McNeil v. Hoskyns

• Decision Date: 30 September 2014
• Docket Number: No. 1 CA–CV 12–0685.,1 CA–CV 12–0685.
• Citation: 236 Ariz. 173,337 P.3d 46
• Parties: In re the Marriage of Nancy Sailors McNEIL, Petitioner/Appellant, v. Robert Nicholas HOSKYNS, Respondent/Appellee.
• Court: Arizona Court of Appeals

236 Ariz. 173

337 P.3d 46

In re the Marriage of Nancy Sailors McNEIL, Petitioner/Appellant

v.Robert Nicholas HOSKYNS, Respondent/Appellee.

No. 1 CA–CV 12–0685.

Court of Appeals of Arizona, Division 1.

Sept. 30, 2014.

Hymson, Goldstein & Pantiliat, PLLC, By Yvette D. Ansel, Scottsdale, Counsel for Petitioner/Appellant.

Gillespie, Shields & Durrant, By Mark A. Shields, DeeAn Gillespie Strub, Mesa, Counsel for Respondent/Appellee.

Chief Judge DIANE M. JOHNSEN delivered the opinion of the Court, in which Acting Presiding Judge PATRICIA K. NORRIS and Judge KENTON D. JONES joined.

OPINION

JOHNSEN, Judge.

¶ 1 By statute, the superior court lacks jurisdiction to modify a dissolution decree approving the parties' agreement that spousal support may not be modified. We hold in this appeal that the statute does not apply to a non-modifiable spousal support order that is the product of a fraud on the court.

FACTS AND PROCEDURAL HISTORY

¶ 2 Nancy S. McNeil (“Wife”) and Robert Hoskyns (“Husband”) married in 1985.¹ In 2005, Wife petitioned for dissolution, and the parties signed an agreement, which the court adopted, by which Husband agreed to pay Wife $5,000 a month in temporary child and spousal support, commencing January 2006. Husband is a dentist. Through an oversight, he and someone else at his dental office each arranged for automatic withdrawals of his monthly support payment from his office account. As a result, for the next 17 months, double payments were withdrawn from Husband's account and forwarded to Wife. Wife knew she was receiving double payments, but did not alert Husband, who did not know of the overpayments.

¶ 3 At the trial on their dissolution in May 2007, the parties orally affirmed an agreement their lawyers put on the record, consistent with Arizona Rule of Family Law Procedure 69, that Husband would pay Wife $5,000 each month in spousal support for an additional six years, commencing June 2007. The agreement also provided that spousal support would be non-modifiable and non-terminable. The superior court questioned both parties about any spousal support payments still owing under their prior agreement. Husband responded that he still owed $2,500. Wife did not disclose that as of that date, Husband unwittingly had paid $85,000 more than was due. In October 2007, the court approved the agreement and repeated its terms in the dissolution decree. After entry of the decree, Wife continued to receive some double spousal support payments, but still did not notify Husband of the mix-up.

¶ 4 In October 2009, Wife filed a Petition to Enforce Spousal Maintenance, claiming Husband owed more than $14,000 in arrears. At the time, she knew that even though Husband had missed some post-decree payments, overall, he had overpaid her by tens of thousands of dollars since the start of the dissolution proceedings. After reviewing a court-ordered accounting that revealed the overpayments, Husband filed a response and counter-petition asking the court for relief from provisions in the decree waiving all pendente lite claims and establishing the non-modifiable spousal support obligation. Husband attached an email from Wife in which she had threatened to notify the dental licensing board of his alleged nonpayment in order to have his dental license revoked.

¶ 5 Wife filed a response to Husband's counter-petition and a separate petition to hold him in contempt, claiming he owed $49,102 in arrearages. She eventually withdrew her contempt petition, but not before Husband was arrested and briefly jailed. After a hearing on Wife's petition to enforce, the superior court found in October 2010 that Husband was entitled to interest of $3,147 on overpayments made between June 2007 and July 2009, but that he still owed spousal support payments totaling $59,100 through July 2010. Postponing consideration of Husband's contention that any post-decree arrearages should be reduced by the sum of the pre-decree overpayments, the court awarded Wife $59,100 in past-due spousal support, along with attorney's fees and costs, less the accrued interest due Husband.

¶ 6 At an evidentiary hearing in August 2011, the superior court heard Husband's petition to set aside spousal maintenance. Wife testified she had known she was receiving overpayments and that the pre-decree overpayments totaled about $85,000. Husband testified he was unaware of the overpayments until November 2009.

¶ 7 The superior court found Wife had committed three instances of fraud on the court that authorized it to modify the non-modifiable spousal maintenance term of the decree pursuant to In re Marriage of Waldren, 217 Ariz. 173, 175 n. 3, ¶ 10, 171 P.3d 1214, 1216 n. 3 (2007). The court vacated the prior order requiring Husband to pay post-decree arrearages, terminated Husband's spousal maintenance obligation effective May 1, 2010, and imposed a $5,000 sanction pursuant to Arizona Revised Statutes (“A.R.S.”) section 12–349 (2014) against Wife for her “repeated fraud and misrepresentations to the Court which resulted in numerous, unnecessary hearings.”² The court also awarded Husband his attorney's fees and costs.

¶ 8 We have jurisdiction of Wife's timely appeal pursuant to Article 6, Section 9, of the Arizona Constitution, and A.R.S. § 12–2101(A)(2) (2014).

DISCUSSION

¶ 9 Wife argues that pursuant to A.R.S. § 25–317(G) (2014), the superior court lacked jurisdiction to modify the agreed non-modifiable spousal support provision of the dissolution decree. We review de novo the court's jurisdiction to modify the award. Waldren, 217 Ariz. at 175, ¶ 6, 171 P.3d at 1216.

¶ 10 Dissolution proceedings are statutory actions, and “the trial court has only such jurisdiction as is granted by statute.” Weaver v. Weaver, 131 Ariz. 586, 587, 643 P.2d 499, 500 (1982) (citations omitted). In the ordinary course, the superior court maintains “continuing jurisdiction” over spousal maintenance, and it may modify a support award if the parties' circumstances substantially change. See Waldren, 217 Ariz. at 175, ¶ 8, 171 P.3d at 1216.

¶ 11 By statute, however, “[i]f both parties agree, the maintenance order and a decree of dissolution of marriage or of legal separation may state that its maintenance terms shall not be modified.” A.R.S. § 25–319(C) (2014). Moreover, “entry of a decree that sets forth or incorporates by reference a separation agreement that provides that its maintenance terms shall not be modified prevents the court from exercising jurisdiction to modify the decree and the separation agreement regarding maintenance....” A.R.S. § 25–317(G) (2014). Waldren held that even in the face of substantially changed circumstances that otherwise might permit modification of spousal maintenance, if the parties have agreed that maintenance may not be modified and the decree so orders, § 25–317(G) divests the court of jurisdiction to consider a subsequent petition to modify. 217 Ariz. at 175, ¶¶ 9–10, 171 P.3d at 1216.

¶ 12 Waldren left open, however, whether fraud by one of the parties may render the statutory bar ineffective. There were no allegations of fraud in that case, and the supreme court noted, “We do not address whether fraud or duress in the making of a non-modification agreement may render such a provision void.” Id. at 175 n. 3, ¶ 10, 171 P.3d at 1216 n. 3 ; see also Ariz. R. Fam. Law P. 85(C)(3) (time limits applying to motion to set aside judgment do “not limit the power of a court ... to set aside a judgment for fraud upon the court”).

¶ 13 The superior court in this case found Wife committed fraud on the court that voided the parties' agreement that spousal maintenance could not be modified. We will affirm a finding of fact by the superior court unless it is clearly erroneous. Ariz. R. Fam. Law P. 82(A); see also Valley Med. Specialists v. Farber, 194 Ariz. 363, 366, ¶ 9, 982 P.2d 1277, 1280 (1999). Factual findings are not clearly erroneous if substantial evidence supports them, even if there is substantial conflicting evidence. Kocher v. Dep't of Revenue of State of Ariz., 206 Ariz. 480, 482, ¶ 9, 80 P.3d 287, 289 (App.2003).

¶ 14 Fraud on the court is a variety of extrinsic fraud. See, e.g., Dockery v. Cent. Ariz. Light & Power Co., 45 Ariz. 434, 450–51, 45 P.2d 656, 662–63 (1935). The doctrine may allow relief when, by fraud, a party has prevented “a real contest before the court of the subject matter of the suit,” id., or, put differently, has committed “some intentional act or conduct ... [that] has prevented the unsuccessful party from having a fair submission of the controversy,” Bates v. Bates, 1 Ariz.App. 165, 169, 400 P.2d 593, 597 (1965). The court has the power to set aside a judgment “[w]hen a party obtains a judgment by concealing material facts and suppressing the truth with the intent to mislead the court.” Cypress on Sunland Homeowners Ass'n v. Orlandini, 227 Ariz. 288, 299, ¶ 42, 257 P.3d 1168, 1179 (App.2011) (complaint contained false statements and material omissions, and counsel made false statements in ex parte hearing); see also Gordon v. Gordon, 35 Ariz. 357, 364–65, 278 P. 375, 377–78 (1929) (wife lied in affidavit about where husband lived to excuse her failure to provide notice).

¶ 15 A judgment resulting from a fraud on the court may be set aside by motion or by an independent action. Cypress, 227 Ariz. at 299, ¶ 42, 257 P.3d at 1179. More specifically, we have held that a party may be entitled to equitable relief from a provision of a dissolution decree that is “procured by extrinsic fraud.” Bates, 1 Ariz.App. at 168, 400 P.2d at 596 (when judgment is the product of extrinsic fraud, “equity will act to prevent a failure of justice, for fraud is the arch enemy of equity”).

¶ 16 Consistent with these cases, we hold that A.R.S. § 25–317(G) does not divest the superior court of jurisdiction to modify a decree imposing spousal support that the parties have agreed may not be modified when the decree is the product of a fraud on the court. In such a case, the party's fraud has...