Magallanes v. Magallanes ( 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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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
LYN MAGALLANES, Petitioner/Appellant,
v.
MICHAEL MAGALLANES, Respondent/Appellee.
No. 1 CA-CV 14-0534 FC
FILED 2-18-2016
Appeal from the Superior Court in Navajo County
No. S0900DO20070239
The Honorable Robert J. Higgins, Judge
AFFIRMED
COUNSEL
David J. Martin, Lakeside
Counsel for Appellant
Michael Magallanes, Phoenix
Appellee
MEMORANDUM DECISION
Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge Kent E. Cattani and Judge Randall M. Howe joined.
MAGALLANES v. MAGALLANES
Decision of the Court
T H U M M A, Judge:
¶1 Lyn Magallanes (Wife) appeals from the denial of her motion
for new trial, claiming the superior court erred by allowing Michael
Magallanes (Husband) to retain $3,000 in proceeds from a foreclosure;
refusing to hold Husband in contempt for not timely paying Wife $1,500 in
attorneys’ fees and $850 for preparing a qualified domestic relations order
(QDRO); ordering Wife to correct the QDRO; dividing Wife’s previously-
undisclosed retirement account as a community asset and awarding
Husband $2,500 in attorneys’ fees.1 Because Wife has shown no error, the
order is affirmed.
FACTS AND PROCEDURAL HISTORY
¶2 Wife filed a petition for dissolution of marriage in May 2007.
The parties reached an agreement on the division of community property,
which was incorporated in a February 2008 decree. Among other things, the
decree required Husband to pay Wife $1,500 in attorneys’ fees; awarded
Wife one-half of Husband’s retirement accounts to be divided by a QDRO;
required Husband to pay for the cost of preparing the QDRO and required
the sale of the community’s home, with the net proceeds divided equally.
In June 2011, Wife submitted a QDRO, which she amended early the next
year.
¶3 In April 2012, Wife filed a petition for contempt claiming, as
relevant here, that Husband did not comply with the decree because he
failed to pay the $1,500 in attorneys’ fees and failed to pay Wife’s attorney
$850 for the cost of preparing the QDRO. Husband responded by claiming
he had paid the $1,500 in attorneys’ fees and had offered to create the QDRO
without cost to Wife. In a series of subsequent filings: (1) Husband claimed
Wife had a previously-undisclosed retirement account subject to division
as a community asset; (2) Wife claimed she was entitled to half of the $3,000
Husband had received from the foreclosure of a house owned as a
community asset; and (3) both Husband and Wife sought attorneys’ fees.
The court set an evidentiary hearing for mid-February 2014, noting that
1 Husband did not file an answering brief, “which could constitute
confession of reversible error.” Nydam v. Crawford, 181 Ariz. 101, 101 (App.
1994). Because this court is “reluctant to reverse based on an implied
confession of error when . . . the trial court has correctly applied the law,”
id., Husband’s lack of answering brief will not be considered a confession
of reversible error.
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MAGALLANES v. MAGALLANES
Decision of the Court
“with the number of motions here we should have a motions hearing and
hear it all.”
¶4 Both Wife and Husband testified at the hearing, and the court
took the matters under advisement. In an April 2014 order, “having
considered the pleadings, evidence, including testimony, demeanor of the
witnesses and exhibits,” the court found that (1) Husband was entitled to
retain the $3,000 in proceeds from the foreclosure because he paid the
mortgage, as well as expenses related to upkeep and to the attempted sale
of the property; (2) Husband had paid Wife $1,500 in attorneys’ fees as
required; (3) Husband did not retain Wife’s attorney to prepare the QDRO;
(4) Wife’s attorney was required to amend the QDRO to accurately reflect
the date of filing for dissolution; (5) Wife’s retirement account was acquired
during marriage but had not been disclosed at the time of the decree and,
accordingly, would be divided equally as a community asset; and (6)
Husband would not be held in contempt. After finding Wife took
unreasonable positions on several issues, the court awarded Husband
attorneys’ fees in an amount to be determined.
¶5 Wife moved for a new trial under Arizona Rule of Family Law
Procedure 83(a)(1)(2016),2 alleging she was denied a fair hearing because
she did not have adequate notice of the issues that would be addressed at
the hearing, and because the hearing was not conducted properly. Husband
then filed a request for attorneys’ fees. After full briefing, the court denied
Wife’s motion. The court found the issues in the April 2014 order were
adequately developed in Husband’s “brief pre-hearing statement for
hearing on petition for contempt set for February 13, 201[4],” in a notice of
potential witnesses and exhibits, and at the February 2014 hearing. The
court also found Wife had waived any argument that the proceedings
leading up to the April 2014 order were irregular or improper. Finally, the
court awarded Husband $2,500 in attorneys’ fees.
¶6 Wife filed a timely notice of appeal, and this court has
jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) section 12-
2101(A)(1) and (5).
2Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated.
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MAGALLANES v. MAGALLANES
Decision of the Court
DISCUSSION
I. Wife Has Not Shown The Superior Court Erred By Denying Her
Motion For New Trial.
¶7 This court reviews the denial of a motion for new trial for an
abuse of discretion. Matos v. City of Phoenix, 176 Ariz. 125, 130 (App. 1993);
State v. Spears, 184 Ariz. 277, 287 (1996); Pullen v. Pullen, 223 Ariz. 293, 296 ¶
10 (App. 2009) (noting superior court has broad discretion in ruling on
motion for new trial).
A. Foreclosure Proceeds.
¶8 Wife argues the superior court erred in allowing Husband to
retain $3,000 in proceeds from the foreclosure and that the superior court
did not consider Husband’s benefit of living on the property rent-free
before the foreclosure.
¶9 The February 2008 decree required the house to be sold, with
the net proceeds to be divided equally between the parties. While the decree
did not expressly mandate consideration of expenses related to the
property, it did not preclude such consideration, and the court did not
abuse its discretion by crediting father for expenses associated with the
property. Evidence at the February 2014 hearing showed Husband lived at
the home for 22 months, from the time of the petition for dissolution in May
2007 to March 2009, and paid all utilities and maintenance costs during that
time. Although Wife testified Husband rented a second house on the
property during some of this time, the record does not quantify any rental
income received. In late 2008 and early 2009, Husband fell behind on
mortgage payments and the foreclosure occurred in 2012.
¶10 Wife testified that, at the end of 2008, she lived in the second
house for two months, paid all of the utilities and paid $1,200 to Husband
to put towards the mortgage. When not living in the second house on the
property, Wife claimed she paid $650 monthly to rent another residence.
The record does not indicate a reasonable rental value for the marital house
during this time. However, using $650 per month as a proxy, the potential
rental value for the marital house for Husband’s 22-month stay totaled
$14,300, half of which ($7,150) would have been owed to Wife. Because
Husband lived in the marital house “rent free,” Wife argues the facts on the
record do not “justify a complete offset” of Wife’s $1,500 interest in the
$3,000 foreclosure check.
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MAGALLANES v. MAGALLANES
Decision of the Court
¶11 Wife’s argument, however, does not account for costs
Husband incurred. The evidence from the February 2014 hearing indicated
Husband made the mortgage payments totaling more than $26,000 during
this period. Because the house was a community asset, Wife’s share of those
mortgage costs would have totaled more than $13,000, and Wife
acknowledges that she only paid Husband $1,200 during this time for
mortgage payments. Wife’s responsibility for this expense significantly
exceeded the foreclosure proceeds and rental value she claims should have
been divided equally. Additionally, Husband testified that he paid for
upkeep and spent significant time working to sell the house. Based on this
record, the court did not err by allowing Husband to retain the proceeds of
the foreclosure as an offset for these expenses. Cf. A.R.S. § 25-318(A)
(requiring equitable, not exactly equal, division of community property).
B. Request To Hold Husband In Contempt.
¶12 Wife argues the superior court erred by refusing to hold
Husband in contempt for failing to pay $1,500 in attorneys’ fees specified in
the decree. The court found “[t]estimony revealed that [Husband] paid
[Wife’s attorney] $1,500 in attorneys’ fees ordered by the Court in the
dissolution of marriage.” Wife argues that because the fees were not paid
until after she sought a contempt filing, the court erred in failing to find
Husband in contempt.
¶13 The superior court had broad discretion in imposing
consequences for any claimed lack of compliance with the decree. See Ariz.
R. Fam. Law P. 92. Although Husband was late in paying the fees ordered,
he ultimately paid and complied with the decree. Wife also did not establish
undue prejudice stemming from the late payment. Accordingly, Wife has
failed to show the superior court abused its direction by refusing to hold
Husband in contempt.
C. Cost Of Preparing The QDRO.
¶14 Wife argues the superior court erred by denying her request
that Husband pay $850 for preparing the QDRO. The decree did not specify
the date by which Husband was to prepare the QDRO. Wife, through her
attorney, offered to prepare the QDRO at Husband’s expense, but Husband
declined that offer. Wife then had her attorney create the QDRO, rather than
demanding that Husband do so. See Ariz. R. Fam. Law P. 92. On this record,
Wife has not shown the superior court abused its discretion by declining to
hold Husband in contempt for failing to pay the cost of preparing the
QDRO.
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MAGALLANES v. MAGALLANES
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D. Amending The QDRO And Dividing Wife’s Retirement
Account.
¶15 Wife argues she lacked proper notice and, as a result, was
denied due process when the superior court ordered that her attorney
amend the incorrect QDRO and divided the previously-undisclosed
retirement account. Contrary to Wife’s claim, however, when setting the
February 2014 hearing, the court stated, “[w]ith the number of motions here
we should have a motions hearing and hear it all.” The court noted that the
parties could submit evidence and call witnesses to “just do it all at once
and get it all done.” Husband’s pre-hearing statement, filed several days
before the February 2014 hearing, made plain that he intended to press
these issues at the hearing. Moreover, as the superior court noted in
denying the motion for new trial, Wife never objected to Husband’s brief
pre-hearing statement. Thus, the court did not err by considering and ruling
on these issues.
¶16 Wife suggests that no evidence presented at the February
2014 hearing supported the order relating to Wife’s retirement account.
That order required “that the portion of [Wife’s] retirement account
acquired during marriage be divided pursuant to a QDRO as it was not
properly disclosed by [Wife] at the time of divorce.” Husband provided
documentary evidence about the existence of the account and Wife does not
dispute that she failed to timely disclose the account or that it existed before
the entry of the decree. Thus, the court did not err by ordering Wife’s
attorney to amend the incorrect QDRO he had drafted or by ordering Wife’s
retirement account be divided equally as community property.
E. Award of Attorneys’ Fees
¶17 Wife argues the superior court erred by awarding Husband
$2,500 in attorneys’ fees because he did not submit an affidavit of financial
information in support of his request. Husband requested attorneys’ fees in
his pre-hearing statement, but did not attach an affidavit reflecting his
financial position. In mid-2010, however, both Husband and Wife filed
affidavits of financial information. Wife suggests Husband was required to
file an updated affidavit and that his failure to do so precluded a fee award
under Ariz. R. Fam. Law P. 76(C)(2)(a) and 91(N)(3). In filings leading up
to the February 2014 hearing, both Husband and Wife requested attorneys’
fees but neither filed an affidavit of financial information. Nevertheless, the
record does not indicate that either party’s financial information changed
significantly since their 2010 affidavits and, importantly, does not show that
Husband’s income materially increased. Accordingly, Wife has not shown
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MAGALLANES v. MAGALLANES
Decision of the Court
that the 2010 affidavits had become inaccurate by 2014 or that the court
could not rely on the 2010 affidavits in awarding Husband $2,500 in
attorneys’ fees.
CONCLUSION
¶18 Because Wife has not shown error, the superior court’s order
is affirmed. In exercising this court’s discretion, Wife’s request for
attorneys’ fees on appeal is denied.
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