Court Opinion

ID: 7801046
Source: CourtListenerOpinion
Date Created: 2022-08-16 18:01:46.233132+00
Date Added: 2024-06-11T16:29:13.875945
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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 Matter of:

                            JESSICA ANN WILSON,
                       Petitioner/Appellant/Cross-Appellee,

                                         v.

                        JOSEPH ROBERT NORIEGA,
                      Respondent/Appellee/Cross-Appellant.

                            No. 1 CA-CV 21-0048 FC
                            No. 1 CA-CV 21-0449 FC
                                 (Consolidated)
                                FILED 8-16-2022

            Appeal from the Superior Court in Maricopa County
                            No. FC2018-001816
                   The Honorable Kevin B. Wein, Judge

    VACATED AND REMANDED IN PART; MODIFIED IN PART;
                  AFFIRMED IN PART

                                    COUNSEL

Katz & Bloom, Phoenix
By Jay R. Bloom
Counsel for Petitioner/Appellant/Cross-Appellee

Woodnick Law PLLC, Phoenix
By Markus Risinger
Counsel for Respondent/Appellee/Cross-Appellant
                           WILSON v. NORIEGA
                           Decision of the Court

                       MEMORANDUM DECISION

Presiding Judge Samuel A. Thumma delivered the decision of the Court, in
which Judge Cynthia J. Bailey and Vice Chief Judge David B. Gass joined.

T H U M M A, Judge:

¶1           Jessica Ann Wilson (Wife) challenges the decree dissolving
her marriage to Joseph Robert Noriega (Husband) and the denial of her
motion to correct the decree. For the reasons stated below, the spousal
maintenance award is vacated and remanded for further consideration, the
order equalizing the financial benefits paid by the community business is
modified and the denial of Wife’s request for attorneys’ fees is vacated and
remanded. All other rulings are affirmed.

                 FACTS AND PROCEDURAL HISTORY

¶2            The parties married in 1995 and have one child who was a
minor at the time of the dissolution. During the marriage, the community
owned, and the parties operated, a masonry business. The office building
was on the same property as the parties’ marital home. Along with paying
Husband and Wife each $6,500 in monthly salary, the business paid many
of the family’s living expenses, including utilities, housing expenses,
personal vehicle expenses and motor home and sand truck payments. This
continued during the divorce proceedings. The parties jointly retained an
accountant to value the business and to reconcile personal and other
expenses the business paid in a reconciliation report.

¶3            The parties agreed that Husband would receive the business
but disputed how he would pay Wife for her interest. The court valued the
business at $1,020,000, an amount not challenged here. The court found that
the business paid Wife $46,558.58 more in non-salary benefits than it paid
Husband during the divorce proceedings, and reduced Wife’s share by that
amount. Husband was ordered to pay Wife $463,441.42 for her share of the
business, but was allowed to do so in monthly payments of $8,000 starting
January 1, 2021, with interest accruing after June 1, 2021, if not paid in full.
The court did not impose a lien to secure Wife’s interest, as she requested.

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                           WILSON v. NORIEGA
                           Decision of the Court

¶4             The parties valued the marital home at $1,090,000. If Husband
could not refinance the debt on the home and pay Wife her half of the equity
within three months, the court ordered the parties to sell the home and split
the proceeds equally. Husband paid Wife about $275,000 for her share of
the equity in the home a few months after the entry of the decree.

¶5           The decree awarded Wife spousal maintenance of $1,000 a
month for five years, significantly less than the $5,800 a month she had
requested. This amount was based, in part, on Wife’s earning ability of
$3,640 a month, and the award of over $700,000 in community assets,
including an “income stream of $8,000 per month for the next five years”

¶6             Wife appealed, and while the appeal was pending, she
petitioned for contempt and sought to enforce the decree. Husband
responded and counter-petitioned for relief from the decree. This court
stayed the appeal so the superior court could rule on the competing
requests. During the stay, Wife also moved to correct the decree. The court
summarily denied Wife’s motion to correct, and the parties settled the other
post-decree issues. Wife also appealed the denial of her motion to correct.
This court has jurisdiction over Wife’s timely appeal pursuant to Article 6,
Section 9, of the Arizona Constitution and Arizona Revised Statutes (A.R.S.)
sections 12-120.21(A)(1) and -2101(A)(1) & (2) (2022). See also Yee v. Yee, 251
Ariz. 71, 73 ¶ 1 (App. 2021).1

                               DISCUSSION

I.     The Spousal Maintenance Award is Vacated and Remanded.

¶7            The court found Wife was entitled to an award of spousal
maintenance, a finding Husband does not challenge on appeal. Based on
Wife’s anticipated earnings of $3,640 and the “income stream of $8,000 per
month for the next five years” to pay her for her share of the business, the
court determined that she could meet her reasonable needs with a spousal
maintenance award of $1,000 a month for five years. Wife argues the court
erred in considering the $8,000 monthly payment for her share of the
business as part of her monthly “income stream.”

1 Absent material revisions after the relevant dates, statutes and rules cited
refer to the current version unless otherwise indicated. Although Husband
filed a cross-appeal, he has not provided a statement of issues presented for
review in the cross-appeal, meaning they are waived. See ARCAP 13(g).

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                          WILSON v. NORIEGA
                          Decision of the Court

¶8            In determining the amount and duration of a spousal
maintenance award, courts must consider several statutory factors,
including “the financial resources of the party seeking maintenance,
including marital property apportioned to that spouse.” A.R.S. § 25-319(B)(9)
(emphasis added). As the court correctly found, Wife received about
$700,000 in marital property, mostly consisting of her share of the marital
home and the community business. Husband paid Wife about $275,000 for
her share of the equity in the marital home. Wife, however, did not receive
a lump sum for her share of the business. Instead, Husband is paying Wife
$8,000 a month until her share is paid off. If Husband regularly pays, Wife
will be paid in full in about five years.

¶9            The $8,000 monthly payments are marital property awarded
to Wife as an asset, not a stream of income. Like the lump sum amount Wife
received for her share of the marital home, the court can consider this
marital property for purposes of spousal maintenance. See Deatherage v.
Deatherage, 140 Ariz. 317, 320 (App. 1984) (as used in A.R.S. § 25-319,
property “means all property capable of providing for the reasonable needs
of the spouse seeking maintenance”).2 But the monthly distribution of this
asset is not an “income stream” for Wife. And a spouse “should not be
expected to live off both the principal, and interest, exhausting whatever
financial reserves she possesses to the extent that when she no longer had
any earning capacity there would be nothing left upon which she could
draw.” Thomas v. Thomas, 142 Ariz. 386, 391 (App. 1984) (citing Wineinger v.
Wineinger, 137 Ariz. 194 (App. 1983)). It, therefore, was error to categorize
the $8,000 monthly payments as an “income stream” when, in fact, they
were distributions to Wife over time of her share of the marital property.
Moreover, the record does not show how the five-year, $1,000-per-month,
spousal maintenance award allows Wife to transition to financial
independence.

2 Although Deatherage interpreted A.R.S. § 25-319(A) to determine if the
spouse was entitled to support, the same approach applies in determining
the amount of such an award under A.R.S. § 25-319(B). See State ex rel. Larson
v. Farley, 106 Ariz. 119, 122 (1970) (courts construe statutes relating to the
same subject together and seek to achieve consistency).

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                          WILSON v. NORIEGA
                          Decision of the Court

¶10            Given the award in the decree, Wife would have to spend a
significant portion of her marital assets during those five years (including
the monthly distribution of marital property), leaving her without adequate
resources to support herself afterward. Wife’s financial affidavit showed
she had more than $9,000 in monthly expenses.3 The court found Wife could
reduce her anticipated $2,500 mortgage expense by using the equity from
the marital home to purchase a new home “without a significant
mortgage.” Although such a purchase would reduce Wife’s anticipated
expenses, it would also deplete the marital assets awarded to her and Wife
would need to use a significant portion of the $8,000 monthly payments for
her share of the business to meet her anticipated expenses. Doing so for five
years, when Husband’s spousal maintenance obligation and the “income
stream” from the equalization payment expires, will result in Wife having
less than half of her share of the community business (slightly more than
$200,000) left to support herself in addition to her monthly income. Given
Wife’s age, earning ability, and expenses, this remaining marital property
does not appear sufficient to provide for Wife’s needs.

¶11           One goal of spousal maintenance is to transition the receiving
spouse to financial independence. See Rainwater v. Rainwater, 177 Ariz. 500,
503 (App. 1993). The award here does not achieve this goal, instead
requiring Wife to deplete a significant portion of her share of the marital
property within five years. See Wineinger, 137 Ariz. at 198 (affirming award
of spousal maintenance because without it, the receiving spouse would
dissipate the principal and interest of the money awarded to her to meet
her needs, leaving nothing for retirement years). Nor does the record show
that Wife’s earning ability will have increased at the end of the five years.
There is no evidence that Wife, who has a high school diploma and has not
worked outside the family business for many years, was completing a
degree or training program.

¶12            Husband argues that the evidence showed he could not
afford to pay the $5,800 Wife sought in support. To be sure, the court did
not have to award Wife the full amount she requested. That said, the record
also shows that Husband might have more discretionary income from the
community business because it no longer would be paying Wife’s salary,
utilities, housing expenses, personal vehicle expenses and the community’s
motor home and sand truck payments. Although the court did not have to
state its reasons for the award absent a request for written findings of fact

3Wife’s affidavit conflicts with her contention that her reasonable monthly
needs are $12,640, and the record does not support her argument that the
court found she had $12,640 in reasonable monthly needs.

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                          WILSON v. NORIEGA
                          Decision of the Court

and conclusions of law which was not made here, see Ariz. R. Fam. Law. P.
82, the evidence does not support the spousal maintenance award. For that
reason, it is vacated and remanded for further consideration.

II.    Property Allocation.

¶13           The allocation of community property is reviewed for an
abuse of discretion. Davies v. Beres, 224 Ariz. 560, 562 ¶ 6 (App. 2010).

       A.     The Calculation of the Equalization Payment Based on the
              Reconciliation Report.

¶14           The community business continued to pay the parties’
personal expenses during the litigation. Based on the reconciliation report
and testimony, the superior court found Wife received $46,558.58 more
from the business than Husband. As a result, it reduced Wife’s share of the
business by $46,558.58. This was error. To equalize the amount of non-
salary benefits the parties received, the court should have ordered Wife to
repay half that amount, or $23,279.29.

¶15            Husband contends the equalization order is correct because
the court ordered the parties to return the amounts withdrawn from the
business for personal expenses. He misstates the record. Only Wife’s share
of the business was reduced. And even if the excess amount Wife received
is viewed as waste under A.R.S. § 25-318(C), Husband is only entitled to his
share of that amount. The order offsetting Wife’s interest in the community
business is modified to reduce her share by $23,279.29.

       B.     The Court Did Not Err in Allowing Husband to Pay Wife
              for Her Share of the Community Business Over Five Years.

¶16           Wife argues that allowing Husband to pay her for her interest
in the business in $8,000 monthly installments over five years is inequitable.
Although Wife would prefer a lump sum payment, the superior court has
discretion to determine the appropriate manner to equitably allocate assets.
Because Wife received an equal share of the assets, the allocation was
equitable. See A.R.S. § 25-318(A). Wife has thus shown no error.

       C.     The Court Did Not Err by Declining to Impose a Lien.

¶17           “The court may impress a lien on the separate property of
either party or the marital property awarded to either party in order to
secure the payment of . . . [a]ny interest or equity the other party has in or
to the property.” A.R.S. § 25-318(E)(1). By its own terms, the imposition of

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                           WILSON v. NORIEGA
                           Decision of the Court

a lien is discretionary. The statute does not identify any specific factors the
court should consider in exercising its discretion. Although the court could
have imposed a lien, Wife has failed to show how the court abused its
discretion in not doing so here.

III.   Attorneys’ Fees and Costs.

¶18           The superior court denied Wife’s request for attorneys’ fees.
Because the spousal maintenance award is vacated and remanded for
reconsideration and the equalization payment is modified in Wife’s favor,
the fee award is vacated, and the issue is remanded for further
consideration after the resolution of the substantive issues on remand. Both
parties request an award of attorneys’ fees on appeal under A.R.S. § 25-324.
After considering the reasonableness of the parties’ positions and
Husband’s greater financial resources post-decree, Wife’s request is
granted. Wife is also entitled to her costs on appeal under § 12-342, both
fees and costs contingent upon her compliance with ARCAP 21.

                              CONCLUSION

¶19           The spousal maintenance award is vacated and remanded for
further consideration consistent with this decision. The equalization
payment related to the reconciliation report is modified to show that Wife
owes Husband $23,279.29 and Wife’s interest in the community business is
modified to reflect this judgment. The denial of Wife’s request for attorneys’
fees by the superior court is vacated and remanded. All other rulings in the
decree are affirmed.

                           AMY M. WOOD • Clerk of the Court
                           FILED: AA

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