Crawford v. Crawford

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE In re the Marriage of: ) ) LEE CRAWFORD, ) ) Petitioner/Appellee, ) ) v. ) ) MICHAEL JAY CRAWFORD, ) ) Respondent/Appellant. ) ) __________________________________) DIVISION ONE FILED: 05/29/2012 RUTH A. WILLINGHAM, CLERK BY: sls 1 CA-CV 11-0099 DEPARTMENT D MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. FC2009-001946 The Honorable David J. Palmer, Judge AFFIRMED Michael E. Isler, P.C. By Michael E. Isler Attorneys for Petitioner/Appellee Thomas M. Shaw, Attorney at Law By Thomas M. Shaw Attorneys for Respondent/Appellant G O U L D, Judge Phoenix Mesa ¶1 Michael Crawford ( Husband ) appeals from the trial court s decree of dissolution of marriage. He challenges the court s valuation of the community business and the awards of spousal maintenance, attorney fees and costs to Lee Crawford ( Wife ). For the following reasons, we affirm. Background ¶2 Husband parties have one and Wife child were common married to the in June marriage. 2000. During The the marriage, Husband started MC Mechanics, Inc. ( MCM ) an HVAC business of which he was 100% owner, and Wife worked as a nurse. ¶3 Wife filed a petition for dissolution of marriage in April 2009. In the petition, Wife sought joint legal custody of the parties minor child, designation as the primary residential parent, an award of child support, an award of spousal maintenance, and equitable division of the parties community property and debts. Wife also requested the court order Husband to pay her attorney fees and costs. Prior to the evidentiary hearing, the parties divided their property - with the exception of MCM - by settlement agreement. The valuation and division of MCM, and the amount of child support and spousal maintenance, if any, remained contested issues to be resolved by the court. ¶4 the The court held an evidentiary hearing and considered evidence, witness testimony, 2 exhibits, and the parties arguments. A large portion of the evidence presented at the hearing concerned the value of MCM. though profitable in its first Husband testified that MCM, few years of operation, had essentially become defunct due to the economic downturn. As a result, only Husband $1,300/month. claimed that he currently made Husband s expert, his CPA, testified that MCM had no value as of December 31, 2009. ¶5 In contrast, Wife presented evidence that based on the parties 2006-2008 tax returns, Husband $150,000-$200,000 per year from MCM. made approximately Wife acknowledged that MCM s profits declined after 2008, but she claimed that Husband, and not the economy, was largely responsible for MCM s decline. Wife testified coincided with that the the business s divorce proceedings demise and strategically that Husband s failure to aggressively bid for jobs and his habit of drinking alcohol were more to blame than the economic downturn. Wife also presented expert testimony estimating MCM s value to be $406,000. ¶6 Following the dissolving the marriage. custody of the minor hearing, the court entered a decree The court awarded Wife sole legal child and ordered $691.97 per month in child support. Husband to pay Wife After analyzing the factors set out in Arizona Revised Statutes ( A.R.S. ) section 25-319 3 (2007), the court awarded Wife spousal maintenance in the amount of $500 per month for a period of 42 months. Upon considering the parties individual and business tax returns for 2006-2008 and the testimony of their experts concerning the value of MCM, the court Husband determined to pay MCM Wife to an be worth equalization $125,000, payment and of ordered $62,500. Finally, the court found Husband had considerably more resources available to contribute to Wife s attorney fees and costs and Husband had acted unreasonably in the litigation, and granted Wife s request for attorney fees and costs. Husband timely appealed. Discussion ¶7 Husband argues the court abused its discretion in creating its own method of valuation to determine the value of MCM. He takes issue with the fact that the court did not identify which portions of each [expert s] method it used. Husband cites Kelsey v. Kelsey, 186 Ariz. 49, 918 P.2d 1067 (App. 1996), in support of this position. However, in Kelsey, a party, prior to trial, requested that the court make findings of fact and conclusions of law pursuant to Arizona Rule of Civil Procedure 52(a). 69. affirm Kelsey, 186 Ariz. at 50-51, 918 P.2d at 1068- Rule 52(a) was not invoked in this case; therefore, we if any evidence supports 4 the court s ruling. See Mitchell v. Mitchell, 152 Ariz. 317, 323, 732 P.2d 208, 214 (1987). ¶8 The court must determine an asset s true economic value in order to equitably divide the marital property upon dissolution. In re Molloy, 181 Ariz. 146, 151-52, 888 P.2d 1333, (App. 1338-39 factual 1994). determination The left to valuation the trial this discretion by considering assets court s Kelsey, 186 Ariz. at 51, 918 P.2d at 1069. exercises of is a discretion. The trial court various methods of valuing businesses as explained and applied by the testimony of qualified expert witnesses. ¶9 The trial Id. court s determination of issues of credibility and resolution of conflicting evidence regarding the value of MCM is supported by substantial evidence, and we will not disturb the trial court s findings on appeal. See Lee v. Lee, 133 Ariz. 118, 123, 649 P.2d 997, 1002 (App. 1982). Wife s expert based his valuation of MCM on tax returns and records of the business from 2006 through 2008. that his valuation may be missing In doing so he recognized data and minimizing or eliminating steps because Husband refused to provide him with more complete data. Husband s expert testified that MCM had no value and was no longer a going concern in light of the economic decline. However, the trial court 5 properly considered the testimony of Wife s expert that there were serious flaws in the methodology and conclusions of Husband s expert. ¶10 Based on the entire record before us, we cannot say the court abused its discretion in determining MCM s value to be $125,000. See Lee, 133 Ariz. at 123, 649 P.2d at 1002. In reaching its conclusion, the court relied upon MCM s tax returns for 2006-2008, as well as the opinions of the parties experts. Despite the conflict in the experts opinions, the court properly exercised its discretion in weighing these opinions and taking into consideration the different methods they used to value MCM. Kelsey, 186 Ariz. at 51, 918 P.2d at 1069 ( If an expert fails to calculate the value of an asset according to standard methodology, that failure goes to the weight of the expert s opinion, not the admissibility. ). Husband has not provided the relevant transcripts; thus we must presume that the findings by the trial court were supported by the evidence at trial. Walker v. Walker, 18 Ariz. App. 113, 114, 500 P.2d 898, 899 (1972). ¶11 The evidence in the record determination that MCM was not valueless. supports the court s MCM s tax returns for 2006, 2007, and 2008 show that despite fluctuations in ordinary business income, MCM was able 6 to increase the amount of compensation for officers.1 Additionally, although the court decided Wife s expert was more credible than Husband s expert, it did not totally discredit the economic factors discussed by Husband and his expert. ¶12 Husband next challenges the court s award of spousal maintenance. earning He argues capacity to him the court erred for purposes of when it attributed calculating spousal maintenance without first considering the factors set out in Pullen v. Pullen, 223 Ariz. 293, 222 P.3d 909 (App. 2009). Husband argues that in the absence of a consideration of the Pullen factors, the court must have relied on its valuation for MCM to attribute an income to Husband and that the award of spousal maintenance based on this valuation must be reversed. ¶13 The trial court did not expressly state in the decree whether purposes it of was attributing calculating earning spousal capacity maintenance.2 to Husband for However, the record does contain sufficient financial information from which the trial court could have made this determination. For 1 For example, in considering the opinion of Husband s expert that MCM had no value as of December 31, 2009, the court could consider the fact that MCM s 2008 business tax returns show gross receipts of over $1,000,000. 2 Once again, we do not have the relevant hearing transcripts on this issue; Husband failed to make those transcripts part of the record before this court. 7 example, Husband s tax returns show that from 2006-2008 he made between $100,000-$150,000 from MCM. Husband concedes in his financial affidavit that he made approximately $100,000 in 2007 and 2008. In addition, in the child support worksheet, the court attributed a gross monthly income of $5,000 to Husband; we presume the court used this attributed income when calculating the spousal maintenance award. ¶14 We review the court s attribution of income to a party, and the determination of what factors to apply in doing so, de novo; however, we review for abuse of discretion the manner in which the court applies those factors. Ariz. at 295, ¶ 9, 222 P.3d at 911. Pullen Pullen, 223 sets out the following five factors for the court to consider, in addition to other evidence, when determining whether to use actual income or earning capacity to calculate spousal maintenance : (1) The reasons asserted by the party whose conduct is at issue; (2) The impact upon the obligee of considering the actual earnings of the obligor; (3) When the obligee s conduct is at issue, the impact upon the obligor of considering the actual earnings of the obligee and thereby reducing the obligor s financial contribution to the support order at issue; (4) Whether the party complaining of a voluntary reduction in income acquiesced in the conduct of the other party; and (5) The timing of the action in question in relation to the entering of a decree or the execution of a written agreement between the parties. 8 Id. at 297-98, ¶¶ 15, 18, 222 P.2d at 913-14. We review for clear error to determine whether sufficient evidence supported the court s application of these factors. Id. at 296, ¶ 9, 222 P.3d at 912. ¶15 When determining spousal maintenance, the trial court first examined whether Wife was entitled to such an award under A.R.S. § 25-319(A). Finding she was so entitled, the court then turned to the amount and duration of spousal maintenance that would achieve independence for both parties and . . . require an effort toward maintenance. P.2d 1212, independence by the party requesting Schroeder v. Schroeder, 161 Ariz. 316, 321, 778 1217 (1989). After a full consideration of the thirteen statutory factors set out in A.R.S. § 25-319(B), the court found that Wife was entitled to an award of $500 per month, for 42 months. See Leathers v. Leathers, 216 Ariz. 374, 377, ¶ 10, 166 P.3d 929, 932 (App. 2007) ( The trial court must consider thirteen factors [set out in A.R.S. § 25-319(B)], as each may be relevant in the particular case . . . . ). ¶16 Although the trial court did not expressly consider the factors listed in Pullen before attributing an income of $5,000 per month to Husband for purposes of determining spousal maintenance, the record supports 9 its decision under that analysis. See Pullen, 223 Ariz. at 298, ¶ 19, 222 P.2d at 914. The court recognized that Husband testified his business was no longer a going concern because of the economic decline, but the court believed Husband was overstating the downturn and his capability to otherwise earn income. The court noted that Wife is a licensed LPN but she can only work 32 hours per week because Husband has historically been able to meet his needs and those of Wife. The court of considered coupled Wife s The physical with fact Wife s her earning that limitations; actual limited capacity the earnings ability on furthermore to Husband s court noted work of $22.75 and the financial Wife s per hour impact of contribution. testimony regarding Husband s lack of effort in maintaining the business after the filing of the petition for dissolution indicates the court concluded that Wife did not acquiesce in the decline of the business. Furthermore, timing MCM s of the decline court s in findings connection show with that the the divorce proceedings makes Husband s lack of effort to keep the business going suspect. ¶17 With an appreciation for the trial court s superior position to determine the amount and duration of a spousal maintenance award, we find no grounds to reverse the award. See Pullen, 223 Ariz. at 298, ¶ 22, 222 P.3d at 914 (stating that 10 trial court is given broad discretion in determining what is a reasonable amount ). We conclude considered Husband s future the earnings trial properly earning and/or court capacity when attributing income to him for the purposes of its spousal maintenance award. Williams v. Williams, 166 Ariz. 260, 266, 801 P.2d 495, 501 (App. 1990). ¶18 Finally, Husband challenges the court s award of attorney fees and costs to Wife pursuant to A.R.S. § 25-324 (Supp. 2011). Husband argues the court s attribution of income to Husband as a basis for finding that there was a disparity of financial resources between Husband and Wife was error. review an award of attorney fees for abuse Kelsey, 186 Ariz. at 54, 918 P.2d at 1072. of We discretion. The trial court may consider the pre-decree financial resources of both parties and the reasonableness of the positions taken by each determining whether to award attorney fees or costs. when A.R.S. § 25-324(A); Kelsey, 186 Ariz. at 54, 918 P.2d at 1072. The court recognized a substantial disparity of financial resources between Husband and Wife; this disparity is evidenced by Husband s capability throughout the marriage of meeting his own needs and those of [Wife] and wife s physical limitations and ailments week. permitting her to work no more than 32 hours per Furthermore, the court found Husband acted unreasonably 11 in the litigation ; Husband did not cooperate or communicate with Wife s expert regarding the valuation of MCM or with Wife s counsel regarding payments for community assets sold. Considering the entire record, and, in the absence of the trial transcripts presuming the record supports the court s findings, we find no abuse of discretion in the trial court s award to Wife of her attorney fees and costs. See Walker, 18 Ariz. App. at 114, 500 P.2d at 899. Conclusion ¶19 For the reasons above, we affirm the trial court s decree of dissolution. /S/ ___________________________________ ANDREW W. GOULD, Judge CONCURRING: /S/ ________________________________ JOHN C. GEMMILL, Presiding Judge /S/ ________________________________ PETER B. SWANN, Judge 12

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