Opinion
No. 1 CA-CV 13-0177
06-24-2014
In re the Marriage of: LORRAINE Y. WALSH, Petitioner/Appellant, v. ROBERT E. FRANK, Respondent/Appellee.
Lorraine Y. Walsh, Phoenix Petitioner/Appellant R. D. Smith Law, Scottsdale By Roger D. Smith Co-counsel for Respondent/Appellee Ryan Rapp & Underwood, P.L.C., Phoenix By Paul E. Steen Co-counsel for Respondent/Appellee
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. FN2010-050068
The Honorable Gerald Porter, Judge
AFFIRMED
COUNSEL
Lorraine Y. Walsh, Phoenix
Petitioner/Appellant
R. D. Smith Law, Scottsdale
By Roger D. Smith
Co-counsel for Respondent/Appellee
Ryan Rapp & Underwood, P.L.C., Phoenix
By Paul E. Steen
Co-counsel for Respondent/Appellee
MEMORANDUM DECISION
Judge Peter B. Swann delivered the decision of the Court, in which Presiding Judge Andrew W. Gould and Judge Jon W. Thompson joined. SWANN, Judge:
¶1 Lorraine Y. Walsh ("Wife") appeals the superior court's entry of a money judgment in favor of her former husband Robert E. Frank ("Husband") for the value of bonds awarded to Husband as sole and separate property pursuant to their decree of dissolution, but sold by Wife while the dissolution was pending. Wife contends that the court lacked jurisdiction to enter a money judgment based on sole and separate property, that there was insufficient evidence to support the judgment amount, and that the court erred by failing to find ambiguity in the decree provision awarding Husband the bonds. For the following reasons, we affirm.
FACTS AND PROCEDURAL HISTORY
¶2 Wife and Husband married in July 2003 and Wife petitioned for dissolution in April 2010. During their marriage they purchased several savings bonds that are now the subject of dispute. After Wife filed for dissolution, Husband served her with a set of nonuniform interrogatories that in part asked her to state the face amount of each bond in which she held an interest and the date she had acquired that interest. Wife responded in June 2010 by attaching a list of the calculated value of 23 bonds purchased between August 2003 and June 2008, and declaring that "[a]ll the bonds except [the last one on the list were] issued in [Wife]'s name."
¶3 In August 2010, Husband and his son from a previous relationship filed a lawsuit against Wife and other parties alleging various tort claims. In September 2010, according to a declaration by Wife's daughter, Wife's dissolution attorney advised Wife that she could redeem the bonds listed in her interrogatory response because they were her separate property and use the proceeds to retain a second attorney to defend her in the civil case. Acting upon this advice, Wife sold the bonds and used the proceeds to hire another attorney. In October 2010, Husband's attorney sent a letter to Husband acknowledging that "[Husband's son] recently indicated that [Wife] may have spent those [financial] assets [that Husband wished for her to return]."
¶4 Both parties filed a resolution management statement in November 2012. Husband stated that he had "purchased the savings bonds . . . with his sole and separate funds," and that "virtually all items purchased during the marriage are his sole and separate property because they were purchased with [Husband]'s sole and separate funds, i.e., retirement money that was earned prior to the marriage." Wife's statement did not reference any bonds, though it stated that "all liquid assets belonging to the parties at time of filing should be divided equally." At the Resolution Management Conference, the court affirmed the time for a settlement conference, ordered the parties to prepare a joint pretrial statement, and set a trial date.
¶5 There is no record of the parties' settlement conference, but Husband's attorney sent a letter to Wife's attorney afterwards that read:
This will confirm that we [a]greed at the settlement conference that the annuity and the bonds will be provided to [Husband] as his sole and separate property. I will treat this as a binding agreement unless you immediately notify me that I am not correct, in which case I will prepare to present evidence on this issue. . . . It is my understanding that we will be litigating only spousal maintenance and attorneys fees. Please let me know if I am incorrect.The record on appeal does not contain a response by Wife. Though Husband's attorney's letter did not create a binding agreement, the parties then filed a joint pretrial statement that declared: "The primary issue [for trial] is for the maintenance [of Wife]. . . . The only other issue is attorney's fees. . . . The annuity and savings bonds purchased during the marriage are Husband's sole and separate property. . . . Except as provided above, each party is awarded the real and personal property [in] his/her possession."
¶6 At the dissolution trial, Wife's attorney made an oral request for leave to amend the joint pretrial statement to dispute Husband's ownership of the bonds listed in Wife's interrogatory response. Wife's attorney told the court that he met with Wife on the morning of trial and realized that he "apparently [had] a miscommunication with [her] with respect to the bonds." He informed the court that Wife had redeemed the bonds to hire an attorney in the civil case and that he did not believe the testimony would support the position taken in the joint pretrial statement. Wife's attorney also told the court that the bonds were purchased in Wife's name, to which the court responded: "[t]hey may well have been but you signed a joint pretrial [statement] that said the [bonds] . . . are [H]usband's sole and separate property and . . . [therefore] cashing them would have been in violation of an acknowledgment that the bonds are [H]usband's sole and separate property."
¶7 Wife in turn testified that Husband bought the bonds as a present to her and had them issued in her name, and confirmed that she had since sold all of them and spent the proceeds on legal fees in the civil case. The court nonetheless denied the request to amend the joint pretrial statement, finding that "it is not appropriate to address the nature of the [bonds] based on that both parties had reached an agreement that the bonds and annuities were Husband's sole and separate property and there is no asset to divide in this case." The court then ordered Husband's attorney to prepare a decree of dissolution, "approved as to form by both parties, and incorporating all of the terms of the parties' agreement, and the appropriate findings and orders [of the court]." Husband's attorney accordingly lodged a decree providing that "[a]ll of the savings bonds purchased during the marriage are [Husband]'s sole and separate property and are awarded to him," which the court entered in June 2011 without Wife's objection.
¶8 Wife moved in propria persona for a new trial, citing ARFLP 83(A)(5). Wife argued that she had not received a fair trial because her attorney had failed to obtain her approval of the joint pretrial statement before filing it and she would not have approved it as filed. Wife asserted that her attorney had disregarded her instructions and lied to her by denying that he had made any agreements that gave away her property. The court denied Wife's motion for a new trial and her motion for reconsideration of its denial. Wife did not appeal the decree.
Under ARFLP 83(A)(5), "[a] ruling, decision or judgment may be vacated and a new trial granted on motion of the aggrieved party for . . . error in the admission or rejection of evidence or other errors of law occurring at the trial or during the progress of the action" that "materially affect[s] that party's rights."
¶9 In April 2012, ten months after the court entered the decree, Husband filed a Petition for Order to Show Cause re: Contempt and Request to Award Certain Property under the same cause number as the dissolution case, requesting a court order directing Wife to deliver to him the bonds purchased during their marriage or their cash value. Wife, with new legal representation, argued in response that the petition should be dismissed because it concerned sole and separate property and therefore fell outside the family court's jurisdiction. Wife also argued for the first time that she had purchased some of the bonds during the marriage with separate monies from her since-deceased first husband's social security payments, and that Husband had purchased only one of the bonds listed in her interrogatory response, which she had already returned. Wife further argued that Husband had failed to identify which bonds he sought and failed to support his petition with evidence of any actual loss. Moreover, Wife contended that because both parties and the court knew that the bonds no longer existed at the time the court entered the decree, she could not be held in contempt for failing to deliver them pursuant to the decree. The court set the matter for trial and ordered Husband to prepare a list of the bonds he claimed were purchased during his marriage to Wife.
¶10 The court held two status conferences on Husband's show-cause petition and ultimately ruled without trial. At the first conference in June 2012, Husband told the court that the bonds he sought were the 23 that Wife had listed in her interrogatory response. The court ordered the parties to brief Wife's counterargument that the decree provision awarding Husband all of the savings bonds purchased during the marriage did not include the bonds in Wife's interrogatory response, because she had purchased those with her sole and separate monies and sold them before the court entered the decree.
¶11 At the second status conference in October 2012, the court concluded that, based on the parties' briefing and the court's reading of the dissolution trial transcript, "it's very clear . . . that the parties contemplated . . . that all of the bonds purchased during the marriage were going to be turned back over to Husband," which the court interpreted as "all of the bonds purchased during the marriage from whatever source." Wife argued that Husband had admitted to purchasing more bonds during their marriage than the 23 she had listed in her interrogatory response, to which the court responded that Husband's willingness to settle on a smaller number of bonds was only to Wife's advantage. Wife's attorney engaged the court in the following discussion:
[WIFE'S ATTORNEY]: Your Honor, I mean, is there -- are you going to address at all the sole and separate issue?The court then ordered "that the bonds reflected in [Wife's interrogatory response] shall be immediately surrendered to Husband . . . [and t]o the extent they do not exist, the value of the bond[s] as [they] would exist today shall be paid over to Husband."
Because many of those bonds were purchased with [Wife]'s monies from her husband, her first husband, not [Husband].
THE COURT: You know, I'm not because the language of the decree is clear. I think it's very, very clear. I'm not going to go back and hear now where the source of monies came from because that was never subject to the decree. I mean, the decree didn't say all bonds purchased with Husband's money shall be turned over to Husband. It said all bonds purchased during the marriage.
[WIFE'S ATTORNEY]: This wasn't language that [Wife] saw. This was language drafted by the [Husband]'s attorney.
THE COURT: I know, but you know what?
[WIFE'S ATTORNEY]: It's construed against them.
THE COURT: No, no, you had a chance to appeal. You filed a motion for reconsideration denied by the Court. There was an opportunity to appeal. I think it's done.
¶12 Husband proceeded to file a calculation of the bonds' value and requested the entry of a formal judgment against Wife for $35,308.30. The court entered judgment in the requested amount, but made no finding of contempt. Wife timely appeals.
DISCUSSION
I. THE COURT PROPERLY EXERCISED JURISDICTION.
¶13 Wife first contends that it was "an improper exercise of the Family Court's jurisdiction" to order her to deliver the bonds or their value to Husband and to enter a money judgment against her based on that order. Whether the court had jurisdiction to do so is a question of law we review de novo. See In re Marriage of Crawford, 180 Ariz. 324, 326, 884 P.2d 210, 212 (App. 1994).
¶14 "Subject matter jurisdiction is the power to hear and determine cases of the general class to which the particular proceedings belong." In re Marriage of Dorman, 198 Ariz. 298, 301, ¶ 7, 9 P.3d 329, 332 (App. 2000) (citation omitted) (internal quotation marks omitted). "The test of jurisdiction is whether the tribunal has power to enter upon the inquiry . . . ." Greater Ariz. Sav. & Loan Ass'n v. Tang, 97 Ariz. 325, 327, 400 P.2d 121, 123 (1965). The Arizona Constitution and statutes prescribe the superior court's jurisdiction. In re Estate of Hash v. Henderson, 109 Ariz. 174, 178, 507 P.2d 99, 103, modified on other grounds, 109 Ariz. 258, 508 P.2d 334 (1973). The superior court is a single unified court with original jurisdiction over "[c]ases and proceedings in which exclusive jurisdiction is not vested by law in another court," including "cases in which the demand or value of property in controversy amounts to one thousand dollars or more," and actions for "[d]ivorce and for annulment of marriage." Ariz. Const. art. VI, §§ 13, 14(1), (3), (9). Under A.R.S. § 25-318, the superior court has limited jurisdiction over the parties' sole and separate property in proceedings for dissolution of marriage, legal separation, and disposition of property after dissolution when the court previously lacked jurisdiction over a party or to dispose of the property, and may only assign it to each spouse or impress a lien on it. A.R.S. § 25-318(A), (E); Weaver v. Weaver, 131 Ariz. 586, 587, 643 P.2d 499, 500 (1982).
¶15 Wife relies on Proffit v. Proffit, 105 Ariz. 222, 462 P.2d 391 (1969), and Weaver, 131 Ariz. 586, 643 P.2d 499, for her argument that the court lacked jurisdiction. In Proffit, defendant-wife admitted at her dissolution trial that she had sold plaintiff-husband's separately owned savings bonds while the dissolution was pending. 105 Ariz. at 223, 462 P.2d at 392. The court entered a dissolution decree that provided that the sum defendant-wife received upon cashing the bonds was plaintiff-husband's sole and separate property and ordered her to deliver that sum to him. Id. Defendant-wife appealed, arguing that the superior court lacked jurisdiction under A.R.S. § 25-318 to enter a money judgment against her in the decree. Id. at 224, 462 P.2d at 393. Our supreme court affirmed the entry of judgment, holding that although the dissolution court, in pronouncing a dissolution decree, does not have the authority to compel a party to divest herself of title to separate property, the judgment concerned possession of such property rather than title to it. Id. The court reasoned that because defendant-wife was still in possession of the bond proceeds, "title to which had been adjudged in plaintiff . . . [t]he divorce court, as a court of equity, certainly ha[d] the inherent power to direct [her] to relinquish possession of separate property belonging to [him], just as it ha[d] the power to order a division and disposition of the[ir] community property." Id.
¶16 In Weaver, petitioner-wife filed an amended petition for dissolution and order to show cause alleging that respondent-husband had intentionally destroyed certain of her separate property. 131 Ariz. at 586, 643 P.2d at 499. The superior court entered a decree of dissolution that awarded money damages to petitioner-wife. Id. The supreme court reversed, holding that "[t]he dissolution court cannot, even in equity, assume jurisdiction not provided by statute," and "nowhere in Title 25 is there a statute which authorizes the superior court to allow a money judgment for damage by one spouse to the separate property of the other spouse in a dissolution proceeding." Id. at 587, 643 P.2d at 500. The court distinguished Proffit, reasoning that
[o]nly because the separate property wrongfully possessed in Proffit was converted into money did relinquishment of possession necessitate the payment of a sum of money. Thus, our holding permitting a court in a dissolution proceeding to require the defendant to pay a sum of money to the plaintiff was premised upon the defendant's actual possession of the other spouse's separate property which happened to be in the form of money. . . . In the instant case, however, we are not dealing with possession, but rather destruction, of separate property.Id. Wife argues that because she, unlike the wife in Proffit, did not actually possess the bonds when the decree was entered, the court lacked jurisdiction to enter a money judgment against her for their value.
¶17 In this case, Husband filed a post-decree petition in the superior court, under the same cause number as Wife's petition for dissolution, requesting an order directing Wife to comply with the decree by delivering the bonds or their proceeds. The court set the matter for an evidentiary hearing and ordered that the Arizona Rules of Family Law Procedure would control discovery and disclosure obligations. However, Wife's reliance on Proffit and Weaver is inapposite -- those cases interpret the superior court's jurisdiction under A.R.S. § 25-318 to enter a money award in a dissolution decree for one spouse's separate property that the other spouse either possessed or destroyed. See Weaver, 131 Ariz. at 587, 643 P.2d at 500; Proffit, 105 Ariz. at 224, 462 P.2d at 393. Here, on the other hand, Husband initiated a post-dissolution proceeding seeking enforcement of a decree provision and entry of a money judgment. Nothing in § 25-318 divests the superior court of jurisdiction to hear such a petition or otherwise restricts how it may resolve the action. See A.R.S. § 25-318; Fry v. Garcia, 213 Ariz. 70, 72-73, ¶ 9, 138 P.3d 1197, 1199-1200 (App. 2006) ("For a statute to divest the superior court of jurisdiction, even in the broader sense of authority to act, the legislature must declare its intent to create divestiture 'explicitly and clearly.'"). Moreover, "those aspects of a divorce decree which merely fix the rights and legal relationship of the parties take on the character of a declaratory judgment" and "under our declaratory judgment statutes, A.R.S. § 12-1838 provides that supplemental relief such as [a money judgment] . . . can be sought [in a court having jurisdiction to grant the relief]." Srock v. Srock, 11 Ariz. App. 483, 485, 466 P.2d 34, 36 (1970).
¶18 Wife contends that "[t]he resolution for any legitimate issue regarding the bonds does not lie with the Family Court because the bonds have been identified as sole and separate property." We disagree. "The superior court may maintain separate departments for different kinds of cases, but such administrative organization does not partition the court's general subject matter jurisdiction." Rinegar v. Rinegar, 231 Ariz. 85, 88, ¶ 13, 290 P.3d 1208, 1211 (App. 2012). The court properly exercised jurisdiction by entering a judgment against Wife based on Husband's post-decree petition. Cf. id. at ¶ 12 ("The allocation of omitted property may be accomplished either by a separately filed civil action or by a motion to reopen the dissolution action—there is no jurisdictional impediment to a 'family court' rather than a 'civil court' considering the question."). II. SUFFICIENT EVIDENCE SUPPORTED THE JUDGMENT AMOUNT.
¶19 Wife next contends that the court abused its discretion by entering a money judgment against her for $35,308.30, arguing that the evidence was insufficient to support the court's valuation of the bonds at that amount. In particular, Wife argues that the judgment "include[d] a $5,000.00 bond (plus interest) that was issued in [Husband]'s name and was previously delivered to him . . . [and therefore] should not have been included when calculating the judgment."
¶20 Based on their dates of purchase, Husband established that the 23 bonds Wife had listed in her interrogatory response were bought during their marriage. The court was not persuaded by Wife's counterargument that those bonds did not come within the decree provision awarding Husband all of the bonds purchased during the marriage, see Troutman v. Valley Nat'l Bank of Ariz., 170 Ariz. 513, 517, 826 P.2d 810, 814 (App. 1992) ("The party who asserts a fact has the burden to establish that fact."), and properly ordered her to surrender them or their current value. Husband thereafter filed a calculation of the bonds' total value, which he derived by comparing the list of bonds Wife attached to her interrogatory response to an updated list. Wife's list from November 2009 showed the total redemption value of the 23 bonds at $32,323.12, and the updated list from April 2012 showed their total redemption value at $34,796.56. By dividing the $2,473.44 difference over 29 months (November 2009 through April 2012), Husband correctly arrived at a monthly interest of $85.29.
¶21 Wife objected to the court's order and Husband's calculation by arguing that "[i]f the purpose of the 'all bonds' language was to award [Husband] 'all bonds' whether in possession of [Wife] or not, then the bonds would have been listed with specificity as required by A.R.S. § 25-318(F) and there would have been a determination of the value of the redeemed bonds." Wife further argued that the 23 bonds were her sole and separate property and that Husband's calculation included a $5,000 bond with interest that "has long been delivered to [Husband]" and therefore should be excluded from any judgment. At no point, however, did Wife provide any evidence that she had actually delivered the $5,000 bond to Husband, and Husband disputed that she had returned any bonds. See Gutierrez v. Gutierrez, 193 Ariz. 343, 347, ¶ 13, 972 P.2d 676, 680 (App. 1998) ("We will defer to the trial court's determination of witnesses' credibility and the weight to give conflicting evidence.").
¶22 On this record, we cannot say that the court abused its discretion by entering a judgment against Wife for $35,308.30, which comprised the $34,796.56 redemption value of 23 bonds shown on the April 2012 list (the month Husband filed his show-cause petition), plus $85.29 of monthly interest through October 1, 2012 (the month the court ordered Wife to deliver the bonds or their current value). III. THE DECREE IS UNAMBIGUOUS.
¶23 Finally, Wife contends that the court erred by failing to find ambiguity in the decree provision that stated: "All of the savings bonds purchased during the marriage are [Husband]'s sole and separate property and are awarded to him." We review de novo the court's interpretation of the dissolution decree. See In re Marriage of Johnson & Gravino, 231 Ariz. 228, 233, ¶ 15, 293 P.3d 504, 509 (App. 2012).
¶24 "The first step in construing a decree is to determine if it is ambiguous." Cohen v. Frey, 215 Ariz. 62, 66, ¶ 11, 157 P.3d 482, 486 (App. 2007). We determine the meaning of the decree from the language used and will find ambiguity "only when the language can reasonably be construed to have more than one meaning." Id. (internal quotation marks and brackets omitted). We construe the decree language according to its natural and legal import, and with reference to any related decree provisions. Id.
¶25 In Cohen, the wife argued that a decree provision authorizing her former husband to sell a residence in which they were tenants in common "for whatever price and on whatever terms" should not be interpreted literally. Id. at 65-66, ¶¶ 7, 10, 12, 157 P.3d at 485-86. The court agreed, finding that construing the provision literally would "render other language in the decree meaningless, conflict with the trial court's duty to ensure a fair and equitable distribution of property, and undermine [the wife's] interest in the property." Id. at 67, ¶ 16, 157 P.3d at 487.
¶26 Here, Wife likewise argues that "[a]ll of the savings bonds purchased during the marriage" is ambiguous when read in the context of the decree as a whole and with the purpose of an equitable property division. We are not persuaded by Wife's argument. Unlike the wife in Cohen, Wife had no interest in the bonds after the court entered the decree based on the parties' pretrial stipulation that all bonds purchased during the marriage were Husband's sole and separate property. Because no other provision of the decree refers to the bonds, interpreting the provision according to its plain meaning would not render other language in the decree meaningless. Nor does the provision's literal meaning conflict with a fair and equitable distribution of property. The decree provides that "Wife's income is now the same as it was prior to marriage," which presumably means even without income from the bonds. The decree also awards Wife spousal maintenance indefinitely after recognizing that she lost her residence from before the marriage and used up her savings on attorney's fees in the civil case.
¶27 Wife again argues that Husband failed to disclose all of the bonds purchased during the marriage and that he thereby caused an inequitable division of property and an improper spousal maintenance award. But Wife's opportunity to present this argument on appeal and to seek relief from the decree based on fraud or misrepresentation has long passed. See ARCAP 9(a); ARFLP 81(A), 85(C)(2). We do not inquire further into the merits of the decisions underlying the decree, because Wife did not appeal the decree.
¶28 We conclude that the decree provision awarding Husband all the bonds purchased during the marriage cannot be reasonably construed beyond its plain meaning: each and every single bond that Husband or Wife purchased during their marriage. See In re Estate of Tovrea v. Nolan, 173 Ariz. 568, 572, 845 P.2d 494, 498 (App. 1992) ("The word 'all' means exactly what it imports. . . . A more comprehensive word cannot be found in the English language. Standing by itself the word means all and nothing less than all." (emphasis removed) (citations omitted)); see also Merriam-Webster's Collegiate Dictionary 31 (11th ed. 2003) (defining "all" as "the whole amount, quantity, or extent of"). The fact that the bonds no longer existed when the decree was entered has no bearing on our decision because they were still "purchased during the marriage," and whether some or all of them were in fact Wife's separate property at one point is also immaterial because the decree unambiguously says "all" without regard to the purchasing party or the source of payment. And Husband's willingness to settle on the 23 bonds listed in Wife's interrogatory response as "all" bonds, even though more bonds may have been purchased during the marriage, only served to benefit Wife. IV. REQUEST FOR ATTORNEY'S FEES ON APPEAL
¶29 Husband requests an award of attorney's fees and costs on appeal, citing Ariz. R. Civ. P. 11 and A.R.S. § 12-349, and arguing that Wife's appeal was not well-grounded in fact or law. We award Husband his costs on appeal upon compliance with ARCAP 21, but exercise our discretion to deny his request for attorney's fees. Wife's request for attorney's fees and costs is also denied.
CONCLUSION
¶30 For the foregoing reasons, we affirm.