Welch v. Welch

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1 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
2 DARON WELCH,
3 Petitioner-Appellee/Cross-Appellant,
4 v. No. A-1-CA-35570
5 JANE CALTON FOSTER WELCH,
6 Respondent-Appellant/Cross-Appellee.
7 APPEAL FROM THE DISTRICT COURT OF ROOSEVELT COUNTY
8 Donna J. Mowrer, District Judge
9 Eric D. Dixon Attorney and Counselor at Law, P.A.
10 Eric D. Dixon
11 Portales, NM
12 for Appellee
13 Caren I. Friedman
14 Santa Fe, NM
15 Sandra E. Gallagher
16 Portales, NM
17 for Appellant
18 MEMORANDUM OPINION
19 BOHNHOFF, Judge.
1 {1} This appeal arises from the dissolution of the parties’ marriage. Respondent
2 Jane Calton Foster Welch (Wife) challenges the district court’s orders granting partial
3 summary judgment in favor of Petitioner Daron Welch (Husband) on Wife’s claims
4 of community liens against Husband’s businesses as well as the district court’s final
5 decision and order on division of community property. In addition to contesting the
6 community lien rulings, Wife contends that the district court abused its discretion in
7 refusing to award ongoing spousal support to Wife and in not granting Wife all of the
8 attorney’s fees she sought. In his cross-appeal, Husband argues: (1) the district court
9 erred in awarding Wife a $20,000 reimbursement on separate debt; (2) the district
10 court erred in awarding Wife one-half of the income tax she paid following the
11 parties’ separation; and (3) the district court erred in awarding Wife temporary spousal
12 support, a lump sum spousal support payment, and attorney’s fees. This is a
13 memorandum opinion and because the parties are familiar with the facts and
14 procedural posture of the case, we set forth only such facts and law as are necessary
15 to decide the issues raised.
16 BACKGROUND
17 {2} The parties were married on July 13, 2007. At the time of the marriage,
18 Husband held ownership interests in three businesses, WTI, Inc. (WTI), Welch
19 Trucking, Inc. (Welch Trucking), and Bubby & Son, Inc. (Bubby & Son). On October
3
1 15, 2013, Husband filed a petition to dissolve the marriage. Husband filed a
2 succession of motions for partial summary judgment on Wife’s community lien claim;
3 the district court ultimately granted partial summary judgment as to all three
4 businesses. The district court entered an order dissolving the parties’ marriage on
5 March 25, 2015. The district court held an evidentiary hearing on the remaining issues
6 on November 3 and December 17, 2015, and entered its final decision on March 16,
7 2016.
8 DISCUSSION
9 A. Community Lien
10 {3} Wife argues that for three reasons the district court erred in granting Husband’s
11 motions for partial summary judgment on her community lien claim: Husband did not
12 make a prima facie showing of entitlement to summary judgment; genuine issues of
13 material fact in any event precluded summary judgment; and the court additionally
14 erred in granting summary judgment while discovery was ongoing.
15 {4} “Summary judgment is appropriate where there are no genuine issues of
16 material fact and the movant is entitled to judgment as a matter of law.” Self v. United
17 Parcel Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. “The movant
18 need only make a prima facie showing that he is entitled to summary judgment.” Roth
19 v. Thompson, 1992-NMSC-011, ¶ 17, 113 N.M. 331, 825 P.2d 1241. “Upon the
4
1 movant making a prima facie showing, the burden shifts to the party opposing the
2 motion to demonstrate the existence of specific evidentiary facts which would require
3 trial on the merits.” Id. “Arguments by counsel are not evidence and cannot be used
4 to create a material issue of fact to defeat summary judgment.” Cain v. Champion
5 Window Co. of Albuquerque, LLC, 2007-NMCA-085, ¶ 14, 142 N.M. 209, 164 P.3d
6 90.
7 {5} “On appeal, we examine the whole record for any evidence that places a
8 genuine issue of material fact in dispute.” Rummel v. Lexington Ins. Co.,
9 1997-NMSC-041, ¶ 15, 123 N.M. 752, 945 P.2d 970. “An issue of fact is ‘genuine’
10 if the evidence before the court considering a motion for summary judgment would
11 allow a hypothetical fair-minded fact[-]finder to return a verdict favorable to the non-
12 movant on that particular issue of fact.” Associated Home & RV Sales, Inc. v. Bank of
13 Belen, 2013-NMCA-018, ¶ 23, 294 P.3d 1276. (internal quotation marks and citation
14 omitted). “We are mindful that summary judgment is a drastic remedial tool which
15 demands the exercise of caution in its application, and we review the record in the
16 light most favorable to support a trial on the merits.” Woodhull v. Meinel, 2009-
17 NMCA-015, ¶ 7, 145 N.M. 533, 202 P.3d 126 (internal quotation marks and citation
18 omitted). We review de novo a movant’s entitlement to summary judgment.
5
1 Hernandez v. Wells Fargo Bank N.M., N.A., 2006-NMCA-018, ¶ 5, 139 N.M. 68, 128
2 P.3d 496.
3 1. Community Lien Legal Principles and Burden of Proof
4 {6} Where the separate character of property “[is] established, it maintains that
5 character until the contrary has been made to appear by direct and positive evidence.”
6 Katson v. Katson, 1939-NMSC-021, ¶ 5, 43 N.M. 214, 89 P.2d 524. “Therefore, any
7 increase in the value of separate property is presumed to be separate property.” Bayer
8 v. Bayer, 1990-NMCA-106, ¶ 13, 110 N.M. 782, 800 P.2d 216. Further, an “increase[]
9 in the value of separate property arising from an increase in market value or natural
10 growth belong[] to the owner of the separate property.” Id. ¶ 21.
11 {7} “The presumption may be rebutted by direct and positive evidence that the
12 increase is attributable to community funds or labor.” id. ¶ 13. A lien in favor of the
13 community may be imposed on a business that is separate property if the “evidence
14 supports a determination that community skill and labor have resulted in an increase
15 in the value of the [business] and whether such efforts were uncompensated or
16 undercompensated.” Zemke v. Zemke, 1993-NMCA-067, ¶ 21, 116 N.M. 114, 860
17 P.2d 756 (internal quotation marks and citation omitted). The value of community
18 labor performed on behalf of such business may be established by evidence of the
19 amount of wages paid for comparable work. See Jurado v. Jurado, 1995-NMCA-014,
6
1 ¶ 10, 119 N.M. 522, 892 P.2d 969. Importantly, however, the party claiming the
2 community lien on separate property bears the burden of proving its existence and
3 amount. See Trego v. Scott, 1998-NMCA-080, ¶ 8, 125 N.M. 323, 961 P.2d 168;
4 Smith v. Smith, 1992-NMCA-080, ¶ 12, 114 N.M. 276, 837 P.2d 869. In particular,
5 if the spouse was paid a definite salary for his or her services, “in the absence of
6 definite evidence of their value, it will be presumed that the salary paid was the value
7 of the services.” Zemke, 1993-NMCA-067, ¶ 21 (internal quotation marks and citation
8 omitted).
9 2. The Partial Summary Judgment Motions
10 {8} We note initially that the district court was sensitive to the summary judgment
11 requirement that there be no disputed issues of material fact. Husband first sought
12 summary judgment on Wife’s community lien claims as to all three of his businesses
13 in a motion filed on June 18, 2014. In an August 20, 2014 order, the district court
14 denied the motion on the grounds that “material issues of fact exist and summary
15 judgment is not appropriate at this time.”
16 {9} Husband’s Renewed Motion. Husband filed a renewed motion for partial
17 summary judgment on August 25, 2014 (Renewed Motion). He supported the
18 Renewed Motion with his affidavit as well as the affidavit of the accountant who
19 prepared tax returns for the three businesses. The affidavits stated that Husband
7
1 acquired his interests in the businesses prior to marrying Wife; the fair market value
2 of the businesses was not enhanced during the marriage by Wife’s labor; the book
3 value of Welch Trucking and WTI had decreased during the marriage; any increase
4 in the value of all three businesses was attributable to the normal growth of the
5 businesses due to market conditions; and Husband was not undercompensated for any
6 of his services to the businesses.
7 {10} In her response to Husband’s Renewed Motion, Wife generally disputed
8 whether the businesses were acquired before the marriage and disputed the value of
9 the three companies. However, she did not respond, as required by Rule 1-056(D)
10 NMRA, in opposition to Husband’s statement of undisputed material facts. Wife also
11 did not support her arguments with any of her own evidence regarding when she
12 contended Husband acquired his ownership interests in the companies, the values of
13 the companies, or whether Husband was undercompensated for his labor on behalf of
14 the companies. Wife summarily argued that discovery was incomplete, but did not
15 support her argument with an affidavit as contemplated by Rule 1-056(F), explaining
16 why she could not respond to Husband’s motion.
17 {11} Following an October 30, 2014, hearing, the district court granted in part and
18 denied in part Husband’s Renewed Motion by order entered on November 6, 2014.
19 Citing Smith, the district court observed that to prevail on the motion, Wife had to
8
1 demonstrate “genuine issues of fact regarding an increase in the value of the business
2 due to the efforts of community labor.” Because Wife had not rebutted any of
3 Husband’s undisputed facts regarding Welch Trucking and WTI, the district court
4 granted the motion as to those entities. The district court determined, however, that,
5 because Husband’s statement of undisputed facts did not address the value of Bubby
6 & Son, Husband had not met his prima facie burden of demonstrating the absence of
7 genuine issues of fact regarding the business and denied the motion to that extent.
8 {12} Wife’s Motion to Set Aside. On December 1, 2014, Wife filed a motion to set
9 aside the district court’s November 6, 2014 ruling (Motion to Set Aside). Wife
10 asserted that due to an inability to pay the fee of one accountant and the medical issues
11 experienced by a second accountant, Sandra Calton (Calton), she had been unable to
12 provide an accountant’s affidavit to support her opposition to summary judgment until
13 after the October 14, 2014 hearing. Wife also criticized Husband for not providing a
14 fair market valuation of his three businesses and evidence of the value of services
15 comparable to those that Husband had provided to the businesses. However, in her
16 affidavit Calton did not provide her own valuation of the businesses (either current or
17 as of the beginning of the marriage) or an opinion regarding the amount of any
18 undercompensation for Husband’s services. Instead, Calton critiqued Husband’s
19 reference to the book values of Welch Trucking and WTI, his claim that the
9
1 companies’ value decreased between 2007 and 2014, and his claim that he was not
2 undercompensated.
3 {13} In a March 16, 2015 ruling, the district court denied Wife’s Motion to Set
4 Aside. The court rejected Wife’s contention that she was unable to respond to
5 Husband’s Renewed Motion due to an inability to obtain an accountant’s affidavit,
6 noting that Wife never sought relief pursuant to Rule 1-056(F) and that Calton had
7 admitted in her deposition that she was not asked to provide an affidavit until
8 November 2014, after the hearing on the Renewed Motion. The court nevertheless
9 considered the motion on the merits. After noting that Wife bore the burden of
10 establishing an increase in the values of Husband’s businesses due to community labor
11 and that such labor was undercompensated, the district court concluded that Wife
12 failed to establish a question of fact on this issue:
13 Even if the [c]ourt considered the substance of Calton’s affidavit,
14 which it is not inclined to do, [Wife] still has not met her burden.
15 [Husband] bore the initial burden to establish that the property in
16 question, [WTI] and Welch Trucking were separate property. [Husband]
17 met that burden. The burden then shifted to [Wife] to show that while the
18 property may be separate, any increase in the value of the business was
19 made through community labor. . . . Any issues surrounding
20 undercompensation or uncompensation are not ripe until an increase in
21 value of the business has been established. . . . [Wife]’s affidavit
22 of . . . Calton appears to be a critique of [Husband]’s accountant’s
23 valuation of the companies. [Wife]’s affidavit does not establish a
24 reasonable doubt as to any genuine issue of fact at issue for summary
25 judgment. A critique of another accountant’s valuation is not a
26 reasonable doubt as to the facts [at] issue. . . . Multiple accountants may
10
1 value any business in a myriad of ways. [Wife] argues in the motion to
2 reconsider that book value is improper. The method of valuation is not
3 relevant yet as there has been no increase in value established. [Wife]
4 failed to meet her burden at summary judgment to establish an increase
5 in the value of the businesses.
6 {14} Bubby & Son Motion. On May 5, 2015, Husband moved again for partial
7 summary judgment as to Wife’s claim of a community lien against his Bubby & Son
8 business (Bubby & Son Motion). The motion essentially repeated the argument and
9 analysis that Husband had presented in his earlier Renewed Motion that the business
10 had not increased in value and that any community labor was not undercompensated.
11 This time, however, Husband also provided values for the assets (for the most part,
12 three trucks) of Bubby & Son and stated that the assets’ values had declined since
13 2007.
14 {15} In her response to the Bubby & Son Motion, Wife criticized Husband’s
15 assertions and supporting evidence that the business had lost value and that he was not
16 undercompensated. However, Wife again did not offer any valuation or
17 undercompensation amounts of her own, and instead submitted the same Calton
18 affidavit that she proffered in support of her Motion to Set Aside. Significantly, Wife
19 did not invoke Rule 1-056(F) or otherwise seek additional time or discovery in order
20 to respond to the motion.
11
1 {16} In its October 5, 2015 order, the district court granted the Bubby & Son Motion.
2 The court reiterated the substantive analysis it articulated in its ruling denying Wife’s
3 Motion to Set Aside. Husband had met his burden of establishing a prima facie case
4 of no community lien. Wife, however, had failed to establish a question of fact. She
5 provided no valuation for the business of her own, and instead “Calton’s [a]ffidavit
6 merely critiques [Husband]’s valuation of [WTI] and Welch Trucking [but not Bubby
7 & Son].” In addition, Wife presented no evidence to show that Husband was
8 undercompensated. The court noted that Wife had submitted a 2010 order from
9 Husband’s previous divorce proceeding that valued Bubby & Son at $43,000 as of
10 2006, one year prior to his marriage to Wife, but ruled that the order did not establish
11 “a reasonable doubt as to an increase in the value of the company since the marriage.”
12 3. Husband Made a Prima Facie Showing of Entitlement to Summary
13 Judgment, and Wife Failed to Meet Her Burden of Presenting Evidence
14 That Established Any Genuine Issue of Material Fact
15 {17} The district court did not err in granting Husband’s Renewed Motion. First,
16 Husband satisfied his burden of establishing a prima facie case that his separate
17 property had not increased in value as a result of undercompensated community labor.
18 The burden of establishing a prima facie case for summary judgment is minimal.
19 Savinsky v. Bromley Grp., Ltd., 1987-NMCA-078, ¶ 2, 106 N.M. 175, 740 P.2d 1159.
20 Further, the owner of a business may state an opinion of the value of the business. See
12
1 Lahr v. Lahr, 1970-NMSC-165, ¶ 6, 82 N.M. 223, 478 P.2d 551; see also State v.
2 Hughes, 1988-NMCA-108, ¶ 8, 108 N.M. 143, 767 P.2d 382. Husband made a prima
3 facie showing through his and the companies’ accountant’s affidavits that the three
4 businesses were Husband’s separate property, that the value of the businesses had not
5 increased during his marriage to Wife, and that he had not been undercompensated for
6 his labor. Second, as the district court observed in ruling on Wife’s Motion to Set
7 Aside, that Wife did not properly dispute Husband’s statement of undisputed material
8 facts in accordance with the requirements of Rule 1-056(D), see Richardson v. Glass,
9 1992-NMSC-046, ¶ 6, 114 N.M. 119, 835 P.2d 835, and more fundamentally, did not
10 submit any evidence of her own with which to establish a question of fact regarding
11 the value of the businesses or undercompensation of Husband’s labor. These failings
12 were sufficient grounds for granting summary judgment.
13 {18} The district court also did not err in denying Wife’s Motion to Set Aside. The
14 motion effectively was a motion to reconsider the granting of the Renewed Motion.
15 A district court does not abuse its discretion in denying a motion to reconsider if the
16 movant presents evidence or argument that could have been presented at the time the
17 original motion was decided. See Deaton v. Gutierrez, 2004-NMCA-043, ¶¶ 9-10, 135
18 N.M. 423, 89 P.3d 672. Based on Calton’s deposition testimony, the district court
19 could conclude that the evidence Wife belatedly proffered with her Motion to Set
13
1 Aside—Calton’s affidavit—in fact had been available prior to the hearing on the
2 Renewed Motion.
3 {19} Further, even after considering the Calton affidavit, denying Wife’s Motion to
4 Set Aside was still appropriate. Wife seems to contend, as a premise to her appeal, that
5 the district court was obliged to undertake an independent, affirmative investigation
6 into whether undercompensated labor by Husband resulted in an increase in the value
7 of his businesses. Wife is wrong. The burden fell on Wife to present evidence
8 sufficient to create a question of fact. In ruling on the Motion to Set Aside, the court
9 properly focused on Wife’s failure to meet this burden, in particular, to present
10 evidence to establish the threshold fact that during the marriage Husband’s businesses
11 increased in value at all, much less that the value increased more than would result
12 from normal market conditions. Wife could have met this burden had Calton provided
13 her own opinion regarding an increase in the value of Husband’s businesses between
14 2007 and 2013, and that Husband was undercompensated for his work relative to
15 comparable wages. Calton did not do this, and instead confined her affidavit to
16 criticizing Husband’s valuation methodology and evidence. As the district court
17 recognized, this was insufficient to create a question of fact that would preclude
18 summary judgment.
14
1 {20} Wife’s challenge to the district court’s granting of Husband’s other motion, the
2 Bubby & Son Motion, can be resolved on similar grounds. Husband established a
3 prima facie case for summary judgment. Wife again failed to present evidence
4 regarding the company’s value and undercompensation for Husband’s labor. Indeed,
5 she supported her response with Calton’s original affidavit, which addressed and
6 criticized Husband’s opinions regarding the valuation of WTI and Welch Trucking as
7 opposed to Bubby & Son. Further, the court properly determined that the order
8 entered in connection with Husband’s previous divorce litigation regarding the value
9 of the company in 2006 did not suffice to create a question of fact regarding any
10 increase in the value of the company between 2007 and 2014.
11 4. The District Court Did Not Err in Granting Summary Judgment While
12 Discovery Was Ongoing
13 {21} The discovery deadline, which Wife did not attempt to extend, was December
14 31, 2014. Wife argues that she needed additional time to obtain additional discovery
15 regarding Husband’s businesses, and the district court erred in granting Husband’s
16 Renewed Motion in November 2014 when discovery was still ongoing. See Romero
17 v. Giant Stop-N-Go of N.M., Inc., 2009-NMCA-059, ¶ 17, 146 N.M. 520, 212 P.3d
18 408 (noting that, “[i]t is generally inadvisable to grant summary judgment before
19 discovery has been completed”). We review this argument under an abuse of
15
1 discretion standard. See Griffin v. Thomas, 2004-NMCA-088, ¶ 53, 136 N.M. 129, 95
2 P.3d 1044.
3 {22} We see no abuse of discretion. First, and most fundamentally, as the district
4 court itself noted, if Wife believed she needed additional time to obtain additional
5 discovery of financial information regarding Husband’s business, the proper
6 procedure for her to follow was set forth in Rule 1-056(F):
7 Should it appear from the affidavits of a party opposing the motion that
8 he cannot for reasons stated present by affidavit facts essential to justify
9 his position, the court may refuse the application for judgment or may
10 order a continuance to permit affidavits to be obtained or depositions to
11 be taken or discovery to be had or may make such other order as is just.
12 Wife did not file a Rule 1-056(F) affidavit. See Giant Stop-N-Go of N.M., Inc., 2009-
13 NMCA-059, ¶ 18 (stating that “a party faced with a motion for summary judgment
14 may ask the district court to stay its determination so that the non-movant can conduct
15 discovery needed to rebut the motion. . . . [citing Rule 1-056(F)] If such a stay is
16 sought, the party must submit an affidavit explaining why additional time and
17 discovery are needed.” (emphasis added)); see also Williams v. R.H. Donnelley Corp.,
18 368 F.3d 123, 126 n.1 (2nd Cir. 2004) (noting that failure to file affidavit is “sufficient
19 grounds to reject a claim that the opportunity [to conduct] discovery was inadequate”
20 (internal quotation marks and citation omitted)).
16
1 {23} Second, even assuming for the sake of argument that Wife’s counsel’s
2 statements in her motion papers could substitute for the required affidavit, in light of
3 Calton’s deposition testimony, the district court was not persuaded by Wife’s
4 explanations why she was unable to procure earlier an accountant’s affidavit that
5 established a question of fact regarding the values of Husband’s businesses or the
6 undercompensation of his labor. On appeal Wife provides no basis for concluding that
7 the district court’s determination was in error.
8 {24} Third, under Rule 1-056(F), in any explanation why additional time and
9 discovery are needed, “vague assertions are insufficent; rather, the party must
10 specifically demonstrate how postponement of a ruling on the motion will enable him,
11 by discovery or other means, to rebut the movant’s showing of the absence of a
12 genuine issue of fact.” Giant Stop-N-Go of N.M., Inc., 2009-NMCA-059, ¶ 18
13 (internal quotation marks and citation omitted). Wife never provided any such
14 specificity. In her response to Husband’s Renewed Motion, Wife claimed that
15 Husband had provided profit and loss statements for only one year of marriage. Not
16 only did Husband dispute this claim (which dispute does not appear to have been
17 resolved), but Wife in any event did not explain how additional profit and loss
18 statements would provide information that would permit her to establish material
19 questions of fact regarding her community lien claim. Wife otherwise asserted only
17
1 generally that “discovery was incomplete.” We note as well that Wife never stated in
2 her post-summary judgment affidavit that she needed more information (much less
3 identified specific information) before she could form and state opinions about any
4 increase in the value of Husband’s businesses since 2007 or undercompensation of
5 Husband’s labor. In her response to Husband’s Bubby & Son Motion, Wife did not
6 assert at all that she needed additional time to conduct discovery in order to rebut
7 Husband’s claim of entitlement to summary judgment as to her claim of a community
8 lien against that company. On the contrary, she confined her argument to the topics
9 addressed above (criticizing Husband’s supporting evidence and asserting that the
10 order entered in Husband’s previous divorce case created an issue of fact). For all of
11 these reasons, we find no abuse of discretion in the district court’s decision not to
12 delay proceeding with Husband’s Renewed Motion and Bubby & Son Motion.
13 B. Spousal Support
14 {25} NMSA 1978, Section 40-4-7 (1997), provides that either party in a marriage
15 dissolution proceeding may seek spousal support and identifies a number of factors
16 that the court must consider in making an award. “The actual need of the proposed
17 recipient is a focal consideration in determining whether to order spousal support.”
18 Clark v. Clark, 2014-NMCA-030, ¶ 7, 320 P.3d 991. The court in considering an
19 award of spousal support must not allow the recipient spouse to abdicate his or her
18
1 responsibility to be self-supporting and place that responsibility on the other spouse.
2 See id.
3 {26} The district court had ordered Husband to pay $2,000 monthly spousal support
4 during the pendency of the divorce proceeding. In its March 16, 2016, final decision
5 and order, the district court terminated the monthly payment and ruled on Wife’s
6 request for further ongoing spousal support as follows:
7 The focal consideration in spousal support is need. . . . Spousal [s]upport
8 is not a penalty. . . . Section 40-4-7 . . . outlines the factors the [c]ourt
9 must consider. Both parties are relatively healthy, although [Wife] has
10 arthritis and reports that she is unable to stand for long periods of time.
11 [Wife] has her retirement income to provide for her support. [Husband]
12 has his employment and ownership of his separate property businesses
13 to provide for his support. [Husband] only has a high school education,
14 whereas [Wife] has two advanced degrees. [Wife] testified that she has
15 only applied for two jobs since the separation and does not meet current
16 licensure requirements since her retirement in 2007. Testimony of the
17 parties established that during the term of the marriage they lived debt
18 free, took vacations without incurring debt, and lived comfortably.
19 [Wife] currently has medical/health coverage through her retirement,
20 while [Husband] has coverage through his business. The parties were
21 married from July 13, 2007 until March 25, 2015. The only personal
22 property awarded in this case consists of two vehicles and a bed. [Wife]
23 testified she only has one liability, a $2,000.00 loan from her sister.
24 [Wife] owns no other real estate or other significant property, outside of
25 her LPL Financial Money market. [Husband] owns his home and it sits
26 on more than one acre of land. [Husband] and [Wife] entered into no
27 agreements in contemplation of divorce. [Husband] clearly has more
28 resources and readily [disposable] income. Conversely, this marriage
29 only lasted six years. Both parties are capable of being self-employed.
30 The Court therefore orders an additional fixed, one-time spousal support
31 payment of $5,000.00. Monthly support will cease as of January 1, 2016.
19
1 The balance in Wife’s money market account was approximately $50,000.
2 {27} Wife contends that the district court “failed to follow the law and the evidence
3 when awarding [ongoing] spousal support.” Specifically, she argues that on the basis
4 of her age and health condition; the parties’ relative means of support, current income,
5 and future earning capacity and prospects; the amount, type and nature of the property
6 that was awarded to her and Husband; and her standard of living during the marriage
7 and reasonable needs, the court should have awarded ongoing spousal support, and
8 suggests a figure of $3,800.00 per month. Wife does not make a substantial evidence
9 challenge to any of the factual findings reflected in the district court’s spousal support
10 ruling. Rather, she effectively challenges the district court’s weighing of Section 40-4-
11 7’s factors. “Whether to order spousal support, how much to order, and the duration
12 of the order are within the sound discretion of the district court.” Rabie v. Ogaki,
13 1993-NMCA-096, ¶ 5, 116 N.M. 143, 860 P.2d 785. Absent an abuse of discretion,
14 we will not disturb a district court’s award of spousal support. See Talley v. Talley,
15 1993-NMCA-003, ¶ 12, 115 N.M. 89, 847 P.2d 323. “An abuse of discretion occurs
16 when a ruling is clearly contrary to the logical conclusions demanded by the facts and
17 circumstances of the case.” Clark, 2014-NMCA-030, ¶ 8 (internal quotation marks
18 and citation omitted).
20
1 {28} The question for the district court was whether Wife had any “actual need” for
2 spousal support. The court considered the statutory factors. The court noted that the
3 marriage lasted only six years; both parties were relatively healthy; Wife had
4 retirement income, a money market account with a $50,000 balance, and health
5 insurance coverage; and Wife had no debts. Wife disagrees with the manner in which
6 the district court balanced the various considerations and arrived at its decision to
7 award only $5,000 as a lump sum amount, but such criticism does not rise to the level
8 of abuse of discretion. In re Camino Real Envtl. Ctr., Inc., 2010-NMCA-057, ¶ 23,
9 148 N.M. 776, 242 P.3d 343(stating that “when reasons both supporting and
10 detracting from a decision exist, there is no abuse of discretion” and “merely
11 identifying the existence of evidence which may have tended to support a different
12 outcome does not demonstrate an abuse of discretion”).
13 C. Wife’s Attorney’s Fees
14 {29} Wife requested an attorney fee award of approximately $31,000. The district
15 court awarded her $10,000. Wife contests the award, arguing that the amount was
16 arbitrary and that she also was entitled to recover her attorney’s fees as a sanction for
17 Husband’s “obstructive discovery tactics and defiance of court orders throughout the
18 proceedings.”
21
1 {30} Section 40-4-7(A), provides that, in a divorce proceeding, “[t]he court may
2 make an order, relative to the expenses of the proceeding, as will ensure either party
3 an efficient preparation and presentation of his case.” This authorization encompasses
4 an award of attorney’s fees. As the language of the statute indicates, “the central
5 purpose of an award of attorney fees under Section 40-4-7(A) is to remedy any
6 financial disparity between the . . . parties so that each may make an efficient and
7 effective presentation of his or her claims.” Garcia v. Jeantette, 2004-NMCA-004, ¶
8 19, 134 N.M. 776, 82 P.3d 947. In making an award, the district court will consider,
9 among other factors, not only any disparity in the parties’ resources but also the
10 parties’ relative success on the merits. Weddington v. Weddington, 2004-NMCA-034,
11 ¶ 27, 135 N.M. 198, 86 P.3d 623. “Award of attorney fees rests in the discretion of the
12 trial court and [the appellate courts] will not alter the fee award absent an abuse of
13 discretion.” Lenz v. Chalamidas, 1991-NMSC-099, ¶ 2, 113 N.M. 17, 821 P.2d 355.
14 {31} The district court explained its ruling on Wife’s attorney’s fee request as
15 follows:
16 Pursuant to . . . [Section] 40-4-7(A), attorney fees can be awarded
17 where there is financial disparity between the parties as this is the most
18 important factor. . . . This case has at times been vexatious. Neither party
19 has clean hands in this regard. Clearly, [Husband] has more income to
20 pursue litigation. In fact, the [c]ourt has previously ordered an advance
21 of attorney fees. [Wife] attached an affidavit indicating approximately
22 $30,000.00 in attorney fees in this case. The [c]ourt hereby orders
23 [Husband p]ay [Wife] $10,000.00 for attorney fees.
22
1 {32} We see no abuse of discretion in this ruling. First, while the district court noted
2 that Husband had more income, Wife was not destitute. More to the point, Wife was
3 not unable to secure adequate advocacy of her interests in the divorce litigation, which
4 is the underlying purpose of any attorney’s fee award. See Jeantette,
5 2004-NMCA-004, ¶ 19. That would have been readily apparent to the court from the
6 fact that both parties had vigorously if not “vexatiously” litigated the case—Wife’s
7 attorney’s fee request itself reflected that her attorney had devoted approximately 400
8 hours to the case—and, as previously mentioned, Wife held as her separate property
9 a money market account with an approximately $50,000 balance that would have been
10 available to pay her attorney’s fees.
11 {33} Second, Wife had achieved only partial success in obtaining the relief that she
12 sought. Perhaps most significantly, the district court had declined her request for an
13 award of an ongoing, monthly $3,800 spousal support award. The court could take this
14 into account in determining the amount of an attorney’s fee award. Wife cites
15 Economy Rentals, Inc. v. Garcia, 1991-NMSC-092, ¶ 54, 112 N.M. 748, 819 P.2d
16 1306, for the proposition that the court could not arbitrarily award Wife only one-third
17 of her attorney’s fees on the basis of an “eye-ball estimate,” and instead had to enter
18 findings based on evidence. However, our Supreme Court’s concern in Economy
19 Rentals, Inc., stemmed from the fact that the commercial litigation in that case
23
1 involved multiple issues, only one of which permitted an attorney’s fee award; the
2 district court therefore had to justify its award of one-half of the requested fees by
3 showing that one-half of the attorneys’ time was devoted to advocating the one issue
4 that was the basis for the award. Economy Rentals, Inc., 1991-NMSC-092,¶ 51-54.
5 That concern is not present here, where pursuant to Section 40-4-7(A) an attorney’s
6 fee award is based on all of the work performed in the divorce case. Wife does not cite
7 any authority for the proposition that a district court must enter detailed findings
8 supporting an attorney fee award outside the special context of Economy Rentals, Inc.
9 “Where a party cites no authority to support an argument, we may assume no such
10 authority exists.” Curry v. Great Nw. Ins. Co., 2014-NMCA-031, ¶ 28, 320 P.3d 482.
11 {34} Third, Wife complains that the district court did not award her attorney’s fees
12 as a sanction for Husband’s failure to make all of the monthly $2,000 interim spousal
13 support payments that the district court had ordered earlier in the litigation. Wife does
14 not cite any authority for the proposition that the district court was required to
15 sanction Husband, in particular, award attorney’s fees, for his failure to make the
16 payments, and we are not otherwise aware of any such rule. See ITT Educ. Servs., Inc.
17 v. Taxation & Revenue Dep’t, 1998-NMCA-078, ¶ 10, 125 N.M. 244, 959 P.2d 969
18 (holding that this Court will not consider propositions that are unsupported by citation
19 to authority). Under Section 40-4-7(A), any attorney’s fee award is in any event
24
1 discretionary. The district court was acting in equity, and in considering attorney’s
2 fees properly could consider that both parties were guilty of vexatious conduct—for
3 example, during the course of the proceedings Wife moved to disqualify Husband’s
4 CPA from testifying, which the district court subsequently denied; Wife filed a motion
5 for sanctions against Husband which was not granted; Wife filed two motions for
6 order to show cause against Husband and the court ruled that both were without merit.
7 We hold there was no abuse of discretion on the part of the district court in not
8 making a separate or additional award of attorney’s fees as a sanction for Husband’s
9 failure to make the interim support payments.
10 D. Husband’s Cross-Appeal
11 {35} On cross-appeal Husband argues that the district court erred in awarding Wife
12 a $20,000 reimbursement for payments of separate debt, awarding Wife one-half of
13 the income tax she paid following the parties’ separation, and awarding spousal
14 support and attorney’s fees to Wife. To the extent Husband argues that there is an
15 insufficient factual basis to support the court’s findings of fact “we review the
16 evidence in the light most favorable to support the district court’s findings, resolving
17 all conflicts and indulging all permissible inferences in favor of the decision below.”
18 Jones v. Schoellkopf, 2005-NMCA-124, ¶ 8, 138 N.M. 477, 122 P.3d 844. However,
19 to the extent Husband attacks the court’s conclusions of law including those findings
25
1 that function as conclusions, our review is de novo.” See Gabriele v. Gabriele, 2018-
2 NMCA-042, ¶ 18, ___ P.3d ___. We review a district court’s determination whether
3 an item is community or separate debt de novo. Arnold v. Arnold, 2003-NMCA-114,
4 ¶ 6, 134 N.M. 381, 77 P.3d 285. As stated, we will not alter an attorney fee or spousal
5 support award absent an abuse of discretion. Lenz, 1991-NMSC-099, ¶ 2; Weaver v.
6 Weaver, 1983-NMSC-063, ¶ 5, 100 N.M. 165, 667 P.2d 970.
7 1. The District Court Did Not Err in Awarding Wife a $20,000
8 Reimbursement on Separate Debt
9 {36} Husband does not assert a substantial evidence challenge to the district court’s
10 factual findings that underlie its ruling on this issue. See Rule 12-318(A)(3), (4)
11 NMRA. We therefore assume that the facts material to this issue are undisputed as
12 found by the district court and acknowledged by the parties. Prior to the marriage and
13 in connection with the settlement of his previous divorce, Husband borrowed
14 $100,000 from his mother to pay off a lien on his separate property home. This was
15 Husband’s separate debt. Husband does not assert that the loan accrued interest.
16 During the marriage Husband made some of the $500 monthly payments on the loan
17 with funds from a joint bank account into which community income was deposited.
18 Thus, community assets were used to pay Husband’s separate debt. Wife sought
19 reimbursement for one-half of any community assets that were used to pay his
20 separate debt. The district court generally agreed with Wife and ruled that she was
26
1 entitled to a $13,750 reimbursement from Husband for one-half of the payments that
2 Husband made to his mother from the parties’ joint account; Wife was not entitled to
3 reimbursement for payments Husband made to his mother from a different account
4 that contained only funds that were his separate property.
5 {37} In addition, prior to the marriage Husband had purchased a tract of land
6 adjacent to his home from an aunt who apparently had loaned him some or all of the
7 purchase funds, and he was paying her $500 per month. Again, Husband does not
8 assert that the loan accrued interest. During the marriage Husband used the
9 aforementioned joint bank account into which community income had been deposited
10 to make some of the monthly payments to his aunt. Wife sought reimbursement for
11 one-half of any community assets used by Husband to pay this separate debt. The
12 district court ruled that Wife was entitled to reimbursement of $6,250 for one-half of
13 the payments that Husband made to his aunt from the parties’ joint account but that
14 Wife was not entitled to reimbursement for payments that Husband made to his aunt
15 from a different bank account into which Husband’s separate property funds were
16 deposited.
17 {38} In McElyea v. McElyea, 1945-NMSC-035, 49 N.M. 322, 163 P.2d 635, our
18 Supreme Court held that if the community paid any part of a separate debt, it would
19 be entitled to repayment of the amount so expended. Husband argues, however, that,
27
1 because he and Wife resided in the home that was his separate property, Wife received
2 a benefit from the payments to his mother and aunt and for that reason he should not
3 have been required to reimburse her for one-half of the payments. Husband cites
4 Dorbin v. Dorbin, 1986-NMCA-114, ¶ 30, 105 N.M. 263, 731 P.2d 959, for the
5 proposition that, “[w]hen community [property] is spent to the benefit of separate
6 property, without the acquisition of an asset, for example, when money is paid for
7 interest, taxes and insurance, neither New Mexico statute nor case law authorizes
8 reimbursement.” (emphasis omitted). See also Martinez v. Block, 1993-NMCA-093,
9 ¶ 12, 115 N.M. 762, 858 P.2d 429 (stating that “the community has no right to be
10 reimbursed for funds spent paying mortgage interest, taxes, or insurance premiums on
11 the asset”). However, Husband points to no evidence that any portion of the loan
12 payments that he made to his mother and aunt were used for payment of interest, taxes
13 or insurance premiums as opposed to simply reducing the principal balance on his
14 separate debts. For this reason, we conclude that the district court did not err in
15 awarding Wife one-half of the loan payments made from community assets.
16 2. The District Court Did Not Err in Awarding Wife One-Half of the Income
17 Tax She Paid in the Years Following the Parties’ Separation
18 {39} Husband does not assert a substantial evidence challenge to the district court’s
19 factual findings that underlie its ruling on this issue. See Rule 12-318(A)(3), (4). We
20 therefore assume that the facts material to this issue are undisputed as found by the
28
1 district court and acknowledged by the parties. Husband filed his 2013 and 2014
2 income tax returns (filing as “married filing separately”) without Wife’s knowledge
3 or consent, and as a result Wife also had to file separate returns for the income she
4 received from her retirement pension. Wife paid income tax on the pension income
5 during these two years in the amount of $1,600 and $2,200, respectively. The district
6 court determined that the tax liability was a community debt and that Wife was
7 entitled to reimbursement from Husband of $1,900, one-half of the sum of these
8 payments. Husband argues that the tax liability in fact was Wife’s separate debt and
9 she therefore had no right to reimbursement.
10 {40} In New Mexico, any “debt contracted or incurred by either or both spouses
11 during marriage which is not a separate debt” is a “community debt.” NMSA 1978,
12 Section 40-3-9(B) (1983). One type of “separate debt” is an “unreasonable” debt.
13 NMSA 1978, Section 40-3-9(A)(6). A district court “may declare, as between the
14 parties, a debt to be unreasonable if it was incurred by a spouse while the spouse was
15 living apart and the debt did not contribute to the benefit of both spouses or their
16 dependents.” NMSA 1978, Section 40-3-10.1 (1983) (emphasis added). We construe
17 this language as vesting the district court with discretion to make such a declaration.
18 {41} Pursuant to Section 40-3-9(B), Wife’s 2013 and 2014 income tax liability
19 presumptively was a community debt because the parties were not divorced until
29
1 2015. The district court in theory might have declared that Wife’s income tax liability
2 incurred after October 14, 2013, when she and Husband separated, was an
3 “unreasonable” and thus separate debt. However, the district court was not required
4 to treat the post-October 14, 2013, payments as a separate debt. The district court did
5 not expressly discuss why it did not do so, but in its ruling did note that Husband filed
6 his 2013 and 2014 income tax returns without Wife’s knowledge or consent, “thereby
7 forcing [Wife] to also to file separate.” This consideration is sufficient to support the
8 district court’s exercise of discretion in not declaring the debt to be unreasonable. In
9 any event, review of the record below does not reflect that Husband requested the
10 district court to treat Wife’s 2014 or any portion of the 2013 tax liability as an
11 unreasonable debt. “[O]n appeal, the party must specifically point out where, in the
12 record, the party invoked the court’s ruling on the issue. Absent that citation to the
13 record or any obvious preservation, we will not consider the issue.” Crutchfield v.
14 N.M. Dep’t of Taxation & Revenue, 2005-NMCA-022, ¶ 14, 137 N.M. 26, 106 P.3d
15 1273. For all of these reasons we therefore affirm the district court on this issue.
16 3. The District Court Did Not Err in Awarding Wife Temporary Spousal
17 Support, a Lump Sum Spousal Support Payment, and Attorney Fees
18 {42} “The district court [in a divorce proceeding] has wide discretion to award
19 spousal support [and attorney’s fees,] and its decision will only be set aside if it
20 constitutes an abuse of discretion.” Clark, 2014-NMCA-030, ¶ 8; Lebeck v. Lebeck,
30
1 1994-NMCA-103, ¶ 27, 118 N.M. 367, 881 P.2d 727. For the same reasons that
2 underlie our denial of Wife’s challenges to the district court’s rulings on these issues,
3 we reject Husband’s arguments that the district court abused its discretion in awarding
4 Wife $2,000 per month spousal support through January 1, 2016 and a final $5,000
5 lump sum spousal support amount, and in awarding Wife $10,000 in attorney’s fees.
6 CONCLUSION
7 {43} We affirm the district court.
8 {44} IT IS SO ORDERED.
9 _________________________________
10 HENRY M. BOHNHOFF, Judge
11 WE CONCUR:
12 ___________________________________
13 JULIE J. VARGAS, Judge
14 ___________________________________
15 DANIEL J. GALLEGOS, Judge
31