Muchesko v. Muchesko

• Decision Date: 30 September 1997
• Docket Number: CA-CV,No. 1,1
• Citation: 191 Ariz. 265,955 P.2d 21
• Parties: , 253 Ariz. Adv. Rep. 12 In re the Marriage of Louise A. MUCHESKO, Petitioner-Appellee, v. Samuel MUCHESKO, Respondent-Appellant. 96-0459.
• Court: Arizona Court of Appeals

Page 21

955 P.2d 21

191 Ariz. 265, 253 Ariz. Adv. Rep. 12

In re the Marriage of Louise A. MUCHESKO, Petitioner-Appellee, v. Samuel MUCHESKO, Respondent-Appellant.

No. 1 CA-CV 96-0459.

Court of Appeals of Arizona Division 1, Department E.

Sept. 30, 1997.

Reconsideration Denied Jan. 8, 1998.

Review Denied May 19, 1998.

Favour Moore & Wilhelmsen, P.A. by Mark M. Moore and Thomas M. Stoxen, Prescott, for Petitioner-Appellee.

Musgrove, Drutz & Kack, P.C. by Mark W. Drutz, Grant K. McGregor and John G. Mull, Prescott, for Respondent-Appellant.

OPINION

THOMPSON, Presiding Judge.

Samuel Muchesko (Husband) appeals from the decree of dissolution distributing the parties' property, ordering that Husband pay child support based on an annual income of $131,000.00, awarding Louise A. Muchesko (Wife) half of Husband's monthly retirement benefits and her attorneys' fees, and from the trial court's denial of his motion to quash a lis pendens that Wife filed against the parties' Prescott house. For the reasons stated below, we reverse the property division, the lis pendens and the award of attorneys' fees to Wife and remand for further proceedings.

FACTUAL AND PROCEDURAL HISTORY

Husband and Wife were married in 1979 and lived in Pennsylvania until June 1994, when they moved to Arizona. Husband was a school teacher who retired in 1993. Wife did not work outside the home except for her part-time business trading antiques. The parties separated in June 1990, and Wife filed for divorce in Pennsylvania in November 1990. Between June 1990 and June 1994, the parties made several attempts to reconcile, all of which failed.

At no time between June 1990 and June 1994 did the parties live together. In an attempt to reconcile, in April 1991, the parties decided to purchase a house in Hartstown, Pennsylvania. Wife put down $1,000.00 earnest money on the Hartstown house. However, just before closing, Husband changed his mind, the sale was never completed, and Wife forfeited the earnest money.

In June 1991, the parties discussed a property settlement, and in August 1991, Husband prepared a document setting forth what he thought were the terms of their agreement. Wife refused to sign Husband's proposed agreement, and took the document to her attorney who prepared a more formal settlement agreement with terms more favorable to Wife.

Wife gave the settlement agreement to Husband, who signed it on September 18, 1991 and returned it to Wife. Wife put the agreement in a drawer and did not look at it for over a year. Between June 1991 and January 1992, Husband paid Wife a total of $50,000.00 and reimbursed her for the $1,000.00 earnest money she lost on the Hartstown house. Wife used some of this money to purchase two houses in Greenville, Pennsylvania. She took title in her name only, lived in one of the houses with the parties' two children, and rented the other.

In early 1994, the parties voluntarily dismissed the Pennsylvania divorce action in an attempt to reconcile. They purchased a home in Prescott and moved to Arizona in June 1994. The parties lived as husband and wife until late August 1994, when Husband returned to Pennsylvania to be with his sick mother. He came back to Prescott briefly and again returned to Pennsylvania to seek psychiatric help for depression. Husband returned to Prescott in early November 1994, and Wife filed this dissolution action on November 7, 1994.

After a three-day bench trial, the trial court found that there was no binding settlement agreement between the parties and divided the property and debts according to Arizona's community property laws. The court awarded Wife spousal maintenance of $1,000.00 per month for 24 months, child support of $953.25 per month, and $16,176.00 in attorneys' fees. Wife was awarded the two Greenville houses; a Schwab stock account worth $142,044.00 or its current balance, if greater; a Paul Revere annuity; half of Husband's monthly retirement benefits; a 1994 Honda; antiques in her possession worth approximately $15,000.00; and personal property in her possession. Husband was awarded the Prescott house with equity of $223,500.00, subject to a $10,500.00 lien for Wife's share of community funds Husband dissipated; a Schwab IRA account worth $40,177.00 or its current value, if greater; interest on the Paul Revere annuity through the first quarter of 1995; half of the monthly retirement benefits; a 1994 Blazer; and personal property in his possession.

Husband filed a motion for new trial, which the trial court denied. The court entered a stipulated amended decree, and Husband filed a timely notice of appeal. We have jurisdiction over Husband's appeal from the decree and denial of his motion for new trial pursuant to Ariz.Rev.Stat. Ann. (A.R.S.) § 12-2101(B) and (F).

DISCUSSION

I. Settlement Agreement

A. Application of Pennsylvania Law

Husband contends that the trial court erred in applying Arizona law to determine whether the parties had entered into a binding settlement agreement. He contends that Pennsylvania law applies. Although Husband made this argument below, he did not cite any Pennsylvania authority to the trial court. Husband only cited Arizona law to support his claim that the parties had a binding settlement agreement. On appeal, Husband cites Pennsylvania law for the first time in his reply brief. Issues raised for the first time in the reply brief will not be considered. Anderson v. Country Life Ins. Co., 180 Ariz. 625, 886 P.2d 1381 (App.1994). Furthermore, we need not rely on Pennsylvania law to find an agreement here.

B. Parties' Conduct

Husband contends that the trial court erred in concluding that the parties did not reach a binding settlement agreement in 1991. He contends that the parties acted consistently with the terms of the settlement agreement that Wife's attorney prepared and, therefore, should be bound by the agreement. The trial court found that during the parties' Pennsylvania separation, they reached an agreement as to the division of some of their property, but because Wife never signed the settlement agreement her attorney prepared, there was no binding settlement agreement.

We are bound by the trial court's findings of fact unless they are clearly erroneous. Burnette v. Bender, 184 Ariz. 301, 304, 908 P.2d 1086, 1089 (App.1995). The existence of an implied contract is a question of fact where the evidence is conflicting. Wagenseller v. Scottsdale Mem'l Hosp., 147 Ariz. 370, 383, 710 P.2d 1025, 1038 (1985). "We are not bound, however, by the trial court's conclusions of law nor findings that combine both fact and law when there is an error as to the law." Lee Dev. Co. v. Papp, 166 Ariz. 471, 476, 803 P.2d 464, 469 (App.1990). We conclude the trial court erred in determining that there was no binding settlement agreement merely because Wife failed to sign the agreement.

To establish a binding settlement agreement, Husband must establish all elements of a valid contract. See Malcoff v. Coyier, 14 Ariz.App. 524, 526, 484 P.2d 1053, 1055 (App.1971). The essential elements of a valid contract are an offer, acceptance, consideration, a sufficiently specific statement of the parties' obligations, and mutual assent. Savoca Masonry Co., Inc. v. Homes & Son Constr. Co., 112 Ariz. 392, 394, 542 P.2d 817, 819 (1975).

The fact that Wife did not sign the contract does not preclude a finding of a valid contract. Courts may look at the writing, the conduct of the parties, and the surrounding circumstances in deciding whether a contract existed or whether a meeting of the minds occurred. Malcoff, 14 Ariz.App. at 526, 484 P.2d at 1055. A finder of fact may conclude that a contract exists based solely on the parties' conduct. Cook v. Cook, 142 Ariz. 573, 576, 691 P.2d 664, 667 (1984). Although the failure of one party to execute an instrument usually renders it incomplete, "where all the parties, including the non-signers, by their actions recognize the validity of the agreement and acquiesce in its performance," a contract may exist. Modular Sys., Inc. v. Naisbitt, 114 Ariz. 582, 585, 562 P.2d 1080, 1083 (App.1977). In deciding whether this mutual assent exists, we look at objective evidence, not "the hidden intent of the parties." Id.

"An offer is '... a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.' Restatement (Second) of Contracts § 24." K-Line Builders, Inc. v. First Fed. Sav. & Loan Ass'n, 139 Ariz. 209, 212, 677 P.2d 1317, 1320 (App.1983). In June 1991, the parties began discussing the division of their property and assets. Husband prepared a proposed agreement dated August 21, 1991. Wife disagreed with some of its terms and took the agreement to her attorney who prepared a "Separation and Property Settlement Agreement." Wife delivered this settlement agreement to Husband, who signed it on September 18, 1991 and returned it to Wife. The parties then did not discuss the agreement for over a year.

We conclude that by delivering a formal settlement agreement prepared by her own attorney, Wife made an offer to Husband, which he accepted by signing and returning it to her. Wife had rejected Husband's proposal and proposed an agreement with terms more advantageous to her. Husband had no reason to believe Wife did not approve of the terms of her own proposed agreement. Wife did not indicate that the agreement was conditional or that she did not approve of its terms.

Wife claims she did not intend to make an offer because she had rejected Husband's proposed agreement and the agreement prepared by her attorney contained substantially similar terms. We disagree. Wife's proposed agreement contained two terms significantly more advantageous to Wife. She received $6,000.00 more for her interest in the Hermitage house, and Husband accepted all liability for the failed Hartstown deal. Based on the objective evidence, Wife...