Court Opinion

ID: 8213851
Source: CourtListenerOpinion
Date Created: 2022-10-13 18:02:03.047227+00
Date Added: 2024-06-11T16:42:25.507471
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:

                    MICHAEL OBERG, Petitioner/Appellee,

                                         v.

                 MARGARET OBERG, Respondent/Appellant.

                            No. 1 CA-CV 21-0704 FC
                                FILED 10-13-2022

            Appeal from the Superior Court in Maricopa County
                           No. FC2019-096521
              The Honorable Jacki Ireland, Judge Pro Tempore

                       VACATED AND REMANDED

                                    COUNSEL

Tiffany & Bosco PA, Phoenix
By Amy D. Sells
Co-Counsel for Petitioner/Appellee

The Harding Firm LLC, Gilbert
By Kina Harding
Co-Counsel for Petitioner/Appellee

The Cavanagh Law Firm PA, Phoenix
By Christina S. Hamilton
Counsel for Respondent/Appellant
                           OBERG v. OBERG
                          Decision of the Court

                     MEMORANDUM DECISION

Chief Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Cynthia J. Bailey and Vice Chief Judge David B. Gass
joined.

C A T T A N I, Chief Judge:

¶1            Margaret Oberg (“Wife”) appeals from an amended
dissolution decree, which was based in significant part on the superior
court’s conclusion that Wife’s post-nuptial agreement with Michael Oberg
(“Husband”) was enforceable against Wife. Because Husband did not
present clear and convincing evidence to show the agreement was fair and
equitable, we vacate the amended decree and remand for further
proceedings.

             FACTS AND PROCEDURAL BACKGROUND

¶2          Husband and Wife married in 1996. They have two children,
one of whom has reached majority. Husband petitioned for dissolution in
December 2019.

¶3            Less than two months before Husband filed his dissolution
petition, the parties signed a post-nuptial agreement (the “PNA”). The
PNA granted Husband two community property parcels: the marital home
(with Husband assuming the mortgage) and a lot in Payson (the “Rim Trail
Lot”). The PNA further recited that both parties waived spousal
maintenance.

¶4            Wife did not respond to Husband’s petition or amended
petition, and the court entered a default decree that included the property
grants and spousal maintenance waiver (the “Default Decree”). The
Default Decree equally divided the remaining community property except
for a few items that were awarded to the children.

¶5           Wife then appeared and moved to set aside the Default
Decree. Following an evidentiary hearing, the superior court denied Wife’s
motion. Wife appealed, and we vacated the Default Decree because the
court had not addressed whether the PNA was fair and equitable:

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                            OBERG v. OBERG
                           Decision of the Court

      Although the agreement need not comply with the property
      distribution and spousal maintenance provisions of A.R.S.
      §§ 25-318 and -319, Husband concedes the post-nuptial
      agreement is governed “by case law, such as” [In re] Harber’s
      Estate, [104 Ariz. 79, 88 (1969),] Austin v. Austin, 237 Ariz. 201
      (App. 2015) and Hutki v. Hutki, 244 Ariz. 39 (App. 2018).
      Those cases require the court to determine that the post-
      nuptial agreement was both fair and equitable.

      Here, the record does not reflect that the superior court made
      this required determination, a prerequisite for the post-
      nuptial agreement to be incorporated into the Decree.
      Accordingly, the Decree cannot stand.

Oberg v. Oberg (Oberg I), 1 CA-CV 20-0468 FC, 2021 WL 1578154, at *2, ¶¶
8–9 (Ariz. App. Apr. 22, 2021) (mem. decision).

¶6            On remand, Husband lodged a proposed Amended Decree
that largely mirrored the substantive terms of the Default Decree, arguing
that the superior court had “implicitly determined that the PNA is fair and
equitable by upholding the PNA” in the Default Decree. Wife objected,
contending that the evidence presented at the earlier evidentiary hearing
established that the PNA was unfair. At the next status conference, the
superior court proposed that it could determine whether the PNA was fair
based on the evidence previously presented, and the parties agreed the
court had sufficient record evidence to do so, although Wife’s counsel
suggested the court could hold a “subsequent, smaller hearing” if it
identified “some discrete issues that . . . were not addressed by the
underlying transcript.”

¶7              After reviewing the record, the superior court determined the
PNA was (1) clear and unambiguous, (2) “free from any taint of fraud,
coercion or undue influence,” and (3) “fair and equitable at the time the
PNA was executed based on the benefit Wife was receiving, specifically, the
possibility to reconcile her marriage and maintain her lifestyle.” The
superior court signed an amended decree that “incorporate[d] and
merge[d] . . . the Default Decree” in its entirety (the “Amended Decree”).

¶8            Wife timely appealed from the Amended Decree. We have
jurisdiction under A.R.S. § 12-2101(A)(1).

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                             OBERG v. OBERG
                            Decision of the Court

                               DISCUSSION

I.     Waiver and Law of the Case.

¶9            Preliminarily, Husband contends that Wife “waived a
fairness determination by this court [in Oberg I] in favor of a fairness
determination by the superior court on the same record.” But in Oberg I,
we vacated the faulty Default Decree and remanded for the superior court
to make a fairness determination and enter a new decree. Oberg I, 1 CA-CV
20-0468-FC, at *2, ¶¶ 9–10. Now that the superior court has done so,
nothing precludes Wife from challenging that ruling on appeal. Husband’s
waiver argument is unpersuasive and unavailing.

¶10            Citing several arguments from Wife’s Oberg I appellate briefs,
Husband contends that several of Wife’s arguments in the instant appeal
“were either waived or expressly or impliedly decided against her in the
first appeal” and are thus barred by the law of the case. Under that doctrine,
legal questions previously decided in the same case by the same court or a
higher appellate court will not be reopened. Sholes v. Fernando, 228 Ariz.
455, 458, ¶ 8 (App. 2011); see also Emps. Mut. Liab. Ins. Co. of Wis. v. Indus.
Comm’n, 115 Ariz. 439, 441 (App. 1977) (law of the case applies “if an
appellate court has ruled upon a legal question”) (emphasis added). But we
only addressed one of those issues in Oberg I: that the PNA “need not
comply with the property distribution and spousal maintenance provisions
of A.R.S. §§ 25-318 and -319.” Oberg I, 1 CA-CV 20-0468 FC, at *2, ¶ 8. We
did not reach any of the other six arguments Husband cites. See Stauffer v.
Premier Serv. Mortg., LLC, 240 Ariz. 575, 579, ¶ 15 (App. 2016) (“[I]f the issue
was not resolved in the first ruling, . . . the [law of the case] doctrine does
not apply.”) (citation omitted).

¶11           Moreover, five of those other six arguments relate to the
fairness of the PNA,1 which the superior court determined in the first
instance after our remand in Oberg I. And as to the sixth (whether the
Default Decree’s child support calculation was correct), the superior court
re-addressed and reaffirmed the child support award in the Amended

1      Whether the PNA is unfair under A.R.S. § 25-317; whether the
superior court improperly considered marital misconduct as relevant to
whether the parties were attempting to reconcile; whether the superior
court properly analyzed the fairness of the PNA; whether the PNA fails for
lack of consideration; and whether the fact that Wife was not represented
by counsel at the time of signing is relevant to its fairness.

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                             OBERG v. OBERG
                            Decision of the Court

Decree. Wife is not precluded from challenging these new determinations
in this appeal.

II.    Enforceability of the PNA.

¶12           Spouses are free to contract for changes to their property
rights in a post-nuptial agreement. Harber’s Estate, 104 Ariz. at 88. But to
be enforceable, such agreements must be “free from any taint of fraud,
coercion or undue influence” and must be “fair and equitable,” and the
spouse challenging the agreement—here, Wife—must have entered it “with
full knowledge of the property involved and her rights therein.” Id. The
party seeking to enforce the agreement—here, Husband—must prove those
elements by clear and convincing evidence, id., a heightened standard of
proof that requires a showing that “the thing to be proved is highly
probable or reasonably certain.” Gila River Indian Cmty. v. Dep’t of Child
Safety, 238 Ariz. 531, 537, ¶ 23 (App. 2015) (citation omitted).

¶13           “The touchstone of determining what is ‘equitable’ is a
‘concept of fairness dependent upon the facts of particular cases.’” In re
Marriage of Flower, 223 Ariz. 531, 536, ¶ 18 (App. 2010) (quoting Toth v. Toth,
190 Ariz. 218, 221 (1997)). To achieve a fair and equitable distribution of
community property—even if the parties have a post-nuptial agreement—
the superior court thus must consider all evidence, including “the relation
of the parties at the time of trial, their ages, financial conditions,
opportunities, and the contributions of each to the joint estate.” Wick v.
Wick, 107 Ariz. 382, 385 (1971).

¶14            Here, Husband failed to meet his burden of proving by clear
and convincing evidence that the PNA was fair and equitable. As to the
parties’ real property, Wife testified, and Husband did not dispute, that the
parties purchased the marital home and the Rim Trail Lot during the
marriage, meaning both were community property ordinarily subject to
equitable division. A.R.S. §§ 25-211, 25-318(A). The PNA awards both to
Husband, with Wife receiving no compensation for her interest in either.

¶15           Husband suggests that, because he assumed responsibility for
the mortgage debt, it was fair that he be awarded the marital home. But
that assertion fails to account for Wife’s share of the equity in the property
at the time of the divorce. Husband even conceded that he “potentially”
could have kept both properties while buying out Wife’s interest in each.
He presented no evidence to show the PNA’s arrangement was fair on its
own merits, instead testifying that the agreement was intended “to try and
make the marriage work” after Wife had an affair. Husband’s offer to stay

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                            OBERG v. OBERG
                           Decision of the Court

married (at least temporarily) could not justify an agreement to divide
community assets unfairly upon dissolution. Cf. A.R.S. § 25-318(A)
(division of property “without regard to marital misconduct”). The
superior court’s ruling to the contrary is unsupportable.

¶16           As to spousal maintenance, Wife presented evidence that she
was only earning $2,000 per month on a full-time basis and would not be
able to meet her needs without maintenance. Husband contends Wife
could nevertheless “live comfortably” because she would receive half of the
remaining community assets. Even though these assets would be relevant
to a spousal maintenance calculation under § 25-319(A)(1), see Gutierrez v.
Gutierrez, 193 Ariz. 343, 348, ¶ 18 (App. 1998), Husband presented no
evidence that they would provide for Wife’s reasonable needs during her
lifetime. See In re Marriage of Cotter, 245 Ariz. 82, 86, ¶ 10 (App. 2018).
Indeed, he conceded Wife likely would have to liquidate some of those
assets (not just rely on income from them) to meet her reasonable needs.
See Cullum v. Cullum, 215 Ariz. 352, 354, ¶ 11 (App. 2007). Husband offered
only the same insufficient justification for the waiver—that Wife
“continued to have [an] affair” and Husband wanted to give her an
incentive to stay faithful during the marriage—and he provided no
reasonable basis to conclude that Wife’s alleged marital misconduct
rendered the spousal maintenance waiver fair.

¶17           Husband thus did not show by clear and convincing evidence
that the PNA was fair and equitable. See Harber’s Estate, 104 Ariz. at 88. We
therefore vacate the Amended Decree and remand for further proceedings,
unconstrained by the PNA.2 See Keller v. Keller, 137 Ariz. 447, 448 (App.
1983) (“The court is not bound by any [post-nuptial] agreement and can, if
it believes the agreement to be unfair or inequitable, reject or modify the
agreement.”).

III.   Attorney’s Fees on Appeal.

¶18           Both parties request their attorney’s fees and costs under
A.R.S. § 25-324(A). Having considered the relevant factors and in an
exercise of our discretion, we award Wife her reasonable attorney’s fees and
taxable costs on appeal upon compliance with ARCAP 21.

2      The parties stipulated on March 1, 2022, that Husband would pay
$1,100 in monthly child support going forward. The superior court may
consider on remand whether that stipulation remains appropriate.

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                       OBERG v. OBERG
                      Decision of the Court

                         CONCLUSION

¶19          We vacate the Amended Decree and remand for further
proceedings.

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

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