband's trust at CONBA & Co. The superior court
correctly concluded that "any action by [Sam] . . . was solely as a conduit to
guide those shares from Wife to Husband as the ultimate recipient."
Therefore, this was not a true arms-length transaction with a third party,
but part of an overall family estate plan to ensure that stock in a family bank
stayed within the family. On these facts, the superior court properly treated
this as a transaction between spouses.
¶13 We agree with Husband, however, that the superior court
improperly considered the transfer under the analysis applicable to
postnuptial agreements discussed in In re Harber's Estate, 104 Ariz. 79, 88
(1969), and Austin v. Austin, 237 Ariz. 201, 208, ¶ 20 (App. 2015). "A
postnuptial agreement is defined as '[a]n agreement entered into during
marriage to define each spouse's property rights in the event of death or
divorce.'" Austin, 237 Ariz. at 206-07, ¶ 14 (citing Postnuptial Agreement,
Black's Law Dictionary (10th ed. 2014)). The transfer purported to be a gift
and was not a postnuptial agreement. Therefore, the gift analysis in Thorn,
235 Ariz. at 220, ¶ 14, applies. Likewise, we need not address the parties'
fiduciary duty arguments because "[g]ifts from a husband to his wife are . .
. governed by the same rules as gifts between strangers." O'Hair v.
O'Hair, 109 Ariz. 236, 239 (1973) (quoting Rasmussen v. Oshkosh Sav. & Loan
Ass'n, 151 N.W.2d 730, 732 (Wis. 1967)). To that point, "[t]he necessary
elements of a gift are 'donative intent, delivery and a vesting of irrevocable
title upon such delivery.'" Thorn, 235 Ariz. at 220, ¶ 14 (quoting Neely v.
Neely, 115 Ariz. 47, 51 (App. 1977)). Under Arizona law, a gift must be
voluntary and intentional. McNabb v. Fisher, 38 Ariz. 288, 294 (1931).
Whether a gift was made is a question of fact, and we affirm the superior
court's factual findings absent clear error. Thorn, 235 Ariz. at 219, ¶ 13.
¶14 The evidence supports the finding that Wife voluntarily
transferred three of the four stock certificates to the trust for Husband's
benefit. Sam told Wife that the Moyer family estate plan was to gift shares
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to the Moyer siblings' spouses to maximize the gift tax exclusions and asked
Wife to gift her shares to Husband's trust so that the shares would stay in
the Moyer family, in the event of a divorce. Wife admitted that she signed
all four stock assignments. Based on Wife's testimony, the assignment form
relating to 1,111 shares in certificate 109 – the very first presented to Wife –
was blank when she signed it and was not attached to the corresponding
stock certificate. This supports the court's conclusion that Wife did not
know what or to whom she was assigning. Other evidence provided that
the subsequent three assignments were included on the back of the
corresponding stock certificates and stated that the family trust was the
recipient. Thus, Wife would have known what shares she was assigning to
the trust when she signed the certificates 125, 137, and 174.
¶15 Wife claims she did not know what CONBA & Co. was so she
did not know she was gifting these shares to Husband and, therefore, did
not manifest the requisite "intent to give to the party claiming as donee[.]"
O'Hair, 109 Ariz. at 239. However, Sam testified that he told Wife that
Husband was a beneficiary of this trust. Wife's counsel acknowledged at
oral argument that there was conflicting evidence on this issue. This court
does not reweigh the evidence and, absent clear error, we must defer to the
superior court's resolution of conflicts in evidence. See supra ¶ 14.
Reasonable evidence supports the superior court's findings that Wife
validly transferred 2,630 shares to a trust for Husband's benefit, and that
Wife did not knowingly transfer 1,111 shares when she signed a blank stock
assignment that was not attached to a stock certificate. Accordingly, we
find no clear error and affirm the allocation of the 3,741 shares of HGI stock.
II. The Record Does Not Support the Superior Court's Allocation of
the HGI Shares Purchased During the Marriage.
¶16 In 2000, Husband purchased 3,619 shares of HGI using funds
from a CBSMS bank account. CBSMS was a partnership formed during the
marriage by Husband and his four siblings. Wife argued that CBSMS was
a community partnership because it was formed during the marriage;
consequently, the shares purchased through CBSMS were also community
property.
¶17 Property acquired during marriage is presumed to be
community property, "and the spouse seeking to overcome the
presumption has the burden of establishing the separate character of the
property by clear and convincing evidence." Cockrill v. Cockrill, 124 Ariz.
50, 52 (1979). The superior court correctly found that CBSMS was
presumptively community property because it was formed during the
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marriage, and Husband had the burden of showing by clear and convincing
evidence that it was his separate property.
¶18 The superior court further found that Husband established
that his interest in the CBSMS partnership was his separate property. In
reaching this conclusion, the court found clear and convincing evidence
that CBSMS was initially funded solely from Husband's separate property.
Wife contends the record does not support this conclusion. We review the
court's allocation of property for an abuse of discretion; however, the
classification of property as separate or community is a question of law that
we review de novo. Bell-Kilbourn, 216 Ariz. at 523, ¶ 4.
¶19 Evidence supports the superior court's conclusion. The initial
capital contribution to CBSMS consisted of $43,477 in property and cash
given to the Moyer siblings from their grandmother. It was undisputed that
Husband's CBSMS capital account included both separate and community
funds. Husband contributed $127,500 from community funds to his CBSMS
capital account in 1992. Husband's grandmother's estate also contributed
$150,000 from a debenture, of which $30,000 was attributed to Husband's
capital account. The latter contribution from his inheritance, therefore,
consisted of Husband's separate property. A.R.S. § 25-213(A). CBSMS paid
Husband a $77,500 distribution in 1993 but it does not appear that Husband
received any other distributions.
¶20 Wife contends this comingling transmuted Husband's entire
CBSMS interest into community property. The superior court found that
Husband could trace the community funds in his separate property capital
account and there was no transmutation. Because Husband was able to
trace the separate and community funds, the entire capital account was not
transmuted to community property. See Cooper v. Cooper, 130 Ariz. 257, 259-
60 (1981) (when separate and community funds are commingled, the entire
fund is presumed to be community property unless the separate property can
be explicitly traced by clear and convincing evidence).
¶21 The evidence, however, does not support the superior court's
conclusion that the $77,500 distribution resulted in the community having
a $50,000 interest in CBSMS. The record does not show that the $77,500
distribution went entirely to repay the community contribution. The court
did not cite and the parties do not direct us to anything in the record
showing what Husband did with the $77,500 distribution. In response to
questions at oral argument, Husband's counsel did not point to any
evidence to that effect, only referencing the superior court's finding. Absent
some evidence that these funds were deposited into a community account
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or otherwise expended for the community's benefit, we cannot affirm the
court's conclusion that the entire $77,500 should be considered repayment
of the community contribution. Accordingly, we conditionally vacate the
allocation of the 3,619 HGI shares and remand for the superior court to
determine whether the $77,500 distribution was, in fact, repaid to the
community. If it was repaid to the community, the superior court shall
reinstate the allocation of the HGI shares.
III. In Deciding Spousal Maintenance, the Superior Court Erred by
Failing to Consider the Income-Earning Potential of the Property
Awarded to Wife but Properly Considered the Marital Standard of
Living and Wife's Contributions to Husband's Income.
¶22 In determining the amount and duration of spousal
maintenance, courts must consider several statutory factors, including the
marital standard of living, the receiving spouse's earning ability and ability
to support herself, the receiving spouse's contribution to the other spouse's
earning ability, and the financial resources of the receiving spouse. A.R.S.
§ 25-319(B)(1), (3), (5), (6), and (9). The superior court awarded Wife spousal
maintenance of $7,000 per month for ten years. Husband does not dispute
that Wife was entitled to spousal maintenance but contends the court erred
in its consideration of several of the statutory factors. We review the award
of spousal maintenance for an abuse of discretion. Gutierrez v. Gutierrez, 193
Ariz. 343, 348, ¶ 14 (App. 1998).
A. Marital Standard of Living.
¶23 Husband contends the superior court erred in considering the
marital standard of living because it relied on Wife's current expenses and
did not consider how the parties lived during the entire 34-year marriage.
See A.R.S. § 25-319(B)(1). We disagree with Husband's characterization of
the court's findings.
¶24 The evidence supports the findings that the parties lived
modestly in a small town in Nebraska, but after moving to a retirement
community in Arizona in 2006, the marital standard of living increased
overall. Although Wife claimed nearly $11,000 in expenses, the court
rejected her increased expenses for dining out, clothing, and rent. The court
based the award on Wife buying a modest house for cash instead of paying
$4,250 in monthly rent for a luxury apartment. Thus, the court found these
expenses did not reflect the marital standard of living and did not consider
them. Although the court did not state what it found Wife's reasonable
expenses to be, we find that deducting the rent alone would reduce Wife's
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claimed expenses to approximately $6,700, based on the court's
presumption that Wife would purchase a house and thus have no rent or
mortgage expense.
B. Wife's Contribution to Her Own Financial Needs.
¶25 The superior court must consider the financial resources
available to Wife and her ability to meet her needs independently. See
A.R.S. § 25-319(B)(9). In doing so, the court must consider "all property
capable of providing for the reasonable needs of the spouse seeking
maintenance[,]" including "property presently producing income as well as
property capable of producing income or otherwise transformed in order
to provide for the reasonable needs of the spouse." Deatherage v. Deatherage,
140 Ariz. 317, 320 (App. 1984). Although Deatherage interpreted A.R.S. § 25-
319(A) to determine if the spouse was entitled to support, we will apply the
same definition of property to § 25-319(B). See State ex rel. Larson v. Farley,
106 Ariz. 119, 122 (1970) (noting courts construe statutes relating to the
same subject together and seek to achieve consistency).
¶26 Wife was awarded $809,902 in "liquid" assets in addition to
"less liquid" assets consisting of 2,618.11 shares of HGI (valued at
$555,929.47), an interest-bearing loan (Wife's share valued at $90,500),
several certificates of deposit and bank accounts worth approximately
$193,725, and a retirement account worth $1,814.50. The court assumed
Wife would use $465,000 of the liquid assets to purchase a house, and, after
investing the remainder of the liquid assets, she would have $1,500 in
passive income "until she reached a retirement age whereby she could
liquidate and utilize her less liquid assets."
¶27 The decree and the parties did not indicate that the "less
liquid" assets consisted of restricted retirement accounts (other than the
Nebraska School Employee account); however, the joint pretrial statement
refers to them as such. In any event, Wife, who was 60 at the time of trial,
can take the interest earned on any such retirement accounts without
depleting the principal or facing tax penalties, see 26 U.S.C. § 72(t). Yet the
superior court did not consider any interest income from these assets. The
superior court was within its discretion to find that Wife's HGI shares might
take some time to liquidate and so did not abuse its discretion by deferring
income from that asset for a reasonable time. But the court erred by failing
to attribute some income earning potential to the other "less liquid" assets
that could be presently generating interest income. See Deatherage, 140 Ariz.
at 320.
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¶28 Husband also contends the superior court failed to properly
consider Wife's earning ability in determining spousal maintenance. See
A.R.S. § 25-319(B)(3), (5), and (9). Husband presented a vocational expert
report indicating that Wife had the ability to earn an annual salary of
$20,000 to $30,000 and Husband could earn $50,000 to $65,000. The court,
however, did not attribute any income from employment to either Husband
or Wife, finding they both reasonably chose not to work. Husband argues
the court erred by failing to attribute income from employment to Wife.
¶29 When "determining whether to use actual income or earning
capacity to calculate spousal maintenance when voluntary reduction of
income issues are raised[,]" courts should consider the following factors:
(1) The reasons asserted by the party whose conduct is at
issue; (2) The impact upon the obligee of considering the
actual earnings of the obligor; (3) When the obligee's conduct
is at issue, the impact upon the obligor of considering the
actual earnings of the obligee and thereby reducing the
obligor's financial contribution to the support order at issue;
(4) Whether the party complaining of a voluntary reduction
in income acquiesced in the conduct of the other party; and
(5) The timing of the action in question in relation to the
entering of a decree or the execution of a written agreement
between the parties.
Pullen v. Pullen, 223 Ariz. 293, 297-98, ¶¶ 15, 18 (App. 2009). The court did
not expressly consider these factors, but the evidence supports the decision
not to impute income to either spouse.
¶30 Wife had not worked since 2005. Husband contends he
retired due to health concerns and could otherwise support himself with
his separate property assets. There was, however, no evidence that
Husband had health issues that would preclude employment. Imputing
income would increase Wife's income by $2,083, assuming she could earn
an annual income of $25,000, and increase Husband's income by $4,583 per
month. Neither party had worked in the recent past, and there was no
evidence suggesting that the timing of the retirement was related to the
divorce or that either party retired over the objection of the other. After
considering the Pullen factors, we find the superior court did not err in
failing to impute income to either party.
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C. Wife's Contribution to Husband's Earning Ability.
¶31 The superior court gave no "substantial weight" to the fact
that Wife maintained the household so that Husband could further his
career. A.R.S. § 25-319(B)(6). Husband argues his current earning ability is
a result of his substantial separate property assets and that the court failed
to consider that Wife did not contribute to his current earning ability.
Because the court did not give significant weight to this factor, we fail to see
how Husband was prejudiced. There is no authority for finding that
Husband should pay less spousal maintenance simply because his wealth
consists of separate property.
¶32 Finally, contrary to Husband's claim regarding his earning
ability, the evidence showed that Husband will receive more monthly social
security benefits ($2,505) than Wife ($612) in the future.
¶33 We reverse the award of spousal maintenance and remand for
the court to reconsider the income potential of the "less liquid" assets in
determining how much support Wife needs to meet her reasonable needs.
IV. The Superior Court Did Not Err in Allocating Heritage Bank
Account.
¶34 The superior court equally divided Heritage Bank account
7942 as of the date of service. The court also denied Husband's claim that
he should be reimbursed for paying the parties' 2015 and 2016 tax
obligations on the grounds that Husband did not show that he paid this
debt with his separate property. Husband argues these rulings are
inequitable because he paid the parties' tax obligations from Heritage Bank
account 7942 after the date of service. We review the court's allocation of
property for an abuse of discretion. Bell-Kilbourn, 216 Ariz. at 523, ¶ 4.
¶35 Husband raised the issue of the tax payments in the joint
pretrial statement and at trial. Thus we reject Wife's contention that
Husband waived this argument. Nevertheless, the record supports the
court's ruling. At trial, Husband testified that he paid the community's 2014
and 20152 tax obligation from the Heritage Bank Wall Street account, but he
could not recall the source of the funds in that account. Absent evidence
that the funds in the Heritage Bank Wall Street account were Husband's
2 There is a discrepancy in the years at issue. The pretrial statement
and decree refer to 2015 and 2016, but the trial testimony and Husband’s
briefs refer to 2014 and 2015. Given our resolution, the discrepancy is
irrelevant.
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separate property, the superior court did not abuse its discretion by
denying Husband's reimbursement claim. We affirm the allocation of
Heritage Bank account 7942.
V. The Evidence Supports the Reimbursement Order for Wife's
Withdrawals from the Community Wells Fargo Accounts.
¶36 The superior court found Wife withdrew a total of $199,999.96
from two joint Wells Fargo bank accounts between May 2014 and the filing
of the petition in November 2015. The court ordered Wife to reimburse
Husband $99,499.98, rejecting Wife's claim that she used these funds for
ordinary living expenses and attorneys' fees until the court ordered
temporary spousal maintenance in December 2016. Wife contends the
court's findings are contrary to the evidence. We will uphold the
community property allocation absent an abuse of discretion. Gutierrez, 193
Ariz. at 346, ¶ 5. We view the evidence in the light most favorable to
upholding the court's findings and do not reweigh conflicting evidence or
determine the credibility of witnesses. Id. at 346, 347, ¶¶ 5, 13.
¶37 When apportioning community property, the superior court
has authority to consider a spouse's excessive or abnormal expenditures or
concealment of community property. A.R.S. § 25-318(C). A spouse alleging
waste has the burden to make a prima facie showing of waste. Gutierrez,
193 Ariz. at 346, ¶ 7. If a prima facie showing is made, the burden shifts to
the spending spouse to show the expenditures were reasonable. Id.
¶38 Wife admitted to withdrawing approximately $199,000 from
community accounts and placing those funds into an account to which
Husband had no access. Thus, Husband made a prima facie case of waste,
and the burden shifted to Wife to show how she spent the money. Id.
¶39 Wife testified that she withdrew the funds because Husband
threatened to leave her with nothing and that she spent the money on living
expenses and attorneys' fees. Without citing any evidence, Wife argues on
appeal that Husband was not contributing to her support at that time
because they were living apart. There was no evidence that Wife could not
continue to use the community accounts for living expenses before the
petition was filed or that Husband denied her access to the funds at any
time. In fact, Husband offered bank statements showing that the joint
checking account continued to pay Wife's credit card expenses after she
withdrew half of the funds from one account on October 30, 2015. Wife did
not offer evidence to support her testimony that she spent these funds on
reasonable living expenses due to a lack of access to community funds.
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Thus, we affirm the finding that Wife failed to show her withdrawal of
community funds was reasonable. See Aries v. Palmer Johnson, Inc., 153 Ariz.
250, 261 (App. 1987) (noting courts are not bound to accept as true the
uncontradicted testimony of an interested party).
¶40 Wife also argues the superior court erred in concluding she
unreasonably withdrew funds to pay her attorneys' fees because the court
had previously entered an interim order awarding fees to Wife. Wife
contends the prior fee award was a sanction and should not be factored into
the waste determination. Because Wife does not cite to any evidence that
she used the withdrawn community funds to pay her attorney as she
claimed, the reimbursement order does not negate the impact of the
sanction. Therefore, we cannot say the court abused its discretion in finding
Wife's withdrawal of community funds was unreasonable. We affirm the
order that Wife shall repay Husband for his share of those funds.
VI. The Superior Court Applied an Incorrect Legal Standard in
Awarding Wife's Attorneys' Fees.
¶41 The superior court found Wife was entitled to an award of
attorneys' fees based on the substantial disparity in financial resources
favoring Husband and the fact that neither party was unreasonable. After
Husband objected to Wife's fee application, the court awarded Wife less
than half of the fees she requested. In determining the amount of the fee
award, the court took the total fee amount ($266,433.50) and divided it by
the seven "categories over the course of litigation requiring significant
attention by the court[.]" For each of the seven categories, the court
awarded Wife a "percentage" of the fees based on her success regarding that
issue.
¶42 We review an award of attorneys' fees for an abuse of
discretion. Gutierrez, 193 Ariz. at 351, ¶ 32. The superior court abuses its
discretion when it commits a legal error in making a discretionary decision.
In re Marriage of Williams, 219 Ariz. 546, 548, ¶ 8 (App. 2008). Husband
argues the court erred by applying a prevailing party standard in awarding
attorneys' fees to Wife. Wife contends the award was based on the disparity
of financial resources.
¶43 Section 25-324 "does not establish a prevailing party standard
for awarding fees and costs." Breitbart-Napp v. Napp, 216 Ariz. 74, 84, ¶ 39
(App. 2007). An award of fees under § 25-324 is based on financial disparity
and the reasonableness of the parties' positions. Although the court
properly found that Wife qualified for an award of attorneys' fees based on
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the disparity of financial resources and the reasonableness of her positions,
the degree of Wife's success was irrelevant in determining the appropriate
amount of the fee award. See Bobrow v. Bobrow, 241 Ariz. 592, 599, ¶ 31 (App.
2017) (finding A.R.S. § 25-324 "allow[s] a spouse with limited resources to
advance a legitimate though ultimately unsuccessful claim without being
financially intimidated"). Accordingly, we reverse the award of attorneys'
fees and remand for reconsideration.
¶44 The superior court also awarded Wife $14,093.60 in fees
related to Husband's motion to set aside the decree. The court awarded fees
based on the substantial financial disparity. Husband argues the court
abused its discretion because it lacked updated financial information;
therefore, there was no basis for finding Husband had superior financial
resources. Wife contends the court had sufficiently recent information
about the parties' finances and the parties were not required to file a new
financial affidavit to support an award of fees based on the financial
disparity.
¶45 The superior court ruled on the attorneys' fees related to
Husband's motion to set aside nearly one year after the decree. We do not
decide whether Arizona Rule of Family Law 91.6 required the parties to
submit updated financial affidavits because we have reversed other rulings
that, upon reconsideration, may impact the parties' financial resources.
Therefore, we order the superior court to also reconsider the award of
attorneys' fees related to Husband's motion to set aside. On remand, the
parties shall provide updated financial affidavits relating to the time
periods relevant to any fee request.
VII. Attorneys' Fees on Appeal.
¶46 Husband clams he is entitled to attorneys' fees and costs on
appeal based on Wife's unreasonable positions. Wife bases her fee request
on the significant financial disparity. See A.R.S. § 25-324. Neither party
took unreasonable positions on appeal and we lack current financial
affidavits to determine the extent of any financial disparity. Because we are
remanding for resolution of other issues that may affect the parties'
financial resources, we leave the issue of attorneys' fees and costs on appeal
to the superior court's discretion upon final disposition of the case.
CONCLUSION
¶47 We affirm the allocation of HGI shares originally gifted to
Wife during the marriage and the allocation of the bank accounts. We
reverse and remand for reconsideration of the allocation of the HGI shares
14
MOYER v, MOYER
Decision of the Court
Husband purchased during the marriage, the award of spousal
maintenance, and the award of attorneys' fees. The superior court shall
determine whether either party is entitled to an award of attorneys' fees and
costs on appeal after receiving updated financial affidavits.
AMY M. WOOD • Clerk of the Court
FILED: AA
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