Opinion
No. 1 CA-CV 17-0264 FC
03-22-2018
KIM EDWARD WOEHLER, Petitioner/Appellant, v. SHARON G STOUGH, Respondent/Appellee.
COUNSEL Law Office of Bryan K. Levy, Scottsdale By Bryan K. Levy Counsel for Petitioner/Appellant The Murray Law Offices PC, Scottsdale By Stanley D. Murray Counsel for Respondent/Appellee
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Maricopa County
Nos. FN2015-004045 FN2015-050198 (Consolidated)
The Honorable Chuck Whitehead, Judge
AFFIRMED
COUNSEL Law Office of Bryan K. Levy, Scottsdale
By Bryan K. Levy
Counsel for Petitioner/Appellant The Murray Law Offices PC, Scottsdale
By Stanley D. Murray
Counsel for Respondent/Appellee
MEMORANDUM DECISION
Presiding Judge Randall M. Howe delivered the decision of the Court, in which Judge Kenton D. Jones and Judge James B. Morse Jr. joined. HOWE, Judge:
¶1 Kim Woehler ("Husband") appeals the family court's order awarding Sharon Stough ("Wife") $122,500 from the excess proceeds obtained through the sale of the parties' marital residence and $22,000 in attorneys' fees and costs. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 The parties married in 1992 and acquired their marital residence as joint tenants in 2003. Husband and Wife each petitioned for dissolution in July 2015, and the court consolidated the cases. At a resolution management conference in October 2015, the parties agreed that Wife would have exclusive use of the marital residence for 60 days and that Husband would have a one-time access to the garage to retrieve his car tools. In December 2015, Wife requested that a Special Real Estate Master ("Special Master") be appointed to sell the marital residence. Wife provided two reasons for the appointment: (1) the deed to the property was in a deceased friend's name; (2) although Husband possessed the original deed that transferred the residence's ownership from the deceased friend to Husband and Wife, Husband did not record the deed and denied possessing it. The court initially denied Wife's request but appointed a Special Master in March 2016. The court also ordered Husband to record the residence's deed no later than March 29. Husband did not record the deed, however, until April 14.
¶3 The court ordered Husband to sign all the documents necessary for the sale of the residence through the Special Master by July 5, 2016. On July 22, Wife requested an emergency telephonic status conference informing the court that a trustee's sale on the residence was scheduled for July 26 and that Husband had interfered with the Special Master's attempts to sell the residence. Before a conference could be scheduled, however, the residence was sold at the trustee's sale for $360,000, and $153,000 was left in excess proceeds after satisfying the mortgage. The excess proceeds were deposited with the Maricopa County Treasurer's Office.
¶4 The court held a trial on the petition for dissolution in February 2017. Husband asked the family court for an unequal distribution of the excess proceeds—70% to Husband and 30% to Wife. He claimed that he should receive this amount because Wife had exclusive use and possession of the residence and failed to maintain it, causing it to decrease in value. He also claimed that he had paid the mortgage, utilities, and repairs for the residence. For support, Husband introduced a document listing the community income and expenses from September 2014 to May 2016. On cross-examination, however, Husband admitted that all of the income he received was community income used to pay community expenses. He also admitted that his document had mathematical errors and that the community income was about the same as the community expenses. Furthermore, Wife testified that she had completed most of the repairs to the residence. Wife also introduced the Special Master's affidavit stating that the residence's condition was due to "deferred maintenance or normal wear and tear for a property of that age, rather than the result of any intentional or negligent act of either party."
¶5 Wife requested $122,500 of the excess proceeds, which was half of the potential fair market value of the residence ($485,000) minus the outstanding mortgage. At trial, testimony showed that the parties received the property as joint tenants in March 2003. A document showed that Husband held the deceased friend's power of attorney, and Wife testified that Husband was in control of the mortgage information and foreclosure notices. Wife also testified that she did not know about the foreclosure until April 2016 when the Special Master informed her that the residence was already set for a trustee's sale. She asserted that the residence's value decreased because of the foreclosure, which resulted from Husband's failure to make the mortgage payments. During Husband's testimony, he admitted that the residence's value decreased because of the pending trustee's sale and would have been worth more if it had been sold at the beginning of the dissolution proceedings in September 2015.
The residence's value ($485,000) minus the outstanding mortgage ($207,000) equals $278,000. When divided in half, the amount equals $139,000. Wife, however, did not seek to modify her claim nor is she attempting to do so on appeal.
¶6 Husband testified that Wife had the original deed and could have recorded the deed when the proceedings began. Wife testified that she had a copy of the deed in October 2014, but that Husband had taken it from her before the dissolution proceedings began. Moreover, she testified that she never had the original deed and that Husband had told her that she needed the original deed for a recording. She also stated that she had moved for an order requiring Husband to record the deed and to sign documents for the Special Master to sell the residence. Wife also noted that even though the court ordered Husband to record the deed by March 29, he did not record it until April 14.
¶7 Wife then testified that Husband had continued to delay the residence's sale even after recording the deed. For instance, she stated that Husband had refused to sign the lease termination letter for their guest house tenant as the Special Master had recommended and had refused to sign the listing agreement and other documents that would allow the Special Master to sell the residence until the court eventually ordered him to do so. Wife further testified that Husband had refused to sign the purchase offer that the Special Master obtained and instead suggested that the parties file for bankruptcy to postpone the trustee's sale. Husband did not file for bankruptcy as he agreed, however, and the trustee's sale occurred.
¶8 As for the residence's valuation, Wife requested that it be valued at $485,000. In support for her claim, Wife presented the foreclosure information sheet, which estimated the residence's value to be $478,750. She also introduced a market analysis showing sales of comparable homes between $400,000 and $485,000, which did not include the 1,500-square foot guest house located on the residence. Although Husband did not testify to the residence's value, he did testify that he received an offer in October 2015 for $450,000. Husband had also listed the residence's value at $600,000 in his petition for dissolution.
¶9 The family court issued the decree of dissolution in March 2017. The court found that: (1) Husband's actions and delays in recording the deed were intentional and meant to frustrate and delay the residence's sale, (2) Husband used community funds to pay the mortgage before the residence's foreclosure, (3) the residence was sold for a lesser price than if the residence had not been in foreclosure, (4) the residence was primarily in foreclosure due to Husband's actions, and (5) the residence could have been sold for $485,000 but for Husband's delays. The court then awarded Wife the $122,500 that she had requested from the excess proceeds. The court noted that both parties had requested attorneys' fees and costs under A.R.S. § 25-324. It found that neither party submitted affidavits of financial information for the proceedings and could not determine if a substantial disparity of financial resources existed between the parties. The court also found that Husband acted unreasonably in the litigation and that specifically, Husband acted unreasonably by delaying the recording of the residence's deed. The court then awarded Wife attorneys' fees and costs but did not determine the amount. The court noted that although the amount had not been established, it expressly determined that no just reason for delay existed and directed its order as a final appealable order under Arizona Rule of Family Law Procedure 78(B).
¶10 Husband timely appealed the decree of dissolution in April 2017. During this time in a separate civil proceeding, that court determined that the excess proceeds would be distributed equally to Husband and Wife as A.R.S. § 33-812 requires. That court noted that the family court had the ability to redistribute the excess proceeds in the manner it ultimately ordered. In May, the family court determined that the amount of Wife's attorneys' fees and costs was $22,000, and Husband did not file a notice of appeal from that order.
DISCUSSION
1. Jurisdiction
¶11 Husband appeals the family court's decree of dissolution and its order granting Wife $22,000 in attorneys' fees and costs. A family court order that does not resolve all issues pending before the family court is not final and appealable in the absence of a Rule 78(B) certification of finality. Bollermann v. Nowlis, 234 Ariz. 340, 342 ¶¶ 7-8 (2014); Natale v. Natale, 234 Ariz. 507, 509 ¶ 9 (App. 2014). Here, Husband filed a notice of appeal from the family court's minute entry issuing the decree of dissolution, which also granted Wife's request for attorneys' fees and costs. Although the court certified the order as final under Rule 78(B), it did not resolve the amount of the award until it issued a separate order about two months later. Consequently, Husband's notice of appeal relating to Wife's attorneys' fees was premature. Thus, this Court has jurisdiction to consider the merits of the decree of dissolution, but we lack jurisdiction to consider Wife's award of attorneys' fees and costs.
2. Equitable Distribution of Excess Proceeds
¶12 Husband argues that the family court abused its discretion by awarding Wife an unequal distribution of the excess proceeds from the sale of the parties' martial residence. The family court has broad discretion to determine how to equitably allocate property under the circumstances and we will not disturb its ruling absent a clear abuse of discretion. In re Marriage of Inboden, 223 Ariz. 542, 544 ¶ 7 (App. 2010). "We view the evidence in the light most favorable to sustaining the trial court's findings and determine whether there was evidence that reasonably supports the court's findings." Gutierrez v. Gutierrez, 193 Ariz. 343, 346 ¶ 5 (App. 1998).
¶13 Under A.R.S. § 25-318(A), the family court is required to divide community property "equitably, though not necessarily in kind[.]" Generally, an equitable division of community property "should be substantially equal absent facts to support a contrary result." Inboden, 223 Ariz. at 546 ¶ 14. "[A] substantially equal division is not required if a sound reason exists to divide the property otherwise." In re Marriage of Flower, 223 Ariz. 531, 536 ¶ 18 (App. 2010). In dividing community property, the court may consider excessive or abnormal expenditures on the property and its destruction, concealment, or fraudulent disposition, A.R.S. § 25-318(C), as well as any other equitable factors that bear on the outcome of an equitable division, Toth v. Toth, 190 Ariz. 218, 221 (1997); Flower, 223 Ariz. at 535 ¶ 14. Because the factual circumstances in the present case justified an unequal division of community property, the family court did not abuse its discretion by awarding Wife a greater percentage of the excess proceeds.
¶14 Here, multiple reasons justify an unequal division. Wife continually asked Husband from July 2015 through April 2016 to record the deed, yet he did not. He recorded the deed only after the court ordered him to record it by March 29, 2016, but even then, delayed the recording until April 14, 2016. Furthermore, Husband failed to cooperate with the Special Master in his efforts to sell the residence by refusing to sign multiple documents. Moreover, Husband was responsible for triggering the mortgagee's initiation of the foreclosure by failing to make the mortgage payments and for failing to inform Wife that the residence had entered foreclosure. Husband's actions resulted in the residence entering foreclosure and its resultant decrease in value due to the pending sale.
¶15 Husband contends that both parties contributed equally to the residence's decrease in value due to neglect and disrepair, but this claim fails. The Special Master's affidavit stated that the residence's condition was not the result of any intentional or negligent act of either party, but from deferred maintenance or normal wear and tear attributable to both Husband and Wife equally. Based on this record, the family court did not abuse its discretion by finding that the cause of the residence's decrease in value was the foreclosure—a fact Husband admitted—which was solely Husband's fault.
¶16 Husband also asserts that because none of the factors listed under A.R.S. § 25-318(C) were present in this case, the family court abused its discretion by finding that an unequal distribution of the excess proceeds was appropriate. While the factors enumerated in § 25-318(C) were not present, the family court may consider other factors not listed under the statute. See Toth, 190 Ariz. at 221; see also Flower, 223 Ariz. at 535 ¶ 14 (noting that a court may consider equitable factors not enumerated by A.R.S. § 25-318(C)). As such, the court did not abuse its discretion by considering the residence's decrease in value due to Husband's actions.
¶17 Husband further argues that this case is distinguishable from Toth and other cases that found an unequal division appropriate. He notes that those cases made unequal divisions based on factors that are not present in this case. Those cases, however, do not provide an exclusive list of factors to consider in unequal divisions and do not preclude the court's use of the factors presented in this case. The family court had the authority to consider any equitable factors that bear on the outcome of an equitable division. See Flower, 223 Ariz. at 535 ¶ 14. As such, the court appropriately considered Husband's actions that led to the residence's decrease in value due to the pending trustee's sale.
¶18 Next, Husband contends that the court abused its discretion by awarding Wife a larger portion of the excess proceeds based solely on Husband's failure to timely record the deed. Contrary to Husband's assertion, however, the court did not base its award solely on the untimely recording. The court also based its conclusion on Husband's failure to make mortgage payments on the residence while he controlled the mortgage information. This eventually led to the initiation of the foreclosure, which Wife did not even learn of until the court appointed the Special Master. Furthermore, after the Special Master's appointment, Husband did not cooperate with the Special Master's efforts to sell the residence.
¶19 Husband also claims that Wife could have recorded the deed herself, and cites to A.R.S. § 11-480(A)(2), which states that an original or a copy of an original may be used for a recording. The record shows, however, that Husband told Wife that she needed the original deed, which she did not possess, for a valid recording. To hold Wife responsible for the deed's late recording because she believed Husband's statement that the original deed was required would be inequitable. As such, the court did not err by finding that Husband was responsible for the deed's late recording.
¶20 Husband then argues that the deed's late recording did not affect the parties' ability to sell the residence. Specifically, he claims that the court improperly reasoned that the residence would have sold at a higher price but for his late recording. But the record supports the court's finding that if Husband had recorded the deed earlier in the dissolution proceedings, the foreclosure proceedings could have been avoided and the residence would have sold at a higher price. Husband even admitted that the pending trustee's sale decreased the residence's value and that the residence would have had a greater value if sold at the beginning of the dissolution proceedings. And although Husband correctly notes that he and Wife received only two offers for the residence before the trustee's sale occurred, he fails to acknowledge that the residence was not marketable without proper proof of title recorded for potential buyers to review. Thus, this argument is not persuasive.
¶21 Husband also claims that the family court had insufficient evidence to find that the residence could have sold for $485,000. But Husband is incorrect. A court's finding on a property's valuation will be upheld if any reasonable evidence supports it. Mitchell v. Mitchell, 152 Ariz. 317, 323 (1987). A property's owner is always competent to testify to its value and any explanation for the basis of the owner's opinion goes to the weight of the evidence. Town of Paradise Valley v. Laughlin, 174 Ariz. 484, 486 (App. 1992). Wife was competent to testify to the residence's value and testified that the value was $485,000 as of October 2015. She based her opinion on a market analysis showing the sales of comparable homes, without the inclusion of the 1,500-square foot guest house, and the sales ranged from $400,000 to $485,000. She also submitted a foreclosure information sheet that estimated the residence's value to be $478,750. Although Husband did not testify to the residence's value, he listed the value at $600,000 in his petition and testified that he had received a $450,000 offer for the residence. Husband counters that Wife's market analysis and foreclosure information sheet were flawed and insufficient to make a valuation. He argues that the true value of the residence was $360,000 based on the one offer received while the residence was in foreclosure. But an owner is competent to testify to the property's value, Laughlin, 174 Ariz. at 486, and any cavil with Wife's basis for her opinion simply goes to the weight of the evidence. Furthermore, Husband does not address the $600,000 valuation he provided in his petition or his testimony that he received an offer for $450,000. Last, Husband had an opportunity to testify to the residence's value at trial, but did not do so. Therefore, Husband's arguments fail and reasonable evidence supports the court's $485,000 valuation.
¶22 Finally, Husband argues that the family court should have divided the excess proceeds equally, just as the separate civil division proceeding did under A.R.S. § 33-812. In that proceeding, the court noted that it was bound by A.R.S. § 33-812, which required an equal division of the excess proceeds to the titleholders at the time of the trustee's sale. The family court, however, had the authority to distribute jointly held property equitably. See Flower, 223 Ariz. at 534-35 ¶ 12. Moreover, the civil division noted that although it divided the proceeds equally, the family court had the ability to redistribute the parties' payments in the manner that it ultimately ordered. Thus, this argument is without merit.
3. Attorneys' Fees and Costs on Appeal
¶23 Both Husband and Wife request attorneys' fees and costs incurred on appeal under A.R.S. § 25-324(A). Under § 25-324(A), this Court may award reasonable fees "after considering the financial resources of both parties and the reasonableness of the positions each party has taken throughout the proceedings[.]" We have considered both prongs, and while we cannot make a determination regarding a disparity in financial resources, we find that Husband has taken an unreasonable position by asserting the issues raised within this appeal. Thus, we grant Wife her reasonable attorneys' fees and costs upon her compliance with Arizona Rule of Civil Appellate Procedure 21.
Husband also raises for the first time on appeal that the homestead exemption under A.R.S. § 33-1101 should have prevented the family court from awarding Wife a larger amount of the excess proceeds. Because Husband did not raise this issue with the family court, we will not consider it on appeal. See Airfreight Express Ltd. v. Evergreen Air Ctr., Inc., 215 Ariz. 103, 109 ¶ 17 (App. 2007). --------
CONCLUSION
¶24 For the foregoing reasons, we affirm.