Court Opinion

ID: 4212828
Source: CourtListenerOpinion
Date Created: 2017-10-19 15:02:13.550278+00
Date Added: 2024-06-11T08:46:35.223176
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:

                               KIMBERLY WEISS,
                               Petitioner/Appellant,

                                         v.

                                  LEE WEISS,
                               Respondent/Appellee.

                            No. 1 CA-CV 16-0504 FC
                              FILED 10-19-2017

            Appeal from the Superior Court in Maricopa County
                           No. FC2009-050837
              The Honorable Jennifer C. Ryan-Touhill, Judge

                       VACATED AND REMANDED

                                    COUNSEL

Berkshire Law Office, PLLC, Phoenix
By Keith Berkshire, Erica L. Gadberry
Counsel for Petitioner/Appellant

Tiffany & Bosco, PA, Phoenix
By Tina M. Ezzell
Counsel for Respondent/Appellee
                             WEISS v. WEISS
                            Decision of the Court

                      MEMORANDUM DECISION

Judge Diane M. Johnsen delivered the decision of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Maria Elena Cruz joined.

J O H N S E N, Judge:

              Kimberly Weiss ("Wife") appeals the superior court's order
modifying spousal maintenance payable by Lee Weiss ("Husband"). She
also appeals the court's summary denial of her petition for modification of
child support and parenting time and its award of attorney's fees. For the
following reasons, we vacate the order and remand.

             FACTS AND PROCEDURAL BACKGROUND

             The parties' marriage was dissolved in July 2009. The consent
decree of dissolution provided that Husband would make two types of
spousal maintenance payments to Wife: (1) a fixed payment of $1,000 per
month until May 2018, and (2) a "Monthly Adjustable Payment" of 13% of
Husband's W-2 income, adjusted annually until May 2018. The adjustable
payment was subject to modification if Wife received "income in any form,"
other than her employment income, "that exceeds $26,000 a year." If Wife
received additional income beyond that threshold, Husband's adjustable
payment to Wife was to be modified by the court pursuant to Arizona
Revised Statutes ("A.R.S.") section 25-319 (2017).1

             In May 2014, Husband petitioned to modify spousal
maintenance, alleging Wife had received an inheritance of more than
$26,000 from her father and therefore met the qualifying condition for the
modification of her spousal maintenance award. Husband further asserted
Wife "colluded with her deceased father" to change his will after the decree
was entered "in order to hide and delay payment of her inheritance" until
after Husband's support obligation had expired. Wife then filed a petition
for modification of child support and parenting time and allocation of
expenses for minor children, and asked the court to consider her petition in
conjunction with Husband's petition to modify spousal maintenance.

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

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              The superior court sua sponte appointed a special master to
hear the issues involved in the parties' respective petitions and make
findings and recommendations. After ruling on pretrial motions and
conducting a ten-hour trial, the master issued a report and recommended
rulings that the Monthly Adjustable Payment be reduced to $3,154 from
$3,947. The master further recommended that Wife be required to pay
$20,000 toward Husband's attorney's fees because she "acted unreasonably
at times regarding disclosure and discovery and . . . this unreasonable
behavior has caused Father to incur additional attorney fees."

              Wife filed an objection to the special master's report and
requested a hearing. Without considering Husband's response, the court
denied the request for hearing and issued a ruling further reducing the
Monthly Adjustable Payment to $1,000 per month and increasing the
attorney's fees award to $30,000. We have jurisdiction over Wife's timely
appeal pursuant to Article 6, Section 9, of the Arizona Constitution, and
A.R.S. § 12-2101(A)(2) (2017).

                               DISCUSSION

A.     Spousal Maintenance Modification.

       1.     Due-process issue.

               Wife first argues that the superior court violated her due-
process rights by appointing the special master without a request from
either party. She also asserts that the master was not qualified to decide
family law issues and that the court failed to "specify the particular issues"
the master was to decide. Wife, however, waived those arguments by
failing to raise them in the superior court. See Pflum v. Pflum, 135 Ariz. 304,
307 (App. 1982) ("Matters not raised below will not be considered on
appeal."). In any event, at the relevant time, Arizona Rule of Family Law
Procedure 72(A) (2016) authorized the court to appoint a special master "on
[its] own motion" and without a request from either party.2

       2.     Zale and the interpretation of a consent decree.

              Wife next argues the master and the superior court both erred
by considering evidence of the parties' intent in interpreting the dissolution
decree's terms concerning the "Threshold Amount" of income that would
render the adjustable payment "subject to modification." The interpretation

2     See Order Amending Rule 72, Arizona Rules of Family Law
Procedure, R-16-0037 at 3 (Dec. 14, 2016); Rule 72(M) (2017).

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                              Decision of the Court

of a dissolution decree is a legal issue that we review de novo. Cohen v. Frey,
215 Ariz. 62, 66, ¶ 10 (App. 2007).

               Although courts may use parol evidence to determine the
intent of the parties when interpreting a contract, a dissolution decree is not
a contract, but a judgment. As such, a consent decree is "an independent
resolution by the court of the issues before it and rightfully is regarded in
that context and not according to the negotiated intent of the parties." In re
Marriage of Zale, 193 Ariz. 246, 249, ¶ 11 (1999); see also Ariz. R. Civ. P. 54(a).
Therefore, a court interpreting a consent decree applies general rules of
construction but does not rely on extrinsic or parol evidence of the parties'
intent. See Zale at 250, ¶¶ 16–17. Husband cites no case authority to the
contrary.

             At issue on Husband's petition to modify maintenance was
the following language from the decree:

       Modification of Monthly Adjustable Payment. The Monthly
       Adjustable Payment is subject to modification for the
       following reasons:

                                 *      *       *

       d. [Wife's] Additional Income. Upon [Wife's] receipt of
       income other than her employment income in any form
       (including without limitation income from other employment,
       gifts, inheritances, or direct payments by another person to
       [Wife] or to third parties on [Wife's] behalf towards the minor
       children's and [Wife's] living expenses), that exceeds $26,000
       a year (the "$26,000 Threshold Amount").

 (Emphasis added.) The master and the superior court both concluded that
Wife's inheritance from her father constituted additional income that
exceeded the $26,000 Threshold Amount.

              Wife acknowledges that the decree specifically includes
"inheritances" as a form of income that may trigger a modification of
spousal maintenance. She argues, however, that the decree's reference to
"income from . . . inheritances" does not include a lump-sum inheritance, but
instead means a recurring payment from an inheritance, or an amount
generated from the investment of an inheritance. As support, Wife cites a
dictionary definition of "income" as "money or other form of payment that
one receives, [usually] periodically." Black's Law Dictionary (10th ed.
2014). But the decree likewise refers to "income from other employment,

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                               WEISS v. WEISS
                              Decision of the Court

gifts, . . . or direct payments by another person," a construction that
undercuts Wife's contention that the decree does not treat an inheritance as
income subject to the $26,000 Threshold Amount.

              Wife also cites cases that address whether investments or one-
time capital gains or insurance settlements should be treated as income for
purposes of child support. The cases Wife cites do not control here, when
the decree specifically defines "income" to include "inheritances," which by
their nature often are a one-time event. Moreover, although the parties
dispute whether Wife as a practical matter could access money in one of the
accounts that was to be held in trust for her until 2018, we need not
determine that issue because Wife admitted during the hearing before the
special master that when her father passed away in January 2014, she
became the sole owner of a joint account containing a little more than
$76,000, which she then transferred to various accounts. As a matter of law,
under the decree, Wife's receipt of that amount was more than sufficient to
trigger Husband's ability to request a modification of the monthly
adjustable payment.3

      3.       Redetermination of spousal maintenance.

              Having concluded that Husband had demonstrated that Wife
had "qualifying income" that exceeded the $26,000 Threshold Amount, the
master proceeded under the decree to determine whether spousal
maintenance should be modified pursuant to A.R.S. § 25-319 (2017). The
master noted evidence that Wife's annual employment income had risen to
$84,000 since the decree was entered, and Husband's income had fallen to
$361,000. He then made the following additional findings:

           •   [Wife] is still in need of financial assistance to meet her
               reasonable needs. That said, the [inheritance] . . . and
               [Wife's] increased employment income make [Wife]

3      In addition to the $76,000 in the joint account to which Wife
succeeded after her father's passing, the special master also found that Wife
received income of no less $24,667 in one trust account and an interest in
another $185,000 held in trust for her until December 1, 2018. The master
concluded that even though the $185,000 could not be released to Wife until
beyond the date specified in the decree, her interest in that trust "became
vested and was neither contingent nor speculative," meaning that she
"could sell or encumber" her interest in the trust. According to the master,
however, his findings with regard to the two trusts did not affect his
recommendation that spousal maintenance be reduced to $3,154.

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                               WEISS v. WEISS
                              Decision of the Court

                less in need of such financial assistance than she was
                when the Decree was entered in 2009.

            •   [Husband] retains the ability to meet his needs and to
                assist [Wife] in meeting her needs. That said, in light
                of his decrease in income, [Husband's] ability to do so
                has lessened somewhat since entry of the Decree.

            •   . . . [A]t the hearing, [Husband] contended that the
                Monthly Adjustable Payment should be decreased
                dollar for dollar for all qualifying income above the
                Threshold Amount. Had the money received and to be
                received by [Wife] been part of a stream of annuity
                payments or guaranteed annual gifts, [Husband's]
                argument would be more persuasive.

            •   It is true that the qualifying income relied on by
                [Husband] is in the nature of a series of one time
                events. That said, the Master finds that this income has
                changed [Wife's] financial circumstances in a
                substantial and continuing way.

            •   After having considered all of the factors in Section 25-
                319 and based on all of the facts and circumstances
                presented, the Master finds that the Monthly
                Adjustable Payment should be modified and reduced
                to $3,154.

            •   Assuming for the sake of discussion that [Wife's]
                portion of the trust funds does not constitute
                qualifying income, the Master's decision would not
                change. Whether or not the funds from the trust are
                deemed to be qualifying income, the above discussed
                funds that have flowed and will flow to [Wife] will
                have the same impact on [Wife's] financial
                circumstances.

       4.       The superior court's order.

               Wife objected to the master's report. Although Husband filed
a response to Wife's objection, the superior court ruled the response
untimely and did not consider it. When a party objects to a special master's
report, Rule 72(G) allows the superior court to "set oral argument on the
objection(s), adopt the report, modify it, reject it in whole or in part or . . .

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                             WEISS v. WEISS
                            Decision of the Court

receive further evidence." In a case such as this, when the parties have not
stipulated to accept the master's findings, the court reviews the master's
findings of fact only for clear error, based on the record before the master.
See Rule 72(H) ("[T]he court shall not reverse the special master's findings
of fact unless clearly erroneous and shall review conclusions of law de
novo.").

              In ruling on Wife's objection to the master's report, the
superior court agreed with the master's conclusion that Husband had
established that the $26,000 Threshold Amount was established, rendering
spousal maintenance subject to modification. The court also agreed with
the master that Wife's monthly employment income was about $7,000.
Together with child support of $660 and the non-modifiable spousal
support payment of $1,000, the court noted that Wife's monthly income
accordingly totaled about $8,660 before any modifiable component of
spousal maintenance.

             The court parted with the master, however, on the issue of
Wife's reasonable expenses. Wife testified before the special master that her
reasonable monthly expenses were $12,000, and Husband did not cross-
examine her about that issue. Although the master made no express finding
concerning Wife's reasonable expenses, his award of $3,154 in spousal
maintenance suggests that he accepted Wife's testimony and found her
reasonable monthly expenses to be on the order of $12,000 (i.e., $8,660 +
$3,154 = $11,814). Wife objected to the master's finding, arguing that he
should have made an express finding that she had reasonable monthly
expenses of $12,000.

              Without addressing Wife's contention that the master should
have made such an express finding, the superior court's order extensively
critiqued Wife's most recent affidavit of financial information ("AFI"), dated
December 5, 2015, which listed monthly expenses, net of legal fees, of
roughly $15,000. The court found the expenses listed in the AFI
"overinflated" and concluded that Wife's "necessary monthly expenses total
$10,000.00." On that basis, and without acknowledging the "clearly
erroneous" standard of review specified in Rule 72(H), the superior court
then rejected the master's findings modifying monthly child support to
$3,154, and instead ordered monthly spousal support reduced to $1,000.

              The court's factual finding that Wife "only requires a limited
amount of assistance from [Husband] to pay reasonable expenses in full"
seems to have been based primarily on the court's critique of the recent AFI.
But there is no indication from the record that the master relied on that AFI

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                              WEISS v. WEISS
                             Decision of the Court

in making his recommendation. Although the AFI was in evidence before
the master, it was not the subject of any substantive examination or
argument during the master's hearing. Beyond that, the master did not
embrace or even reference the AFI in his findings; indeed, by finding that
spousal maintenance should be reduced commensurate with reasonable
expenses of only about $12,000 a month, the master, like the court,
impliedly rejected the AFI.

              More generally, in rejecting the master's recommended
award, the superior court did not identify any finding of fact by the master
that it determined to be clearly erroneous. To the contrary, the court ruled
that the master's report sufficiently "addresses the factors under A.R.S. § 25-
319." On this record, we cannot discern whether the superior court's
rejection of the master's recommended modification of spousal
maintenance was based on a finding by the court, supported by the
evidence, that the master made a clear error. For that reason, we vacate the
court's order rejecting the master's recommended spousal maintenance
award and remand for reconsideration of Wife's objections to the master's
report.4

B.     Child Support and Parenting Time.

              The special master recommended granting Wife's request for
a change in parenting time and concluded that the superior court should
decide whether a change in child support should be made. The superior
court did not specifically address Wife's petition to modify child support
and parenting time, but generally denied "any affirmative relief sought
before the date of this Order that is not expressly granted above." Neither
party objected to the master's recommended change in parenting time, and
Husband agrees with Wife on appeal that the superior court now should
address whether child support should be modified. We agree with both

4     Wife also argues the court erred by referring in its order to a 2014 AFI
that was not before the special master. The superior court only referred to
the 2014 AFI in a footnote, suggesting the court did not materially rely on
the outdated AFI in overruling the master's recommendation. Wife further
argues that the superior court's order impermissibly required her to use a
portion of her "nest egg" to supplement her income sufficiently to meet her
reasonable expenses. Without accepting the factual or legal premises of
Wife's argument, we need not address that contention in view of our
decision to grant her request to remand the matter to the superior court.

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                             WEISS v. WEISS
                            Decision of the Court

parties that, on remand, the superior court should consider whether child
support should be modified.

C.     Attorney's Fees.

               The master recommended that Wife pay $20,000 of Husband's
attorney's fees because of what the master characterized as her
"unreasonable behavior." The superior court found that the master's report
adequately "addresses the basis for attorney's fees" award. Nevertheless,
and even though Husband did not object to the fees recommended by the
master as insufficient, the superior court increased the award to $30,000,
citing specific instances in which the court found Wife had lied or otherwise
acted unreasonably, thereby expanding the litigation and increasing the
associated costs. The court also stated it was "extremely cognizant of the
disparity in income, which is the primary reason [it] has not ordered more
than $30,000.00 to [Husband]." Wife argues the superior court erred in
overruling the master's fee award.

              When the superior court referred the spousal maintenance
issue to the special master, it granted the master the power to "make
findings of fact, recommendations and conclusions of law on any and all
disputes between the parties concerning (discovery) (evaluation of the
business known as) (specify other financial issues)." Included within that
broad grant of authority was the power to resolve the parties' respective
attorney's fees claims arising out of Husband's petition to modify spousal
maintenance. Therefore, under Rule 72(H), after the master recommended
an award of fees, the superior court could overrule the award only if it
found the master's award clearly erroneous.

             The superior court made no such finding. Moreover, our
record does not disclose whether the events that the superior court cited in
overruling the master's award were before the master when he ruled.
Therefore, we vacate and remand the fees award for reconsideration by the
superior court.5

5      In increasing the attorney's fees award, the superior court found
Wife lied several times to Husband about the inheritance and also found
Wife "instructed or intimated" her father's probate lawyer to structure her
father's estate-planning in a way that would allow her to avoid receiving
income before the 2018 date specified in the decree. Although Wife's lies
subject her to a fees sanction under A.R.S. § 25-324, the superior court erred
to the extent that it sanctioned Wife merely for working with her father's

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                             WEISS v. WEISS
                            Decision of the Court

                               CONCLUSION

             For the foregoing reasons, we vacate the superior court's
order overturning the special master's report and recommendations and
remand for further proceedings. Both parties have requested attorney's fees
on appeal pursuant to A.R.S. § 25-324 (2017). In our discretion, we deny
both requests, but grant Wife her costs of appeal, contingent on compliance
with Arizona Rule of Civil Appellate Procedure 21.

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

probate attorney to structure her father's estate in a manner that would
avoid the $26,000 Threshold Amount.

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