Arizona Family Law Appellate Year in Review: 2022, Part 2

Arizona Family Law Appellate Year in Review: 2022, Part 2

This is Part II of the recap of Arizona family law appellate opinions in 2022 and this post covers the opinions on financial issues.    Part III will cover the Arizona Supreme Court’s opinion resolving the ongoing Saba and Femiano conflicting opinions and the Blos/Hopkins cases that address when special orders (as opposed to final judgments) are appealable.

The COA cases in 2022 on non-Saba financial issues include:

Spousal maintenance.   In Huey, where the trial court made an award of spousal maintenance for an indefinite term, the Court of Appeals reversed, stating that an indefinite award, where based on a mental health condition, requires evidence that the disabling mental health condition will continue permanently.  Recalling that Schroeder (1989) stated the aim of spousal maintenance “is to achieve independence for both parties and to require an effort toward independence by the party requesting maintenance,”  the court noted that if the finding that financial independence will not be achieved is based on a non-permanent mental health condition, an indefinite award improperly shifts the burden of changed circumstances and modification to the Payor, where that burden should lie with the Payee to show if the condition continues.

Child support.   Three reported decisions in 2022 addressed child support.    In Hoobler, the inclusion of overtime pay in the calculation of child support was affirmed, in the court’s discretion, where the evidence showed that Husband had regularly worked and earned overtime at least for the ten years preceding the trial.    While the inclusion of overtime income is discretionary with the court, in this case the significant history of overtime work, combined with the fact that the Payor was not exercising all parenting time allotted to him, warranted its inclusion in calculating the child support amount.

Temporary child support.   Brucklier     Where temporary child support was overpaid (as the result of retroactively modified support amounts or otherwise), the court erred in not offsetting the overpayments against temporary support arrears.  While ARS §25-357 precludes the court from reimbursing overpaid child support until all child support has been paid, that statute applies only to final child support awards and not to temporary awards.

Registration of out of state child support award.   Ali     Where a California decree awarded parenting time and made no provision for child support, the California child support order did not need to be registered in Arizona under UIFSA for Arizona to subsequently enter a child support award.  Curiously, it was the Father/ Payor who initially asked Arizona to enter a child support award, but later took the position that Arizona had no subject matter jurisdiction to do so.    As no child support order existed out of California or any other state, there was no order to be registered in Arizona. 

Separate property    Brucklier.  Where one party had an equitable interest in property prior to the marriage (in this case, a contract to purchase a business and a down payment paid prior to marriage), the property is separate property even if the purchase closes after the marriage takes place.  The separate property interest is then subject to proof of a community equitable lien if community funds contributed to the property during the marriage.  The trial court erred when it determined that the property was community because the purchase had closed after the date of marriage, because the equitable interest (purchase contract) occurred prior to the date of marriage.  The theory of commingling does not apply to real property. 

Life insurance to insure pension payments  Hoobler  It was not error for the court to order Husband, who was the holder of pension payments to be divided with Wife, to obtain a life insurance policy on his life to secure Wife’s interest in future pension benefits that would be lost to her if Husband died before payments began.  Noting that courts, in dividing pension interests, are to be creative and flexible (per Koelsch) in determining how to divide pension benefits, this court’s determination to use a life insurance policy to ensure payments was not an abuse of discretion.  This decision includes a good discussion of the present cash value and reserved jurisdiction methods of dividing non-mature pension benefits, and noted that the use of life insurance was previously approved in DeLintt and Dopadre

Reimbursements/ outster from family residence.    Ferrill    Where a party occupying a community residence seeks reimbursement for community mortgage payments paid with separate funds after service of the petition, the court has the discretion to offset the reimbursement by up to one-half of the home’s fair rental value, but only if the occupying spouse ousted the other from the residence.  For the first time in Arizona, the amount of reimbursement owed to the paying spouse could depend on whether one of the joint owners of real property left the property voluntarily or was “ousted”  (forced to leave, either actually or constructively) from the property.  If ousted, the party who was prevented from living in the residence may be entitled to an offset against reimbursements for one-half the rental value of the property that he was ousted from.     The Arizona court explicitly declined to set specific parameters for what creates an ouster (such as the mere filing of a dissolution action, or the issuance of an Order of Protection) and stated that the issue of ouster is for the trial court to determine based on the circumstances of each case.   The person asserting an offset against reimbursement for half of the reasonable rental value has the burden of proving the property’s rental value.

Military retired pay.   Chaidez   Because it was apparent from the trial court record that at least some of Payor’s medical disability pay had been divided as a community asset, the Court of Appeals vacated and remanded for a determination of what portion of the retired pay was “disposable retired pay” subject to division, as opposed to the disability portion, which could not be divided under federal law. 

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