Backus v. Backus ( 2016 )

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:
JANE BACKUS, Petitioner/Appellee,
v.
LARRY A. BACKUS, Respondent/Appellant.
No. 1 CA-CV 14-0649 FC
FILED 4-26-2016
Appeal from the Superior Court in Yavapai County
No. V1300DO201380132
The Honorable Jeffrey G. Paupore, Judge Pro Tempore
The Honorable Mark M. Moore, Judge Pro Tempore
VACATED AND REMANDED
COUNSEL
Aspey Watkins & Diesel PLLC, Flagstaff
By Zachary J. Markham, Staci Lynn Foulks, Edward Jakob Walneck
Counsel for Petitioner/Appellee
Bryon Middlebrook PC, Flagstaff
By Bryon Middlebrook
Counsel for Respondent/Appellant
BACKUS v. BACKUS
Decision of the Court
MEMORANDUM DECISION
Judge John C. Gemmill delivered the decision of the Court, in which
Presiding Judge Andrew W. Gould and Judge Margaret H. Downie joined.
G E M M I L L, Judge:
¶1 Lawrence Backus (“Husband”) appeals an amended consent
decree and order denying his motion for clarification/new trial. For the
following reasons, we vacate the amended decree and the order denying
Husband’s motion for clarification/new trial and remand for further
proceedings consistent with this decision.
BACKGROUND
¶2 Upon dissolution of their marriage, Husband and Jane Backus
(“Wife”) negotiated a Partial Property Settlement Agreement (“the
Agreement”). The Agreement laid out the parties’ provisions for Wife’s
“spousal maintenance” as follows:
Wife is unemployed and has no monthly income. Husband is
retired and has gross monthly income on the sum of $7,593.14
from several sources (Social Security: $2,108.00; [Orange
County] Assessor: $2,246.02; USMC (DFAS): $2,793.25;
Boeing: $445.89). Husband shall pay to Wife, as and for
spousal maintenance, the sum of $3,300 per month. Said
payments shall commence on May 1, 2013 and [are] payable
before or on the 5th day of each and every month thereafter,
indefinitely. It is specifically agreed that this provision for
spousal maintenance is not subject to modification. It is
further agreed that spousal maintenance, payable pursuant to
this provision, shall terminate immediately upon any of the
following events with no further payments being required
thereafter: Wife’s death; Husband’s death; Wife’s remarriage
or cohabitation.
The Agreement divided Husband’s Boeing and Orange County pensions
equally between the two spouses. It also set forth an unequal division of
(1) Husband’s USMC pension, with Wife receiving 9.38 percent and
Husband receiving 90.62 percent; and (2) Husband’s Social Security
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benefits, with Wife receiving 30 percent and Husband receiving 50 percent.1
The Agreement also stated:
The division of these retirement accounts and assets is for the
purpose of providing Wife with a spousal maintenance/
property equalization payment in the sum of $3,300 per
month. The division of the assets is not in addition to the
spousal maintenance/equalization payment.
¶3 The parties then presented the family court with a proposed
consent decree that referred to the Agreement. The consent decree
contained an order stating:
Petitioner [sic] is ordered to continue to pay to Respondent
[sic] the sum of $3,300.00 per month as and for spousal
maintenance, which began on the first day of May 2013,
pursuant to the parties’ Partial Property Settlement
Agreement dated March 28, 2013. This monthly payment of
$3,300.00 includes the Petitioner’s interests in the
Respondent’s Boeing and Orange County Pensions,
Respondent’s social security and USMC pension. Each
payment shall be made by the fifth day of each month and
shall continue until either the Petitioner is remarried or
deceased or until the Respondent is deceased. . . . Payments
made shall be included in the receiving spouse’s taxable
income and is tax deductible from the paying spouse’s income
as required by law. The parties acknowledge that the
circumstances of their futures are unknown but each desires
that this maintenance award, so awarded by their agreement,
not be modified in the future for any reason; therefore, it is at
this time ordered that this spousal maintenance award shall
NOT be modifiable for any reason.
The decree also awarded each party various other property and one-half of
the Boeing and Orange County pensions pursuant to the “pre-approved”
Qualified Domestic Relations Orders (“QDROs”) filed with the court. The
Orange County pension payments terminate upon Husband’s death, but
1 There is no explanation in the record or appellate briefs regarding the
remaining 20 percent of Husband’s Social Security benefits.
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upon Wife’s death become payable to her estate. Wife’s payments from the
Boeing pension terminate upon the death of either party.
¶4 Five months after the family court signed the consent decree,
Husband filed a motion to set it aside pursuant to Arizona Rule of Family
Law Procedure (“Rule”) 85(C). Husband argued the decree erroneously
ordered Wife to pay Husband support and awarded Wife an interest in
Husband’s Social Security benefits. Husband also argued the decree
improperly granted Wife spousal maintenance in lieu of her property rights
in the Boeing and Orange County pensions, but also inconsistently granted
her community property rights in those pensions through the QDROs.
Husband asked the court to set aside the decree, equitably allocate the
community property, and determine whether Wife was entitled to spousal
maintenance pursuant to Arizona Revised Statutes (“A.R.S.”) section 25-
319. Wife moved to dismiss Husband’s motion and argued that any errors
in the decree were merely clerical errors the court could correct without
setting it aside.
¶5 Following argument on Husband’s motion, the court signed
an order setting aside the 2013 consent decree and the two QDROs. The
court also signed an amended decree submitted by Wife. The amended
decree provides as follows:
Respondent is ordered to continue to pay to Petitioner the sum
of $3,300.00 per month as and for spousal maintenance, which
began on the first day of May 2013, pursuant to the parties’
Consent Decree signed on August 6, 2013, which by this
reference is incorporated herein. Petitioner is to receive
$3,300.00 per month as and for spousal maintenance. This monthly
payment of $3,300.00 consists of a payment from Respondent’s
Boeing pension in the amount of $220.60 per month (representing
Petitioner’s community interest in Respondent’s pension), a
payment from Respondent’s Orange County pension in the amount
of $1,173.92 (representing Petitioner’s community interest in
Respondent’s pension), and the balance of $1,905.48 per month shall
be paid to Petitioner directly by Respondent. Each payment shall
be made by the fifth day of each month and shall continue
until either the Petitioner is remarried or deceased or until the
Respondent is deceased. . . . Payments made shall be included
in the receiving spouse’s taxable income and is [sic] tax
deductible from the paying spouse’s income as required by
law. The parties acknowledge that the circumstances of their
futures are unknown but each desires that this maintenance
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award, so awarded by their agreement, not be modified in the
future for any reason; therefore, it is at this time ordered that
this spousal maintenance award shall NOT be modifiable for
any reason.
(Emphasis in original.) The amended decree also awarded Wife, as her
separate property:
Petitioner’s one-half community interest in Respondent’s
Boeing Pension in Respondent’s name payable at the rate of
$220.00 per month [and] Petitioner’s one-half community
interest in Respondent’s Orange County Assessor pension in
Respondent’s name payable at the rate of $1,173.92 per
month.
No new QDROs were issued.
¶6 Following the trial court’s orders, Husband filed a motion for
clarification/motion for new trial. The family court denied Husband’s
motion, and Husband filed a notice of appeal. At the time of filing,
however, the trial court’s order was still unsigned. Accordingly, this court
stayed the appeal and re-vested jurisdiction in the family court to allow it
to issue an appealable, signed order. Husband then timely filed a second
notice of appeal that included the signed order denying his motion for
clarification/motion for new trial. We have jurisdiction pursuant to A.R.S.
§§ 12-2101(A)(2) and 12-2101(A)(5)(a).
DISCUSSION
¶7 Husband argues the court erred by denying his motion to set
aside. He argues the trial court should not have entered the amended
decree without hearing additional evidence, and that the amended decree
did not fix the legal errors contained in the original decree. We review the
trial court’s ruling on a Rule 85(C) motion to set aside for an abuse of
discretion. Duckstein v. Wolf, 230 Ariz. 227, 231, ¶ 8 (App. 2012).
I. Errors in Decree Were Not Merely Clerical
¶8 Wife maintains any errors in the original decree were clerical
errors because the court did not “intend” to approve mistaken language.
See Ace Auto. Prods., Inc. v. Van Duyne, 156 Ariz. 140, 142–43 (App. 1987)
(explaining that courts may correct clerical errors, but may not change the
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substance of a judgment if it reflects the court’s intended result); Rule 85(A).
We agree that the decree’s mislabeling of the parties, which provided Wife
would pay support to Husband rather than Husband paying support to
Wife, was a clerical error that was properly corrected under Rule 85(A). See
Ace Auto. Prods., 156 Ariz. at 142 (holding difference between judgmental
and clerical error is “whether the error occurred in rendering the judgment
or in recording the judgment rendered.”). But the remaining issues
Husband raises are legal questions.
¶9 When it is presented with a consent decree, the family court
has a statutory obligation to determine whether the parties’ agreement
achieves a fair and equitable property distribution. See A.R.S. § 25-317(B);
Wick v. Wick, 107 Ariz. 382, 385 (1971); Sharp v. Sharp, 179 Ariz. 205, 210
(App. 1994). The existence of a consent decree does not give the family
court discretion to delegate this obligation to the parties by signing a
consent decree without reviewing its terms. See Wick, 107 Ariz. at 385;
A.R.S. § 25-318(A). Because the amended decree contains legal mistakes,
Husband was entitled to seek review of the amended decree under Rule
85(C).
II. Legal Errors in Amended Decree
¶10 Husband argues the original consent decree contained
irreconcilable provisions. According to Husband’s interpretation, the
parties intended to award Wife spousal maintenance in lieu of her
community property interests in Husband’s pensions. He therefore
contends it was inconsistent to award Wife an interest in those pensions
under the QDROs. Husband also argues the court abused its discretion by
entering an amended decree that substantively changed the original
consent decree without evidence supporting the changes.2 Although we
reject Husband’s interpretation of the consent decree and the Agreement,
we agree there are several errors in both the original and amended decrees.
¶11 First, the decree conflates property rights with “spousal
maintenance.” “Property division and spousal maintenance are two
2 Wife argues Husband waived his right to object to the amended decree
because he did not submit an amended decree to the family court. Instead,
Husband submitted an order setting aside the consent decree, consistent
with the relief he sought. This is what the family court anticipated from
Husband, and we find no waiver.
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separate and distinct considerations at dissolution and [ ] increased spousal
maintenance cannot justify depriving a spouse of his or her property right.”
Cooper v. Cooper, 167 Ariz. 482, 488 (App. 1990); see also Koelsch v. Koelsch,
148 Ariz. 176, 182 (1986). Spousal maintenance is not a proper vehicle for
settling the parties’ community property interests. Instead, it is awarded
where necessary for the spouse’s support. See Buttram v. Buttram, 122 Ariz.
581, 582 (App. 1979). The court may consider the community property
allocated to the spouse in determining whether that spouse is entitled to
spousal maintenance, but the parties cannot deny a spouse his or her
property rights in exchange for spousal maintenance. See A.R.S. § 25-
319(A); see also Cooper, 167 Ariz. at 488.
¶12 Generally, pension plans are community property subject to
equitable division upon dissolution. Koelsch, 148 Ariz. at 181; Cooper, 167
Ariz. at 487; A.R.S. § 25-318(A). But under the decree, Wife’s “spousal
maintenance” payments, which include a portion of her community
interest in Husband’s Boeing and Orange County pension, terminate upon
either party’s death or Wife’s remarriage. Thus, the decree runs afoul of
Arizona community property law by improperly divesting Wife of her
vested rights in community property that should survive her death or
remarriage. See Koelsch, 148 Ariz. at 181.
¶13 The decree also deprives Husband of his separate property
interest. The original decree awarded Wife a portion of Husband’s separate
property, namely, his Social Security benefits and USMC pension. See Kelly
v. Kelly, 198 Ariz. 307, 308, ¶ 5 (2000) (explaining that federal law prohibits
Social Security benefits from being divided by state courts upon
dissolution). Wife concedes that Husband’s Social Security benefits and his
USMC pension are his separate property and not subject to equitable
allocation, but argues the amended decree corrects the error by deleting
those two property awards. We disagree, because the original decree
specifically stated that the $3,300 payment amount included Wife’s interest
in Husband’s Social Security benefits and USMC pension. Under the
amended decree, Wife is still entitled to $3,300 per month. Accordingly, the
amended decree presumably still places some monetary value on
Husband’s separate property interests.
¶14 Finally, the amended decree contemplates that a portion of
the $3,300 “spousal maintenance” payment will come from the QDROs. But
the family court set aside the QDROs when it set aside the original decree.
Therefore, the decree is flawed because it relies on QDROs no longer in
effect. The fact that Wife may be receiving the previously designated
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payment amounts from the QDROs does not, by itself, breathe life into
QDROs that have been set aside by court order.
¶15 Because the amended decree contains legal errors, the family
court erred by denying Husband’s motion for clarification/motion for new
trial.3 See Flying Diamond Airpark, LLC v. Meienberg, 215 Ariz. 44, 50, ¶ 27
(App. 2007) (holding a trial court abuses its discretion if it commits an error
of law).
III. Non-Modifiability Language Does Not Preclude Relief
¶16 Wife contends that, even if it is flawed, the court could not set
aside the entire spousal maintenance award because Husband agreed to a
“non-modifiable” spousal maintenance payment of $3,300. Under A.R.S. §
25-317(G), “entry of a decree that sets forth or incorporates by reference a
separation agreement that provides that its maintenance terms shall not be
modified prevents the court from exercising jurisdiction to modify the
decree and the separation agreement regarding maintenance[.]”
Interpreting this statute, our supreme court has held that when parties
agree to non-modifiable spousal maintenance, the family court may not
consider a petition to modify a decree even if a substantial change in
circumstances has occurred. In re Marriage of Waldren, 217 Ariz. 173, 175,
¶¶ 9–10 (2007). Wife argues that A.R.S. § 25-317(G) should apply to the
consent decree here and that the family court was precluded from
modifying it beyond correcting the clerical errors it contained.
¶17 As discussed above, however, the payment here is not
entirely “spousal maintenance,” and on this record, it is not possible to
determine what portion of the lump sum payment may accurately be
classified as spousal maintenance. Additionally, to the extent that it
deemed Wife’s community property as a portion of her spousal
maintenance, the decree is erroneous. The parties cannot prevent the court
from exercising its authority to grant relief by classifying a legally
erroneous payment provision as “non-modifiable.” Sharp, 179 Ariz. at 210
(explaining that parties cannot by agreement “‘completely defeat the
3 Wife argues for the first time on appeal that Husband improperly
combined a motion for clarification with a motion for new trial. We will
not address arguments raised for the first time on appeal. See K.B. v. State
Farm Fire & Cas. Co., 189 Ariz. 263, 268 (App. 1997). Moreover, at the time
Husband filed his motion in 2014, combined motions were not prohibited.
Compare Rule 84(B) (2016) with Rules 83, 84, 85 (2014).
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authority expressly conferred upon the trial court by our statute.’” (quoting
Wick, 107 Ariz. at 385)).
¶18 Because the decree is legally erroneous, the parties’ “non-
modifiable” language does not prevent the court from vacating it.
Accordingly, the family court erred by denying Husband’s motion for
clarification/motion for new trial.
CONCLUSION
¶19 We vacate the amended decree and remand for a new trial
regarding allocation of the community property and the award of spousal
maintenance to Wife. Having found the amended decree was erroneous,
we also vacate the order denying Husband’s motion for clarification/
motion for new trial.
¶20 Both parties request an award of attorneys’ fees and costs
pursuant to A.R.S. § 25-324. Husband also asks for an award of fees as a
sanction for Wife’s allegedly baseless positions. See Rule 31 and A.R.S. § 12-
349. We do not agree that a sanction is warranted on this record, and we
therefore deny the request under Rule 31 and A.R.S. § 12-349. Additionally,
in the exercise of our discretion under A.R.S. § 25-324, we decline to award
fees to either party. As the successful party on appeal, however, Husband
is entitled to his taxable costs on appeal pursuant to A.R.S. § 12-342.
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