Gonzales v. Gonzales (In re Marriage of Gonzales)

• Decision Date: 28 May 2020
• Docket Number: No. 1 CA-CV 19-0303 FC,1 CA-CV 19-0303 FC
• Parties: In re the Marriage of: TINA J. GONZALES, Petitioner/Appellee, v. SIMON GONZALES, Respondent/Appellant.
• Court: Arizona Court of Appeals

In re the Marriage of: TINA J. GONZALES, Petitioner/Appellee, v. SIMON GONZALES, Respondent/Appellant.

No. 1 CA-CV 19-0303 FC

ARIZONA COURT OF APPEALS DIVISION ONE

May 28, 2020

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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

Appeal from the Superior Court in Maricopa County

No. FN2017-002932

The Honorable Kerstin G. LeMaire, Judge

AFFIRMED

COUNSEL

Duenas Eden, PLC, Phoenix

By Dorian L. Eden

Counsel for Petitioner/Appellee

Horne Slaton, PLLC, Scottsdale

By Thomas C. Horne, Kristin M. Roebuck Bethell

Counsel for Respondent/Appellant

MEMORANDUM DECISION

Judge Maria Elena Cruz delivered the decision of the Court, in which Presiding Judge Lawrence F. Winthrop and Judge David B. Gass joined.

CRUZ, Judge:

¶1 Appellant Simon Gonzales ("Husband") challenges the superior court's grant of summary judgment to Appellee Tina J. Gonzales ("Wife") on his challenge to the parties' property settlement agreement. We conclude the court did not err in finding the agreement to be enforceable and therefore affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 Wife petitioned for dissolution of the parties' marriage in June 2017. On October 2, 2017, the parties participated in a private mediation. Both parties were represented by counsel in the mediation, and Husband attended telephonically.

¶3 The parties reached agreement on all outstanding issues in mediation, and a settlement agreement was prepared. When Husband reviewed the settlement agreement, he balked at the final paragraph stating that the parties entered into it freely, voluntarily, and without undue coercion or duress, and asserted he felt "there was some coercion." He said "[t]here were several levels of coercion that included from [Wife's] lawyer that was very intimidating" and the mediator "presented his case which was somewhat coercive."

¶4 After privately conferring with counsel, Husband told the mediator the agreement's terms were fair and equitable. When asked if he had been forced or coerced into the agreement, he responded "not applicable." He also affirmed his intent to be bound by the agreement and authorized his counsel to sign it on his behalf.

¶5 Approximately one month later, Husband, represented by new counsel, moved to set aside the settlement agreement. He contended (1) he was not "fully informed as to the assets during mediation"; (2) the agreement did not equitably divide the community property; and (3) he "felt unprepared and unsupported by his [former] lawyer" and for that reason "reluctantly directed his lawyer to sign [it] on his behalf" despitestating that "he did not agree that the agreement was fair and equitable." He specifically challenged

(1) the award of the marital home to Wife without any offset;

(2) the requirement that he pay $32,000 towards the parties' adult child's college education; and

(3) the untimely disclosure that Wife had four bank accounts, which he speculated "were utilized to transfer and hide community funds."

He requested a hearing under Sharp v. Sharp, 179 Ariz. 205 (App. 1994), to ensure the settlement agreement was fair and equitable.

¶6 The superior court set a hearing on Husband's motion. But on May 9, 2018, the court issued an order stating it "likely will not schedule trial (or will continue a scheduled trial) for 90 days after a party files a motion for summary judgment" based on this court's opinion in Hutki v. Hutki, 244 Ariz. 39 (App. 2018).

¶7 The parties filed cross-motions for summary judgment. The superior court ruled in Wife's favor, finding no fact questions remained as to the enforceability of the agreement or the need for an evidentiary hearing. The court also found (1) the settlement agreement was presumptively valid; (2) Husband "fail[ed] to seek more information prior to the mediation" regarding the value of the community home; and (3) Husband's other arguments amounted to "a case of 'buyer's remorse.'"

¶8 Husband appealed the summary judgment ruling. We dismissed that appeal for lack of jurisdiction. The superior court then entered a final decree setting forth the agreement's terms and awarding Wife $13,011.96 in attorneys' fees and costs. Husband timely appealed from the decree; we have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(1).

DISCUSSION

I. The Court Properly Entered Summary Judgment to Wife on the Validity of the Property Settlement Agreement

¶9 Summary judgment is appropriate only if "the moving party shows that 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. Fam. LawP. ("ARFLP") 79(a). We review a grant of summary judgment de novo. Palmer v. Palmer, 217 Ariz. 67, 69, ¶ 7 (App. 2007).

¶10 The parties to a dissolution case "may enter into a written separation agreement containing provisions for disposition of any property owned by either of them." A.R.S. § 25-317(A). The agreement is valid and binding on the parties if it is "in writing and signed by the parties personally or by counsel on a party's behalf," as is the case here. ARFLP 69(a)(1). A party challenging the validity of a separation agreement "has the burden to prove any defect in the agreement." ARFLP 69(c). If the court finds the agreement to be unfair, it may request that the parties submit a revised agreement or make property disposition orders. A.R.S. § 25-317(C). We review de novo the validity and enforceability of a contract, which presents a mixed question of fact and law. Armiros v. Rohr, 243 Ariz. 600, 605, ¶ 16 (App. 2018).

A. Husband Did Not Show Duress or Coercion

¶11 Contract law governs a property settlement agreement once it is incorporated into a decree. Buckholtz v. Buckholtz, 246 Ariz. 126, 129, ¶ 10 (App. 2019); see also Emmons v. Super. Ct. in & for Cty. of Maricopa, 192 Ariz. 509, 512, ¶ 14 (App. 1998) ("Construction and enforcement of settlement agreements . . . are governed by general contract principles."). Legal grounds for voiding a contract include lack of mutual consent, consideration, or capacity, or that it is voidable for fraud, duress, lack of capacity, mistake, or violation of a public purpose. Austin v. Austin, 237 Ariz. 201, 206, ¶ 12 (App. 2015).

¶12 Husband contends the settlement agreement is voidable because he agreed to it under "duress and coercion." Duress typically requires "a wrongful threat or act of the other party." Inter-Tel, Inc. v. Bank of Am., Ariz., 195 Ariz. 111, 117, ¶ 36 (App. 1999); see also Restatement (Second) of Contracts § 175(1) (1981) ("If a party's manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim."). Husband did not show any such act or threat; he only vaguely stated at the mediation he felt "several levels of coercion" from Wife's attorney and the mediator. Then, after privately conferring with counsel, he told the mediator he was not threatened or coerced into making the agreement and intended to be bound by it. The court did not err in granting summary judgment on the enforceability of the agreement. See Sharp, 179 Ariz. at 209-10 (rejecting duress argument where party "was represented by counsel and . . . couldhave asked him to evaluate her chances for a more favorable outcome if the court distributed the parties' property").

B. The Court Was Not Obligated to Conduct a Fairness Hearing

¶13 Husband contends the court should have held an evidentiary hearing under Sharp before granting summary judgment because genuine issues of material fact remained as to whether the agreement was "fair and equitable . . . because the division was grossly disproportionate in Wife's favor."

¶14 In Sharp, we reversed a grant of summary judgment because "there were plainly disputed facts on the question of the fairness of the [property settlement] agreement, and the court was presented no evidence as to the extent of the community assets." Sharp, 179 Ariz. at 210. We held that the court should consider

all the evidence before it relating to the agreement, together with all other evidence concerning the relation of the parties at the time of trial, their ages, financial conditions, opportunities, and the contributions of each to the joint estate. Accordingly, the court need also determine what assets comprise the community estate and whether the party challenging the agreement had full knowledge of the property involved.

Id. (internal citation and quotation marks omitted). We further stated that the party asserting the agreement is valid must prove by clear and convincing evidence that it is fair and equitable. Id.

¶15 In Hutki, however, we recognized that then-ARFLP 69(B) had superseded the burden of proof established in Sharp. Hutki, 244 Ariz. at 43, ¶¶ 18-19. That rule, which now appears as ARFLP 69(c), stated that "it shall be the burden of the party challenging the validity of the agreement to prove any defect in the agreement[.]" We held that neither Sharp nor A.R.S. § 25-317(B) obligates the court to conduct a hearing in all cases where the parties dispute the fairness of a property settlement agreement. Id. at 44, ¶ 29. As such, the issue before us is whether Husband presented sufficient evidence to require a fairness hearing. We conclude he did not.

¶16 Husband contends "Wife was awarded the [marital] home with equity of $175,000 to $181,000 without any equalization to Husband." But he relies on post-mediation appraisals that valued the home at $405,000. These appraisals are irrelevant because fairness must be evaluated at thetime the agreement was entered. See Buckholtz, 246 Ariz. at 133, ¶ 24 n.5. Moreover, Husband admitted he did not obtain an appraisal before mediation. His decision not to do so is not grounds to invalidate the agreement. See Hutki, 244 Ariz. at 45, ¶ 30 (noting party challenging the agreement, despite disagreeing with the valuation of the parties' business, ...