Scott v. Scott

• Decision Date: 28 February 1979
• Docket Number: No. 13939,13939
• Citation: 121 Ariz. 492,591 P.2d 980
• Parties: In re the Marriage of Ray E. SCOTT, Appellant, v. Eda SCOTT, Appellee.
• Court: Arizona Supreme Court

Page 980

591 P.2d 980

121 Ariz. 492

In re the Marriage of Ray E. SCOTT, Appellant, v. Eda SCOTT, Appellee.

No. 13939.

Supreme Court of Arizona, In Banc.

Feb. 28, 1979.

Burch, Cracchiolo, Levie, Guyer & Weyl, P.A. by Daniel Cracchiolo, and Barry Becker, Phoenix, for appellant.

Allen, McClennen & Fels by James R. Harrison, Phoenix, for appellee.

GORDON, Justice:

This is an appeal from the judgment of the Superior Court regarding Ray E. Scott's petition to modify spousal maintenance. Taking jurisdiction pursuant to 17A A.R.S., Arizona Rules of Civil Appellate Procedure, rule 19(e), we affirm the judgment of the Superior Court.

Ray Scott, hereinafter referred to as Ray, and Eda Scott, hereinafter referred to as Eda, were divorced on February 6, 1975. Pursuant to a property settlement agreement executed on November 15, 1974, and incorporated by reference into the divorce decree, Ray was to pay Eda $3,000 a month in spousal maintenance. One year and eight months after the divorce, he filed a petition to modify spousal maintenance.

Pursuant to A.R.S. § 25-327.A, the provisions of a divorce decree respecting spousal maintenance may be modified only upon a showing of changed circumstances that are substantial and continuing. The Superior Court denied Ray's petition, finding no substantial and continuing change in circumstances that would warrant a reduction in the alimony being paid.

This Court is faced with two issues on appeal (1) Whether the trial court abused its discretion in denying Ray's petition to modify spousal maintenance, because it was supported by evidence of a substantial change in circumstances that occurred after the entry of the divorce decree.

(2) Whether it was an abuse of the trial court's discretion to award Eda $2,114 in attorneys' fees.

Ray is a broadcaster who was fifty-seven when he filed his petition to modify spousal maintenance and fifty-five at the time of his divorce from Eda. Although he had been a network broadcaster for many years, he was no longer with a network at the time of the divorce nor when the property settlement agreement was executed. Ray alleges that, because of his advancing years, the demand for him as an independent broadcaster is waning. His age and status as an independent broadcaster were, however, known to him at the time of the divorce. To be relevant evidence for a modification, a changed circumstance must occur subsequent to the divorce. Hornbaker v. Hornbaker, 25 Ariz.App. 577, 545 P.2d 425 (1976).

Moreover, the evidence does not support Ray's contention that there was, at the time of the hearing, less demand for his talents as a broadcaster. Although he alleges that many of his contracts have not been renewed, Ray's broadcasting income from Ray Scott and Associates, Inc. for 1976 was greater than his 1975 income and was not substantially less than his 1974 income. ¹ In 1976, Ray opened a marketing division of Ray Scott and Associates, Inc. The broadcasting activities of Ray Scott and Associates, Inc. continued to operate under the term "personal services division." Ray's 1976 income from the latter would have exceeded even his 1974 income had a portion of the profits from the personal service division not been allocated to the marketing division. ²

Ray predicts that, because of his advancing age and the resulting drop in demand for his broadcasting talents, his 1977 income will be substantially less. The burden of proving changed circumstances is on the party seeking modification. Linton v. Linton, 17 Ariz.App. 560, 499 P.2d 174 (1972). An estimation of an expected, but as yet unrealized, decrease in income is speculative evidence at best and is not sufficient to sustain a finding of substantial changed circumstances. ³ Linton, supra.

Ray asserts that the newly formed marketing division of Ray Scott and Associates, Inc. has suffered a financial setback in its first year and that his income in the future will, therefore, be less. Again, this is mere speculation. Despite its operating at a loss in its inaugural year, Ray himself indicated at the modification hearing that he still expected the marketing division to be profitable in the future, or he would not continue to be involved with it. To merit modifying a divorce decree, the changed circumstances must be both substantial and Continuing. Murphy v. Murphy, 26 Ariz.App. 302, 547 P.2d 1102 (1976); A.R.S. § 25-327.A. Even Ray does not expect that the losses of the marketing division will continue. Temporary present losses and speculative future losses of this kind are simply not sufficient to support a modification.

Ray contends that his debts have increased substantially since the divorce. At the time of the decree of dissolution Ray was in debt in the amount of $36,000. Since the divorce, this figure has increased to $58,500. This Court must consider whether an increased indebtedness of $22,500 is a substantial change that merits a modification of Ray's support payments. Ten thousand dollars of his increased indebtedness is a home improvement loan that Ray took out when he purchased his second home. ⁴ A debt of this kind will have the effect of increasing the debtor's equity.

We recognize that this is a sizable increase in indebtedness. When we take into consideration Ray's net worth of $324,000, at the time of his petition for modification, his yearly income that approaches $100,000, and the long run beneficial effect that at least a portion of the debt will have, we do not find, however, that this is a substantial increase in indebtedness that merits a modification of Ray's support payments.

Since his divorce, Ray has guaranteed $200,000 worth of loans to Ray Scott and Associates, Inc. He is not primarily liable for this amount and does not assert that he has, in fact, become liable for the corporation's debts. Once again, the evidence is merely speculative and will not support the contention that any change, let alone a substantial and continuing change, has occurred. See Linton, supra.

At the time of his divorce, Ray had an interest in Ray Scott and Associates, Inc. Profit Sharing Plan and the American Federation of Television and Radio Artists Pension Plan of $28,710 and $26,269 respectively. Since his divorce, he has liquidated both plans. Ray was given these assets in the divorce decree. Eda has no interest in them. A transformation of Ray's assets from one form to another is not, in and of itself, a changed circumstance. Liquidation of his own assets is only relevant if reflective of a change in circumstances, such as an increase in debt. Because we have rejected his allegations of changed circumstances, the liquidation of his pension plans is not pertinent and merely reflects that he received the pension plans in the property settlement agreement and can do with them as he pleases.

Ray also contends that Eda's financial needs have undergone a substantial and continuous change. She has sold the family home, which she received in the property settlement agreement, and purchased a new home. As a consequence, her living expenses have dropped approximately $317 per month. Changed circumstances of the wife are as material to a motion to modify support payments as are the changed circumstances of the husband....