Court Opinion

ID: 2827027
Source: CourtListenerOpinion
Date Created: 2015-08-13 16:03:45.177719+00
Date Added: 2024-06-11T11:31:24.024200
License: Public Domain

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

                             In re the Marriage of:

                 MIRJANA BOURKE, Petitioner/Appellant,

                                        v.

              JON RICHARD BOURKE, Respondent/Appellee.

                           No. 1 CA-CV 14-0126 FC
                              FILED 8-13-2015

           Appeal from the Superior Court in Yavapai County
                        No. P1300DO201200080
              The Honorable Patricia A. Trebesch, Judge

   AFFIRMED IN PART, VACATED IN PART, AND REMANDED

                                   COUNSEL

Musgrove Drutz Kack & Flack, PC, Prescott
By Mark W. Drutz, Jeffrey Gautreaux
Counsel for Petitioner/Appellant

Nirenstein Garnice, PLLC, Scottsdale
By Victor A. Garnice
Counsel for Respondent/Appellee
                          BOURKE v. BOURKE
                          Decision of the Court

                      MEMORANDUM DECISION

Presiding Judge Kent E. Cattani delivered the decision of the Court, in
which Judge Lawrence F. Winthrop and Judge Peter B. Swann joined.

C A T T A N I, Judge:

¶1            Mirjana Bourke (“Wife”) appeals from a decree of dissolution
denying her request for spousal maintenance, modifying temporary
spousal maintenance, dividing the parties’ community property, and
awarding attorney’s fees to Jon Richard Bourke (“Husband”). For reasons
that follow, we affirm the denial of spousal maintenance and modification
of temporary spousal maintenance. We vacate, however, the superior
court’s order regarding property allocation and its award of attorney’s fees
to Husband and remand to recalculate/clarify those awards.

             FACTS AND PROCEDURAL BACKGROUND

¶2            The parties married in 1994. In January 2012, Husband told
Wife he intended to pursue a divorce, and that same month, Wife filed a
petition for dissolution. Wife was a graduate student at the time and was
unemployed. Husband worked out of state as a pilot for a government
contractor earning approximately $10,000 per month. By the time of trial,
Wife had started working for a defense contractor in Kosovo, earning $4,000
per month, in addition to room and board in military-style housing.

¶3            The parties owned a home in Prescott, but Husband had not
lived there since early 2009. Wife extensively remodeled the home
beginning in the months prior to filing for divorce and continuing during
the dissolution proceedings.

¶4           The superior court concluded that Wife dissipated significant
community funds remodeling the marital home without increasing its
value. To account for Wife’s dissipation of community assets, the court
awarded Husband the remaining liquid assets and a condominium, and
Wife received the marital home, offset by the community credit card debt.

¶5           Prior to trial, the superior court awarded Wife temporary
spousal maintenance of $2,800 per month beginning August 2012, which
she received for a period of 17 months. At the dissolution trial, the court
denied Wife’s request for spousal maintenance and ordered Wife to repay

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                           BOURKE v. BOURKE
                           Decision of the Court

a portion of the temporary spousal maintenance, concluding that Wife was
only entitled to $2,000 per month for 12 months, rather than $2,800 per
month for 17 months. Finally, the court awarded Husband $9,000 in
attorney’s fees because of unreasonable positions Wife took during the
litigation.

¶6           Wife filed a notice of appeal from the decree before the court
entered a final award of attorney’s fees to Husband. After the superior
court awarded fees to Husband, Wife filed a timely amended notice of
appeal. We have jurisdiction under Arizona Revised Statutes (“A.R.S.”) §
12-2101(A)(1).1

                              DISCUSSION

I. Spousal Maintenance.

¶7            Wife contends that the superior court abused its discretion by
denying her request for future maintenance. She argues in particular that
she lacks sufficient property to meet her reasonable needs, and that as a
result of the length of the marriage, she is unable to be self-sufficient
through appropriate employment.

¶8            We review the superior court’s decision to award or deny
spousal maintenance for an abuse of discretion. In re Marriage of Berger, 140
Ariz. 156, 167, 680 P.2d 1217, 1228 (App. 1983). Under A.R.S. § 25-319(A),
the superior court may grant a maintenance order for either spouse if the
spouse seeking maintenance: (1) “[l]acks sufficient property . . . to provide
for that spouse’s reasonable needs,” (2) “[i]s unable to be self-sufficient
through appropriate employment . . . or lacks earning ability in the labor
market adequate to be self-sufficient,” (3) “[c]ontributed to the educational
opportunities of the other spouse,” or (4) “[h]ad a marriage of long duration
and is of an age that may preclude the possibility of gaining employment
adequate to be self-sufficient.”

¶9            The superior court’s ruling under § 25-319(A) is supported by
the record. Wife was well-educated in various fields, and she had no
physical or health issues preventing her from obtaining regular
employment.      Wife earned a master’s degree focusing on project
management for defense contractors, and she was previously able to obtain
lucrative positions overseas. By the time of trial, Wife had obtained gainful
employment as a linguist for a defense contractor in Kosovo. Wife also

1     Absent material revisions after the relevant date, we cite a statute’s
current version.

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                            BOURKE v. BOURKE
                            Decision of the Court

received the house and a car, both debt-free, thereby minimizing her living
expenses in the event she were to choose to remain in Prescott and pursue
different employment.

¶10             Wife nevertheless contends she is entitled to spousal
maintenance because her employment contract in Kosovo was for only one
year and she was not awarded any liquid assets in the decree, and because
Husband earns significantly more than she does. Wife further argues that
she only accepted the job in Kosovo because she was financially destitute
and that she should not be required to take a position far from home. But
Wife’s desire to live in Prescott is not determinative of her need for spousal
maintenance.         And the evidence established that Wife’s one-year
employment contract will be extended if the employer’s own defense
contract is still in force, and that her income of $4,000 plus housing expenses
was sufficient to satisfy her reasonable expenses, which her financial
affidavit at the time of trial fixed at less than $2,200 per month. Moreover,
Wife’s skills and educational background will presumably enable her to
find similar positions once her current position ends.

¶11          Wife cites several findings that she claims establish that the
denial of spousal maintenance was improperly intended to penalize her.
She references in particular the court’s findings that (1) she failed to include
her undergraduate degree for nursing on her three financial statements, (2)
her employer indicated its intent to renew her one-year contract if possible,
and (3) she did not want to travel to the primarily Muslim town near her
employment because of safety concerns. But these findings are supported
by the evidence and in any event do not establish that the superior court
relied on an improper basis for denying spousal maintenance.2
Accordingly, the superior court did not abuse its discretion by finding that
Wife did not qualify for spousal maintenance under § 25-319(A). See
Schroeder v. Schroeder, 161 Ariz. 316, 321, 778 P.2d 1212, 1217 (1989)
(describing the goal of rehabilitative support as to achieve financial
independence for both parties). We thus affirm the denial of spousal
maintenance.

2     Although the superior court incorrectly stated that Wife failed to
request a specific amount or specify the length of time for which she was
seeking support, this was not the reason the court gave for denying spousal
maintenance.

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                          BOURKE v. BOURKE
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II.   Modification of Temporary Spousal Maintenance.

¶12           Wife contends that the superior court abused its discretion by
retroactively decreasing her temporary spousal maintenance of $2,800 per
month for 17 months to $2,000 per month for 12 months. The court found
that Wife’s excessive and abnormal expenditures “establish[ed]
conclusively that the temporary spousal maintenance award was
excessive[]” and that one year was a reasonable period of time to find
employment. The court further ordered Wife to repay the amount that she
had received in excess of $24,000 in temporary spousal maintenance.

¶13           In determining whether a retroactive modification is
warranted, the court must consider whether there were substantial and
continuing changed circumstances. See A.R.S. § 25-315(F)(2) (temporary
orders may be modified upon a showing of facts necessary to revoke or
modify a final decree under § 25-327); A.R.S. § 25-327(A) (spousal
maintenance may be modified or terminated upon a showing of substantial
and continuing changed circumstances). Under A.R.S. § 25-315(F) and
Arizona Rule of Family Law Procedure 81(A), “the family court retains its
authority to modify temporary support nunc pro tunc” and need not make
an express finding of good cause. Maximov v. Maximov, 220 Ariz. 299, 301,
¶¶ 7–8, 205 P.3d 1146, 1148 (App. 2009). We review a modification of
temporary support for an abuse of discretion. Id. at 300, ¶ 2, 205 P.3d at
1147.

¶14           Here, the superior court’s temporary order found that Wife
needed support to allow her time to find employment, noting her recent
success in obtaining a graduate degree. Wife was healthy, well-educated,
and less than a year after the date of the temporary order, had found a job
consistent with her graduate degree, earning enough to meet her reasonable
needs. The court also noted that Wife’s reasonable expenses were only
$2,000, and that her excessive expenditures established that the amount of
the initial award was excessive.

¶15            Wife’s claim that the temporary spousal maintenance award
did not meet her reasonable needs is not supported by the evidence. Wife
spent a portion of her spousal maintenance on several household projects
that the court determined were unnecessary and unreasonable. Wife also
maintained a separate bank account in which she deposited her spousal
maintenance payments, and that account had funds remaining at the time
of trial.

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                           BOURKE v. BOURKE
                           Decision of the Court

¶16           Wife asserts that under Maximov, modification of a temporary
support award is only warranted when the paying spouse is unable to
afford the support payment. See id. at 301, ¶ 8, 205 P.3d at 1148. But the
holding in Maximov is not limited to the specific facts of that case and does
not preclude modification when there is evidence—as here—that a spouse
has obtained employment paying enough to meet the spouse’s reasonable
needs. The record supports the superior court’s conclusion that there was
a reasonable basis for modification, and we thus affirm the modification of
temporary spousal maintenance and the order that Wife repay Husband for
the $23,600 he overpaid. 3

III.   Wife’s Excessive Expenditures.

¶17            The superior court rejected Wife’s contention that all of the
expenditures on the marital home were reasonable and necessary, and the
court estimated that Wife’s unnecessary expenditures totaled
approximately $80,000. Wife argues this was an abuse of discretion, and
that, even if she did commit waste, the property allocation was nonetheless
inequitable and an abuse of discretion.

¶18           “When there is waste or dissipation of marital assets by one
spouse, the trial court may, when apportioning the community property,
award money or property sufficient to compensate the other spouse for that
waste[]” under A.R.S. § 25-318. Hrudka v. Hrudka, 186 Ariz. 84, 93, 919 P.2d
179, 188 (App. 1995). We review the allocation of community property for
an abuse of discretion. Boncoskey v. Boncoskey, 216 Ariz. 448, 451, ¶ 13, 167
P.3d 705, 708 (App. 2007).

¶19           The superior court concluded that Wife’s expenditures were
not for her reasonable needs and diminished the community estate by
approximately $80,000. The court determined that Wife’s remodeling did
not increase and in fact reduced the value of the marital home by $17,500.
The court also found that Wife spent $53,384.96 from the parties’ joint IBM
account and $33,100.67 from the joint Schwab account in the months
following the parties’ decision to file for divorce, and that Wife charged a

3     Wife also asserts that the final decree operated as a horizontal appeal
from the temporary order. However, § 25-315(F) allows retroactive
modification of temporary orders. The cases Wife cites regarding
horizontal appeals do not involve temporary orders and are thus
inapposite.

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                           BOURKE v. BOURKE
                           Decision of the Court

total of $8,806.06 on the joint American Express card and $10,866.56 on the
joint Visa card after the parties decided to divorce.

¶20           Wife contends the remodeling expenditures were reasonable
because they were designed to improve the marital home. Some of Wife’s
expenditures could be characterized as reasonable and necessary, such as
replacing an old water heater, replacing a door with a defective lock, or
replacing a damaged roof. But Wife spent excessive amounts to replace all
the doors in the home despite evidence that only one door needed repair.
Wife also spent $1,000 to relocate a water heater, which was not a necessary
expense. And although an insurance company paid $10,000 to replace the
roof on the house, Wife decided to spend several thousand dollars more to
install a metal roof.

¶21            Notwithstanding Wife’s expenditures on the house, a
certified real estate appraiser testified that several the net result was a
reduction in value. Although Wife testified that her expenditures were
reasonable, we defer to the superior court’s assessment of witness
credibility and resolution of conflicting evidence. Gutierrez v. Gutierrez, 193
Ariz. 343, 347, ¶ 13, 972 P.2d 676, 680 (App. 1998). The evidence thus
supports the court’s conclusion that the majority of Wife’s expenditures on
the marital home were excessive and unnecessary.4

¶22           Wife contends many of the expenditures were prior to the
date of service of the preliminary injunction and, therefore, do not
constitute waste. Misuse of community assets constitutes waste regardless
whether the spouse made excessive expenditures during the marriage or
while the preliminary injunction was in effect. See Martin v. Martin, 156
Ariz. 452, 455–56, 752 P.2d 1038, 1041–42 (1988) (holding that the superior
court may compensate one spouse for the misuse of community property
during the marriage to offset the value of the lost property); Gutierrez, 193
Ariz. at 346–47, ¶¶ 3, 8, 972 P.2d at 679–80 (affirming finding of waste based
on excessive and abnormal expenditures during marriage).

¶23           Wife argues that the court ignored evidence of Husband’s
dissipation of community assets. Wife contends Husband’s purchase of a
condominium in Georgia and his withdrawal of $12,000 from the joint
Schwab account constituted waste. Husband testified that he used $59,900

4      Contrary to Wife’s argument, the court did not conclude that all of
her expenditures were excessive, because Wife spent more than the $80,000
the court deemed to be waste. Thus, the superior court necessarily found
that some of Wife’s expenditures were appropriate.

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                            BOURKE v. BOURKE
                            Decision of the Court

from the joint IBM account as collateral to purchase the condominium. The
purchase of a modest condominium was a reasonable living expense under
the facts of this case. See A.R.S. § 25-315(A)(1)(a). Husband withdrew the
$12,000 remaining in the joint Schwab account when he learned that Wife
had withdrawn $33,000 from that account. The superior court properly
treated both accounts as community property in the property allocation and
allocated the amount withdrawn to each spouse.

¶24            Wife also argues that her use of the joint funds and credit
cards was reasonable because Husband conceded that she had access to the
parties’ joint accounts and Husband did not begin paying temporary
support until August 2012. Using community funds for reasonable and
necessary living expenses is permitted, but the community was entitled to
compensation for Wife’s excessive or abnormal expenditures. See A.R.S. §§
25-315(A)(1)(a), -318(C). Thus, the fact that Husband agreed Wife could
access the joint accounts does not justify Wife’s excessive expenditures, and
the evidence supports the superior court’s conclusion that Wife wasted
approximately $80,000 of community assets.

IV.    Property Allocation.

¶25            Generally, all community property “should be divided
substantially equally unless sound reason exists to divide the property
otherwise.” Toth v. Toth, 190 Ariz. 218, 221, 946 P.2d 900, 903 (1997); see also
A.R.S. § 25-318(A). The court may consider Wife’s excessive expenditure of
community assets and the reduced value of the marital home in
determining an equitable property allocation. See Flower v. Flower, 223 Ariz.
531, 535, ¶ 14, 225 P.3d 588, 592 (App. 2010). We review the property
allocation for an abuse of discretion. Id.

¶26           As stated above, we affirm the conclusion that Wife’s
expenditures were excessive and unreasonable. Husband, however,
received significantly greater community assets than Wife, even after
taking into account Wife’s dissipation of community assets. According to
the superior court’s calculations, Wife received $246,719.08 in community
assets, which included the reduced value of the marital home and Wife’s
share of the joint accounts she dissipated in 2012. The court also ordered
Wife to pay two credit card debts totaling $20,806.06, thereby reducing
Wife’s net property allocation to $225,913.02. Husband appears to have
received at least approximately $260,000 in community assets and no debts,
although it is not clear from the record how the superior court treated
Husband’s encumbrance of the IBM account used to secure payment for the
Georgia residence.

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                           BOURKE v. BOURKE
                           Decision of the Court

¶27             Although the superior court has discretion to allocate a
greater amount to Husband based on Wife’s waste of community property
assets, we are unable to ascertain from the record the total amount allocated
to Husband and to Wife and the amount of waste charged to Wife.
Accordingly, we are unable to determine whether the superior court abused
its discretion in making an arguably inequitable division of assets. On
remand, the court should determine a beginning balance of assets at the
time of dissolution and divide the assets equally. The court has discretion
to increase Husband’s share of remaining community assets to ensure that
he receives an equitable share of what would have been the value of the
estate but for Wife’s waste. The court should also clarify the initial value of
the assets listed on the court’s worksheet, such as the IBM Employees Credit
Union account and specify whether funds from that account or another
source of community funds were used or encumbered to purchase the
Georgia condominium. The court should also subtract any credit card
debts allocated to Wife from the amount deemed to have been awarded to
her. And to the extent amounts are credited as having been given to Wife,
e.g. $33,100.67 spent by Wife from the couple’s Schwab account, those
amounts should not be “double counted” as waste.

V.     Attorney’s Fees Award.

¶28           The superior court awarded Husband $9,000 in attorney’s
fees, finding Wife took unreasonable positions (1) in seeking spousal
maintenance in light of her education and employment, (2) in claiming her
reasonable needs included the excessive amounts spent on remodeling the
marital home, and (3) suggesting that Husband should have objected to
Wife’s expenditures. We review the superior court’s decision to award
attorney’s fees for an abuse of discretion. In re Marriage of Robinson, 201
Ariz. 328, 335, ¶ 20, 35 P.3d 89, 96 (App. 2001).

¶29           In     light   of     our     ruling     remanding      for    a
recalculation/clarification of the asset distribution, we vacate the award of
attorney’s fees to Husband and remand for a redetermination of that
amount. Counsel for Husband conceded at oral argument that no adequate
explanation was given for the amount of the award. Moreover, we note
that it is unclear from the record how the superior court calculated the
amount of $9,000 in attorney’s fees for Husband. Although the court made
several findings regarding the legal basis for attorney’s fees, no calculation
or explanation of the amount was provided.

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                          BOURKE v. BOURKE
                          Decision of the Court

VI.   Attorney’s Fees and Costs on Appeal.

¶30          Both parties request an award of attorney’s fees under A.R.S.
§ 25-324. The parties did not take unreasonable positions on appeal, and
the record does not reflect the parties’ current financial resources.
Accordingly, we decline to award fees and costs to either party.

                            CONCLUSION

¶31          We affirm the denial of future spousal maintenance, the
modification of temporary spousal maintenance, and the superior court’s
finding of waste. We vacate the property allocation award and the award
of attorney’s fees and remand for a recalculation/clarification of those
amounts.

                                  :RT

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