Alvrus v. Volk

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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 STATE OF ARIZONA ex rel. ARIZONA DEPARTMENT OF ECONOMIC SECURITY (ANNALISA B. ALVRUS), ) ) ) ) Petitioners/Appellees, ) ) v. ) ) KENNETH ALLEN VOLK, ) ) Respondent/Appellant. ) ) __________________________________) DIVISION ONE FILED: 07-13-2010 PHILIP G. URRY,CLERK BY: GH 1 CA-CV 09-0547 DEPARTMENT D MEMORANDUM DECISION (not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court of Maricopa County Cause No. FC2001-000831 and FC2001-090230 (Consolidated) The Honorable Wesley E. Peterson, Judge Pro Tempore and The Honorable David P. Arrow, Commissioner, Retired The Honorable Colleen McNally, Judge REVERSED ________________________________________________________________ Kenneth Allen Volk Respondent/Appellant in propria persona T H O M P S O N, Judge Tempe ¶1 Kenneth Allen Volk (Father) appeals from the superior court s decision denying his motion to modify his child support obligation based on Annalisa Alvrus s (Mother s) salary increase and a reduction in child daycare costs. Father contends that the circumstances. trial court ignored response has been filed. and remand support to the obligations these No For the following reasons, we reverse trial of changed court the to calculate in parties the of light appropriate the changed circumstances. FACTS AND PROCEDURAL HISTORY ¶2 On June 3, 2003, a child support order was entered directing Father to pay $652.86 per month in child support, plus additional amounts for arrears and fees. The amount was based on Father s 2002 income of $56,089.64 or $4,674.13 per month, and Mother s yearly salary of $37,793.00 or $3,149.41 per month. At the time of the order, their only child was three years old. ¶3 Child In January Support 2005, Simplified monthly support. Father filed Procedure, a Request seeking a to Modify reduction in The accompanying Worksheet for Child Support Amount listed Father s adjusted monthly gross income as $2,542. ¶4 In October 2005, Mother filed a motion to compel discovery, claiming that Father had failed to respond fully to requests for information related to his request to modify child support. In November, the court 2 granted Mother s motion to compel and ordered Father to comply requests in full within ten days. February 2006, Mother again with Mother s discovery At a status conference in asserted that Father was not complying with discovery requests. ¶5 In March 2006, Mother filed a Motion to Preclude Evidence Pursuant to Rule 65(C), Arizona Rules of Family Law Procedure (ARFLP). Mother argued that Father was claiming that his income from his family trust, on which his child support obligation was based, had decreased. Mother also asserted that Father had for several years been running several businesses, none of which had been considered when calculating his child support. of his She contended that a preliminary review of only some books for 2004, suggested that $139,000 in business income that year. he grossed more than She argued that despite discovery requests, Father had failed to disclose his business receipt books and business account bank statements subsequent to 2004, personal or business 2004 and 2005 income taxes, and receipts supporting business expenses written off on taxes for any year. Mother asked the court to preclude Father from supporting his claims or defenses regarding his income or to oppose Mother s claims and defenses, to prohibit Father from introducing evidence concerning business expenses and business and personal evidence all income, and information to prohibit and Father witnesses 3 not from yet using as disclosed. Father responded that he complied with Mother s request to the best of his ability. He contended that he did not believe he was required to provide copies of the receipts to Mother, that he provided access to the documents by suggesting that Mother come look at the documents, and that he should not be punished because Mother chose not view the documents. ¶6 In July 2006, the court, Commissioner David Arrow, held an evidentiary hearing on Father s Request to Modify Child Support. Before the hearing began, the court denied Mother s motion to preclude evidence. Father explained that his motion was based on a decrease in his trust income from approximately $56,000 to $30,000 per year, an increase in Mother s income to about $55,000, and the elimination of daycare expenses since his daughter was now in school. He also asserted that his business had shown no income before 2005 and that he had no income other than from the trust and the business. Father sought a revision retroactive to January 2005 when he filed the motion. ¶7 Mother agreed that her income had increased, disputed Father s representation of his income. asserted that, although the child was in but Mother also school, she still incurred after-school daycare costs. ¶8 An accountant for Mother testified that Father had received four distributions from the trust each in the amount of $7,625 for a total of $30,500; that he received 151,291.99 from 4 stocks; and that he received another $46,287 from undetermined sources. She further testified that his business account had received deposits of $69,429.57, and that a receipt book showed receipts in the amount of $139,238.72. ¶9 Father adjusted gross produced income tax of returns -$47,992 adjusted gross income of $527. and for for 2004 showing an 2005 showing an With respect to the business in 2004, the tax return showed income of $123,443 and expenses of $158,811, resulting in a loss of $35,368. ¶10 Mother testified that her base salary was $55,824 and that the after-hours day care for the child cost $145 per month. With regard to Father s tax returns, Mother questioned Father s write-offs, noting that Father had not produced receipts for those amounts. ¶11 Mother asked the court to determine Father s income based on the income from the trust, stocks, cash receipts, and a Pay Pal account, without deducting questionable business expenses for which Father had not produced expense receipts. ¶12 The court expressed the view that, as the trial proceeded, it became clear that the evidence pertaining to the business expense receipts and Father s failure to produce them was significant. The court indicated that if Mother could produce evidence that Father was ordered to produce copies of his expense receipts and not just access to them and had failed 5 to do so, the court would consider sanctions and would consider making the assumption that the expenses Father documented should not be deducted from income. that using the figures presented would had not The court noted result in either a substantial decrease or substantial increase in support. ¶13 Several supplement the days record later, with Father filed evidence of a motion business to expenses. Mother objected, arguing that Father had failed to comply with Mother s request for the production of all documents related to business expenses, that the court had granted Mother s order to compel Father to never complied produce with the the documents, court s order. and that Mother Father argued had that Father should not be permitted to supplement the record with information he had previously failed to provide and asked the court to set child support based on Mother s calculations of the parties income. In a simultaneously filed Parents Worksheet for Child Support, Mother calculated child support based on her income of $4,652 per month based on an annual income of $55,824 and Father s income income of $59,492. of $4,958 per month based on an annual Mother based Father s income on $30,500 from the trust and $28,992 from his business. Mother explained that she derived the figure for the business income by splitting the difference between the Parties 6 for business expenses that [Mother] would have challenged had [Father] complied with discovery. ¶14 In a lengthy unsigned minute entry filed August 23, 2006, the court stated in part: The Court is not satisfied with the evidence presented in this case. . . . At trial, the Respondent was unable to state with clarity what child support amount he should pay and how he calculated that amount. As best the court could understand, the Respondent s position is that he is making little or no net income and so he should therefore pay little or no child support. The Petitioner s CPA and the Respondent s accountant were of little help in determining the ultimate issue of the Respondent s income, neither having adequate access to the Respondent s original records. While the Court was able to glean some information from all of the witnesses and exhibits, the central question of the Respondent s income substantially eluded the presentation of evidence. In addition, the Court did not find the demeanor or credibility of the witnesses very convincing. Since it was the Respondent s burden to prove a substantial and continuing change in circumstances justifying a modification of child support, it was incumbent on him to present a case that is reasonably intelligible and persuasive to the Court. He did not do so. At the same time, the Respondent s course of conduct has prevented the Petitioner from launching a proper challenge to the Respondent s income claims. The court indicated it was making somewhat alternative rulings in this case. Based on the evidence presented, the court found that Father had not shown a substantial and continuing change 7 in circumstances justifying a modification of child support and denied Father s petition to modify. The court also recounted that Father had failed to comply with discovery orders regarding expense receipts, ruling on noted Mother s that Motion the to court had Preclude reserved that a final evidence, and ultimately granted the motion to preclude, precluding from the court s consideration all of [Father s] proffered evidence concerning business expenses and business and personal income. The court then again denied Father s motion to modify child support based on the evidence remaining after Father s evidence of business expenses and business and personal income was excluded, saying that Father had not shown a substantial and continuing change in circumstances justifying a modification of child support. The court denied Father s motion to reopen and awarded Mother her attorneys fees. In September 2006, Father filed a motion for new trial from the ruling. ¶15 By minute entries filed March 11 and April 28, 2008, Father was found in contempt for failure to remain current in child support payments. proceeding, Father unjust suggested and On June 11, 2008, at another contempt argued that before Commissioner Arrow. that the an error child support occurred in amount the was hearing The court found Father in contempt and ordered Father incarcerated, unless he purged the contempt 8 by paying $3,600 and remained current in his support obligations for two years. ¶16 In September 2008, Father filed a motion requesting a ruling on the motion for new trial he filed in September 2006. In January 2009, Commissioner Wesley E. Peterson, denied Father s motion for new trial, in an unsigned minute entry filed January 14, 2009. On January 22, 2009, Father filed a Motion for Reconsideration of the January 7, 2009 Ruling and Request for Specific Findings of Fact. On June 1, 2009, Father filed a motion requesting a ruling on his motion for reconsideration. ¶17 In an unsigned minute entry dated June 16, 2009, and filed June 17, 2009, Commissioner Peterson denied the motion for reconsideration. On June 29, 2009, Father filed a motion for the court to issue a signed order reflecting the court s June 17, 2009, ruling denying his motion for reconsideration. ¶18 On July 29, 2009, Father filed a motion requesting a signed order with respect to the August 23, 2006, minute entry by Commissioner Arrow denying Father s Request to Modify Child Support filed January 31, 2005. Father also filed a notice of appeal from the August 23, 2006 minute entry and the January 14, 2009 minute entry. On August 19, 2009, the Honorable Colleen 9 McNally entered a signed order adopting the findings of the August 23, 2006, minute entry. 1 ¶19 This court has jurisdiction with respect to the August 19 order pursuant to Arizona Revised Statutes (A.R.S.) section 12-2101(C) (2003). DISCUSSION ¶20 Father argues on appeal that Commissioner erroneously denied his Request to Modify Child Support. contends that the original order evidence was issued, at trial Mother s showed income that, had Arrow Father since the substantially increased and the child was no longer in full-day day care. ¶21 A showing of continuing. Ariz. 518, decision to child support changed order may circumstances be modified that are only on substantial a and A.R.S. § 25-327(A)(2007); Little v. Little, 193 520-21, modify ¶ 6, a 975 child P.2d 108, support 110-11 order (1999). is within The the discretion of the trial court, and we will not disturb that decision absent an abuse of discretion. 520, ¶ 5, 975 P.2d at 110. when the record, viewed Little, 193 Ariz. at The court abuses its discretion in the light most favorable to upholding the trial court s decision, is devoid of competent 1 The subsequent signed order rendered timely the premature notice of appeal with respect to the August 23 ruling. See Barassi v. Matison, 130 Ariz. 418, 421-22, 636 P.2d 1200, 1203-04 (1981)(entry of final order after notice of appeal from unsigned minute entry makes appeal timely). 10 evidence to support the decision. Id. (internal citation omitted). ¶22 Mother conceded that her income beginning in 2005 was $55,824 a year or $4,652 per month, compared with $3,149.41 per month when the original support order was entered. Mother also agreed that she paid $145 per month for the child s day care, where under $366.66. child the original order she was credited with paying Mother included these amounts in the calculations for support demonstrating she provided agreement to that the she court after considered the hearing, these to be substantial and continuing changes. ¶23 Although the trial court indicated in its minute entry that it considered all the facts presented at the hearing, the court offered undisputed no explanation evidence of as Mother s decrease in daycare costs. to why it disregarded the increase in income the and Mother s income increased by almost half and the daycare costs decreased by more than half. We find these to be substantial and continuing changes that the court should have addressed. See Fletcher v. Fletcher, 137 Ariz. 497, 497, 671 P.2d 938, 938 (App. 1983) (not an abuse of discretion to find income substantial had been change reduced by in circumstances half). The where court husband s was clearly concerned with what it viewed as inadequate evidence regarding Father s income. Such concern, however, does not explain the 11 court s failure to take into account the changes in circumstances on which the parties agree, namely her increased income and lowered daycare expenses. Because the record does not support the court s finding of no substantial and continuing change, we remand to the trial court to recalculate Father s and Mother s support obligations in light of the changed circumstances. ¶24 Father also argues that the court improperly precluded his evidence of business expenses as a discovery sanction and that that evidence should reduced income on remand. be considered as evidence of his We review a trial court s evidentiary rulings for an abuse of discretion and do not reverse absent unfair prejudice. Larsen v. Decker, 196 Ariz. 239, 241, ¶ 6, 995 P.2d 281, 283 (App. 2000). ¶25 Mother moved to preclude the evidence pursuant to Rule 65(C), ARFLP, which states in part that a party who fails to timely disclose information required by Rule 49 shall not be permitted to use that evidence at trial. ARFLP 65(C). Rule 49 sets out the information to be disclosed with respect to child support. ARFLP 49(C). ¶26 Although the court initially denied Mother s Motion to Preclude, thereby permitting Father to present his evidence, the court made it clear at the close of the hearing that it would reconsider its ruling if a review of the record showed that 12 Father in fact had not complied with discovery requirements. When the court ultimately ruled, it noted that it had reviewed a transcript of the November 2005, hearing before Commissioner Hugh Hegyi, at which the court granted Mother s motion to compel and ordered related Father minute to entry produce clearly the requested stated, Respondent comply within 10 days of today s date. Production sought the production documents; of shall the fully Mother s Request for the original expense receipts for copying at Mother s counsel s office or delivery of legible copies to Mother s counsel s office. the court with a indicating that Father business expense presented with statement was receipts a letter by in Father the from process requested. from Mother presented The Father s November of copying court then 2005, was counsel the also dated February 2006, saying that if Mother wanted to see the receipts for the business write-offs, she should make arrangements to send a copy service to Father or should go to Father s location to examine the documents. However, the record shows that, on February 8, 2006, Mother advised the court that Father had not complied proceed with by a the discovery motion to request preclude and asked evidence; the the court court to ordered Mother to file the motion to preclude that Commissioner Arrow then addressed. Father has not denied that he did not provide the documents or copies to Mother, but contends that he complied 13 with disclosure because he offered access to the documents, which Mother declined to accept. ¶27 Commissioner Arrow, after review, concluded that Father did not comply with the order to compel and precluded evidence of his business court s decision. expenses. The record supports the We find no abuse of discretion under the circumstances. ¶28 We ultimately also note precluded that and the issued court heard alternative the evidence rulings, one it in which the court considered this evidence and one in which the court excluded it. Even considering the evidence, the court found presented the determine evidence Father s income. at The the hearing exclusion inadequate of the to evidence therefore had no practical adverse effect on the trial court s decision and so did not result in prejudice to Father. ¶29 Father also asks this court to vacate the continued award of attorney fees . . . arising from contempt hearings and to vacate and set aside the findings of contempt resulting in incarceration. Father does not identify the particular orders or circumstances with respect to the findings of contempt, but appears to base his request for relief on the invalidity of the existing child support order; several minute entries in the record indicate father has been held in contempt for failure to keep current in his support payments. 14 ¶30 Findings of contempt for court order are not appealable. failure to comply with a Pace v. Pace, 128 Ariz. 455, 456-57, 626 P.2d 619, 620-21 (App. 1981). We therefore do not have jurisdiction to address Father s request. 2 ¶31 Father also argues that the superior court s January 2009, ruling denying his motion for new trial was erroneous. This order is an appealable order. unsigned minute entry and not a final See ARFLP 78, 81(A); Rancho Pescado, Inc. v. Northwestern Mut. Life Ins. Co., 140 Ariz. 174, 181, 680 P.2d 1235, 1242 (App. 1984). We therefore have no jurisdiction to consider Father s argument. 3 challenge that ruling on In any event, Father appears to the grounds that the decision denying his motion to modify was incorrect. underlying We have already addressed the propriety of the underlying judgment. ¶32 We find that the increase in Mother s income and the decrease in child daycare costs represent a substantial and 2 To the extent that Father is arguing that his contempt adjudications should be vacated because the underlying order was improper, we note for Father s benefit that an order issued by a court with jurisdiction must be obeyed by the parties until that order is reversed. See Broomfield v. Maricopa County, 112 Ariz. 565, 568, 544 P.2d 1080, 1083 (1975). Until modified, the June 2003 support order remains a valid order with which Father must comply. 3 Father asserts that the superior court ignored repeated entreaties to sign the order. The record shows a single motion requesting a signed order reflecting the January 2009 ruling (although other requests were made with respect to other minute entries). The record shows no response from the court. 15 continuing change in circumstances warranting a recalculation of the parents child support obligations. We therefore remand to the trial court to make the required calculation. CONCLUSION ¶33 We reverse the trial court s decision substantial and continuing change in circumstances. for a Mother s recalculation change in of child income and support the taking decrease in finding We remand into account child daycare costs. /S/ _____________________________ JON W. THOMPSON, Judge CONCURRING: /S/ ___________________________________ MICHAEL J. BROWN, Presiding Judge /S/ ___________________________________ SHELDON H. WEISBERG, Judge 16 no

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