Engel v. Landman

• Decision Date: 30 April 2009
• Docket Number: No. 1 CA-CV 07-0587.,1 CA-CV 07-0587.
• Citation: 212 P.3d 842,221 Ariz. 504
• Parties: In re the Matter of Devon S. ENGEL, Petitioner/Appellant/Cross-Appellee, v. Julie Kay LANDMAN, Respondent/Appellee/Cross-Appellant.
• Court: Arizona Court of Appeals

212 P.3d 842

221 Ariz. 504

In re the Matter of Devon S. ENGEL, Petitioner/Appellant/Cross-Appellee, v. Julie Kay LANDMAN, Respondent/Appellee/Cross-Appellant.

No. 1 CA-CV 07-0587.

Court of Appeals of Arizona, Division 1, Department A.

April 30, 2009.

Sternberg & Singer, Ltd. By Melvin Sternberg, Phoenix, Attorneys for Petitioner/Appellant/Cross-Appellee.

The Cavanagh Law Firm, PA By Christina S. Hamilton, Phoenix, Attorneys for Respondent/Appellee/Cross-Appellant.

OPINION

SWANN, Judge.^*

¶ 1 This is an appeal and cross-appeal from orders modifying the amount of child support Devon Engel ("Father") is to pay Julie Landman ("Mother"). We hold that the trial court erroneously attributed hypothetical income and childcare expenses to a voluntarily unemployed parent because the Arizona Child Support Guidelines do not support the use of such attribution to increase the burden on the employed parent. We further hold that the court erred in computing Father's stock option income.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 The parties were divorced pursuant to a consent decree in July 2004. The decree provided that Father would pay $2,000 per month in child support — $73 more than that prescribed by the Arizona Child Support Guidelines. See Arizona Revised Statutes ("A.R.S.") § 25-320 app. (2007) ("Guidelines"). At that time, Father's income was $25,000 per month and Mother was not employed.

¶ 3 Father filed a petition to modify child support in September 2006. In support of his contention that there had been the necessary continuing and substantial change of circumstances, Father presented evidence that Mother's investment assets had substantially increased as a consequence of her receipt of an inheritance from her father and an annuity from his former employer. The court ultimately found that Mother's monthly income, excluding spousal maintenance, exceeded $13,000. Because Mother was voluntarily unemployed, Father also sought to attribute income to her in an amount equal to her earning potential as an accountant. Mother responded that Father's employment income had risen dramatically and his child support obligation therefore should increase, not decrease. Mother also argued that any income the court chose to attribute to her should be offset by the childcare costs that would be necessitated by full time employment, and warned that the result might be an increase in child support. Mother also asserted that the parties' investment portfolios, each substantially exceeding $1,000,000, should be treated as a "wash."

¶ 4 Despite the parties' respective assertions that each endeavored to settle the matter, and the fact that the amounts in dispute are small compared to their personal resources (and the cost of the litigation), the parties litigated the issues vigorously. The family court held a two-day evidentiary hearing. On June 18, 2007, the court modified the child support order downward to $1,686.99 per month. It also awarded Mother her attorneys' fees. Father filed a motion for new trial, to which Mother did not substantively respond, and a response to Mother's fee application, to which Mother did not reply. Before the court ruled on the motion for new trial, Father filed a notice of appeal on July 19, 2007. Mother filed a notice of cross-appeal on August 14, 2007.

¶ 5 On September 11, 2007, the court ruled on Father's motion for new trial. Though the court ruled against Father on several significant issues, including the calculation of his gross income and the attribution of income and childcare costs to Mother, it ruled in his favor on a few minor adjustments to educational and childcare expenses that had the net effect of lowering his support obligation further still. In the September 11 minute entry, the court also vacated the fee award in Mother's favor. On September 17, 2007, unaware of the court's ruling, Father sought to withdraw his motion for new trial. The September 11 minute entry was filed on September 21, 2007. On September 21, 2007, after learning of the ruling, Father sought to withdraw his previous motion to withdraw the motion for new trial. Mother objected and on September 27, 2007, filed a motion to strike the court's September 11 order.

¶ 6 On October 9, 2007, Father filed a supplemental notice of appeal from the September 11 order and from the earlier order modifying his support obligation. On November 21, 2007, in an unsigned minute entry, the court granted Father's request to withdraw his motion to withdraw his motion for new trial and denied Mother's motion to strike the ruling on the motion for new trial. On November 30, 2007, Mother filed a notice of appeal from the November 21, 2007 order.

¶ 7 We have jurisdiction over Father's appeal pursuant to A.R.S. § 12-2101(C), (F) (2003). We discuss our jurisdiction over Mother's cross-appeal and her appeal from the November order below.

¶ 8 Father's appeal argues that the family court abused its discretion by: (1) attributing hypothetical childcare expenses to Mother; (2) erroneously computing Father's income; and (3) denying his request for fees.¹

¶ 9 Mother raises a like number of issues in her cross-appeal, but she did not file a separate brief on her direct appeal. We first address the jurisdictional issues presented by Mother's cross-appeal and separate appeal.

II. DISCUSSION

A. Jurisdiction

¶ 10 We review de novo trial court rulings involving questions of pure law, including the court's jurisdiction to enter its orders of September 21, 2007 and November 21, 2007. See Hall v. Lalli, 194 Ariz. 54, 57, ¶ 5, 977 P.2d 776, 779 (1999). We also review independently our own jurisdiction over the parties' appeals.

1. Father's Premature Appeal

¶ 11 In Barassi v. Matison, 130 Ariz. 418, 419-20, 636 P.2d 1200, 1201-02 (1981), the supreme court held that a notice of appeal filed after the denial of a motion for new trial but before the entry of final judgment was sufficient to secure appellate jurisdiction. Because the lower court's substantive decision had become final, and only ministerial tasks remained to accomplish the entry of a final judgment, the court reasoned that dismissal of such a premature notice of appeal would "punish the appellant for being too diligent." Id. at 421, 636 P.2d at 1203. The court pointed out, however, that appellate courts lack jurisdiction when "a litigant attempts to appeal where a motion is still pending in the trial court or where there is no final judgment." Id. at 422, 636 P.2d at 1204; see also Baumann v. Tuton, 180 Ariz. 370, 373, 884 P.2d 256, 259 (App.1994) (concluding that appellate courts lack jurisdiction over an appeal that was filed while the appellant's time-extending motion was still pending in the lower court, and that such a premature notice of appeal is a "nullity").

¶ 12 In Performance Funding, LLC v. Barcon Corporation, 197 Ariz. 286, 289, ¶¶ 10-13, 3 P.3d 1206, 1209 (App.2000), we held that a notice of appeal filed during the pendency of the appellee's time-extending motion was not jurisdictionally defective. Performance Funding interpreted Baumann narrowly — the court construed Baumann to mean simply that a premature notice of appeal did not operate to effect a withdrawal of the appellant's own motion for new trial. Id. at ¶ 10, 884 P.2d 256. Performance Funding also declined to follow as dictum the language in Barassi that warned that a notice of appeal filed during the pendency of a time-extending motion was insufficient to confer appellate jurisdiction. Id. at 288, ¶¶ 7-8, 3 P.3d at 1208.

¶ 13 If Performance Funding still controlled, we would conclude that the prematurity of Father's notice of appeal and Mother's notice of cross-appeal did not deprive us of jurisdiction. But in Smith v. Arizona Citizens Clean Elections Commission, the supreme court underscored its commitment to the more restrictive rule first expressed in Barassi: "[A]ppellate courts should dismiss a case for lack of jurisdiction while [a time-extending] motion was still pending in the trial court." 212 Ariz. 407, 415, ¶ 38, 132 P.3d 1187, 1195 (2006) (citing Barassi, 130 Ariz, at 422, 636 P.2d at 1204). Smith not only interpreted the Barassi exception to the final judgment rule as narrowly as possible, it read Baumann more broadly to defeat jurisdiction over an appeal commenced while a motion for new trial was pending. Id. at ¶¶ 37-39, 884 P.2d 256. In view of the supreme court's reprise of the cautionary language concerning time-extending motions in Barassi, we can no longer dismiss that language as mere dictum. Though Smith did not discuss Performance Funding, the court concluded that outside the slim exception announced in Barassi, premature notices of appeal are ineffective because they disrupt the court process and prevent two courts from assuming jurisdiction and acting at the same time. Id. at ¶ 39, 636 P.2d 1200.

¶ 14 Here, Father's initial appeal to this court was premature because he filed his notice while his own motion for new trial was still pending before the superior court. Baumann, 180 Ariz, at 372, 884 P.2d at 258. Under Baumann, Father's premature notice of appeal was a "nullity and did not constitute an abandonment of the pending motion for new trial." Id. at 373, 884 P.2d at 259; see also Smith, 212 Ariz. at 415, ¶ 39, 132 P.3d at 1195. We therefore conclude the family court retained jurisdiction to consider the motion for new trial. It is Father's October 9, 2007 supplemental notice of appeal following the signed minute entry disposing of the motion for new trial that confers jurisdiction on this court.

¶ 15 In addition, the court correctly denied Mother's motion to strike its September order. Arizona Rule of Family Law Procedure ("ARFLP") 32(E) provides that a motion to strike is available to request that the court "order stricken from a pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." (Emphasis added.) Compare with Ariz. R. Civ. P. 12(...