Court Opinion

ID: 5117740
Source: CourtListenerOpinion
Date Created: 2021-10-12 17:03:09.333352+00
Date Added: 2024-06-11T08:22:04.068516
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                CHRISTOPHER E. BAIKER, Plaintiff/Appellee,

                                         v.

           ASHLEY DORRANCE KAPLAN, Defendant/Appellant.

                              No. 1 CA-CV 20-0627
                                FILED 10-12-2021

            Appeal from the Superior Court in Maricopa County
                           No. CV2014-091912
                The Honorable Janice K. Crawford, Judge

                                   AFFIRMED

                                    COUNSEL

Limón-Wynn Law PLLC, Tempe
By Monica A. Limón-Wynn
Co-Counsel for Plaintiff/Appellee

Jones, Skelton & Hochuli, PLC, Phoenix
By Eileen Dennis GilBride
Co-Counsel for Plaintiff/Appellee

Dickinson Wright PLLC, Phoenix
By P. Bruce Converse, Scott A. Holcomb, Paxton D. Endres
Counsel for Defendant/Appellant
                           BAIKER v. KAPLAN
                           Decision of the Court

                      MEMORANDUM DECISION

Judge David B. Gass delivered the decision of the court, in which Presiding
Judge D. Steven Williams and Judge James B. Morse Jr. joined.

G A S S, Judge:

¶1           The superior court granted summary judgment against
mother, finding she sought to modify the parents’ Amended and Restated
Joint Custody Agreement (Custody Agreement) without a good-faith basis.
Mother appeals. Finding no error, we affirm.

              FACTUAL AND PROCEDURAL HISTORY

¶2            From 2010 through March 2012, the parents engaged in
extensive litigation in their dissolution matter, including custody—now
legal decision-making—and parenting time issues involving their two
minor children. Baiker v. Kaplan (Baiker I), 1 CA-CV 15-0033, 2016 WL
3101783 at *1, ¶ 2 (Ariz. App. June 2, 2016) (mem. decision). The underlying
facts are unchanged from Baiker I, and this appeal arises out of the same
disputed 2013 summer-vacation schedule. See id.

¶3             In 2012, the parents entered into the Custody Agreement and
a Separate Property Agreement (Property Agreement). The Property
Agreement provides either mother or father generally may seek to enforce
the Custody Agreement. But the Property Agreement establishes only four
grounds under which a parent may seek to modify the Custody Agreement
without breaching the Property Agreement. The four grounds are: (a) a
child has significant health issues and a change is in the child’s best
interests; (b) a bona fide and genuine issue exists as to the other parent’s
physical or mental ability to parent; (c) a parent is substantially non-
compliant with the Custody Agreement; or (d) father moves within 100
miles of mother. To avoid breaching the Property Agreement, the parent
seeking modification must have a good-faith belief one of the four
enumerated grounds applies.

¶4           The Property Agreement includes a “financial incentive” to
discourage both parents from breaching its modification provisions. Under
the Property Agreement, mother agreed to give father $1,000,000 in
supplemental funding to purchase a home near where she lived with the

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                          BAIKER v. KAPLAN
                          Decision of the Court

children in California. Father ultimately would own the home as his sole
and separate property. But if mother were to seek to modify the Custody
Agreement without a good-faith basis as discussed above, the Property
Agreement would accelerate her obligations to transfer the supplemental
funds and the home to father.

¶5          In 2012, the superior court approved the Custody Agreement
and incorporated the Property Agreement into its order. The Custody
Agreement gave father priority in scheduling summer vacations in odd-
numbered years starting in 2013. In 2013—the first summer father had
summer-vacation priority under the Custody Agreement and over father’s
objection—mother booked two lengthy vacations with the children. Id. at
*1, ¶ 3.

¶6           Father sued mother, seeking to enforce the Custody
Agreement and asserting she breached the Property Agreement and owed
him the specified financial incentives. Id. at *1, ¶ 7. The superior court
dismissed father’s complaint. Id. at *2, ¶ 8. This court reversed, ruling
mother sought to modify the Custody Agreement. Id. at *3, ¶¶ 12, 16. This
court then remanded for the superior court to determine whether—when
mother sought the modification—she acted in good faith under the
Property Agreement. Id. at ¶ 13.

¶7            On remand and after additional discovery, the parties filed
cross-motions for summary judgment. The superior court denied mother’s
motion and granted father’s motion, finding mother sought the
modification in violation of the Property Agreement. The superior court
awarded father $142,071.86 in attorney fees and costs under A.R.S. §§ 12-
341 and 12-341.01. Mother timely appealed. This court has jurisdiction
under article VI, section 9, of the Arizona Constitution, and A.R.S. §§ 12-
120.21.A.1 and 12-2101.A.1.

                               ANALYSIS

¶8           Mother appeals the superior court’s finding she lacked a
good-faith basis to seek to modify the 2013 summer-vacation schedule. She
argues she did not breach the Property Agreement, a good-faith
determination is not appropriate for summary judgment, and the Property
Agreement’s custody-related financial incentives are unenforceable.

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I.     Summary judgment is appropriate because mother failed to show
       a genuine dispute of material fact.

       A.     Mother failed to show a genuine dispute as to the four
              enumerated modification grounds provided under the
              Property Agreement.

¶9             Summary judgment is appropriate when the moving party
shows “there is no genuine dispute as to any material fact and the moving
party is entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). To
carry its burden of proof, the party seeking summary judgment must
submit “undisputed admissible evidence that would compel any
reasonable juror to find in its favor on every element of its claim.” Comerica
Bank v. Mahmoodi, 224 Ariz. 289, 293, ¶ 20 (App. 2010). This court views the
facts and reasonable inferences in the light most favorable to the non-
moving party—here, mother. See Rasor v. Nw. Hosp., LLC, 243 Ariz. 160, 163,
¶ 11 (2017).

¶10           On appeal, mother argues she presented sufficient evidence
from which a jury reasonably could conclude she had a good-faith basis to
believe father’s substantial non-compliance with the Custody Agreement—
the third modification ground—justified her modification request. But
mother’s depositions belie her claim she acted under the third, or any other,
enumerated ground.

¶11          After remand, mother gave two depositions. During those
depositions, mother acknowledged she understood father had priority
vacation scheduling in 2013 and father’s decision-making controlled. But
mother expressly testified she pursued a modification so her 2013 vacation
decisions would control despite believing none of the four enumerated
grounds applied, including the third:

       FATHER’S COUNSEL: And item (c), that says that a party, either of
       you, can move to modify the [Custody Agreement] if either party is
       in substantial non-compliance. That wasn’t the situation for your
       Hawaii vacation or your Canada vacation, correct?

       MOTHER: Correct.

Mother responded with equal clarity and detail when she denied believing
the other three grounds applied. And, to resolve any uncertainty, mother
twice denied believing she had any grounds under the Custody Agreement:

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                            BAIKER v. KAPLAN
                            Decision of the Court

       FATHER’S COUNSEL: And at the time in 2013, you didn’t believe
       that any of these exceptions existed, did you?

       MOTHER’S COUNSEL: Object to the form.

       MOTHER: No.

       ....

       FATHER’S COUNSEL: Okay. And in 2012 when you -- in 2013 when
       you filed the response . . . you did not believe that any of those four
       exceptions that we just talked about existed, correct?

       MOTHER’S COUNSEL: Object to the form.

       MOTHER: Correct.

¶12         In short, mother unequivocally repudiated believing any of
the four grounds existed. Father, therefore, met his initial burden of
showing no genuine issue of disputed material fact.

¶13            Mother’s sworn, unequivocal deposition testimony defeats
her present attempt to assert she had a good-faith belief an enumerated
ground applied. Mother brought forth no evidence to overcome her express
testimony. See Wright v. Hills, 161 Ariz. 583, 587–88 (App. 1989). Instead, she
cites to her April 22, 2020, declaration. But “[a] party’s affidavit which
contradicts [her] own prior deposition testimony should be disregarded on
a motion for summary judgment.” Id. Mother asserts no exception to the
rule from Wright. See id. Mother does not argue she “was confused at the
deposition” or has since discovered new evidence. See id. at 588. And to the
extent mother’s use of the word “response” in her declaration is an attempt
to create a fact issue, it falls flat under Wright. See id. Mother’s response and
request to modify are one in the same, and as to that document, mother
squarely addressed each of the grounds in her deposition. See Baiker I, 1 CA-
CV 15-0033 at *3, ¶ 12.

¶14           The only other evidence mother points to is her
contemporaneous argument father was not acting in the children’s best
interests. But, as mother correctly acknowledges, whether father
substantially complied or acted in the children’s best interests is not at issue.
At issue is whether mother had a good-faith belief one of the four Property
Agreement grounds justified her modification effort. Mother’s deposition
shows, definitively, she did not. Mother, therefore, raises no genuine factual
dispute. See Martin v. Schroeder, 209 Ariz. 531, 534, ¶ 12 (App. 2005) (“[a]

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‘genuine’ issue is one that a reasonable trier of fact could decide in favor of
the party adverse to summary judgment on the available evidentiary
record”).

¶15             For the same reason we reject mother’s argument her state of
mind is an issue for a jury and not for summary judgment. Mother testified
she did not believe any of the four enumerated modification grounds
applied. Her testimony is uncontroverted, and no factual dispute remains
for a reasonable factfinder to resolve. See Orme Sch. v. Reeves, 166 Ariz. 301,
309 (1990) (“affidavits . . . that tend to contradict the affiant’s sworn
testimony at deposition, and similar items of evidence may provide a
‘scintilla’ or create the ‘slightest doubt’ and still be insufficient to withstand
a motion for summary judgment”).

       B.     Because mother sought modification, the Property
              Agreement’s enforcement exemption does not apply.

¶16            Mother contends father violated his general duty under the
Property Agreement and the Custody Agreement to act in the children’s
best interests and to resolve amicably any differences when he refused to
accommodate her vacation plans. She argues his failure to agree to her
vacation plans allowed her to seek enforcement under the sentence in the
Property Agreement that provides actions to enforce the Property
Agreement or the Custody Agreement “shall not be deemed a breach.”

¶17             Mother characterizes her 2013 response as an effort to enforce
the Custody Agreement, and she undisputedly is entitled to seek to enforce
it. But mother also sought to modify the Custody Agreement. Baiker I, 1 CA-
CV 15-0033 at *3, ¶ 12. That determination is law of the case, and we will
not revisit it here. See Emps. Mut. Liab. Ins. Co. of Wis. v. Indus. Comm’n, 115
Ariz. 439, 441 (App. 1977). Because mother sought modification, she
foreclosed resort to the Property Agreement’s enforcement exemption.

¶18          Mother’s reliance on her good-faith belief in seeking
enforcement is misplaced. The Property Agreement’s good-faith provision
only applies to the four modification grounds, not the enforcement
exemption. Accordingly, mother failed to show a genuine dispute as to
whether she breached the Property Agreement.

II.    As to mother, the Property Agreement’s financial incentives
       regarding modification are enforceable.

¶19          Mother argues the financial incentives regarding
modification are unenforceable because they constitute an in terrorem

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                             BAIKER v. KAPLAN
                             Decision of the Court

penalty clause and are against public policy. On summary judgment, the
superior court disagreed and found this court in Baiker I implicitly
determined the financial incentive provisions were enforceable. Though the
parties briefed and argued enforceability at that time, this court did not
resolve it then. We exercise our discretion to address the merits now.

¶20           Settlement agreements are contracts. Emmons v. Super. Ct., 192
Ariz. 509, 512, ¶ 14 (App. 1998). Written agreements between the parties to
a family law case are presumed to be “valid and binding[,]” and any party
challenging the agreement has the burden of proving otherwise. Ariz. R.
Fam. Law P. 69(a)(1), (c); see also A.R.S. § 25-317.B. This court reviews de
novo whether a settlement agreement is enforceable. Robertson v. Alling, 237
Ariz. 345, 347, ¶ 8 (2015).

¶21             Arizona generally presumes “private parties are best able to
determine if particular contractual terms serve their interests.” 1800
Ocotillo, LLC v. WLB Grp., Inc., 219 Ariz. 200, 202, ¶ 8 (2008). When parties
bind themselves with clear and unambiguous terms, the court “must give
effect to the contract as written.” Estes Co. v. Aztec Constr., Inc., 139 Ariz. 166,
168 (App. 1983). This court enforces contract terms unless they are
unconscionable, illegal, or otherwise against public policy. See Dobson Bay
Club II DD, LLC v. La Sonrisa de Siena, LLC, 242 Ariz. 108, 115, ¶ 39 (2017).

       A.      The Property Agreement does not violate public policy.

¶22            As a matter of public policy, Arizona prioritizes the best
interests of the children in family law matters. See, e.g., Nold v. Nold, 232
Ariz. 270, 274, ¶ 14 (App. 2013); Downs v. Scheffler, 206 Ariz. 496, 499, ¶ 7
(App. 2003); Canty v. Canty, 178 Ariz. 443, 448 (App. 1994). Parents may not
by agreement limit the court’s ability to review issues in their children’s
best interests. See Albins v. Elovitz, 164 Ariz. 99, 101–02 (1990) (financial
agreements regarding parenting modifications “will be enforced only so
long as the interest of the child is not adversely affected”).

¶23           The Property Agreement does not adversely affect the
children’s best interests or alter the superior court’s control. The Property
Agreement controls the transfer of previously pledged supplemental funds
in the event of a breach. The express purpose of the financial incentives is
to limit contentious litigation. Moreover, the Property Agreement does
not—and did not here—circumscribe the superior court’s adjudication of
parental disputes, and it does not supplant any best-interests
determination. Accordingly, the Property Agreement is consistent with

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                            BAIKER v. KAPLAN
                            Decision of the Court

Arizona’s public policy prioritizing the children’s best interests in family
law matters.

       B.     The Property Agreement creates an enforceable unilateral
              acceleration clause against mother.

¶24           Mother argues the Property Agreement creates an
unenforceable in terrorem penalty “designed to create a draconian economic
threat to deter Mother from seeking” modification. See Albins, 164 Ariz. at
102. We disagree.

¶25           A penalty is designed to punish a party for a breach of
contract. Aztec Film Prods., Inc. v. Quinn, 116 Ariz. 468, 470 (App. 1977)
(distinguishing a penalty from a reasonable liquidated damage provision).
This court reviews whether the Property Agreement’s financial incentives
as to mother are a penalty as a matter of law. See Pima Sav. & Loan Ass’n v.
Rampello, 168 Ariz. 297, 300 (App. 1991).

¶26            If mother were to breach the Property Agreement’s
modification provisions, all remaining supplemental funds “shall be
accelerated and paid” to father. (Emphasis added.) The Property Agreement
regulates the transfer terms of the principal mother pledged under a
“defined schedule of repayment.” See Webster Bank NA v. Mutka, 250 Ariz.
498, 500, ¶ 10 (App. 2021) (quoting Mertola, LLC v. Santos, 244 Ariz. 488, 491,
¶ 16 (2018)). When a fixed debt is payable in installments, the unmatured
future installments may be subject to an acceleration clause. See id. Here,
the Property Agreement creates a unilateral acceleration clause by
accelerating the transfer of supplemental funds in the event of mother’s
breach. See id. An acceleration clause is not a penalty, but rather an
enforceable contract term determining when a debt is payable. See Ciavarelli
v. Zimmerman, 122 Ariz. 143, 144 (App. 1979). Accordingly, the Property
Agreement is enforceable as to mother’s obligation.

III.   Father was entitled to attorney fees in the superior court.

¶27           The superior court awarded father contract attorney fees
under A.R.S. § 12-341.01. Because we affirm the superior court, we affirm
the attorney fees award against mother.

                      ATTORNEY FEES ON APPEAL

¶28          Both parents seek attorney fees on appeal under § 12-341.01.
As the successful party, we award father his reasonable attorney fees and
costs on appeal upon compliance with ARCAP 21.

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                     BAIKER v. KAPLAN
                     Decision of the Court

                        CONCLUSION

¶29   We affirm.

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

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