Sterling v. Sterling

CourtCourt of Appeals of Arizona
Writing for the CourtMAURICE PORTLEY
PartiesIn re the Marriage of: PETER J. STERLING, Petitioner/Appellant, v. HEATHER K. STERLING, Respondent/Appellee.
Decision Date22 August 2013

In re the Marriage of: PETER J. STERLING, Petitioner/Appellant,
HEATHER K. STERLING, Respondent/Appellee.

1 CA-CV 12-0554


Dated: August 22, 2013

See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24

(Not for Publication -
Rule 28, Arizona Rules of
Civil Appellate Procedure)

Appeal from the Superior Court in Maricopa County

Cause Nos. FC2011-095094 and FC2012-090277 (Consolidated)

The Honorable James P. Beene, Judge


Rowley Chapman Barney & Buntrock, Ltd.
by Shane D. Buntrock
Paul S. Rowley
Nathaniel H. Wadsworth
Attorneys for Petitioner/Appellant


Hymson Goldstein & Pantiliat, PLLC
by Yvette Ansel
Jennifer Rubin
Attorneys for Respondent/Appellee


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¶1 Peter Sterling ("Husband") appeals the order requiring him to designate his former spouse, Heather Sterling ("Wife"), as the beneficiary of his life insurance policy. For the reasons that follow, we affirm the court's order.


¶2 The parties entered into a Marital Settlement Agreement ("Agreement") which was incorporated into their 2007 California divorce decree. In the Agreement, Husband agreed to pay child support for their two children and to keep Wife as the beneficiary of a million dollar life insurance policy.

¶3 Both parties subsequently moved to Maricopa County, and in 2011, both domesticated their California decree in the Maricopa County Superior Court. After the cases were consolidated, Husband sought to modify his child support obligation and Wife, by counterclaim, sought $110,000 in child support arrears.1 Wife soon discovered that the life insurance policy that Husband had maintained pursuant to the Agreement had lapsed. She also learned that Husband had acquired a different life insurance policy with AXA Equitable Life Insurance Company ("AXA life insurance policy") and had named his new wife as the beneficiary.

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¶4 Wife filed a motion asking the court to order Husband to name her as the beneficiary on his current life insurance policy pursuant to the Agreement. Following briefing,2 the court granted her request and ordered Husband to designate Wife the sole beneficiary of his life insurance policy.



¶5 Husband contends in his reply brief that the trial court lacked subject matter jurisdiction to enforce the California decree.3 We disagree.

¶6 Subject matter jurisdiction "refers to a court's statutory or constitutional power to hear and determine a particular type of case." State v. Maldonado, 223 Ariz. 309, 311, ¶ 14, 223 P.3d 653, 655 (2010). Because jurisdiction cannot be vested by waiver or estoppel, Guminski v. Ariz. State Veterinary Med. Examining Ed., 201 Ariz. 180, 184, ¶ 18, 33 P.3d

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514, 518 (App. 2001), we independently review whether the superior court had subject matter jurisdiction over the domesticated decree as an issue of law. Medina v. Ariz. Dep't of Transp., 185 Ariz. 414, 417, 916 P.2d 1130, 1133 (App. 1995).

¶7 Husband contends that the court was precluded from exercising jurisdiction because the decree was not registered as required by Glover v. Glover, 231 Ariz. 1, 289 P.3d 12 (App. 2012). His reliance on Glover, however, is misplaced. In Glover, the father failed to properly register, not domesticate, the Massachusetts judgment of divorce pursuant to the Arizona Uniform Interstate Family Support Act. Id. at 3, ¶ 8, 289 P.3d at 14. As a result, this court held that, in the absence of proper registration, the court did not have subject matter jurisdiction to modify the foreign child support order. Id. at 6-7, ¶¶ 20-22, 289 P.3d at 17-18.

¶8 Here, although neither Husband nor Wife properly registered their domesticated decree, the issue is whether the court had subject matter jurisdiction to enforce the decree by entering the order. Regardless of any defects in registering the California decree, the decree was properly domesticated with the superior court. As a result, the court had subject matter jurisdiction to enforce the decree's terms, even though it could not then modify the child support obligation. Consequently, because the decree was properly domesticated, the court had

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subject matter jurisdiction to resolve Wife's motion to enforce the life insurance provision. See Ariz. Const. art. 6, § 14 (3), (9) (conferring the superior court with original jurisdiction over proceedings involving divorce and cases "in which the demand or value of property in controversy amounts to one thousand dollars or more").



¶9 Husband contends the court erred by both finding that the Agreement required him to designate Wife as the beneficiary of his AXA life insurance policy and entering the order. Because the Agreement provides that any dispute about the Agreement will be governed by California law, we apply California law. See, e.g., Cardon v. Cotton Lane Holdings, Inc., 173 Ariz. 203, 207-08, 841 P.2d 198, 202-03 (1992).

¶10 We review issues of contract interpretation de novo, People ex rel. Lockyer v. R.J. Reynolds Tobacco Co., 107 Cal. App. 4th 516, 520 (2003), and give effect to the "mutual intention" of the parties. Palp, Inc. v. Williamsburg Nat'l Ins. Co., 200 Cal. App. 4th 282, 290 (2011) (citing Cal. Civ. Code § 1636 (West 2013)). Because "we strive to determine the actual intent of the parties," Campbell v. Scripps Bank, 78 Cal. App. 4th 1328, 1337 (2000), we look solely to the written provisions of the contract, interpreted as a whole and in the

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circumstances of the case. MacKinnon v. Truck Ins. Exch., 31 Cal. 4th 635, 647-48 (2003).

¶11 The Agreement provides in relevant part that:

Husband shall designate Wife as the sole primary beneficiary on a life insurance policy in the face amount of $1,000,000, insuring his life. Such designation shall be maintained until the obligation for support ends. Husband shall make all premium payments on the policy during that period as they become due. Within ten days after the effective date of this agreement, Husband shall direct the insurer in writing to send to Wife as well as to himself all premium notices, lapse notices, and receipts for premiums paid. If Husband fails to make any premium payments as required, Wife may, at her option, make such payments in which event she shall be entitled to recover from Husband or his estate all premiums paid by her to preserve the policy. If the policy lapses because of Husband's default in the payment of premiums, Wife shall be entitled to payment from Husband's estate of the full amount of all death benefits to which she would have been entitled but for the lapse of the policy. Husband waives the right, during the period in which he is required to maintain said designation, to exercise any rights, privileges, and options granted to the owner of the policy without the prior written consent of Wife.
. . .
Neither party may cash out or borrow against the life insurance policy to reduce effective coverage to less than $1,000,000 unless a new policy is purchased to bring the total face value to $1,000,000, and the beneficiary designation shall remain the same as the original policy.

(Emphasis added.)

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¶12 The provision clearly provides that Husband was required to name Wife as the sole beneficiary of a $1,000,000 life insurance policy so long as he is required to pay child support. The provision also required Husband to provide notice of premium payments and lapses to Wife to protect her interest in the policy and name Wife as the sole beneficiary of any subsequent policy if he cashed out or borrowed against the original policy. If, however, the policy lapsed due to Husband's failure to pay the premiums, Wife could collect any child support arrearages from Husband's estate after he passed away as if the policy had not lapsed.

¶13 Husband contends the court erred by directing him to substitute Wife as the beneficiary of the AXA life insurance policy. He argues that the plain language of the Agreement did not require him to name Wife as his beneficiary on any subsequent policy because he allowed the original policy to lapse.

¶14 The parties do not contest the operative facts: Husband had or acquired a $1,000,000 policy and named Wife as the beneficiary; he did not give Wife notice of the policy; he...

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