Opinion
2 CA-CV 2021-0153-FC
12-22-2022
IN RE THE MARRIAGE OF MARIA D. JUAREZ DE OSUNA, Petitioner/Appellee, and JESUS MANUEL OSUNA, Respondent/Appellant.
Maria D. Juarez de Osuna, Nogales In Propia Persona Pahl & Associates, Tucson By Danette R. Pahl Counsel for Respondent/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Santa Cruz County No. DO20180026 The Honorable Anna M. Montoya-Paez, Judge The Honorable Liliana Ortega, Judge
Maria D. Juarez de Osuna, Nogales In Propia Persona
Pahl & Associates, Tucson By Danette R. Pahl Counsel for Respondent/Appellant
Judge Brearcliffe authored the decision of the Court, in which Presiding Judge Eppich and Vice Chief Judge Staring concurred.
MEMORANDUM DECISION
BREARCLIFFE, JUDGE
¶1 Appellant Jesus Manuel Osuna appeals the trial court's default decree of dissolution. Jesus also appeals the court's order denying in part his motion to set aside the decree, the division of the parties' tax debt, allocation of tax exemptions for the dependent children, and post-decree modifications of spousal maintenance and child support. For the following reasons, we affirm.
Facts and Procedural Background
¶2 We view the facts in the light most favorable to sustaining the trial court's rulings. Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, n.1 (App. 2007). Appellee Maria D. Juarez de Osuna filed a petition for dissolution of marriage on January 26, 2018. Maria served Jesus several days later. Jesus did not file a response, and Maria applied for a default decree in April 2018. She certified that a copy of the application for default "was mailed postage prepaid" to Jesus. Jesus did not file a response or otherwise defend following her application, and the default became effective. After a hearing in September, the trial court granted a default dissolution in an unsigned minute entry. Among other stated findings, the minute entry reflected a finding that Jesus had a monthly income of $6,000.
¶3 After issuance of the minute entry, Maria filed a motion for reconsideration claiming she mistakenly had stated Jesus's monthly income was $6,000 when it was really $16,000, with a net income of $8,000. The trial court set a hearing, limiting any reconsideration to the matter of child support, and directed Maria to serve Jesus with the motion; the parties were directed to "be prepared . . . with all documentation and evidence." Maria served Jesus, and both parties appeared at the hearing. According to the minute entry, at the hearing, the court gave Jesus a copy of the default hearing minute entry. After taking the parties' testimony, it affirmed the child support amount determined at the default hearing.
¶4 In January 2019, the trial court entered a default decree of dissolution that mirrored the default hearing minute entry, along with a child support order and income withholding order. Neither the default decree nor the child support order were entered pursuant to Rule 78(b) or (c), Ariz. R. Fam. Law P. Jesus thereafter filed a motion to set aside the decree. In July 2019, by a signed written order, the court denied the motion to set aside the decree as a whole, but set aside its award of the marital home to Jesus. The court also did not enter this order under Rule 78(b) or (c). The court set a hearing date for August 2019 to discuss disposition of the home.
Rules 78(b) and (c) were effective January 1, 2019. Ariz. Sup. Ct. Order R-17-0054 (Aug. 30, 2018).
¶5 Jesus appealed the July 2019 order ahead of the August hearing, but litigation continued. Jesus filed a "Petition for Order to Appear re: Contempt, for Modification of Child Support and Spousal Maintenance, and to Equally Divide Tax Debt" and served it on Maria at the August 2019 hearing. At the August hearing, the trial court awarded the marital home to Jesus, and set a hearing for October 2019 to discuss the extent to which Maria was entitled to share in the home's equity. The court thereafter vacated that hearing, however, and stayed the proceedings in light of Jesus's earlier notice of appeal. Despite the stay, in October 2019, Maria answered Jesus's petition and filed her "Petition to Enforce Court Order About Division of Property."
¶6 We ultimately dismissed Jesus's appeal in September 2020 for lack of jurisdiction in light of the matters pending in the trial court. The case was thereafter reassigned to a new trial court judge, who held several status conferences to determine which matters remained pending. The court determined that "the pending issues at hand" were: (1) the issue of dividing the house, from the original motion to set aside the decree; (2) Jesus's August 12th Petition for Order to Appear; and (3) Maria's Petition to Enforce Court Order. In his Petition for Order to Appear, Jesus asked the court to hold Maria in contempt for traveling with their child to Mexico. Jesus also asserted that his income had changed, justifying a reduction of child support and elimination of spousal maintenance. Jesus also asked the court to divide the parties' $17,929 tax debt evenly.
Maria filed multiple petitions to modify or enforce the decree of dissolution, but here the trial court is likely referring to Maria's "Petition to Enforce Court Order About Division of Property" filed in October 2019. In its second status conference, the court "reserve[d] the right to set a hearing to address other issues in any pleadings filed after last hearing and prior to today's matter." The court's reservation of the right to set a future hearing does not undermine the appealability of the October 2021 judgment from which this appeal stems, because the court substantively addressed the issues raised in each pending matter filed up to that date, and no further matters remained pending when the court certified its order under Rule 78(c), Ariz. R. Fam. Law P. See In re Marriage of Chapman, 251 Ariz. 40, ¶ 10 (App. 2021) ("[T]he inclusion of Rule 78 language alone does not make a judgment . . . appealable; 'the certification also must be substantively warranted.'" (quoting Sw. Gas Corp. v. Irwin ex rel. Cnty. of Cochise, 229 Ariz. 198, ¶ 12 (App. 2012))).
¶7 The trial court addressed these pending issues at a trial in August 2021, and issued a ruling in October 2021, in which it awarded Maria $3,430 for her share of the home. The court denied Jesus's request to hold Maria in contempt, and reduced Maria's spousal maintenance award from $735 to $600 per month. The court also removed the parties' adult child from the child support order, reduced Jesus's child support obligation from $543 to $215 per month, and awarded Maria the tax deduction for their remaining minor child each year. The court also divided the parties' 2017 tax debt evenly, allocating $8,964.50 of the debt to each party with a credit to Maria of $8,141 for her share already paid. Finally, the court granted Maria's petition to enforce the decree, ordering Jesus to pay $25,000-representing half of the value of the trucking business Jesus operated-to Maria within six months of the order's filing date.
¶8 The trial court entered the order with Rule 78(c) finality language. Jesus timely appealed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1).
Analysis
¶9 We review the trial court's orders granting or denying motions for an abuse of discretion. Quijada v. Quijada, 246 Ariz. 217, ¶ 7 (App. 2019) (motion to set aside decree under rule 85); In re Marriage of Priessman, 228 Ariz. 336, ¶ 7 (App. 2011) (petitions to modify); In re Marriage of Pownall, 197 Ariz. 577, ¶ 15 (App. 2000) (division of marital property). "A court abuses its discretion if it commits an error of law in reaching a discretionary conclusion, it reaches a conclusion without considering the evidence, it commits some other substantial error of law, or 'the record fails to provide substantial evidence to support the trial court's finding.'" Duckstein v. Wolf, 230 Ariz. 227, ¶ 8 (App. 2012) (quoting Flying Diamond Airpark, L.L.C. v. Meienberg, 215 Ariz. 44, ¶ 27 (App. 2007)). "We defer to the court's factual findings unless they are clearly erroneous or unsupported by substantial evidence." McClendon v. McClendon, 243 Ariz. 399, ¶ 8 (App. 2017). We review its application of the law, and whether a judgment is void, de novo. Id.; Duckstein, 230 Ariz. 227, ¶ 8.
The Trial Court's Refusal to Set Aside the Default Decree
¶10 Jesus first argues that the default judgment "was likely obtained through [Maria]'s misconduct or was a product of [Jesus]'s mistake and surprise" and thus the trial court abused its discretion by failing to set aside the default decree. Jesus also argues that the default hearing "was procedurally unsound" because he "was never properly notified" of it. Jesus generally cites to Rule 85, and we take these arguments as being raised under Rule 85(b)(1), (3) and (4), Ariz. R. Fam. Law P.
Jesus correctly observes that Maria's answering brief does not respond to specific arguments in Jesus's opening brief. Jesus asks us to deem Maria's failure to respond to Jesus's arguments as a "confession that the trial court committed reversible error in regards to the issues that the arguments address." In our discretion we deny Jesus's request. See Nydam v. Crawford, 181 Ariz. 101, 101 (App. 1994) (doctrine of confession of reversible error is discretionary).
¶11 Jesus asserts that Maria committed misconduct causing his "mistake and surprise" because she "never mailed or provided [Jesus] with a copy of the Application for default," "coaxed [Jesus] into inaction by insisting that they were reconciling," and "likely intercepted" his mail. As a result of these alleged actions, Jesus contends he "did not know about the default hearing and did not have the opportunity to appear at the hearing." These allegations, however, are wholly unsupported by the record, and Jesus points to no facts in support of his argument, aside from those stated in his original motion to set aside, where he first raised these allegations on "information and belief," and an affidavit submitted in his prior appeal.At best, Jesus is asking us to reweigh the evidence and judge witness credibility, which we will not do. Vincent v. Nelson, 238 Ariz. 150, ¶ 18 (App. 2015). The trial court is best situated to judge the credibility of the parties and resolve conflicting evidence. Id. Therefore, the court did not abuse its discretion by refusing to set aside the default decree under Rule 85(b)(1) and (3).
The affidavit is not in the record of appeal in this case. Although we can take judicial notice of our own records, and thus Jesus's affidavit filed in the prior appeal, State ex rel. Corbin v. Tocco, 173 Ariz. 587, 590 n.1 (App. 1992), the affidavit was never presented to the trial court, and we do not have a transcript where the substance of the affidavit was repeated to the court. Consequently, we will not consider it here. Crook v. Anderson, 115 Ariz. 402, 403-04 (App. 1977).
¶12 As to whether the default judgment was void under Rule 85(b)(4) for improper service of process, Maria filed her petition for dissolution on January 26, 2018. She filed proof of service, certifying that Jesus was served on January 29, 2018 with the petition of dissolution, a summons, and other required documents. In the sworn proof of service, the process server attests that he served the documents on Jesus's son, a member of Jesus's household who was sixteen years old, and "explained] the general nature of the papers." See Ariz. R. Fam. Law P. 41(c)(2) (service can be made by leaving summons, petition, and other documents "at that individual's dwelling or usual place of abode with someone of suitable age and discretion who resides there"). Evidence of proof of service "can be impeached only by clear and convincing evidence." Gen. Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191, 194 (App. 1992). Jesus does not now, and did not below, provide any evidence challenging whether his son was of "suitable age and discretion" or resided in his home at the time service was made. See Id. (defendant "did not offer any evidence to show" that the person served at her residence was "not of suitable discretion").
¶13 After service, Jesus filed no response, even though the summons notified him that judgment could be entered against him if he failed to respond within twenty days. Jesus's failure to respond entitled Maria to apply for a default judgment. See Ariz. R. Fam. Law P. 44(a)(1).She applied, and certified that a copy of the application for default had been "mailed postage prepaid" to Jesus at their shared address. Ariz. R. Fam. Law P. 44(a)(3)(A). The application for default stated that "The Default [would] be effective ten (10) business days after the filing of this completed document," unless Jesus "file[d] a Response or otherwise defends before the ten-day period passes." Jesus did not file a response or otherwise defend, so the default became effective. See Ariz. R. Fam. Law P. 44(a)(4), (5). After the default became effective, Maria requested a hearing. Jesus was not owed notice of the hearing because he had not appeared. See Ariz. R. Fam. Law P. 44.2(b). The trial court held a default hearing, and Jesus was accordingly deemed to have admitted "every material allegation of the petition." Ariz. R. Fam. Law P. 44.2(d).
Rule 44 was amended and re-numbered, effective on January 1, 2019, ahead of the trial court's default decree of dissolution. Ariz. Sup. Ct. Order R-17-0054 (August 30, 2018). Former Rule 44(b)(1), for entering default without a hearing, became Rule 44.1. Id. Former Rule 44(b)(2), for entering default with a hearing, became Rule 44.2. Id. Where the relevant portions of former Rule 44 do not substantively differ from the current version of Rules 44, 44.1, and 44.2, we cite the current rule.
¶14 Jesus eventually appeared at a hearing to "modify spousal support" between the default hearing and entry of the default decree, and he was thereafter entitled to receive notice and participate. Id. Jesus was properly notified of subsequent proceedings and participated. In sum, the trial court properly refused to set aside the decree on the basis of lack of notice.
Validity of the Default Decree of Dissolution
¶15 Maria's petition for dissolution stated "[Jesus] owns and operates Osuna Trucking" and "shall continue to keep the profits of said business." Nonetheless, at the default hearing, the trial court determined that Maria was entitled to half of the value of Jesus's trucking business because it was "purchased during the marriage." And Maria testified that the business was worth "maybe" $40,000 or $50,000; the court ordered Jesus to pay Maria $25,000.
¶16 On appeal, Jesus argues that the decree is void because the award to Maria of half of the value of Jesus's trucking business was different in kind from or exceeded the award requested in Maria's petition, in violation of former Rule 44(G) and current Rule 44.1(a)(1). Jesus argues that the trial court's ultimate $25,000 award to Maria for one-half the value of the business cannot be validated by the "generic language in [Maria]'s petition" that requested "such other and further relief that the Court deems just, proper and equitable in the premises." Jesus contends that granting a court "carte blanche" to award relief on the basis of a catch-all request would be contrary to the "well-settled rule . . . that one has a right to assume that the relief granted on default will not exceed or substantially differ from that described in the complaint and may safely allow a default to be taken in reliance upon this assumption." S. Ariz. Sch. for Boys, Inc. v. Chery, 119 Ariz. 277, 282-83 (App. 1978).
¶17 As an initial matter, Jesus's citations to the rules are misplaced. Rule 44 was amended before the entry of the default decree, and, as a result, former Rule 44(G) was removed and no longer applied. Compare Ariz. Sup. Ct. Order R-05-0008 (Jan. 1, 2006) with Ariz. Sup. Ct. Order R-17-0054 (August 30, 2018). And, because the trial court held a default hearing here, rather than proceeding without a hearing, Rule 44.2, rather than Rule 44.1, applies. Certainly, under Rule 44.2(c), the court is not bound by the prayers in the petition, but may "conduct the hearing as necessary to resolve factual issues, determine the relief to be granted, and to enable the court to enter an appropriate decree or judgment." Compare Ariz. R. Fam. Law P. 44.2(c) with Ariz. R. Fam. Law P. 44.1(a)(1) ("[T]he court may not enter a default judgment without a hearing that is different from what the petition requested, or for amounts greater than requested in the petition.").
¶18 Pursuant to A.R.S. § 25-318(A), in a proceeding for dissolution of marriage, "the court shall . . . divide the community, joint tenancy and other property held in common equitably." We see no error in the trial court, once it determined that the trucking business was community property, dividing the value of the business between the parties absent an express prayer for such relief. Although Maria requested in her petition that Jesus be awarded all profits from the business - which could be read as requesting that he, rather than she, be awarded the business as an ongoing concern-the request did not preclude the court from exercising its broad discretion to award Maria the dollar value of her then-present community interest. See Boncoskey v. Boncoskey, 216 Ariz. 448, ¶ 13 (App. 2007). Consequently, we see no error in the court's award.
¶19 Jesus also argues that the decree of dissolution improperly awarded spousal maintenance because Maria did not comply with Rule 44.1(a) and (f). As we explained above, Maria did not proceed by motion without a hearing, but instead requested and attended a default hearing under Rule 44.2. The trial court similarly did not err in awarding spousal maintenance in the default decree of dissolution.
Arguments Challenging the Merits of the Default Decree of Dissolution
¶20 Jesus argues that the trial court's default decree disproportionately awarded federal tax exemptions for the parties' two dependent children in violation of the Arizona Child Support Guidelines.If Maria requested an allocation of dependent tax exemptions that was contrary to what she was allowed to legally claim, she could not be awarded such an allocation by default. Moran v. Moran, 188 Ariz. 139, 146 (App. 1996) ("Entry of default did not entitle [the party applying for default] to an application of the law that was contrary to the law."); McNutt v. McNutt, 203 Ariz. 28, ¶¶ 25-26 (App. 2002) (holding that trial court abused its discretion by failing to allocate the federal tax exemption at all, and directing the court to allocate the exemption according to the Child Support Guidelines on remand).
Jesus raises multiple arguments on appeal challenging the merits of the trial court's default decree that are not properly before us because Jesus defaulted: whether the default decree of dissolution was inequitable, see Villalba v. Villalba, 131 Ariz. 556, 557 (App. 1982); the applicability of the legal precedent the court employed to validate its division of property or the consistency of that division, see id.; S. Ariz. Sch. For Boys, 119 Ariz. at 282 (defaulted party cannot make argument that "goes to the very right of recovery"); the sufficiency of the evidence underlying the default decree, see S. Ariz. Sch. For Boys, 119 Ariz. at 282; the documentary evidence underlying the original spousal maintenance award in the default decree, see Villalba, 131 Ariz. at 557-58; or the merits of the child support award in the default decree. see id.
¶21 Section 27 of Arizona's Child Support Guidelines direct the trial court to allocate tax exemptions as the parties agree. Ariz. R. Sup. Ct. Admin. Order 2018-08 (Jan. 24, 2018). If there is no agreement, the court shall allocate the tax exemptions "in a manner that allows each parent to claim allowable federal dependency exemptions proportionate to adjusted gross income in a reasonable pattern that can be repeated in no more than 5 years." Id. The court may deny the right to present or future tax exemption when a history of non-payment of child support exists. Id.
¶22 Maria requested equal tax allocations in her petition for dissolution; each party was to claim one child each year. Jesus did not, as detailed above, participate in the default hearing, but did participate in a subsequent hearing on child support, before the entry of the default decree of dissolution. According to the minute entry, Jesus "testified on his behalf" at this hearing. Jesus did not provide the transcript of this hearing, so we assume whatever testimony he provided, in addition to all other evidence presented, supported the judge's tax exemption allocation. Blair v. Burgener, 226 Ariz. 213, ¶ 9 (App. 2010) ("[I]n the absence of a transcript, we presume the evidence and arguments presented at the hearing support the trial court's ruling."). Therefore, the tax exemption allocation is not erroneous.
Challenges to Post-Decree Modifications and Tax Debt Division
¶23 Jesus argues that the modified spousal maintenance order should be "voided" because Maria failed to file financial affidavits under Rule 49, Ariz. R. Fam. Law P., which made it "impossible" for the trial court to appropriately weigh her ability to support herself, the couple's relative financial resources, see A.R.S. § 25-319(B)(4), (5), or whether spousal maintenance is necessary for Maria's support and maintenance. The court may abuse its discretion by failing to consider a relevant factor listed in A.R.S. § 25-319(B). See Rainwater v. Rainwater, 177 Ariz. 500, 502 (App. 1993). And spousal maintenance "should not be awarded if it is not necessary for the spouse's support and maintenance." Buttram v. Buttram, 122 Ariz. 581, 582 (App. 1979). However, Rule 49(b)(3), Ariz. R. Fam. Law P., directs "[a] party prejudiced by a failure to disclose" to "seek the remedies identified in Rule 65." Jesus never pursued these remedies with the court, and he cites no authority to support the argument that it is legal error for the court to modify spousal maintenance without one spouse's financial affidavit.
¶24 Furthermore, the record otherwise contained sufficient evidence for the trial court to balance § 25-319(B)(4) and (5) and determine if spousal maintenance was necessary for Maria's support and maintenance. The court's October 2021 order reflects multiple findings about both parties' financial situation, including that Maria's efforts allowed Jesus to have a successful career and that Maria will need "at least five years to achieve financial independence." And, again, Jesus failed to offer transcripts of all of the proceedings at which the parties testified about their financial circumstances so as to allow us to evaluate the sufficiency of the evidence before the court. See Blair, 226 Ariz. 213, ¶ 9. Consequently, we have no reason to conclude that the court failed to consider all relevant factors in light of the evidence presented. Therefore, the court's decision to maintain the original duration of spousal maintenance, while reducing the monthly amount, was not clearly erroneous or unsupported by substantial evidence.
Maria testified as to her income, employment history, language proficiency, education, and age at the original default hearing. This testimony, along with Maria's testimony about Jesus's age, health, income, education, and work experience, informed the trial court's initial spousal maintenance order in the default decree of dissolution. The court heard additional testimony from Maria pertaining to her income during the August 2021 trial. The court received Jesus's financial disclosure and Jesus's testimony as to his own financial position and ability to pay maintenance on multiple occasions.
¶25 Jesus argues that the modified child support order is invalid because the trial court failed to attribute full-time employment to Maria as required by the Arizona Child Support Guidelines. Under A.R.S. § 25-320(N), "[t]he court shall presume, in the absence of contrary testimony, that a parent is capable of full-time employment at least at the applicable state or federal adult minimum wage, whichever is higher." (Emphasis added.) The court found, based on Maria's testimony, that although she had "the physical ability to work full time," she had little employment history, limited English-speaking abilities, limited earnings, and that it would take time for her to achieve financial independence. The court did not abuse its discretion by attributing less than full-time employment to Maria based on the evidence presented.
¶26 Next, Jesus argues that the trial court improperly credited Maria with a tax payment without documentary evidence. Jesus argues that the credit is improper because Maria never filed a financial affidavit, and Maria did not submit an IRS document as an exhibit when she testified that she had paid the tax debt. Jesus claims that Maria's "lack of disclosure unfairly prejudiced [Jesus]'s ability to prepare for trial," and the court should have provided remedies under Rule 65. As explained above, a party prejudiced by another party's failure to make required disclosures may seek remedies identified in Rule 65, but Jesus never requested such relief. Ariz. R. Fam. Law P. 49(b)(3). The court heard testimony from Maria on her tax payments, then ordered the tax credit divided, with a credit to Maria, based on that testimony. We will not reweigh the evidence. Vincent, 238 Ariz. 150, ¶ 18. The court did not abuse its discretion by awarding a tax credit on this basis.
¶27 Finally, Jesus argues that the trial court's modified child support order allocates tax exemptions in violation of the Child Support Guidelines. As we addressed above, the court did not originally err in allocating annual tax exemptions for the children as requested in Maria's petition. After the court denied Jesus's motion to set aside the default decree on that basis, the parties agreed that their eldest child had reached the age of majority and requested the court to modify the child support order. Maria requested the court to award her tax exemptions for the remaining child, then nearly fourteen years old. Jesus did not request any changes to the tax exemption allocation and failed to raise the issue before the court. Therefore, his argument is waived on appeal. See Ertl v. Ertl, 251 Ariz. 308, ¶¶ 16, 29 (App. 2021).
Attorney Fees on Appeal
¶28 Jesus requests attorney fees and costs incurred on this appeal pursuant to A.R.S. § 25-324(A) and Rule 21(a), Ariz. R. Civ. App. P. Maria requests attorney fees and costs incurred on this appeal pursuant to A.R.S. § 25-324. Jesus did not prevail on appeal, and Maria is not represented by counsel on appeal. We therefore deny both requests for attorney fees. Because Maria is the successful party on appeal, however, she is entitled to her costs on appeal upon compliance with Rule 21.
Disposition
¶29 For the foregoing reasons, we affirm.