This is Part 2 of the 2021 Arizona family law appellate review (non Saba-Femiano opinions, which were Part 1). There were a BUNCH of reported family law cases in Division 1 in 2021, so these are divided up between Part 2 and the next post.
There were no Arizona Supreme Court decisions in family law cases in 2021.
Chapman is a Rule 78 cases involving an enforcement issue for the sale of real property under a Decree. Husband sold a parcel of real property, post-decree, without notifying Wife, which was in violation of the Decree, and Husband was found in contempt. First, orders were entered in October 2019 establishing that the remedy of contempt was available for enforcement of those provisions. Husband did not appeal the October 2019 ruling. Later, after an evidentiary hearing, Husband was found in contempt, and he appealed that contempt ruling. His appeal was dismissed, because (a) civil contempt adjudications are generally not appealable; and (b) he did not appeal the court’s original ruling that contempt was a remedy for his alleged violations of the Decree.
Margain is a UCCJEA case involving a 10-year custody battle between Mexico and Arizona and which court has subject matter jurisdiction over a custody determination. The opinion starts by quoting the trial court: As the Pima County Superior Court astutely observed, “almost an impenetrable web of international litigation has been woven around the custody of the divorced parties’ minor child.” Terrible case. The Court of Appeals previously weighed in on this case in a 2016 opinion as well. It’s evident that anyone handling a UCCJEA subject matter jurisdiction issue should review both Margain rulings very thoroughly. While very fact-specific, the opinion addresses whether the Mexico court’s declination of jurisdiction over this custody matter showed “clear intent” to relinquish jurisdiction to the Arizona court.
And here’s the first half of the Division 1 cases.
Meister is a long-awaited case involving the appropriate valuation date for a property division. I’m not sure how much this new opinion adds to the previous Sample decision on a valuation date, although “substantial equity” is emphasized in this opinion. I would imagine a Petition for Review to the Arizona Supreme Court is being contemplated (this opinion came out on December 2, 2021). In this fairly fact-specific situation, the value of a company changed significantly between the date of service of the Petition and the dissolution trial. (Note that no Arizona case law or statute mandates the use of a “date of filing/ service” valuation, although that date is often used.) The use of a March 2017 valuation date resulted in a value of $2.6M (according to one expert) while the use of a December 2017 valuation date resulted in a $1.1M value (according to the other expert). (Trial occurred in March 2019.) The company underwent substantial changes in 2017 which resulted in a diminution of value, and those changes may have occurred because of the misdeeds of one party.
The COA reversed the trial court’s use of the earlier (approximate date of service) valuation for a determination of whether that date created an equitable result. The substantial diminution in value which occurred shortly after the March 2017 valuation date obviously concerned the COA
An interesting valuation quandary is created by this opinion. Valuation experts obviously must adhere to their own professional standards in valuing a business. Whether or not a valuation should consider changes in circumstances that occur after a valuation date – or whether those changes were “foreseeable” as of the valuation date — is covered by standards and guidelines that qualified experts must adhere to. But in a dissolution valuation, the court’s equitable principles may call for an expert to deviate from the expert’s own practice guidelines. This COA opinion notes “ . . . [W]hen a court is valuing a community asset in a dissolution proceeding it triggers different considerations, and otherwise “standard” valuation approaches must yield to the overarching principles of equity.” (Emphasis added) How will valuation experts deal with the call to depart from their otherwise standard valuation approaches?
Meister also includes a discussion of waste issues, as the diminution in this business’ value was potentially due to the actions of one party.
Andrews looked at the question of whether accrued vacation pay is CP for division or SP (this is dependent on whether the pay is “reimburseable” to the employee); and discusses the burden of proof where a party is requesting reimbursements for payments made during dissolution.
Ertl confirms that signed emails between counsel create an agreement enforceable under Rule 69, ARFLP. The opinion also mentions ARS 44-7007 by noting “a record and signature in electronic form ‘cannot be denied legal effect’”, and Murray regarding valid Rule 69 agreements.
Larchick v. Pollock. I’ll shorthand this one as “improper exclusion of a business appraisal/er” but that’s far from the whole story. In this case, where two opinions of the value of a business were prepared, but one was submitted only as a “calculation of value” as opposed to a full appraisal report, the court should have heard testimony from both experts and given the two experts’ evidence the weight each deserved. Instead of hearing both experts, the trial court precluded the testimony of the expert who prepared the “calculation of value” report on the basis that this lesser report did not “follow all possible methods that an expert should be using, all reliable methodology”. But nothing in Rule 702, Arizona Rules of Evidence, requires an expert to account for “all possible methods” of valuation.
To make matters worse, the court also precluded one party from calling the other party’s expert business evaluator (the witness who had prepared the full appraisal report), which was also error. It is not necessary for a party to have subpoenaed a particular witness (who is already present in court) to call that person as a witness.
Finally, a party’s admissions made in a Pretrial Statement regarding a value (in this case, the value of a community interest in a separate property business) was evidence of an increase in the separate property business and that admission should not have been ignored by the trial court. The party’s disclosure of the increase in value in the PTS rendered that information admissible against that party and the court could rely on that as proof that an increase in the business value had occurred during the marriage.
Kelly v. Kelly. This opinion discusses a trial court’s exclusion of evidence as a sanction for a party’s failure to cooperate with a court-appointed custody evaluator.
Hubert v. Carmony is another UCCJEA opinion, this one establishing that an evidentiary hearing and consideration of all A.R.S. § 25–1037(B) factors is necessary before a court can decline custody jurisdiction under the UCCJEA. Merely relying on the court’s UCCJEA telephonic conference with another state is not enough, and the parties must be given the opportunity to present facts and evidence before jurisdiction is declined.
Gelin v. Murray involves pre-petition child support and establishes that retroactive child support is mandatory (by statute) to the date of filing, but an award prior to filing is discretionary, not mandatory.